Daily update
Daily update
- Another day, another round of Gulf war stories—the latest originated from semi-official Iranian sources, so markets took them more seriously. Iran’s apparent suspension of negotiations with the US prompted US President Trump to attempt a ceasefire between Israel and Hezbollah. Market opinions differ as to the terms and effectiveness of this.
- Rising oil prices hurt US farmers, directly (tractors use a lot of fuel) and indirectly (via things like fertilizer costs). Trump countered the rising costs from war policy by lowering costs from trade war policy, cutting agricultural equipment tariffs. Farmers planning near-term investment spending benefit by paying lower tariffs—farmers who are just growing crops face higher input costs without relief.
- Eurozone May consumer price inflation data is a non-event because a) we know the provincial data already and b) the ECB seems determined to commit a policy error and raise rates regardless of the economic signals.
- US job openings “data” is due. If this were accurate it would be really helpful, but the survey response rate is very low. Policy uncertainty seems to have paralyzed decision making by US chief executives, leading to a “no hire, no fire” approach. That gives enough job security to allow consumers to reduce savings to meet higher prices.