US Retail Sales disappoint ahead of FOMC meeting

While the global economic recovery appears to be moving along at a fairly rapid pace, with many countries ending the final stages of covid-19 lockdowns, macroeconomic data is becoming increasingly important to monitor. This is in part due to the fact that for quite some time, indices and stock prices appear to no longer reflect the actual performance of the overall economy after the unprecedented interventions by central banks. While today’s US retail sale figures showed a drop of 1.3% compared to the expected -0,6%, it is interesting to note that this comes after the above expectation inflation figures which indicated an increasing pressure on the US consumer who has also exhausted the latest stimulus cheque and is now contending with a segmented economy which is still dealing with significant turmoil, both politically and economically. Focus once again shifts to the FOMC, whose meeting this week will be closely followed after constant downplaying of inflation fears, which it called “transitory”. While other central banks, including the ECB, have decided to remain cautious, it remains to be seen if the FED will finally react to the signs coming from consumers by adjusting it’s policy, or if it will once again remain on the sidelines.

UK-Australia trade deal reached as some concerns arise

The topic of post-Brexit trade deals was a long discussed one leading up to the negotiations deadline, and while the UK has signed several trade deals over the last year, they have been rollovers of ones the UK already had as part of the EU. Boris Johnson’s government has completed its first new trade deal, and while it appears to aim to allow free trade and exchange of goods and services with one of the UK’s closest allies, several skeptics are unsure about the deal due to the lack of detail and oversight. Some of the concerns raised include uncertainty for British farmers, along with unclear standards regarding food safety and animal welfare which would require extensive consideration to amend. On the other hand, the deal could potentially allow the UK access into the broader Asian market through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which would open many possibilities for UK consumers and businesses. As with most deals, the details are going to be the key factors to keep an eye on as the UK continues to set itself up in a post brexit scenario.