Australia-UK Trade deal

The UK has singularly failed to establish any trade deals which are materially better than they already had as members of the EU. The current great white hope is one with Australia. The problem seems to be that farmers object to having to face competition from a country with a huge competitive advantage over the UK in beef production. Ricardo understood that the economically rational decision was to get our beef from Australia, but he wasn’t a politician, so I have no doubt that we’ll succumb to some mercantilist fudge.

Market retrieves poise

Yesterday’s market dip was reversed to day. Those traders who BTFD were rewarded, as they usually are.

Specifically:

• Treasuries up,
• equities up, almost everywhere,
• commodities up apart from those dragged down by oil. The explanation seems to be that Iran will be released from sanctions, which will boost supply; the backwardation in futures prices in oil seems to be easing (i.e. the market is changing its mind somewhat about future oil prices being cheaper than today’s),
• precious metals retrace, a little,
• the dollar resumes it downward trajectory, against the JPY and EUR (approx 0.4%),
• bitcoin resumes upward momentum,

News

• US weekly unemployment claims fall,
• several frontier and developing markets report strong growth, and produce prices gains,
• housing market in Canada is still red hot,
• many European markets (incl. UK) were strong. UK factory orders strong.

Chart