There is "elevated uncertainty", apparently

Posted by: Paul Donovan

17 Jul 2020

Daily update

  • Eurozone area consumer price inflation is due. It will likely under-report the inflation, but markets are really not very interested. The ECB left policy unchanged yesterday (but in a masterful manner). ECB President Lagarde suggested that there might be "elevated uncertainty" in the economy. Investors are suitably grateful for this insight.
  • The US Michigan consumer sentiment opinion poll is due. This data suffers two significant problems. The virus renders all survey data highly suspect, as people are not rushing to fill in forms in a pandemic. The partisanship of the US means that political bias may skew results.
  • US-China tensions continue, with the popular video social media app TikTok remaining in focus. Investors have acquired a degree of herd immunity to the rhetoric, however. If the tensions are either verbal, or focused on specific companies, markets do not seem to react.
  • The UK Prime Minister wants people to return to work in offices. The UK Chief Scientist suggests working from home might be a better idea. Around 45% of UK jobs can be done from home and the structural changes of the fourth industrial revolution suggest this is where we are heading. Trying to hold back the tide of change is, perhaps, futile.

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