- US President Trump speculated that relations with China could be "cut off", saving USD 500bn. Economists have questions. What does the USD 500bn refer to? What does "cut off" mean? What happened to the greatest trade deal ever in the history of trade deals? Investors were braced for anti-China rhetoric ahead of the November election, but this is quite strong.
- US President Trump talked of taxing US companies that do not move supply chains. Supply chains cannot be moved that quickly, so in the near term this would just be an additional burden for US firms. In time companies will move anyway, as the fourth industrial revolution promotes localisation. A chip manufacturer announced a new plant in the US overnight.
- Chinese economic data showed improvement in April. Investment and production gained. Retail sales saw increased car sales and communication equipment sales. As people work from home they will upgrade their technology. This means companies can spend less on investment and get the same results, relying on workers to provide their own equipment.
- US initial jobless claims contained an error (someone typed in the wrong numbers for Connecticut). German GDP and US retail sales data are both survey based, and thus of dubious quality.