Good morning, this is Paul Donovan, Chief Economist at UBS Global Wealth Management. It's six o'clock in the morning London time on Thursday the 23rd of October. There has been a small upward blip in the oil price, which some areas of the media have sensationalised into a jump.
This follows the announcement of the United States blacklisting two Russian oil companies. Europe is set to announce further sanctions against Russian energy today, though that has been anticipated for a while. US President Trump intends to speak to China's President Xi next week about China's purchases of Russian oil, presuming that the meeting with Xi still goes ahead.
The economic implications of this move are negligible, however. The recent decline in the oil price far outweighs this blip, and similar upward price shifts took place as recently as September. If it were not for the political overtones, this shift would pass unnoticed.
Trump has also talked about resuming subsidies to US farmers, even as the US government shutdown has now emerged as the second longest ever. The record of being the longest ever shutdown may also well be reached, in spite of the unitary control of both legislature and White House. US farmers have not been receiving US government money during the shutdown.
Indirectly, Argentinian farmers have. That combined with labour shortages has started to create political tensions. Last week, the US Department of Agriculture lowered the minimum pay for seasonal agricultural workers to try to encourage farmers to hire more of this group, in order to offset concerns that labour shortages might create instability in US food production.
There are some sentiment opinion polls due out, which in the normal course of events might thus be dismissed. The French business confidence surveys may get some attention, however, because they come against a backdrop of political instability. Care is still required in interpreting these results.
It's hard not to reflect the media spin when the cacophony of noise from journalists is quite so loud. But doing so means that the economic realities an individual business is experiencing may be overwhelmed by the negative talk of pundits desperately seeking soundbites and clicks. The Bank of Korea left rates unchanged.
Almost everybody thought that they would. A couple of economists were expecting a cut, or perhaps more cynically, wanted to stand out from the crowd. The Korean economy has an export focus, but the AI enthusiasm and normal trade away from the United States has meant that this focus is not necessarily a terrible thing.
The US Federal Reserve and the European Central Bank are now both in pre-meeting quiet periods. That seems a little unfair given the US shutdown is also depriving markets of swathes of economic data. That's all for today.
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