Move along, no recession to see here…
Late on Sunday evening, the top bods at 1600 Pennsylvania avenue, DC — The Whitehouse to you and I — announced, rather emphatically (shock!) that the US economy was not headed for a recession. Also that the ongoing trade war with China was having no effect on its economy. Well, did you really expect them to say anything less?! What’s really going on… Read on to find out.
What’s this all about?
Mr. Trump’s best economic bud, Larry Kudlow, said that trade deputies from both the US and China would have a chat within 10 days and “if those meetings pan out…we are planning to have China come to the USA”. The hope is that these meetings will bring an end to the trade battle that’s playing havoc with global economic growth and ruffling more than a few feathers.
Hope is a funny word. If you’ve only just been introduced to the US-China standoff, firstly, welcome back to planet earth, we’ve missed you; secondly, you’ll probably be feeling pretty chirpy reading Larry’s words — hopeful, even.
Kudlow went on to say that the United States remained “in pretty good shape”. He continued, “There is no recession in sight… Consumers are working. Their wages are rising. They are spending and they are saving.” Sound familiar? It’s so overly-positive that the president may well have written the statement for him!
Everything is rosy, then?
Well, the talks have been stalled for a while for good reason. Neither side wants to budge, it’s not going to be so easy and this is (surely) far from over. Instead, this appears to be the latest attempt by the Trump administration to claim that everything is rosy, hoping to buoy the markets and restore some lovely consumer confidence. We’re getting pretty used to those now, right? We live in hope that this time it’ll be different, that it’ll be more than words, but we’ve been here before!
This story impacts everything, everywhere. So, traders of all flavours — from forex scalpers to tech stock swingers — should keep an eye on events here, the threat of strong volatility is always lurking.
All the other important stuff coming up this week
Trading is all about information. Good traders gobble up as much of this delicious stuff as they can get their hands on, but that can lead to indigestion because the most crucial of crucial info isn’t always so easy to find. To save you from tummy trouble, we dish up the most important stuff for you here each week — we’re nice like that! Here’s what should be on your radar:
● Wednesday sees the release of the The Federal Open Market Committee (FOMC) minutes, a report issued 8 times a year by the governors of the US Federal Reserve. It’s a biggie, serving as an excellent guide to the future US interest rate policy — something USD traders should be looking out for.
● On Thursday, it’s time to hear the preliminary German Manufacturing Purchasing Managers Index (PMI) reports announcement, a key measure of the German manufacturing sector — a massive sector in Europe’s biggest economy. Don’t miss!
● The chair of the Fed, Jerome H. Powell, makes his next speech on Friday — which is always a key moment uncovering vital info about the US economy.
● Finally, the G7 — the coolest finance cats of the world’s seven largest economies — are due to meet on Saturday. Traders should pay close attention to this event as it might bring a new dimension to the markets.
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That’s your lot! See you next week.
The Contentworks Team
