Of mountains and molehills

Daily update

Yesterday’s Anglo-US trade framework was preceded by substantial media spin but ultimately revealed only minimal substance. US consumers are worse off than in January, though better off than a week ago. Some UK exporters get better conditions, some US exporters might get better conditions. Yesterday’s Bank of England’s rate cut was a more important economic event.
Two things did matter from yesterday’s media opportunity. US President Trump signalled that US consumers will continue under the burden of a 10% universal trade tax (with a few “friends and family” tax discounts). Trump also suggested all imports were bad for the US, setting a tone for future trade discussions. If this is truly what Trump believes then the administration’s trade policies must be considered a negative for US living standards.
Investors face a pontification of central bankers. The Bank of England’s Governor Bailey and Chief Economist Pill speak, having voted on different sides in yesterday’s rate cut. The several US Federal Reserve speakers will presumably collectively shrug their shoulders at the uncertainty of everything.
China’s April trade data is due in the near future. This will be affected by the US tariffs. However China has a history of avoiding Trump’s trade taxes, and trade with other nations should not be too disrupted.