US tax cuts (again)

Posted by: Paul Donovan

01 Apr 2020
  • Media reports suggest that US President Trump will cut taxes for US companies, by suspending trade taxes (tariffs) for 90 days. This will not apply to some of the goods partially made in China. The reports do emphasize that it was American companies that paid the taxes, and need the help with cash-flow.
  • Korean export data improved in March relative to February. This reflects the gradual normalization of the Chinese economy. There was evidence of a slowdown in exports in the final 11 days of March, reflecting the demand shock coming out of Europe and the US.
  • Business sentiment opinion poll data has come out of Asia, and is due in Europe and the US. The question is who is filling in these surveys? You have to be a fairly unusual person to rush to fill in a survey in a lockdown. Unusual people are not necessarily representative.
  • European unemployment data for February is due – only useful as a benchmark for the pre-crisis world. US Fed President Mester suggested US unemployment would go "above 10%" but not hit 30%. Around a quarter of US small businesses have less than two week's cash available. "Above 10%" may be a cautious way of putting things.

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