- Trump’s Lawyer gets raided by FBI
- China suggests more liberal trade arrangements
By David Johnson
China’s President Xi Jinping surprised many when he vowed to liberalize automobile investment, protect intellectual property rights and to reduce the tariffs on car imports. These have all been demanded for a long time by European and US trade ministers. The Asian equities markets liked the news and European and US markets may well follow suit.
As yet, the US Dollar hasn’t strengthened on the news and that is a surprise; the US is likely to be a major beneficiary of such liberalisation. It seems US traders were distracted by the FBI raid on Donald Trump’s personal lawyer’s office in connection with payments to Stormy Daniels. They took some documents as well as bank records. The President is still denying any association with the ‘adult’ actress. The USD may recover a little composure later in the day and maybe the President will too.
Monday was notable for its lack of data but, the Pound did benefit from a strong report from the Halifax showing a sharp rise in house prices. Forecasters had expected a 0.1% rise but got a 1.5% move. Overnight we also had a positive retail sector report from the British retail Consortium. Once again, the forecasters suggested a small fall of 0.1% was coming but the actual result was growth of 1.4%. The UK economy is proving to be frustratingly resilient for those who would talk it down.
The other overnight news was a business confidence index from Australia and the result was disappointing. The markets had expected a rise to 12 on the index and that would have been an improvement on last month’s 9. The actual result was just 7. The Aussie Dollar is weaker as a result.
The rest of today is pretty quiet on the data front. We get a couple of central bankers speaking (Bank of England and Federal Reserve) and we get Canadian housing market data. The prime data is probably the US producer price indices which are forecast to be a tad down on the previous month. I doubt it is enough to move the USD significantly but, as we have seen in the last 24 hours, forecasters are not doing a great job right now and results that differ substantially from the forecasts have the power to shift rates.
And Yoko Ono’s exhibition organisers are working with the Canadian police to find an elderly woman who stole a rock upon which Ono had written ‘Love Yourself’. That apparently made the rock worth $17,500. The exhibition is described as totally interactive and, it seems, one woman took that very literally. Quite why that is true I have no idea but couldn’t she just get another rock and write on that. Seems like a lot of fuss about nothing.