President Trump put a temporary end to the shutdown on Friday after signing a funding package that reopens the US government for business until 15 February. Federal workers will receive their back pay, but the president continues to hold firm on his demand for funding for a border wall, threatening to resume the shutdown if […]
The US government shutdown marched into its fifth week, making it the longest in US history, with 800,000 ‘non-essential’ federal workers and even more contractors affected. While it is concerning that there seems to be no end in sight, there are also some potential positive effects that could play out in the economy. Any damage […]
Economic data came in weaker than expected last week, especially in China and Europe, and we can anticipate messy forthcoming US data, given the ongoing US government shutdown. In China, manufacturing survey readings dropped into contraction territory, which together with hard data points toward continued growth deceleration in China’s imports and exports. At the same […]
The first week of the year delivered a series of conflicting signals and a complementary dose of volatility in markets. After 20 days of daily moves of over +/-2% in the S&P 500 in 2018, out of last week’s three trading days of 2019 alone, two were marked by daily moves of over +/-2%. In […]
In an attempt to quell the widespread unrest and disruption caused by the “gilets jaunes” protesting against fuel tax rises, French president Emmanuel Macron announced a fiscal plan to the tune of EUR10bn. Without countermeasures, this spending increase will push France into a deficit of above 3% in 2019, to as high as 3.4%. As […]
The arrest of Huawei CFO Meng Wanzhou by Canadian officials on a US extradition order brings a new layer of complication to the ongoing US-China trade dispute. Chinese telecoms giant Huawei Technologies has ambitions to be a global leader in the next generation of 5G wireless network technology, which has equipment vendors around the world […]
As expected, the US and Chinese presidents Donald Trump and Xi Jinping met to discuss trade alongside the G20 summit in Buenos Aires. For now, a tentative truce has been agreed, with Trump calling off further tariff rises in January. On its side, China will purchase an unspecified amount of goods from the US in […]
Brexit and oil kept their centre-stage positions in last week’s headlines. Despite initial opposition from France and Spain, all 27 EU members agreed to Theresa May’s Brexit deal by lunchtime at Sunday’s European Council meeting. Could this be an indication of how poor the deal is for the UK? Despite May’s insistence that there is […]
Oil is on a losing streak. 12 consecutive days of falling prices led to a rise in high yield spreads. Because this decline has been largely supply-, rather than demand-driven and on the front-end of the forward curve, we are not overly alarmed about the long-term prospects of the oil price at this point. However, […]
One-time Remain advocate, Jo Johnson (brother of leading Leave campaigner Boris), resigned from his position as minister of transport in protest at Theresa May’s handling of Brexit negotiations. Johnson’s departure signals an increased risk of no deal or a second referendum in our view, with a high level of uncertainty around the outcome persisting. Sterling’s […]
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