Daily update
Daily update
- One of the credit rating agencies (it does not matter which) downgraded the US government from something (it does not matter what) to something else. Markets care about the fiscal position of the US, and the repeated farce of the debt ceiling debacle. They do not care what credit rating agencies think about the matter.
- Former US President Trump has been indicted on criminal charges, again. Markets care when policy changes, which normally means when governments change. But it is too soon for markets to speculate on the 2024 presidential election, so markets do not really care about the indictments.
- One thing which does matter is a US congressional committee investigating two fund managers over investments into China. Regardless of the specifics of the accusations, the tone fits with the rise of economic nationalism. Economic nationalism is a double hit to the financial sector—global financial firms are vulnerable to attack because they are foreign, and the global capital flows that are the business of financial firms are vulnerable to protectionism.
- The data calendar is quiet. South Korean consumer prices continued their disinflationary path. US ADP payrolls may get attention because there is nothing else to talk about, not because they offer insight into Friday’s US employment report.
