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Art monopolizing headlines: strategy customs:
A look at the coming day on European and world markets, by Wayne Cole.
It is becoming more. In addition, more obvious that, for President Trump, the customs prices are above all a practical means of dominating the media cycle and ensuring a place in one. Consequently, Forget the months of long and complex commercial negotiations aimed at a win-win result. Moreover, Why bother when you just have to threaten a price of 30 % by a tweet on a Saturday. Similarly, morning to appropriate the news all weekend?
Believing that it is mainly a negotiation tactic, Asian markets have only backed down moderately. Nevertheless, The term contracts on the S&P 500 give in about 0.4 %, while most regional indices drop only slightly.
The euro backs up marginally, but European term contracts lose a clearer 0.7 %. Consequently, so much it art monopolizing headlines: strategy customs seems difficult to imagine how Brussels could meet Trump’s requirements, especially since it is not clear what he really wants. EU customs duties on American products are already so weak that it is little to reduce. while granting exemptions on national taxes and regulations remains very delicate.
It is also possible that the stoic reaction of the markets is ultimately too optimistic. Investors think that Trump really wants to avoid a new stock market rout. and that he will release the pressure on prices when the situation becomes critical. But with American actions reaching historical heights. bond yields well below their peaks, Trump could be tempted to think that the markets are now on his side and that they understand how beautiful “the prices are.
Be that as it may. it seems certain that the effective rate of American prices will approach the levels of the Smoot-Hawley law, which had art monopolizing headlines: strategy customs contributed so much to the great depression. We will then see if Trump is right and the vast majority of professional economists are mistaken.
For the moment, the prices have not yet made it possible to magically resolve the American trade deficit. China announced today that its trade surplus with the United States had jumped 48 % in June. reaching nearly $ 27 billion, while its global exports exceeded forecasts.
Trump also found the time to rekindle his quarrel with the president of the Fed. Jerome Powell, declaring that it would be “great” that the latter resigns – eight years after having appointed him to this position.
Even more worrying. Kevin Hassett, economic advisor of the White House, suggested this weekend that Trump could have reasons to dismiss Powell due to cost exceeding when renovating the Fed seat in Washington.
Analysts believe that a president of the Fed chosen by art monopolizing headlines: strategy customs Trump would follow his instructions by seeking to aggressively lower interest rates. even if the membership of the rest of the FOMC members remains uncertain.
This orientation could lower short -term rates. but longer term yields would likely climb, investors demanding compensation for the risk of faster inflation, like what happened in Turkey.
Key events likely to influence the markets on Monday:
- Member of the ECB Board, Piero Cipollone, auditioned before the Committee on Economic and Monetary Affairs of the European Parliament
Art monopolizing headlines: strategy customs
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