Daily update
Daily update
- China’s fiscal stimulus plans underwhelmed financial markets. There is a sense that consumer weakness has not been addressed directly (the weekend’s consumer price inflation data suggested consumer weakness). There might be a reluctance to admit that current policies are not working, or a desire to keep some fiscal firepower in reserve to deal with the risk of trade taxes in 2025.
- Weekend reports suggested former US Trade Representative Lighthizer may reprise his role in the next US administration. Investors have assumed US President-elect Trump’s campaign rhetoric will not translate into policy, but Lighthizer is known to aggressively advocate increasing US consumer taxes via trade tariffs.
- UK labour market data is due, and is unreliable. Immigration hints that the general state of the labour market remains solid—people tend not to migrate to weak economies. Concerns about the employment impact of the recent budget will not show up in this data.
- The US NFIB small business sentiment poll, and the German ZEW economic sentiment poll are due. In the past six days, surveyed views on the US economy have soared (if Republican) and crashed (if Democrat). As economic reality has neither soared nor crashed, that is a good indication of what drives sentiment measures nowadays.
