Daily update
Daily update
- The US detailed restrictions on investment in China’s technology sector. Reports suggest the UK may follow. This is not surprising, but is another manifestation of deglobalization (political interference in global trade / capital flows). As structural change sweeps the economy, scapegoat economics is likely to increase—blaming foreigners is always convenient. That encourages prejudice politics and economic nationalism. Whatever the merits of individual sanctions, the result is less efficiency.
- US consumer price inflation for July is due for release. Energy is less of a drag on the headline number. The deflation of durable goods (a continuous trend since December 2022) is likely to subdue the core. Two points beneath the headline hysteria: any decline in owners’ equivalent rent lowers inflation but does not actually benefit anyone’s spending power; remember there is unusual regional divergence, with parts of the US already having sub-2% inflation but Miami experiencing nearly 7%.
- Japanese July producer price inflation slowed, more or less as expected. Disinflation forces in Japan come from external factors, but also from relatively subdued wage growth.
- The European Central Bank will be publishing its economic bulletin. This is not market moving, but it is interesting to learn what the ECB thinks is happening in the economy—and to contrast that with reality.
