Trade

US growth has slowed in recent weeks. This can be seen in the weaker data on retail sales, consumer confidence, services PMIs, and a swath of housing releases (notably starts, existing home sales, homebuilder confidence, and stock prices). It can also be seen in the decline in GDP tracking estimates. The Atlanta Fed's GDPNow model projects growth of 2.3% in Q1, down from a peak of 3.9% on February 3. The Citi US Economic Surprise Index has also dipped into negative territory.

The Trump administration posits that the world owes the US for the provision of its security. In this report, we perform a quantitative analysis to come up with a naïve estimate of the cost of that peace. More importantly (and more seriously), our qualitative assessment argues that save for a number of frontline countries that rely on the US defense umbrella, the vast majority of the world faces manageable security threats due to the complex multipolar global environment and a growing number of alternatives to the US security blanket.

The rise of the far-right is challenging mainstream German politics. The CDU/CSU and SPD will govern Germany again after the election. A ceasefire in Ukraine will offer some relief, but Trump’s policies will keep tensions high. 

In his latest Thoughts Of The Day, Peter Berezin discusses the different moving parts of the global economy today and the potential impact of Trump's policies.

Europe is about to become President Trump’s next target. The good news: a US/EU trade war will be short as common ground to achieve a deal exists. The bad news: European assets remain at the mercy of heightened uncertainty. How should investors position themselves in this tricky context?