Politics Still Dominating

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The clock is ticking

With barely ten months to go until the next US Presidential Election, we hope our US colleagues will forgive us from ruminating on that event and its implications for Asia form time to time over the coming months.  We are, after all, at one end of what has been a very nasty trade war, and what happens in the US and to the USD, does have very great ramifications for our region.

A story I picked up from the newswires this morning ran with the theme that the recent trade deal would go some way to offsetting any political damage to President Trump due to the impeachment process currently underway. I'm not sure I buy this view on a number of levels. 

For one, I'm not sure that the trade truce, or whatever you want to call it, has done all that much to lift President Trump's national approval. I took a quick look at Nate Silver's excellent FiveThirty-eight site this morning, which for amateur punters like myself, provides a quick insight into a political system that can otherwise be quite opaque. I can't see much of a trade deal spike. But neither do I believe the impeachment trial will do much to harm the President's approval ratings either. Depending on your politics, you will either accept all the evidence as damning, or conclude that this really is just a witch-hunt, and move along. So the conjecture of the article I referred to seemed a bit like an idea in search of a story. 

One thing that does still bear watching, however, is the state of the economy.

James Knightley sums up the state of the economy in the colour "Beige", the same colour as the Fed's regional survey of the economy.I can't add much if anything to this, but two US data points that came out late Friday Asia time and caught my attention this morning are the strong spike in new home starts (possibly weather related - this is not home building season, so perhaps a seasonal aberration?), and,maybe more worrying, the continued slackening in the JOLTS job openings. 

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