US President Donald Trump threatened the federal government with a shutdown in a move to push through his hard-line immigration policy. Over the weekend he tweeted, “I would be willing to ‘shut down’ government if the Democrats do not give us the votes for Border Security, which includes the wall!” Trump nearly vetoed the government spending package at the beginning of this year in attempt to fund his border wall – a pledge that propelled him to presidency in 2016. Congress has until 30 September to pass a budget or face a shutdown.
Meanwhile, US economic growth accelerated by 4.1 per cent in the second quarter – its fastest pace since 2014. This expansion was boosted by consumer spending and farmers bringing forward soybeans exports to China before the imposition of tariffs.
This week a number of central banks across the globe will announce their monetary policy decisions. First, the Bank of Japan is due to make an interest rate decision, following speculation it is considering reducing the size of its accommodative monetary policy. As a result, Japanese bond yields jumped to the highest level in two years before the central bank’s intervention.
Finally, today my focus will be on German inflation. Economists forecast prices would have increased by 2.1 per cent in July – the same pace as in June. However, if inflation rose faster than expected, the Euro will gain strength.