Green issues

Posted by: Paul Donovan

08 Jul 2020

Daily update

  • ECB President Lagarde is suggesting that the central bank may have a green bias in its stimulus policies. Central bank policy is a relatively blunt tool for sustainability – fiscal policy and private investment and philanthropy are more precise. Nonetheless, this stresses that the issues of the environmental credit crunch remain critical.
  • US-China tensions continue, with media reports that the US is considering undermining the Hong Kong dollar peg to the US dollar. Markets are not taking this threat seriously at the moment. US President Trump confirmed that a ban on the video app Tik Tok is being considered – there are domestic US implications from that, in that some (generally young) users earn income from Tik Tok.
  • In the interminably tedious EU-UK divorce, UK Prime Minister Johnson apparently told German Chancellor Merkel that the UK was prepared to leave on "Australian terms". "Australian terms" translates into comprehensible English as "no deal", which markets are not priced for. Meanwhile, UK Chancellor Sunak will formally unveil the plan to use roof insulation to stimulate the economy.
  • The EU Commission revised forecasts for the EU economy yesterday. They included decimal points in the forecasts - a signal that these numbers should not perhaps be taken seriously.

Explore more CIO Daily Updates