Wars and trade wars

Daily update

Market reactions to Friday’s events in Alaska are likely to be muted. The Russia-Ukraine war is not producing many market significant outcomes. While US President Trump seems to be following Russian President Putin’s lead at the moment, the changeable nature of administration policy means investors are not likely to take any direction as certain.
EU trade data for June is due. US trade taxes have led to abnormal trading patterns, as US importers have desperately shifted the timing of demand to try and avoid trade taxes. The numbers are more likely to be of political than economic significance. However, the non-US trade may hint at how well the world might work with a more isolated US trade position, and whether there is any evidence of “dumping” exports into Europe.
Friday’s release of US July import price data showed, again, that exporters to the US are generally unwilling to offer any new price discounts to offset trade taxes. The question is not whether trade taxes can be passed up the supply chain, but where lower down the supply chain the burden will ultimately land.
The US housing index is due. Housing is important to the US economy, but at this juncture it is probably not the focus for consumer behavior.