Daily update
Daily update
- The US postal service has stopped receiving parcels from mainland China and Hong Kong after US President Trump taxed buyers of goods from mainland China worth less than USD 800. Meanwhile, restaurants are surcharging egg-eaters. These are trivial issues, but they affect economic perceptions. Small parcels make up less than 5% of mainland China’s exports to the US, but individuals either do not receive those parcels or abruptly learn that tariffs are paid by consumers, not exporters. Egg prices were a key political issue, and some consumers (wrongly) use them as a measure of wider economic wellbeing.
- Trivial issues can affect economic perceptions. The question for investors is whether perceptions then affect economic reality. Consumers had negative perceptions under US President Biden, but were better off in reality which kept them spending and supported the economy. The persistence of that perception-reality divorce matters to the economic outlook.
- Various business sentiment poll are due, and will be plagued by the normal problems. French December industrial production data is not a market focus, but the US December trade balance may be looked to for evidence of pre-tariff stockpiling.
- Oil prices rose slightly as Trump directed US Treasury Secretary Bessent to increase economic pressure on Iran. Investors are not taking Trump’s comments on Gaza seriously.