ING’s Robert Carnell anticipates more clarity over the Brexit to emerge during this week. Mr. Carnell also seems to have optimistic view concerning the US-China trade relations while supporting the odds of a slow grind lower.
Key quotes
“Now, we either get a “meaningful vote” today, or more probably, a vote on the “programme motion”, which sets out the timetable for legislation votes over the days ahead. That, if it goes ahead, will still try to meet the October 31st deadline.”
“On paper, at least, it also has the votes to get through, though only by a whisker. 5 votes according to what I have been reading this morning.”
“Sterling has given back a bit of ground, but with the prospects of a no-deal outcome seeming to dim, that weakness may prove short-lived. I have some modest euro-denominated bills to pay, so I may wait a couple of days.”
“Risk sentiment more broadly is improving on growing hopes for a partial trade deal, and perhaps also a bit on looming Brexit relief.”
“Perhaps what this is telling us is that we are not about to lurch into some sharp slowdown, but that a continued slow grind lower is in prospect.”
“A more workable definition might be that a rate of global growth of 3% or less would constitute a global recession. Any guesses what the latest IMF forecast for global growth in 2019? It’s 3%, down from their earlier estimate of 3.2%. In other words, recession, already. They do forecast a pick up to 3.4% in 2020 incidentally. But I think that will be contingent on the trade war.”
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