Perceptions versus realities

Daily update

US President Trump has declared trade talks with China “not easy”. There may be a difference between the administration’s perception of its bargaining position and reality. With the 90-day deadline to do deals approaching, no deals have yet been made—and the UK trade agreement has not come into effect. There are suggestions that Trump will retreat from export restrictions on chips in exchange for some so-called “rare” earths.
The UK’s May BRC retail sales figure was weaker than consensus– but the consensus is made of only three forecasts (and those three forecasts are normally a long way from reality). Weather and the timing of Easter are possible causes—UK labor market data should show UK consumers are doing OK.
Bank of Japan Governor Ueda said that trade taxes complicated the economic outlook (which is true everywhere, except perhaps the Heard and McDonald Islands). Their remarks on inflation were a little cautious, suggesting no rush to raise rates and allowing the yen to weaken a little.
Trump is to send 700 Marines to Los Angeles, in defiance of local authorities. Protests have been limited in scope, but international media coverage will focus on the sensational—opening a gap between international and domestic investors’ perceptions of US stability.