Onwards and upwards or levelling off?

Posted by: Paul Donovan

07 Jul 2020

Daily update

  • German May industrial production came within the consensus range of -9% to +25.6%. Data keeps coming within forecast ranges – economists are good at this stuff. The EU Commission's GDP forecasts (which are not a range) are due and will be somewhere between a guess and an approximation. The UK just announced that growth, inflation and productivity data for the past 20 years is wrong and the economy was stronger than reported.
  • US Federal Reserve President Bostic suggested that the US economy was levelling off, as states stop easing or being tightening lockdown restrictions. Both the restrictions imposed and the fear of the virus are less pronounced than three months ago. Nonetheless, new restrictions may encourage Congress to offer more stimulus in fiscal package number five.
  • The UK government has leaked some details of fiscal stimulus. Loft insulation is to be a key part of the UK recovery.
  • US Secretary of State Pompeo suggested that Chinese social media apps may be banned in the US, including Tik Tok. The issue is not the possible devastation of the younger generation (they can find alternative entertainment in the videos on www.ubs.com/pauldonovan ) but the fact that specific companies may be targeted in a tense political environment.

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