UBS: "Political Entertainment While We Await The Fed"

Four quick, and unexpectedly sarcastic bullets, from UBS' global chief economist Paul Donovan, on what will occupy markets in the coming days.

  • The US Federal Reserve dominates the near term, with markets not looking for a quantitative policy tightening this month. The Fed's challenge is communicating long-term real world policy to investors obsessed with hashtag economics. (@PDonovan_Econ)
  • Manufacturing purchasing managers' opinion polls are due. Markets and media love this data. Including preliminary data, it is out twice a month. There is lots of it. There is lots of superficially interesting details. The fact that the correlation of this data to reality has collapsed does not seem to matter - it is something to talk about.
  • The Russian question has two strands this week. The US Congress is expected to pass sanctions against Russia, which the US president may not veto but the EU will object to. And various members of the Trump family are to testify to Congress on Russia ties.
  • ¬†Japanese PM Abe's approval rating has fallen significantly. Unlike the US, Japan is a consensus-based political society and this may hinder Abe's ability to pass legislation through the Diet