The noise
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The world’s leading economies have agreed a plan to ensure multinational companies pay a global minimum corporate tax rate of 15%. On Thursday the OECD announced the agreement between 130 different countries. Estimates suggest that Big Tech firms will pay up to $100bn a year more under the agreement. The rules are set to be put in place next year and implemented fully in 2023.
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The US non-farm payroll is due to be published on Friday at 1.30pm GMT. Coming at a time when the US recovery is becoming well-developed, expectations are high that another solid payroll report will be delivered. A total of 645,000 jobs are expected to have been created for the month of May, a significant improvement over the 266,000 in April, itself a significant miss on estimates. Meanwhile, the unemployment rate is expected to improve as well, falling to 5.9% from 6.1%.
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Rishi Sunak has confirmed that talks to secure City of London access to the EU have stalled. The chancellor said a deal on a comprehensive post-Brexit financial services settlement with the EU had not happened during his first Mansion House speech. Suggesting the UK would pivot away from Europe, he said he would build on deals such as a partnership on financial services signed with Singapore earlier this week.
The numbers
The nuance
In many ways, the Federal Reserve seems to spend as much time appearing competent to nervous investors as it does actually dictating monetary policy. At the time of writing, we await the US jobs report as markets traded flat or down, although the S&P 500 edged to a new all-time high on Thursday. The fear for investors is that robust jobs numbers will lead to the curtailment of Fed monthly bond purchases that have underpinned asset prices throughout the pandemic.
The fact is, that the Fed will no doubt act to assuage any fears. If you cast your mind back to the Fed’s June meeting, the mere mention of a motion to consider discussing the easing of monetary policy was enough to stoke fear in investors. However, for now, the status quo remains in place. There is no plan for addressing government deficits in the USA and money will continue to be printed and distributed. Instead of addressing ever widening deficits, there are now calls for government to make the sweeping social programmes and infrastructure investment permanent. That may not look likely in the short term but is likely over the long term. The Fed is complicit in this program and will continue to spend for the foreseeable. Jerome Powel is nothing if not acutely aware of his role as a stage manager; if something is due to change, we’ll know about it.
Quote of the week
“There is not evidence that cow dung therapy works.” - Metro
Whether it be bleach, elderberry and lemongrass or expensive Cognac, some Covid remedies have ranged from the sublime to the ridiculous. Don’t get me wrong, taking control of your health is key and my arm was sore for days after my first vaccine, but that’s still a whole lot better than smearing myself in cow dung. Although I have friends who have expressed a certain amount of scepticism toward the vaccines, none of them have come to Sunday League smothered in excrement, up until now anyway.
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