MACRO ANALYSIS: German Sensitivity Could Support Firmer Retaliation [2/2]
Feb-19 15:34
- One area where there can be a greater argument for the lack of dovish reaction at today’s open is that Germany’s greater sensitivity to these sectors sees stronger support from the largest EU member for retaliation beyond non-tariff measures (NTMs).
- This Sunday’s German election muddies proceedings but comes sufficiently ahead of these early April deadlines.
- German exports of vehicles to the US were worth 0.8% German GDP in 2024 (vs an equivalent 0.3% GDP for EU exports to the US) whilst medicinal and pharmaceutical products were worth 0.6% GDP (similar to the 0.7% for the EU).
- On the same net trade basis as in part one, auto net exports were worth 0.6% GDP in 2024 (vs 0.2% for EU) and 0.5% GDP for pharma (0.4% for EU).
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US: Waltz Resignation Shrinks Republican House Majority Until April
Jan-20 15:34
The United States House of Representatives has gaveled in for a pro-forma session to formally accept the resignation of Representative Michael Waltz (R-FL), tapped to serve as President-elect Donald Trump's National Security Advisor.
- Waltz's resignation is expected to be followed by the registration of Rep Elise Stefanik (R-NY), who will serve as Trump's ambassador to the United Nations.
- The two resignations, along with the exit of former GOP Rep Matt Gaetz (R-FL), will take the House balance of power to 217 Republicans, 215 Democrats, and 3 vacancies (Waltz, Gaetz, Stefanik).
- Special elections will be held to fill the two Florida seats on April 1st. A special election to fill Stefanik's seat will be called by New York Governor Kathy Hochul (D-NY), who may seek to delay the special election for as long as possible - feasibly until mid-May.
- Until the vacant seats are filled, House Speaker Mike Johnson (R-LA) cannot drop a single Republican vote in any vote on the House floor, assuming all Democrats are present and voting.
- The fine margin is unlikely to affect Johnson's reconciliation agenda, which targets floor votes in May. However, the razor-thin margin may hand Democrats some additional leverage talks to avert a government shut and raise the debt limit in mid-March.
BOC POLLS: CANADIANS SAW RECESSION, INFLATION AFTER TRUMP WIN
Jan-20 15:30
- BOC POLLS: CANADIANS SAW RECESSION, INFLATION AFTER TRUMP WIN
- CONSUMER INFLATION EXPECTATIONS REMAIN ELEVATED IN BOC SURVEY
- BOC: CONSUMER CONFIDENCE AIDED BY VIEW INTEREST RATES FALLING
BOC: BOC Polls: Half Of Consumers See Recession; Firms See Inflation Pressure
Jan-20 15:30
- BOC survey showed nearly half of consumers expect a recession over the next year. Consumer surveys conducted Oct. 31 to Dec. 3.
- BOC says uncertainty around new US administration is prevalent among firms.
- In a separate Business Leaders' Pulse survey in December, 40% anticipated negative effects from the new US administration mainly due to higher input costs amid trade tensions. Impacts on selling prices were mixed with some planning to raise prices while others holding increases back to stay competitive.
- Business executives see higher cost pressures. Inflation expectations are unbalanced. Some 51% anticipate inflation at 2%-3% over the next two years. Another 20% of those surveyed said they expect it to be above 3%.
