A MACRO MINUTE: Trump vs Allies, Trump vs May, who's next?

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07/12/2018 | 09:29 am
Welcome back to our daily review of macroeconomic and geopolitical news impacting financial markets around the world. Today's roundup has a special Trump feature. In other news, the NATO summit holds a lot of surprises, while the thorny subject of immigration is set to be debated in Austria.

Donald Trump. The US President couldn't keep his tongue to himself at the NATO summit in Brussels. He deplores that the target of 2% of GDP spent on the military is reached by only 5 out of 29 countries and therefore thinks it is worthwhile to increase the figure to 4% of the GDP. For now, the ricochet effect of the trade war is visible on the dollar: the greenback is pushed upwards as it is considered a safe haven by investors.

The dollar index climbs with each announcement of trade sanctions for 6 months (Source: Bloomberg)

NATO. A brief summary of the agreements reached yesterday by the 29 heads of state: the threshold for military spending remains at 2% of the GDP by 2024; Russia will have to answer to the accusations about the annexation of Crimea, the nerve agent used in the United Kingdom and the destruction of the MH17 airliner; the denuclearization in North Korea and Iran must continue its course; Macedonia is invited to join the Alliance.

Brexit. After many twists and turns, Theresa May is expected to present the Brexit "White Paper" this Thursday, explaining in detail the UK's future relations with Brussels. This "soft" Brexit project, much-criticized across the Channel, will subsequently be accepted by the European Union. Soon to be isolated from the European continent, May will meet her American counterpart today, an opportunity to consolidate their commercial ties.

European Union. The 28 Interior Ministers meet in Innsbruck (Austria) today to develop new immigration plans. The issue of "landing platforms" in Africa will be at the heart of the debate.

Floriane Rousseaux
MarketScreener.com 2018
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