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Summary for the 25th of October

At the press conference, the ECB encourages governments with fiscal space to act in an effective manner to soften the economic downturn. Countries with high public debt, should let the automatic stabilizers from prudent policies and a structural balance, to operate freely. Draghi believes in the policy of negative rates, and that the positive effects from this policy outweigh its side effects. He denies that there are disagreements in the Governing Council about the decision made in September. The PMI for October from the EU Area hasn’t worsened. France shows improvements in the PMI data with value over 50 both in manufacturing and service sectors. PMI data from Germany shows a little improvement in the manufacturing sector but the service sector still weakens. The manufacturing index is at 41.9 showing a downward trend while the service sector is at 51.2. The data for US durable goods orders is lower than expected in September. Orders ex transport and defence decline by 0.5
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Summary for the 23rd of October Brexit on hold.

The British parliament has started the process of approving Boris Johnson’s Brexit bill. The first voting is approved by 329 vs 299 votes. Though Johnson has failed to the approval for the swift timetable that would have allowed the bill to pass the House of Commons by Thursday, thus making it less likely for the bill to be passed before the Brexit deadline of 31 st of October. The British’s CBI Industrial Trends Orders shows a fall to -37, the lowest value since the financial crisis, the index for the expected output increases while the rest of the indexes show a decline. The US’s existing home sales have declined by 2.2 percent from August to September, the decline is more than expected by the financial markets. The US housing market has been on a positive trend with increasing sales, housing constructions, positive sentiments in the sector, and increasing price for existing homes. Housing investments have been on a decline for the past six quarters, but this has changed t
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Summary for the 21st of October Brexit drama

On Saturday, the British parliament is withholding the final decision of the revised Brexit deal and forcing Boris Johnson to ask the European Council for an extension to the 31 st of January. Instead the parliament has greed on Oliver Letwin’ amendment, which states that there wont be a no deal Brexit until the parliament has agreed on the revised Brexit deal this week. And on Saturday night, Boris Johnson has sent an unsigned letter to the European Council asking for a Brexit delay as well as a personal letter to the Council asking the EU leaders not to delay Brexit. The US stock exchange has closed in negative on Friday after Johnson & Johnson has to recall 33 000 bottles of baby powder in the US after health regulators found trace amounts of asbestos in a bottle purchased online. Boeing has admitted that two of its employers in 2016 misled the FAA about the 737 Max and its technical system. Weaker than expected Chinese economic indicators also contributes to the negative
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Summary for the 15th of October

China’s balance of trade shows a fall in exports by 3.2 percent, comparing to a year ago and the imports fall by 8.5 percent, the first fall since May this year. China is the largest contributor to world economic growth, through the weaker imports, China’s economic decline is affecting the rest of the world economy, such as the Euro area. The Euro area’s industrial production for  August has risen by a little more than the markets have expected. The industrial production in the Euro area has been weakening since the start of 2018. Finland is currently holding the council of the EU presidency. At a press conference with the European Council President elect, Charles Michel, the Finnish prime minister, Antti Rinne, says that The EU needs more time to reach a Brexit agreement. Boris Johnson is hoping to seal a Brexit deal before the EU summit on Thursday, so that he will be able to present it to the British Parliament on Saturday for approval, in doing so, he won’t need to postpone B
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Summary for the 2nd of October -Weaker manufacturing outlook

Last week’s flash PMI estimates for the EU area and yesterday’ final PMI numbers are indicating that the weakening in the manufacturing sector isn’t country specific, but rather the weakening is across countries. The decline in Germany’s manufacturing sector is less than expected by the financial markets, while the decline in France is higher than expected. The same goes for Spain and Italy. The UK’s PMI index has increased by 0.9 to 48.3 and is more than expected, though 48.3 still indicates a weaker outlook. The US Manufacturing PMI has increased to 51.1 while the ISM index declines by 1.3 percent to 47.8, the lowest value since 2009. Despite weakening activities in the manufacturing sector for the developed countries, for the developing countries the outlook is still positive. The global PMI value in the manufacturing sector has risen from August to September. Past months’ decline has been due to weaker growth in the global trade. The WTO has updated its global trade forecast
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Summary for the 1st. of October -Impeachment

The US House of Representatives continues the impeachment inquiry against Donald Trump. The inquiry has been launched after President Donald Trump’s 25 th of July phone call with the Ukraine President Volodymyr Zelensky has been revealed, and that the conversation is about Trump pressuring Zelensky to investigate Trump’s political opponent, Joe Biden and his son. The secretary of state, Mike Pompeo, also is one of the people that have been listening in on the conversation. It is also revealed that the White House has curbed access to the content of the conversation between Trump and the Australian prime minister. The Senate Majority Leader, Mitch McConnell, would have no choice but to take up impeachment if the House of Representatives passes the articles charging the President with crimes. Boris Johnson is to present the Brexit plans to the EU leaders. He is expected to propose new plans for the Irish border. There have been talks about implementing customs checkpoints 10 miles
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Summary for the 20th of September

The Bank of Japan keeps its monetary policy unchanged while indicating further expansionary policy in the future. Swiss National Bank has downward adjusted its growth and inflation outlook while keeping the interest rate unchanged at -0.75%. Bank of England also keeps the interest rate unchanged at 0.75%. The central bank says that the underlying growth of the British economy has slowed, and excess capacity has opened within companies. Exports and investments are weighted down by weaker global growth and Brexit uncertainties, respectively. Growth in consumer spending remains resilient due to an increase in real household income. The fiscal policy for 2020 to 2021 is expected to increase the economic growth by 0.4% in the upcoming years. If the Brexit deal goes smoothly, and with some recovery in global growth, the central bank judges that it will increase the interest rate at a gradual pace. In the event of a no deal Brexit, the monetary policy response would be in either dir
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