Main macro themes
Trade war. A meeting between EU Commission President Jean-Claude Juncker and US President Donald Trump resulted in a plan for further negotiations and Trump vowed not to put tariffs on cars. However, China and the US took another step into the tit-for-tat trade war, imposing tariffs on each other on 6 July for goods worth USD34bn. The US is investigating another 10% tariffs on goods worth USD200bn. There are no negotiations taking place and Trump has said that he is willing to put tariffs on all Chinese goods worth USD505bn. Trump again accused the EU and China of manipulating their currencies.
Policy. China added fiscal stimulus to the mix of policy easing this week to counter 'external uncertainties'. It came on top of monetary easing recently. Fed chairman Jerome Powell's semi-annual hearing in Congress on 17 July indicated a continued moderate hiking cycle from the Fed but increased focus on the trade war. Trump created new headlines when he criticised the Fed for raising rates.
Brexit . The Conservative Party has become even more divided following PM Theresa May's shift towards a softer Brexit. Negotiations with the EU will still be complicated.
Riksbank. The minutes on 12 July indicate that the discussion concentrated on the importance of the underlying inflation trend (CPIF excl. Energy). Deputy Governor Per Jansson said that it may be necessary to delay the rate hike into 2019.
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