Daily update
Daily update
- Japan’s governing coalition lost its majority in the Diet lower house. Prime Minister Ishida signaled that he does not intend to resign, but a third coalition partner must now be sought. This creates market uncertainty. If political bargaining drags on, the Bank of Japan might delay raising rates. Opinion polls underestimated support for the opposition—a reminder that investment decisions should not be based on opinion poll evidence, anywhere.
- Former US President Trump reiterated that trade tariffs (a sales tax) might replace income taxes in the US. Trump is focused on tariffs, but this idea seems impractical: income taxes raise over USD 2 trillion per year; the total value of imported goods in 2023 was USD 3 trillion. The comment suggest that if Trump is elected, tariffs are likely, but the specifics are more campaign rhetoric than practical proposals.
- The Dallas Federal Reserve manufacturing sentiment poll is due. Ignore the headline numbers, and read the comments section. It is a reminder that political partisanship injects subjective bias into survey evidence.
- Israel’s military strikes against Iran over the weekend focused on military targets. This has allowed oil prices to drop (as oil capacity was unaffected). Iranian leader Khamenei has seemingly signaled a measured response, supporting hopes that the situation will not escalate.
