Summary for the 5th of April 2019


The US president, Donald Trump, said yesterday that a trade deal between the US and China would be reached in four weeks. He said that many of the main issues had been agreed.

As mentioned in the last two previous posts, Liu He is in Washington and have been in talk with Robert Lighthizer and Steven Mnuchin. The talk started on Wednesday and will be continued today.
Trump said that the deal should be ready in four weeks, maybe a couple more additional weeks for the drawn up of paperwork. He also said that there were still differences that needed to be bridged.

Germany’s factory order fell by 4.2% from January to February. The market was expecting an increase of 0.3%. The decline for the last two months had led the factory orders to the lowest level in two years (paywall). The decline was from difference countries and sectors , export orders were weaker than domestic orders, especially orders from countries outside the Eurozone. Orders on automobiles fell sharply in last summer, then picked up through autumn, fell again and were in February the same level as in last summer.

The ECB accounts from the monetary policy meeting of 6th to 7th of March showed that some of the members in the council were worried about how the prolonged negative interest rates would affect bank’s profitability and the financial stability. The worries came after the ECB’s decision to keep the interest rates unchanged throughout 2019, and not just to the summer as previously decided. Most of the members expressed caution about committing the monetary policy to a long horizon. Mario Draghi mentioned the possibility of a system where banks could deposit up to a certain quota for zero interest rate, deposits that exceeds this quota would be placed for a negative interest rate.

Indices for 5th of April. 
Dow: +0.6% (4th of April)
S&P 500: +0.2% (4th of April)
Nasdaq: -0.1% (4th of April)
Nikkei: +0.3% (5th of April)
Chinese indices: Closed (5th of April)
STOXX Europe 600 Index: +0.09% (5th of April)

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