Daily update
Daily update
- The Liberal Democratic Party of Japan elected former economic security minister Takaichi as its leader, and thus Prime Minister-presumptive. Takaichi is seen as a pro-growth leader, and has signaled scepticism about the persistence of Japan’s inflation. This has supported equities, and may delay expectations of a Bank of Japan rate increase.
- French President Macron announced a new cabinet. This is essentially much the same as the old cabinet, with the merest hint of French polish by way of restoration (the finance minister has changed). The negative reaction from opposition parties might cause investors to increase the risk of another government collapse.
- The US is still doing whatever the US is doing, leaving the data calendar quieter. ECB President Lagarde is speaking—they spoke twice last week but investors are not prioritizing ECB policy. EU August retail sales are not a market focus, but do remind investors that the European consumer is still supportive.
- Bank of England governor Bailey is speaking, and there is more uncertainty about UK policy. The subject is likely to focus on investment. The UK is an interesting case—flexible working and online retail mean existing capital stock may be used more efficiently, potentially reducing the optimal investment level.