US may delay tax hike, to no one's surprise

Posted by: Paul Donovan

14 Feb 2019
  • The US government is indicating that it may delay its equity tax increase (also known as China tariff increase) by 60 days. Markets are now ‎anticipating a limited deal however. US corporate pricing power is on display with producer price data today, of interest as labor markets tighten (possibly increasing costs).
  • Chinese trade data was released with stronger export figures. There is a lunar new year effect (inconveniently for economists, the lunar new year does not stay still). Chinese data is also not known for its detail. But this may indicate once again that tariffs are an 18th century policy not suited to the 21st century.
  • Japan grew in the fourth quarter, recovering from natural‎ disasters. Capital spending was just marginally stronger than expected - and capital spending may be important to trade growth this year. German GDP data is expected to show a positive headline (the phrase "technical recession" is meaningless media hype) - but the detail may give a sense of the structure of growth.
  • The UK Parliament votes again on the interminably tedious exit from the EU. The UK general public does not care and is carrying on about its normal business.