It ain't over 'til it's over

Posted by: Paul Donovan

23 Jun 2020

Daily update

  • US presidential adviser Navarro declared the phase one trade deal with China to be over. US President Trump clarified that this was not true. Markets gyrated back and forth. The trade deal is most at risk in September and October: if US President Trump imposed trade taxes then, the damage to US companies and consumers would be felt after the election. The deal is still likely to survive.
  • US President Trump suspended most visas until the end of the year, hoping that Americans will fill the jobs instead. This obviously reduces labour flexibility, and that may end up increasing US unemployment as firms look to locate to where they can hire the talent that they need.
  • In the interminably tedious EU-UK divorce program, Japan is proposing the trade equivalent of a shotgun wedding. The Japanese are suggesting that a UK trade deal will need to be agreed within six weeks—implying that it will be a less-than-comprehensive trade deal.
  • Assorted business sentiment opinion polls are due. We know from official data that fewer people are answering surveys. We know from this data that people are not answering these surveys accurately. Correctly answered surveys would be near 100.

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