- US President Trump suggested that the US economy should decouple from China. In one sense, this has been happening for some time as a function of the fourth industrial revolution. Localization has been working against long and complex global supply chains. However, localization allows global companies to make goods close to their customers. Decoupling implies only domestic companies can serve domestic customers.
- The rhythmic sound of economists bashing their heads against their keyboards can be heard across markets, for the interminably tedious EU-UK divorce is back (now with added randomness). UK Prime Minister Johnson is suggesting that the deal negotiated by UK Prime Minister Johnson does not make sense. Markets are still willing to regard this as posturing ahead of a deal (by tradition, a last-minute deal).
- Japanese second quarter GDP was revised very slightly lower—which is unusual. Most economic data is being revised higher, as statisticians initially underestimated the ability of people to adapt to the pandemic. Inventory levels were weaker, which suggests consumers were spending faster than companies could react.
- Eurozone second quarter GDP is also due for revision—less of a focus as we have national data (and the national data is not consistently calculated). German export numbers for July showed ongoing improvement.