Daily update
Daily update
- The US “Super Tuesday” primaries offered no real surprises for markets as to the outcome. However, opinion polls seem to be the clear loser. The Republican primaries were the main contested votes, and there notable errors in predictions of former US President Trump’s victory margin.
- Poor polling predictions are a problem for markets. Markets rarely price political risk well. In an increasingly polarized world, banks and brokers use “opinion polls are predicting” rather than “we think” to avoid antagonizing clients. There will now be fewer opportunities to compare polls with actual outcomes, but there is clearly a chance polls mislead markets and November produces a Brexit or “Dewey defeats Truman” surprise.
- Federal Reserve Chair Powell testifies to a House of Representatives committee. For there to be market valuable information the right questions have to be asked and informed answers need to be given. Market valuable information may be lacking today. A general hawkish accent is probably assumed by investors.
- European January retail sales data is inflation adjusted, but does not include any measure of having fun. Some further weakness is anticipated. The US JOLTS labor force data is due. This does not measure vacancies, only publicly advertised vacancies, so may better reflect labor churn than labor market capacity.