Spinning away from war?

Daily update

Markets have not fully regained their earlier optimism bias, but are a little more cheerful. Yesterday, US President Trump signed an agreement essentially reaffirming the status quo with Greenland and Denmark—but spun it as change. Could a similar course be pursued with Iran? Trump’s UN speech was aggressive but both the US and Iranian regimes make frequent use of hyperbole. After the speech, there was playground diplomacy, with Qatar shuttling between the US and Iran carrying notes.
US diesel prices hit another record high yesterday. Trump signaled a willingness to ban diesel exports. That would require a congressional vote. House Speaker Johnson has been reluctant to have members gathering together in case unwelcome issues resurface.
The data calendar is littered with business sentiment polls. In theory, much of the content could be objective and fact based. In reality, these are sentiment driven and subject to bias.
There are some central bank speakers on the agenda, including Barr from the US. The Federal Reserve’s Barkin yesterday suggested that one rate hike might not be “enough”. The recent single rate hike has no impact on economic growth or inflation; it only makes indebted consumers and companies more fragile. That would not be enough if the Fed wants a non-oil economy recession.