Growth increasingly sensitive to trade as 2018 progresses - ANZ

According to analysts at ANZ, the recent escalation in trade tension poses downside risks to economic activity as H2 2018 gets underway.

Key Quotes

“The political economy of US and Chinese trade policy make an early resolution look difficult.”

“A softer export performance has underpinned the downward revision to euro area (EA) growth forecasts for this year. Trade talks with the US are needed to prevent a further deterioration in the current outlook.”

“As well as direct effects, an escalation in trade tensions would potentially hurt growth indirectly through tighter monetary conditions (volatility) and delayed plans for hiring and investment.”