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The OECD released its latest interim report on the global economy and pointed out the usual concerns that currently make front page news. Trade wars, Emerging market concerns over a rising dollar, monetary policy, Brexit and the risk Italy causes further problems within the euro area. Everything we know, sometimes it would be helpful one would feel if these forums provided new insights or areas of concerns that the markets are not necessarily focussing on. Despite all these concerns they have only slightly moderated their estimates for global growth for this year and the next. The global economic growth they forecast for 2018 they now have at 3.7% from 3.8% and the following year, maybe slightly counter-intuitively they have marginally higher at 3.8% in 2019, down from 3.9%. One must bear in mind the OECD, in 2007, “believed the current economic situation is better than what we have experienced in many years”.
Sell on the rumour buy on the news, is an adage often bandied about in the corridors of trading floors. Trump confirmed last night that he intends to put a 10pct tariff to 200 bn dollars of goods imported into America from China. Ahead of this, there was some speculation last week that Chinese and American politicians will attempt negotiations. This move feels like president Trump wants to keep up the pressure on the Chinese to come to that negotiating table.
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