Trials and trade

Posted by: Paul Donovan

21 Jan 2020
  • The impeachment trial of US President Trump gets underway today. Markets are not that interested. This is partly because the outcome is seen as relatively certain, and partly because the alternative would be US President Pence. A Pence presidency is assumed to leave policy largely unchanged (perhaps with less tweeting). The main impact from markets would be if the trial changed expectations about the November election.
  • The Presidential twitter feed has been active on trade issues. French President Macron has been tweeting about progress with the US on threatened trade taxes. French porcelain napkin ring manufacturers will doubtless be relieved by signs of progress. Technology companies may also feel some relief, though digital taxes are clearly a political topic. Uncertainty does remain too, with a rather non-committal US response.
  • UK labor market data is due – obviously an important support for the UK consumer. (UK retail sales were weaker recently, but mainly because of difficult seasonal adjustments. UK consumers are spending more.) The average earnings data is likely to be a focus.
  • The German and Euro area ZEW sentiment surveys are due for release. Survey data always needs to be treated with caution – but the data has been on an improving trend.

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