Daily update
Daily update
- The Washington Post reports that US President Biden will prevent Japan’s Nippon Steel from acquiring US Steel, citing national security grounds. There will probably be a legal challenge to this, as national security might be hard to justify. Economic nationalism, however, is not just about trade in goods—it also often covers capital flows. Interestingly, economic nationalism goes both ways on capital flows: “how dare foreigners buy our assets?” for inflows; and “why are you not investing at home?” for outflows.
- Yesterday’s US factory orders data release showed the expected strength in orders, contrasting with the recent unrelenting pessimism of the ISM sentiment poll. While official data also have quality problems, they tend to be fewer than with sentiment data. Services sentiment is due today. Germany will offer its July factory orders numbers, which may be more pessimistic.
- Japanese July pay data were unexpectedly strong, supporting the idea of rate increases. What really matters is whether this translates into stronger consumption (and wages are less relevant in an ageing society although many Japanese do work past retirement age).
- Second-quarter US productivity and unit labor cost data will be revised. They will be revised again in the future as GDP is revised (probably positively).
