Pricing bananas

Daily update

Yesterday’s US consumer price inflation data showed, as expected, faint hints at the effects of trade taxes and clearer examples of weak demand. The declining number of people wishing to visit the US helped weaken air fares. Goods where inventory is held for longer (like autos) avoided tariff effects for now. Imported goods with shorter inventory times—like bananas—saw price surges. Large consumer appliances had the second largest price increase on record. Producer price data may show more tariff price effects, as these goods sit closer to the point of import in the supply chain.
US President Trump said they would send letters to US trading partners, detailing the threatened 9 July unilateral trade taxes. Markets reactions have been a muted negative; investors have become conditioned to expect retreats from such threats. However, the uncertainty created may weigh on US investment and hiring in the near term.
UK April industrial production and trade data is due, but not a market focus. The UK’s trade agreement with the US has not changed reality (and would not appear in this data). The UK and US disagree over what their trade balance is.
There are nine ECB speakers scheduled today. Does the world need to hear nine ECB speeches? Perhaps not.