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  • Post the G20 meeting there was considerable investor confusion as to what exactly had been agreed between Donald Trump and Xi Jinping- setting aside speculation the only credibly confirmed announcement at this stage was the temporary cessation of scheduled tariffs.
  • The “Trade War” confusion saw a flattening of the US yield curve (UST 10 – UST2) which raised investor concerns with regards the medium-term outlook for the US economy and caused equity market volatility.
  • US employment data, on a headline basis, disappointed but probably not sufficiently to restrain the Federal Reserve from increasing short term rates on Dec 19th.
  • Despite trade risks and market volatility an ISM reading of 59.3, an unemployment rate of 3.7% and average hourly earnings growth of 3.1% points to a healthy underlying US economy. (See graph on US Unemployment rates)