Trump trade so far is diverging from 2016 analogy. At the moment most markets see much smaller incremental policy change compared to 2016. On top of that, rates stay restrictive enough to slow the economy further: demand, employment, margins, inflation – are all softening.
Bonds aren’t selling off post elections, despite large intraday volatility on the election date. 30-year yields are basically flat in the last 2 weeks.
Dollar strengthens less than in 2016 too (percent change ytd).
A number of really weak economic surveys are coming out from EU, while unemployment in Germany is spiking. Output continues to slide, while expectations are dropping quickly too, according to S&P Global:
Unemployment is rising in Germany and France, expectations are deteriorating as well. Lower unemployment in Italy and Spain help keeping overall EU unemployment smaller.
Consumer unemployment expectations are slowly picking up further.
German vacancies are collapsing to absolute levels of 2015-2016.
Overall EU car registrations collapsed 18% year over year in August and ZEW points to more downside here.
Price pressures are easing at the same time in both manufacturing and services, even though motor insurance can continue to have an outsize effect on average services inflation.
Eurozone economic surprise index reversed this week and corporate earnings revisions are deteriorating.
German short term yields are starting to catch up with US move, which should probably continue. And bad news should be bad news for equities too.
MacroKid: my macro blog 