UBS On-Air: Paul Donovan Daily Audio 'Balloon debates'
Economists of a certain age are condemned to have Nena’s 1984 pop song “99 Red Balloons” playing on repeat in their heads this week. The downing of what largely resembles an oversized party balloon from China by the US is reported to be damaging bilateral relations, but beyond a knee-jerk reaction markets are unlikely to care too much. There is political noise, but it seems unlikely to spill over into economic policy (trade taxes, etc). China might conceivably limit tourist travel to the US if it wanted to demonstrate outrage.