9 July 2019

Monthly Economic Update

Every month, our economists study the macroeconomic situation. They analyse the events that have had an impact in recent months, and discuss possible consequences.

The art of the deal

Politics is increasingly driving economics, with escalating US-China trade tensions and subsequent ceasefire being a case in point. We doubt the truce will hold for long and Europe could yet get dragged into the conflict over the next few months. We believe a trade deal will finally be signed later this year, but not before the Federal Reserve has come to the economy’s aid with interest rate cuts. The ECB is expected to offer stimulus of its own, and the nomination of Christine Lagarde as the bank’s new president has added to this dovish view. Moreover, the political deal making in Europe, now under new leadership, looks set to be ramped up as Brexit looms large.

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