Have some more uncertainty

Posted by: Paul Donovan

19 Feb 2019
  • The EU is promising to tax its own citizens if US President Trump taxes Americans who buy the cars they want to buy (rather than the cars President Trump wants them to buy). This is not new information for markets, and should be seen as part of the posturing necessary in negotiations.
  • The noise from US-China trade negotiations is generally positive, but markets have moved to price in no new taxes here, as well. There is perhaps limited upside from more upbeat language. The Japanese are saying that they see no new taxes from President Trump on their cars.
  • Apparently negotiators are working on the Irish problem in the interminably tedious EU-UK divorce. Markets are unlikely to put too much faith in this. The UK's opposition Labour Party split may encourage some governing Conservatives to consider a general election. Just when markets thought political uncertainty could not increase in the UK.
  • The US Federal Reserve's Mester is to speak – the unity of spin from the Fed at the start of the year has become a little less unified of late. In the wake of some rather dubious quality retail sales data, the retailer Walmart will be reporting their results.