Over the weekend, President Donald Trump mused about the possibility of a complete break with China, apparently referring to some kind of autarchy on U.S. - China trade.

So far, financial markets don’t seem to be paying any serious attention to this issue. In part this must be because investors understand that this week is the U.S. Republican Party convention and as such, a certain increase in anti-China rhetoric is to be expected.

In addition, while financial markets are not perhaps prepared to completely price in the outcome of the November elections, current opinion polls mean that investors do appear likely to place a discount on President Donald Trump’s remarks.

This coming weekend we’ll see the Federal Reserve’s annual Jackson Hall Symposium get-together. Normally, this is a summer camp for central bankers and economists. This year, it will be virtual. There will inevitably be a lot of focus on what central banks might do. What rather undermines this is the fact there is not much central banks can do. This is a crisis that requires fiscal policy, not central bank policy.

Where there may be interest, if there is a more in-depth discussion of the damage that the tariffs/tax on savers and financial institutions, otherwise known as negative interest rates, and the merits of yield curve control.

However, nothing is going to change the market perception of lower for longer monetary policy.

On Friday we got the IHS Markit Flash U.S. Composite PMI under the title “Strong expansion in U.S. private sector output in August,” which was better than expected.

Key findings:

▪ Flash U.S. Composite Output Index at 54.7 (50.3 in July). 18-month high.

▪ Flash U.S. Services Business Activity Index at 54.8 (50.0 in July). 17-month high.

▪ Flash U.S. Manufacturing PMI at 53.6 (50.9 in July). 19-month high.

▪ Flash U.S. Manufacturing Output Index at 53.9 (51.7 in July). 19-month high.

After the United States industrial production had shown two months with positive monthly growth (+5.4 percent in June, although with a low year-on-year of -10.8 percent in June), the IHS Markit Flash composite PMI for August signaled, based on data collected from August 10-20, both manufacturers and service providers registered expansions.

U.S. continuing jobless claims — which consist of unemployed people who have been receiving unemployment benefits for some time — decreased to 14.84 million in the week that ended August 8, which is the lowest level since the beginning of April and below market forecasts of 15.0 million.

For investors that want to review in part their euro-based instruments I think it could be helpful to compare IHS Markit Flash Eurozone PMI that came in under the title: “Eurozone growth loses momentum in August,” which was worse than expected.

Key findings:

▪ Flash Eurozone PMI Composite Output Index came in at 51.6 against 54.9 in July. 2-month low.

▪ Flash Eurozone Services PMI Activity Index at 50.1 against 54.7 in July. 2-month low.

▪ Flash Eurozone Manufacturing PMI Output Index at 55.7 against 55.3 in July. 28-month high.

▪ Flash Eurozone Manufacturing PMI at 51.7 against 51.8 in July. 2-month low.

The figures from the Euro and U.S. Flash PMIs don’t justify at the moment, at least in my opinion, the calls for a stronger euro vs. the U.S. dollar.

We’ll have to wait until September 3 to know the final IHS Markit PMI data for the US and the Eurozone.

"Hans" Parisis is a bank economist who has advised investors on financial markets and international investments.