Daily update
Daily update
- There is little macroeconomic data today. Asian markets have been moved by corporate news, with micro evidence of additional weakness from China’s consumers. At a time of structural change, the assumptions behind macroeconomic data can become further and further removed from reality. Corporate data should be more precise, but listed companies are relatively unimportant in most economies.
- Politics also has a way of filling economic data vacuums. News that former US President Trump will be indicted on charges of trying to overturn the 2020 election is unlikely to be of significance to markets. Investors care about politics if it changes policy outcomes (in this case, by shifting election probabilities). In the partisan environment of the US, it seems unlikely that voters will challenge their existing biases on this news.
- The Bank of England’s Mann, who errs to the hawkish side, is to speak. Rate cuts are the standard assumption for most major central banks—investors are more interested in the pace of easing.
- Similarly, remarks from the Federal Reserve’s Bostic will be looked to for indications as to the scale of rate cuts. The Fed should have begun easing some months ago, so the scramble to ease raises questions about how large the initial rate cut is likely to be.
