Daily update
Daily update
- Financial markets had, perhaps, hoped that the next US treasury secretary would serve as a defender of free trade in the administration, and at least seek to minimize the severity of US consumer tax hikes. Media reports suggest that the search is being broadened, and commitment to the tax increases is being sought. The challenge of the proposed tariffs is not just the rate, but also the breadth (and the possibility of universal blanket tariffs).
- Eurozone trade data is released against this backdrop. Trade data has not really been a market focus for years, but the politicization of selling US consumers things they want to buy means this may be more of a focus. Economic nationalism means that the bilateral trade balances with both the US and China might be politically weaponized.
- Several ECB speakers are on the agenda, including Chief Economist Lane and President Lagarde. However, markets are comfortable in their ECB expectations, and it is the Federal Reserve that is generating more uncertainty.
- Industrial production across the major economies has been a little soft in the latest data. One should not overinterpret one month’s data, and shifts in consumption patterns mean industrial activity is not the same thing as growth. Nonetheless, this may be worth monitoring.
