Forex & Commo Market News

Sep 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose after Iraq's oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in U.S. inventories.
- Gold held to a narrow range, with investors in a wait-and-see mode ahead of the outcome of a two-day U.S. Federal Reserve meeting that began on Tuesday.
- London metals were trapped in a tight range ahead of a U.S. Federal Reserve monetary policy meeting which may spell out the near-term direction for the dollar.
- Chicago wheat futures edged higher with prices supported by bargain-buying and expectations of lower production in Canada although abundant world supplies limited gains.
- The dollar edged up against a basket of currencies as investors awaited the outcome of the Federal Reserve's meeting at which it was expected to announce plans to trim its $4.2 trillion in bond holdings.
- The trade group representing US gun makers welcomes potential regulatory reforms to ease exports, which the National Shooting Sports Foundation says offers "considerable upside potential." Domestic sales growth has stalled since the election, making a boost to exports now running about 1M a year an attractive outlet for the excess inventory that's dented margins at Smith & Wesson maker American Outdoor Brands as well as Sturm, Ruger. The companies' shares gained 10% and 14%, respectively, after word of restrictions being lifted were first reported by Reuters. Neither commented on the prospect of regulatory changes.
- More than 20 music organizations protest tech giants' claim they are the "new faces of the American content industry" in a letter to the Trump administration's top trade official working on NAFTA negotiations. Late last month tech firm associations--whose members include Google and Amazon--sent a letter to US Trade Representative Robert Lighthizer urging him to "modernize NAFTA for the digital age" and "seek a strong and balanced copyright framework based on U.S. law" by including the Digital Millennium Copyright Act safe harbors. The music industry fights back saying perpetuating the "antiquated system" would risk the nation's digital future. "Our trade agreements should also adapt, while not preventing our Congress from clarifying the original intent of U.S. law to the benefit of U.S. creators," says the letter signed by RIAA, ASCAP, BMI, SESAC and others.
- US gun makers soar on media reports that the Trump administration will ease export restrictions on commercial firearm sales. Domestic gun sales have eased since the election, though remain at historically elevated levels. That's hit shares this year of gun makers such as American Outdoor Brands and Sturm, Ruger, both of which had double-digit gains in late trading. The US already imports around 3M commercial firearms a year, some six times the level of exports.
- A bipartisan group of US states investigating the marketing and distribution of opioid painkillers has stepped up its probe with a fresh demand for documents from drug makers and distributors. The group, which involves 41 attorneys general, sent civil investigative demands to Purdue Pharma, Allergan, Teva Pharmaceutical, Endo and Johnson & Johnson, says Tennessee's attorney general, who is helping lead the probe. The group also sent "information demand letters" to the distributors AmerisourceBergen, Cardinal Health and McKesson. The states aim "to determine what role the opioid manufacturers and distributors may have played in creating or prolonging" the opioid addiction crisis, the statement said.
- Venezuela's risk of default will depend on the country's cash flow this year, as risk of a system shock from further sanctions or domestic pressures recedes, said Siobhan Morden, strategist at Nomura Securities. The opposition's decision to participate in next month's governor elections makes street protests unlikely and takes away immediate rationale for further US sanctions. "If the US remains reluctant to impose [oil] sector sanctions, then this suggests a fragile stalemate with default then increasingly dependent upon cashflow dynamics," Morden writes in a client note. Coupon payments offer the best gauge of the government's likelihood of meeting the big bond payments in late October.
- ING sees the U.S. dollar falling right after the Federal Reserve meeting on Wednesday because even if Chair Janet Yellen says something which could indicate another interest rise in December, the market may not believe this, given risks such as North Korea, hurricanes, and a soft inflation. "Typically, it is difficult for the dollar to rally on Fed meetings and this time may not be any different," ING says, adding that "we think the USD is likely to follow the historical pattern of moving lower in the aftermath of the FOMC meeting." Also, there is a risk that the Fed may delay its balance sheet reduction, which would bring the dollar lower, ING says. "Fading the USD corrective rally may be a wise tactic."
- Heading into President Trump's address to the United Nations General Assembly, some traders warned fiery rhetoric could jolt the markets. So far, investors seem to be shrugging off Trump's comments, which included harsh rebukes against North Korea, Cuba, Venezuela, Syria and Iran. The S&P 500 edges up 0.1%, on track for a fresh closing high, while the CBOE Volatility Index falls 1.2% to 10.03 and the yield on the 10-year U.S. Treasury note trades at 2.232%, little changed from Monday.
- Boeing's market value briefly peaked above $150B for the first time, just ahead of Monday's close. Still, the second most valuable industrial company isn't webcasting its investor day presentations from Charleston, SC. With a government--Canada--lambasting the aerospace giant on one side, and rival Northrop Grumman swooping in to grab partner Orbital ATK on the other, investors might wonder whether a closed-door event is in their best interest.
- Overseas investors are reacting to a possible Japan parliamentary election next month and they are pricing in an Abe win. "Optimism is back in terms of government continuity," says Kyoya Okazawa, head of global markets for Asia Pacific with BNP Paribas. Investors are covering stock shorts and buying the dollar versus the yen while purchasing December core options because "volatility is cheap," he adds. Local media report a snap election is likely to occur Oct. 22 as Abe apparently looks to take advantage of a disorganized opposition and improving poll numbers. But Okazawa says be prepared for stock profit-taking, especially with the Nikkei up nearly 5% the past 6 sessions. It finished morning trading up 1.4% at a 3-month high.

Sep 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets held largely steady, even as OPEC producers Saudi Arabia and Iraq pointed to a reduction in supplies in line with efforts to tighten the market and prop up prices.
- Gold inched up from its lowest in over two weeks as the dollar shed some gains, while the market's focus turned to a two-day Federal Reserve meeting that kicks off later in the day.
- London metals were steady  as traders are awaiting the outcome of the U.S. Federal Reserve meeting this week for signs of the near-term direction for the dollar.  
- Chicago wheat futures lost more ground, falling for a second consecutive session in the face of abundant global supplies.
- Overseas investors are reacting to a possible Japan parliamentary election next month and they are pricing in an Abe win. "Optimism is back in terms of government continuity," says Kyoya Okazawa, head of global markets for Asia Pacific with BNP Paribas. Investors are covering stock shorts and buying the dollar versus the yen while purchasing December core options because "volatility is cheap," he adds. Local media report a snap election is likely to occur Oct. 22 as Abe apparently looks to take advantage of a disorganized opposition and improving poll numbers. But Okazawa says be prepared for stock profit-taking, especially with the Nikkei up nearly 5% the past 6 sessions. It finished morning trading up 1.4% at a 3-month high.
- Tyson Foods is considering its options after commissioners in Leavenworth County, Kan., voted to rescind an earlier decision that would've provided economic incentives for the company to build a $320M chicken-processing plant there. "We're disappointed by the commission's reversal," a Tyson spokesman says, adding that the county board's earlier approval was among the factors that motivated Tyson to choose the Northeastern Kansas spot. Local residents struck up a campaign to block the plant, citing what they say is Tyson's poor record on the environment and treatment of workers and farmers.
- With Hurricane Maria now bearing down on the Caribbean, the Department of Transportation says it received consumer complaints from areas affected by Harvey and Irma as people in the storms' paths were trying to evacuate and encountered very high last-minute fares. While most airlines capped their fees ahead of Irma, some fliers were unable to take advantage of them. "We will evaluate whether (the fares) raise any violations of our regulations," the DOT says. On September 6, two US senators asked Transportation Secretary Elaine Chao to protect consumers from "outrageous and oppressive fares." Airlines revenue-management systems typically raise fares for seats booked at the last minute, compared with offering much lower prices for tickets purchased months in advance.
- Gasoline prices fell off Washington's radar after the 2014 oil bust that caused prices to plunge for consumers. But pump prices are becoming a beltway issue again after two hurricanes caused prices to spike to 40-cents-a-gallon more than a year ago, at $2.61. "In terms of this nation's supply and demand for gasoline, Hurricanes Harvey and Irma were short-term disruptions that really shouldn't have a long term impact on prices at the pump," Sen. Chuck Schumer (D., NY) says in an emailed statement. "Gas prices should come back down to earth just as fast as they went up." The chamber's Democratic leader wants the Feds to launch a "gouge watch."
- A steadier eurozone political environment is helping support growth and reform momentum and bolstering the case for the region's equities, says Richard Turnill, global chief investment strategist at BlackRock. "The potential for extremist politics to become mainstream has faded in recent months... and prospects for reforms look brighter than they have in years," he says. "Overall, there is a pro-reform wind blowing in Brussels and key European capitals." But risks remain, including the possibility that economic growth dampens the urgency to reform and that differing views on which reforms are needed are too large to overcome, he says.
- Most eyes are on the Federal Reserve meeting and on which direction interest rates are going to take, but Morgan Stanley recommends to focus on the fact that President Donald Trump may strike a deal with the Democrats and pass his long-awaited tax reform. If this happens, which is still at the stage of "possible", then USD840 billion of money could be repatriated back in the U.S., the bank says. This makes up the majority of cash and securities the 30 most cash-rich U.S. corporates hold, according to Morgan Stanley. "Tax reform may lead to a wave of corporate bond selling currently held in offshore accounts such as Bermuda by cash rich U.S. corporate," the bank says. Therefore, the dollar may benefit from higher U.S. yields.

Sep 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets were firm and remained near multi-month highs reached late last week as the number of U.S. rigs drilling for new production fell and refineries continued to start up after getting knocked out by Hurricane Harvey.
- Gold slipped to its lowest level in over two weeks as equities rallied and the dollar firmed, while prospects of monetary policy tightening in the United States ahead of a Federal Reserve meeting also weighed on the metal.
- London copper was little changed, trading near last week's one-month low, while prices in Shanghai slid for a fourth consecutive session on concerns over slowing growth in top consumer China.
- Chicago soybean futures rose for the third session out of four on expectations of strong demand from China although the expanding harvest in the United States kept a lid on the market.
- The dollar held firm near a seven-week high versus the yen, supported by recent rises in U.S. yields, while sterling took a breather after surging last week on growing expectations that the Bank of England could raise interest rates soon.
- Net bets on rising gold prices climbed to their highest level in more than a year in the week ended Tuesday. According to CFTC data, bullish gold bets by hedge funds and other speculative investors outnumbered bearish bets by 264,934 contracts, the most since the week ended Sept. 6, 2016, when they totaled 278,994. Bullish bets have risen in nine straight weeks. Gold prices ended a three-week winning streak this week, falling in four of five sessions as the dollar rose. Still, many investors and analysts say conditions are favorable for higher prices amid geopolitical turbulence and hesitance among Fed officials about when to raise interest rates. For the year, prices are up nearly 15%.
- California Senate passes a bill that would require drug companies to give customers 60-day advance notice of any plan to boost the price of a prescription drug costing more than $40 by 16% in a 2-year period. Bill would require companies to report information justifying price hikes to a state agency, and require health insurers to report the portion of customers' premiums that is spent on prescription drugs. Bill awaits further action by Gov Jerry Brown. Industry trade group PhRMA opposes the bill, as it has done in other states. Vermont, Maryland and Nevada have enacted laws aimed at various aspects of drug pricing. Wells Fargo says the state efforts "are a potentially underappreciated threat to the drug industry," and the California bill it could lead to copycat legislation.
- Bank of Montreal CEO Bill Downe says negotiations of the financial services section of Nafta are going well. He says the 3 countries agree they must update the trade agreement, particularly as financial services and data markets have evolved since the 1994 treaty was negotiated. "I look at Nafta as an opportunity to modernize," Downe says. The CEO is an adviser to Canada's foreign affairs minister Chrystia Freeland on the trade renegotiation.
- Colombia's government will plant some 50M cacao trees over the next several months as they use the source of chocolate to replace the majority of the drug crops that they are eradicating across the vast countryside, says Rafael Pardo, a top presidential adviser for development in areas once ravaged by conflict. The initiative, which will increase the harvest of Latin America's sixth-largest cacao producer by a third, comes as the Colombian government comes under fire from the Trump administration for record high output of coca, the plant used to make cocaine. Pardo says that substitution for cacao will be slower than eliminating coca by forcibly fumigating plantations--a strategy advocated by the US government. "But this is the more sustainable path," he adds.
- President Trump's criticism this week of Colombia's soaring drug-crop cultivation does not signal a worsening of bilateral relations, Control Risks says, because the US still relies on Colombia as a key partner in the region and strategic to addressing troubles in neighboring Venezuela. But the risk consultancy warns that Colombia is unlikely to meet its goal for eradicating coca crops this year and that output will continue as long as cocaine demand in consumer nations like the US rises. That means risks remain high for companies involved in mining or infrastructure projects in the Colombian countryside where coca has long reigned because tensions persist with farmers reluctant to substitute their key cash crop
- Some in Congress are stepping up pressure on Equifax. Sen. Chuck Schumer pledges to "get to the bottom of" the EFX data breach and hold the company accountable. In a series of tweets, the top Senate Democrat from New York demands the company do four things: notify all affected consumers, offer credit monitoring and freezes and cooperate with all investigations. He also demanded EFX comply with a rule unveiled recently by the Consumer Financial Protection Bureau, which bans companies from requiring consumers to waive their rights to sue them in groups before disputes occur. Congressional Republicans are currently working to overturn the rule. "If @Equifax doesn't agree to these things in 1week, the CEO & entire Board should step down," Schumer writes. "It's common sense & the baseline of decency." Separately, Sen. Elizabeth Warren, (D., Mass), introduced legislation to prohibit employers from requiring job applicants to disclose their credit reports.

Sep 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were lower on thin trading but on course for weekly gains, the third in a row in the case of Brent, as the clean-up after hurricanes in the United States gathered pace and the outlook for demand took on a firmer tone.
- Gold inched up as North Korea's latest missile launch over Japan triggered safe-haven buying, but gains were limited as strong U.S. inflation data raised the spectre of another interest rate hike.  
- London copper firmed, rebounding from overnight losses, as investment funds followed a flight into risk-averse investments like metals after North Korea ratcheted up geopolitical tensions with the firing of a missile over Japan.
- U.S. soybeans eased slightly, but the market is poised for a fourth straight week of gains on the back of strong demand and dry weather in Brazil where planting is due to start.
- The dollar inched higher versus the yen, regaining its footing after taking a hit when North Korea fired a missile over Japan into the Pacific Ocean.
- Ontario's plan to tax foreign homebuyers is showing signs it has cooled the Canadian province's housing market. The provincial government said that buyers who aren't citizens or permanent residents of Canada are responsible for 3.2% of home purchases in the southern Ontario region, down 4.7% since April. In Toronto, 5.6% of homes purchases are from foreign buyers, down from 7.2% in April. Ontario's housing measures were introduced several months after Vancouver unveiled taxes on foreign buyers in an effort to cool down that market. Early reports suggest that foreign buyers are making their way back to Vancouver's housing market, raising the potential that Ontario's attempt at managing its housing market may be shortlived.
- Geopolitics is an "underappreciated source of risk that is back in the fore," Bank of America Merrill Lynch strategists say, citing the results of their credit investor survey. And past experience shows that complacency regarding geopolitical risk can hurt. Both the CBOE Volatility index and credit-implied volatility often rise when geopolitical risk events bite--such as Russian-Ukraine tensions, the Paris attacks, Brexit and U.S-North Korea tensions--, based on BAML data.
- China's commerce ministry criticized US President Trump's decision to block a Chinese-funded acquisition of US chipmaker Lattice Semiconductor Corp. on national security grounds, warning countries to treat Chinese companies fairly to avoid hurting investor confidence. "We believe that it's a country's legitimate right to carry out security reviews in sensitive investment areas. But it shouldn't become a tool for protectionism," ministry spokesman Gao Feng said at a regular news conference in Beijing on Thursday. He said deals like the Canyon Bridge Capital Partners bid for Lattice were "normal commercial activity" and directed by the companies themselves. Canyon Bridge and Lattice had argued the deal posed no security concerns as Lattice divested its military product lines years ago.
- Eight Democratic members of Congress would like to know more about the US Centers for Medicare and Medicaid Services' recent deal to pay for Novartis' $475,000 leukemia drug Kymriah only when a patient responds within a month of treatment--one of the newest examples of an "outcomes-based" contract. They sent a letter to the head of CMS asking for details such as how the one-month threshold was chosen, and if any CMS political appointees previously employed by the drug industry were involved in the deal. Rep. Lloyd Doggett of Texas says drugmakers are touting these outcomes-based deals in the face of criticism over high prices, but taxpayers deserve to know "whether they will actually save the government money." CMS hasn't released details of the deal and didn't respond to a request for comment on the letter. A NVS spokesman says the company expects the deal to reduce costs for the Medicare and Medicaid programs and ensure timely access to Kymriah.

Sep 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices eased, but held on to most of their gains in the previous session when the market was buoyed by a forecast for firmer global oil demand by the International Energy Agency.
- Gold edged down to its lowest in nearly two weeks on waning risk aversion, and as the dollar steadied ahead of U.S. consumer inflation data that could offer clues on the timing of further interest rate hikes.
- Chinese lead futures advanced, rising in step with growing signs of supply constraints caused by Beijing's crackdown on industrial pollution and falling stockpiles.
- Chicago wheat futures rose for a third consecutive session, with prices underpinned by short-covering and U.S. government forecasts of slightly lower global supplies.
- A broad coalition of drone manufacturers and users is stepping up lobbying against a bill, introduced by Sen. Dianne Feinstein of California and three other lawmakers, seeking to give states primary regulatory authority over many unmanned aircraft uses at up to 200 feet altitude. By proposing to strip the Federal Aviation Authority of sole responsibility for the nation's airspace, opponents contend the legislation would block industry progress to expand operations. FAA administrator Michael Huerta has said local control over drone rules "is getting a lot of attention from state legislatures and in city councils" nationwide, saying "greater clarity" is needed and "it's extremely important that we as a community get that right."
- Moody's Investors Service downgraded the city of Hartford, CT, two notches deeper into junk status today, citing the mayor's statement that the city will run out of money in 60 days without an infusion of state aid. Connecticut lawmakers are expected to vote Thursday on a state budget, which has been delayed more than two months into the fiscal year as the state struggles to match revenues and expenditures. Hartford has a $5.9M debt payment due October 1, Moody's says. The ratings firm drops Hartford to Caa1 from B2.
- DJ Gribbin, special assistant on infrastructure policy on the White House National Economic Council, says he believes a House bill will pass that would place air-traffic control functions in a not-for-profit corporation funded by user fees. Gribbin, speaking at an airline trade group summit in Washington, said President Trump "is very much in favor of this" as the switch would stabilize air-traffic funding, speed up adoption of new technology and reduce flight delays. Most major US airline support the plan, along with the controllers' union, but opposition remains strong among small plane pilots and operators of corporate jets. A parallel Senate bill has no such language, however, which could be even more of an impediment.
- A diverse group that includes an artist, an engineer, a journalist and a limousine driver is challenging the US government's power to search smartphones at border crossings without warrants or even suspicion of wrongdoing, alleging in a lawsuit that the practice violates the constitutional right to privacy. The lawsuit, filed in federal district court in Boston, seeks to taper an exception to the Fourth Amendment that allows customs and border agents to rummage through luggage, take apart cars, inspect personal devices and more. Courts have ruled the Fourth Amendment's protections against unreasonable searches and seizures are weaker at or near the border and points of entry because authorities need broad powers, unhindered by the warrant requirement that applies inside the country, to screen dangerous people that could be trying to enter the US.
- Bank stocks have recently underperformed assets that the group tends to be tied to, evidence that "investors are pricing in a very low probability of significant regulatory or tax reform," Goldman Sachs analysts write. Bank stocks tend to be linked to assets like interest rates, fixed income, the dollar, and the stock market. But after the election, bank stocks outperformed these assets by 12% as traders forecast a greater chance of policy changes, says Goldman Sachs, adding that the entire financial sector has been volatile since the election. The firm benchmarked returns of the KBW Nasdaq Bank Index with funds tracking the S&P 500, Treasurys, high yield bonds, gold and oil. "The Trump premium has drained out of banks," the analysts write.
- Malaysian opposition lawmakers criticize Malaysia Prime Minister Najib Razak's pledge to help strengthen the US economy during his visit to Washington to meet Donald Trump. Najib said Malaysia will spend as much as $24 billion in the US in deals including the purchase of Boeing airplanes and General Electric engines. State pension fund, Employees Provident Fund, will also spend up to $4 billion on US infrastructure redevelopment, according to Najib. Chief minister of Selangor state Mohamed Azmin Ali questions if helping build US infrastructure is more important than helping the Borneo states of Sabah and Sarawak build roads and water pipes.
- The US trade deficit with South Korea is largely due to the Asian country's weakening imports rather than a free trade deal that the Trump administration has blamed for the imbalance, says DBS. "As such, the effective solution is to urge Korea to further open its domestic market to American goods and services and to boost its domestic demand via fiscal/monetary policy and structural reforms." The bank expects Seoul's new fiscal stimulus, focusing on income growth, to help pick up domestic demand, boost imports from the US and ease trade tensions with DC.
- FocusEconomics, which conducts a thorough monthly survey of global economists and their forecasts, has left its forecast for economic growth in Argentina this year unchanged at 2.6%. The outlook indicates Argentina's economy will recover nicely from last year's recession but won't perform as well as advertised by Argentina's government. "Buoyed by business-friendly reforms adopted by the Macri administration, the economy is expected to rebound this year and next. Fixed investment should recover due to an improved business environment and higher public infrastructure spending, while household spending should benefit from declining inflation and rising wages," FocusEconomics says. Argentine officials have said GDP would expand 3% this year.

Sep 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were mixed, dampened by reports of rising U.S. crude stockpiles but retaining some of the gains made in the previous session after OPEC said it expected higher demand for its crude next year.
- Gold held steady amid firmer equities, with safe-haven demand for the metal supported after U.S. President Donald Trump urged tougher measures against North Korea.
- London copper prices clawed back some of their overnight losses as selling by funds trailed off, while Shanghai contracts for the metal edged lower.
- Chicago corn futures rose after suffering its biggest one-day decline in almost a month while soybeans gained ground following a four-session losing streak with bargain-buying supporting the market.
- The dollar was buoyant against the yen, although it was capped against the euro with a potentially supportive spike in U.S. yields neutralised by a similar move by their German counterparts.
- Canada Foreign Minister Chrystia Freeland tells reporters she spoke with UK Foreign Secretary Boris Johnson about the need to join forces and fight Boeing's trade complaint versus Bombardier. Freeland's revelation comes as UK PM Theresa May says she spoke to President Trump about Boeing's trade petition, and how the complaint put thousands of jobs at a Bombardier-owned factories in Northern Ireland at risk. "We are making our case in strong partnership and synchronicity with our US" peers," she says. Boeing launched complaint this year that Bombardier benefits unfairly from government subsidies. That complaint sparked a probe from US trade authorities. Meanwhile, Canada PM Justin Trudeau and May are set to meet next week in Ottawa.
- US officials approve a potential $5.2B sale of 18 Boeing combat jets plus missiles to Canada, but there's one big wrinkle. Canada has pulled out of talks about buying the planes, pending a resolution of BA's complaint against Bombardier over alleged price dumping and subsidies for CSeries passenger jets. The UK, home to a big Bombardier plant, also calling for the simmering dispute to be resolved. US trade officials due to make an initial determination on the merits of Boeing's complaint on Sept 25.
- Expect plenty of construction in the aftermath of Hurricane Harvey and Hurricane Irma, a Texas home builder told a US commission in Washington. "Moving forward there's going to be a lot of rebuilding," said Eddie Martin, president of Tilson Home Corp. and an official at the National Association of Home Builders. "The reality is we're going to require a significant amount of lumber, including [spruce, pine and fir from Canada] to rebuild," he told the U.S. International Trade Commission in a hearing over the question of whether alleged subsidies and dumping by Canadian lumber mills is injuring US industry. ITC and US Commerce Department have the authority to impose permanent tariffs if Washington and Ottawa don't reach a new agreement on softwood lumber trade.
- Just a week after Philadelphia-based law firm Ballard Spahr said it was taking on 110 lawyers from Minneapolis-based firm Lindquist & Vennum, another merger is already on the books. Ballard Spahr announces it's absorbing prominent First Amendment and media-law firm Levine Sullivan Koch & Schulz. The 25-lawyer boutique has argued major free speech cases in the Supreme Court, and recently represented the New York Times in winning a dismissal of a defamation suit brought by former vice presidential candidate Sarah Palin. The firm's lawyers have also represented the Associated Press in securing the release of sealed documents in the Bill Cosby sexual assault cases, and successfully defended NBCUniversal in a defamation suit brought by George Zimmerman, the man acquitted in the fatal shooting of Trayvon Martin. Law firm mergers are on the rise this year: There were 52 combinations announced in the US in 1H, according to legal consultancy Altman Weil, topping previous midyear highs.
- Most public-company directors expect Congress and the President to approve a tax overhaul, but probably not this year, according to a new survey of directors by accounting firm BDO USA. Of the 130 directors surveyed, 78% think tax reform will be achieved during President Trump's four-year term, but only 22% think it will happen in 2017. When asked about the most important goal for tax legislation, 45% cited reduction of the current corporate tax rate, while 37% cited simplification of the tax code. Among the survey's other findings, 54% disagree with Trump's move to withdraw from the Paris climate-change accord.
- A key measure of turbulence in the stock market--the CBOE Volatility Index, or VIX--has spiked at least 35% intraday four times in 2017, the greatest number of times ever in a single calendar year, according to Bank of America Merrill Lynch. It's "another illustration of how volatile volatility itself has become," the analysts write, adding that the VIX has been jolted by geopolitical tensions over North Korea and US domestic politics. Despite the spikes, the S&P 500 is still on track for one of the calmest years on record, writes the investment bank. The VIX inches down to 10.65 in early trading.
- Corporate officials have been growing more chipper on earnings calls. The number of times they mentioned the word "better," compared to "worse" or "weaker" remained above average levels in 2Q, Bank of America Merrill Lynch says in a report. The three-month ratio of above versus below-consensus earnings guidance also rose in August to 1.24, its highest level in more than six years. "While political uncertainty could keep capex depressed in the near-term, the positive outlook from management in spite of this uncertainty is encouraging," BoFA says.- The USD slumped last week and rebounded on Monday, but it remains to be seen if it can sustain a period of consistent strength, says Greg Gibbs, currency strategist at Amp GFX. Its rebound is more noticeable against safe havens such as JPY, gold, CHF, he adds. The safe haven demand has retreated on the passing of hurricanes and some easing of tensions in North Korea. U.S. Congress and Trump have also had some success with the passage of hurricane relief spending and kicking the debt ceiling a little farther down the road, he says. This has given the USD a reprieve, but it may have limited capacity to turn the trend in the dollar, Gibbs adds.
- Washington gave itself three more months to shore up a heavily indebted federal flood-insurance program as part of broader stopgap spending legislation Trump signed into law Friday. Congress will now have until Dec. 8 to renew--and, ideally, reshape--the National Flood Insurance Program, which was set to expire at the end of September. It has roughly $1.7B to pay claims and about $5.8B left that it can borrow from the Treasury, according to the Federal Emergency Management Agency, which manages the program. What makes the debate over the insurance program challenging is that the program already has a debt of roughly $25B from earlier weather disasters. Much of that stems from Sandy and Hurricane Katrina in 2005. Sandy alone cost $8.4B initially, according to FEMA.

Sep 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices edged down, as traders weighed up the dampening effect on demand of Hurricane Irma versus refinery restarts in the wake of Hurricane Harvey that should lead to more crude oil processing.
- Gold prices hit their lowest in over a week, extending losses from the previous session as investor appetite for riskier assets such as equities began to pick up.
- Aluminium led Chinese metals futures higher amid a wave of bargain hunters buying up contracts on recent price dips as financial markets responded positively to easing of Hurricane Irma.
- Chicago wheat futures slid, heading for a second straight losing session with pressure from record supplies from the Black Sea region making it difficult for U.S. exporters to win business.
- The dollar held on to most of its gains, following a sharp rebound on improving investor risk sentiment as worries over North Korea and Hurricane Irma receded

- The USD slumped last week and rebounded on Monday, but it remains to be seen if it can sustain a period of consistent strength, says Greg Gibbs, currency strategist at Amp GFX. Its rebound is more noticeable against safe havens such as JPY, gold, CHF, he adds. The safe haven demand has retreated on the passing of hurricanes and some easing of tensions in North Korea. U.S. Congress and Trump have also had some success with the passage of hurricane relief spending and kicking the debt ceiling a little farther down the road, he says. This has given the USD a reprieve, but it may have limited capacity to turn the trend in the dollar, Gibbs adds.
- Washington gave itself three more months to shore up a heavily indebted federal flood-insurance program as part of broader stopgap spending legislation Trump signed into law Friday. Congress will now have until Dec. 8 to renew--and, ideally, reshape--the National Flood Insurance Program, which was set to expire at the end of September. It has roughly $1.7B to pay claims and about $5.8B left that it can borrow from the Treasury, according to the Federal Emergency Management Agency, which manages the program. What makes the debate over the insurance program challenging is that the program already has a debt of roughly $25B from earlier weather disasters. Much of that stems from Sandy and Hurricane Katrina in 2005. Sandy alone cost $8.4B initially, according to FEMA.
- OPEC expects Hurricane Irma, currently crossing through Florida, to have a negative effect on oil prices, the group says in an internal report dated Thursday. "Irma could disrupt oil demand and supply, weighing on crude prices in the near term," it says.
- Loadings from Kazakhstan's Kashagan oil field are set to jump by more than a third to 280,000 barrels a day this month, OPEC says in a internal report dated Thursday. The ramp up at the giant oil field has run against Kazakhstan's pledge to reduce its output, made last year as part of a broader pact between OPEC and non-OPEC countries to end a global oil glut. On Sunday, Saudi Arabian Energy Minister Khalid al-Falih met his Kazakh counterpart to discuss the possible extension of the global oil supply cut pact beyond March.
- Miners operating in Tanzania should brace for further showdowns with the government as officials extend the strict enforcement of tax laws in search of a greater share of mine revenue, says Jared Jeffery, an analyst with NKC African Economics. Months after Africa's No. 4 gold producer banned exports from Acacia Mining over a tax spat, London-listed Petra Diamonds halted operations at its Tanzanian mine Monday after authorities confiscated a parcel of diamonds worth $29.5M. Jeffery says moves by investors to cut jobs and scale down operations have "seemingly not rattled President John Magufuli. Gold and diamond miners have gotten the Magufuli treatment and tanzanite miners appear to be next. Investors in the country's burgeoning gas sector will watch closely."
- Five states sue the Trump administration over delaying fuel-economy penalties against auto makers, alleging regulators indefinitely postponed the effective date for increased fines. In December, the National Highway Traffic Safety Administration announced a rule boosting the penalty rate for violating fuel-efficiency standards to $14 per tenth of a mile per gallon, up from $5.50 previously. The penalty is meant to discourage auto makers from flouting mileage regulations. California, New York, Vermont, Maryland and Pennsylvania contend NHTSA's July move to delay implementing the rule is unlawful because the agency acted without notice and taking comment, and that postponement illegally keeps the lower penalty in effect.
- Top US derivatives regulator J Christopher Giancarlo urged his European counterparts to accept "consistent" but not "identical" approaches to clearinghouse regulation, allowing international firms to operate in multiple jurisdictions while complying with the regulations of their home jurisdiction. In an op-ed for the French business newspaper Les Echos, Giancarlo says that this policy of regulatory deference would prevent cases of regulatory arbitrage and would prevent, for example, the need for US regulators to spend their limited resources supervising European firms operating in US markets. He added that there may be cases of systemically important clearinghouses that require a joint supervisory regime. Giancarlo's op-ed, written during a trip to Europe and the UK to meet with policymakers, comes as Brexit has thrown a wrench into international efforts toward cross-border harmonization of derivatives regulation.
- The US poultry industry is reheating a debate over food and worker safety in meat-processing plants, as the National Chicken Council requests USDA permission to boost processing line speeds to 175 birds per minute or higher, up from most plants' current cap of 140. The Washington-based group says plants will be able to run more efficiently while maintaining safety, and that such a move-- which would reverse a 2014 Obama administration decision--aligns with President Trump's deregulatory agenda. Critics, including union representatives and academics, say it'll make already risky jobs more dangerous, and make it harder to properly inspect meat. USDA says it's considering the request.
- Shares in Tahoe Resources surge 39% to $6.54 as the miner says that the Guatemalan Supreme Court has reinstated the mining license for its local subsidiary, Minera San Rafael. The decision reverses a previous suspension of operations at its Escobal mine, which produces silver, gold, lead and zinc and accounted for 45% of TAHO's $784.5M in revenue last year. The temporary suspension was issued amid allegations that local indigenous people weren't consulted when the mine's license was granted. Tahoe hasn't restarted operations, however, because of a roadblock erected by protesters. TAHO expects to update previously suspended guidance for gold operations, including exploration, later this month.
- The U.S. dollar is up on Monday after last week's broad-based pressure, driving down EUR/USD by 0.3% to 1.2003. Threats of North Korea escalation and the most severe U.S. hurricane scenarios have been temporarily avoided, "that's why the dollar could start to find a little support this week," ING says. The bank also expects to "see slightly firmer U.S. price data" on Wednesday and Thursday and "another good U.S. retail sales figure on Friday, suggesting consumer strength has extended into 3Q." Commerzbank says "the slight recovery that we have seen since Friday afternoon can only be temporary and will not go very far."

Sep 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up after the Saudi oil minister discussed possibly extending a pact to cut global oil supplies beyond March 2018 with his Venezuelan and Kazakh counterparts.
- Gold fell, after hitting its highest level in over a year in the previous session, as the dollar recovered from last week's lows and as lack of geopolitical developments dented safe-haven appeal.
- Nickel led an across-the-board decline in Chinese base metals futures, pressured by last week's selloff in London contracts amid profit taking and a flat outlook for China's copper demand.
- Chicago corn futures rose for a second session on expectations of a marginally lower yield-forecast from the U.S. Department of Agriculture, although ample world supplies kept a lid on prices.
- Capital Economics warns clients in a note that a debt-ceiling deal that pushes the issue into December isn't a helpful factor for a Fed that may well be contemplating a rate rise at the same time. They say the debt-ceiling issue and the uncertainty that could surround that period makes a rate rise "less likely" now. "Without another continuing resolution or a full budget being passed, a partial Federal shutdown would now begin on 9th December," the firm writes. "That is particularly awkward timing for the Fed, because its December FOMC meeting ends on the 13th. That meeting might end up taking place just as a Federal shutdown starts."
- Commerce Secretary Wilbur Ross says the Trump administration is keeping open the option of withdrawing from the North American Free Trade Agreement. While officials are currently negotiating a revised deal with Mexico and Canada, "the president has made clear that if they don't work, he's going to pull out, so that shouldn't shock anybody--and that's really the right thing," Ross says at an event hosted by the Washington Post. While reiterating President Trump's threats, Ross contradicted Trump's repeated assertions that the talks, launched in mid-August, have been "very difficult." Asked to characterize the discussions, Ross replies that "it's too early to really tell," saying "there have only been two sessions so far."
- Federal prosecutors in Brooklyn have asked a judge to revoke bail for Martin Shkreli, the former pharmaceutical executive convicted last month on securities-fraud charges, citing Shkreli's "escalating pattern of threats and harassment," including an apparent threat to former Secretary of State, and presidential Democratic Nominee, Hillary Clinton. In a court filing late Thursday night, prosecutors asked US District Judge Kiyo A. Matsumoto to have Shkreli detained until his sentencing. The filing came several days after Shkreli posted a message on his Facebook page in which he urged his followers to "grab a hair" from Clinton while she is on her coming book tour. In the post, he offered $5,000 per strand of hair.
- GBP/USD is up 0.3% at 1.3138 and EUR/GBP is down marginally at 0.9174, but this isn't a pound-positive story. It's a U.S. dollar weakness story. The dollar is being beaten by the fact that President Donald Trump is bypassing his own party to make a deal with the Democrats, as well as by two hurricanes--Harvey and Irma--which could cost the U.S. billions of dollars. "Making a deal with the democrats will weaken his relations with his own party," says Lutz Karpowitz, an analyst at Commerzbank. Mr. Karpowitz doesn't see any reason why "U.S. dollar weakness should come to an end," he says.

Sep 08 - Market Talk Roundup: Latest on Trump, U.S. Politics, Monsanto (WSJ Dow Jones)
- Oil prices rose as U.S. crude production was hit harder by Hurricane Harvey than expected, with even bigger storm Irma heading for Florida and threatening to cause more disruption to the petroleum industry.
- Gold hit its highest in a year as the dollar sagged after weaker-than-expected U.S. jobs data and as festering tensions over North Korea stoked safe-haven demand.
- London copper edged up and was set for a ninth straight week of gains, as slow and steady Chinese and global manufacturing growth fuels the metal's longest winning run since 2006.
- Chicago soybean futures firmed with the market set for a third week of gains on expectations of strong demand, led by China and concerns about potential crop damage from Hurricane Irma.
- The euro reached a 2-1/2-year high versus the dollar, as a policy meeting by the European Central Bank gave bulls cause for short-term optimism and did little to support the beleaguered U.S. currency.
- The Arkansas State Plant Board will review a lengthy critique and data provided by Monsanto, as the body weighs further restrictions on a herbicide blamed for millions of acres of crop damage around the Midwest. A spokeswoman for the Arkansas agency said Monsanto's documents will be included for consideration at two meetings to be held this month, after which any recommendations will go to Arkansas' governor and a legislative subcommittee. Monsanto, which makes a version of the herbicide dicamba and seeds that can tolerate it, laid out a case Thursday that further restrictions aren't needed, but rather better training and education of farmers who use the spray.
- Monsanto often has maintained a constructive relationship with university agricultural scientists who study crops, weeds and bugs. But a polarizing battle over use of the herbicide dicamba, which Monsanto produces, is pitting the seed giant against some scientists who have argued for strict limits on the spray. In a petition to Arkansas state pesticide regulators filed Thursday, Monsanto says a state task force's recommendation that dicamba be barred after April 15 next year was "tainted" by involvement of Ford Baldwin, a former University of Arkansas weed scientist and current consultant, who's been retained by plaintiffs' lawyers suing Monsanto over alleged dicamba-related crop damage. Monsanto also criticizes the involvement of Jason Norsworthy, a UA weed scientist who Monsanto says has publicly endorsed a competing herbicide over the past year.
- Monsanto says it could take a battle against Arkansas' potential herbicide restrictions to court, if the state adopts recommendations that tighten restrictions on the weedkiller dicamba next year. The seed company, which aims over the next year to double its sales of biotech soybeans engineered to survive dicamba, calls current state restrictions on Monsanto's dicamba "arbitrary and capricious," and says a state task force's proposal to restrict use after April 15 next year is based on "unsubstantiated" theories. In a petition to state agricultural officials, Monsanto says it reserves its right to "seek judicial review" -- akin to filing a lawsuit -- if Arkansas implements further restrictions. An Arkansas spokeswoman had no immediate comment.
- Monsanto steps up its defense of the potent weedkiller dicamba, calling on Arkansas' governor to block any proposal by state agricultural officials that would prohibit the herbicide from being sprayed on crops next year. In a letter to Gov Asa Hutchinson and a petition filed with state pesticide regulators, Monsanto criticizes state task force that last month recommended dicamba be barred after April 15 next year, saying members ignored evidence showing it can be used without damaging neighboring fields. Monsanto is defending dicamba, which can be paired with the company's new genetically engineered soybean seeds, as Arkansas and other states have fielded hundreds of farmer complaints that the chemical has drifted and withered other nearby crops. An Arkansas State Plant Board spokeswoman had no immediate comment.
- Whirlpool CEO Jeff Fettig told US trade regulators that imported Samsung and LG washing machines have seriously hurt the Michigan-based appliance maker and its workforce. Were it not for the South Korean manufacturers' washer imports, Whirlpool would have hired at least an additional 1,300 employees at its Clyde, Ohio, factory whose workforce numbers more than 3,000, Fettig says. "We refuse to sit idly by while Samsung and LG flout U.S. government orders, evade duties, and in the process destroy the economics of our industry and hurt American workers," Fettig said in testimony before the US International Trade Commission. WHR is seeking a rare "safeguard" action to protect domestic washer makers, following a series of requests for duties to combat alleged dumping by the Samsung and LG.
- A federally-commissioned study finds that few people understand how to access digital codes on food labels that food manufacturers are pushing to deliver information about genetically-modified ingredients. Of consumers interviewed by Deloitte, none recognize the on-package digital link or associated it with food information. Retailers were also unfamiliar with the QR codes. The study was released as part of a federal rules-making process requiring GMO information be delivered to consumers.
- Emirates Airline President Tim Clark doesn't expect complaints about the growth of Mideast carriers by some big U.S. rivals, including American Airlines, Delta, and United, to get much resonance. The complaints are "falling on deaf ears," he says. The U.S. rivals are lobbying to Trump Administration to curtail the growth of the Mideast carriers Emirates, Etihad Airways and Qatar Airways.
- More than a dozen states sue the Trump administration, challenging the president's plan to rescind a program that protects undocumented immigrants who entered the US as children. The lawsuit came a day after Attorney General Jeff Sessions announced the end of the Deferred Action for Childhood Arrivals program, created by former President Obama. The program allowed nearly 800,000 people who were brought to the US as children to receive temporary work permits and protection from deportation. The lawsuit, brought by attorneys general from 15 states and the District of Columbia, says rescinding DACA violates the Constitution's equal protection and due process rights for DACA recipients.

Sep 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices dipped over fears that Hurricane Irma in the Caribbean could interrupt crude shipments in and out of the United States, and as Libyan output began to recover from disruptions.
- Gold held steady, supported by a weaker dollar and lingering concerns over North Korea, as markets awaited the outcome of a European Central Bank (ECB) policy meeting later in the day.
- London copper edged back towards three-year highs as the dollar lost ground against the euro ahead of a European Monetary policy meeting later, while a brighter outlook for global manufacturing growth underpinned prices.
- Chicago corn futures slid, giving up some of the recent gains that lifted the market to a two-week high in the last session on concerns over slow maturity of the U.S. crop.
- The euro held firm ahead of a European Central Bank policy decision, with the focus on what the ECB might say about the currency's recent strength and how that may influence the policy outlook
- Yields on longer-term Treasurys have edged higher while one-month bill yields have ticked down after reports that President Trump has agreed with Democratic leaders that a short-term extension of the federal borrowing authority should be paired with a measure to fund the government and provide aid to Hurricane Harvey relief efforts. The 10-year yield was recently 2.094%, up from 2.070% before the reports, while a bill due Oct. 12 was yielding 1.061%, down from 1.101% before the news and 1.221% Tuesday, according to Tradeweb. Concerns that the government could temporarily fail to honor debt obligations has helped spur demand for longer-term Treasurys, which are still seen as safe stores of value, while hurting the appetite for bills that mature right after a potential breach of the debt limit.
- The loonie suddenly moved to a new two-year high following the Bank of Canada's surprise rate hike Wednesday. The loonie soared immediately following the Bank of Canada's decision, trading as low as 82.38 US cents from 80.58 US cents right before the announcement. The chance of a rate hike was viewed by analysts as between 35%-50%. The Bank of Canada noted that geopolitical risks and uncertainties around international trade have led to a weaker US dollar, while helping to appreciate the Canadian dollar.
- India's demonetisation caused the economy to slow and failed to achieve its stated aim of rooting out illicit wealth, but it is too simplistic to argue that the measure was a total failure, says Capital Economics. The withdrawal of 86% of currency in circulation late last year is likely to have some positive effects over the longer term, including boosting digital transactions and widening the tax base, the research house says. It has also been a major political success for the Modi government by showing a visible commitment to tackling corruption, CapEcon says. In turn, that has eased the passage of economic reforms, it adds.
- Cargill says that individuals protected by the Deferred Action for Childhood Arrivals program, which Trump says he will end, "contribute talent and innovative thinking to the US workforce." Cargill is one of the largest meat processors in the US and has long relied on immigrants to staff a range of jobs across its food businesses. The company for years has called for comprehensive immigration reform that would let undocumented workers get legal status and fill jobs that US citizens won't take. When it comes to DACA, "[w]e urge Congress to provide a permanent solution," a Cargill spokesman says.
- S&P lowered its growth estimate for the advertising industry to 1.1% from 1.7% citing widespread difficulty among key advertising segments including autos, packaged goods and retail. The firm continues to expect double digit growth in digital ad spending, but sees total ad spending excluding the impact of election and Olympic cycles to increase 2.6%. "We believe advertisers remain somewhat cautious, given the uncertainty surrounding the Trump administration's still-evolving economic policies," S&P says.

Sep 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices slipped as crude demand remained subdued due to the refinery closures that followed after Hurricane Harvey hit the U.S. Gulf coast 10 days ago.
- Gold held steady as heightened geopolitical risks over North Korea and concerns about low inflation in the United States that could delay another rate hike, lent some support.
- London copper dipped after retreating from three-year highs in the previous session, as investors booked profits amid ongoing tensions over North Korea.
- Chicago wheat futures slid, falling for the first time in four sessions as booming exports from the Black Sea region provide stiff competition to U.S. suppliers.
- The dollar edged down against the yen, pushed back toward a recent 4-1/2-month low by simmering tensions on the Korean peninsula and by comments from a Federal Reserve official about subdued U.S. inflation.
- Cargill says that individuals protected by the Deferred Action for Childhood Arrivals program, which Trump says he will end, "contribute talent and innovative thinking to the US workforce." Cargill is one of the largest meat processors in the US and has long relied on immigrants to staff a range of jobs across its food businesses. The company for years has called for comprehensive immigration reform that would let undocumented workers get legal status and fill jobs that US citizens won't take. When it comes to DACA, "we urge Congress to provide a permanent solution," a Cargill spokesman says.
- JP Morgan and Wells Fargo both speak out against the Trump Administration's decision to end the Deferred Action for Childhood Arrivals program, which protects from deportation undocumented immigrants who enter the US as children. "We should do everything in our power to continue to attract the best and brightest because they make us stronger as a people and as an economy," says JPM CEO James Dimon, who is also chairman of the Business Roundtable, a group that lobbies for businesses. "And, when people come here to learn, work hard and give back to their communities, we should allow them to stay in the US." A WFC spokeswoman says in a statement: "Wells Fargo believes young, undocumented immigrants brought to America as children should have the opportunity to stay in the US. DACA is relevant to our team members and the communities we serve."
- S&P lowered its growth estimate for the advertising industry to 1.1% from 1.7% citing widespread difficulty among key advertising segments including autos, packaged goods and retail. The firm continues to expect double digit growth in digital ad spending, but sees total ad spending excluding the impact of election and Olympic cycles to increase 2.6%. "We believe advertisers remain somewhat cautious, given the uncertainty surrounding the Trump
administration's still-evolving economic policies," S&P says.
- Cummins is calling on Congress to pass a permanent legislative solution to allow undocumented immigrants who entered the US as children to remain in the country. CEO Tom Linebarger called the Trump Administration's repeal of a five-year-old program that protected them from deportation "discriminatory" and "harmful." "These young people deserve every opportunity to continue living, working, and thriving in the United States," Linebarger says. "This is their home." CMI's headquarters in Columbus, Ind, is also the hometown of Vice President Mike Pence. CMI has aggressively recruited foreign-born employees and foreign-based companies to Columbus in recent decades. CMI is one of the top corporate users of H-1B visas for foreign nationals with special skills.

Sep 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- U.S. oil prices edged up as the gradual restart of refineries in the Gulf of Mexico that were shut by Hurricane Harvey raised demand for crude, their main feedstock.
- Gold prices edged up, hovering around their highest levels in nearly a year, as North Korea's most powerful nuclear test to date underpinned haven demand for the precious metal.
- Base metals opened mostly firmer, with London copper hitting a fresh three-year high on expectations of further signs of a healthy economic outlook for China.
- Chicago soybeans rose for a third consecutive session with prices climbing to a the highest in almost a month as expectations of strong demand underpinned the market.
- The dollar slipped against the Japanese yen and Swiss franc as global tensions simmered amid signs that North Korea could conduct more missile tests.

- An index tracking news coverage of the global economy rises in August for the second time in as many months. Absolute Strategy Research, which compiles the ASR/WSJ index, says its measure rose to 59.5 compared with a 58.7 reading in July and cites the inflation component --which rebounded over 8 points "with particularly impressive strength in the US"--as the most striking move within the overall gauge. ASR says its newsflow indicator is at levels consistent with "continued positive outperformance of stocks over bonds." Despite tensions between the US and North Korea, ASR says its Global Policy Uncertainty Indicator hasn't moved much, but thinks that could change in September on fears of a US government shutdown, which has potential "for downside risk ahead."
- Tensions between the US and North Korea could dampen a run in Chinese stocks. The iShares China Large-Cap ETF has rallied over 26% this year, but the sector faces a number of headwinds, says Credit Suisse. There could be a leadership change, and the Trump administration's stance toward China remains uneasy, writes the firm's Mandy Xu in a note. "We could see further hardening in the Trump administration's stance toward China, particularly if China keeps up its support of the North Korean regime," she says. Trump has already threatened to cease trade with China. Expected volatility for the China large-cap ETF has been rising along with geopolitical tensions in the region, but remain relatively muted. Xu recommends buying options on FXI to protect against a downturn.
- In a rare bipartisan act, the Republican and Democratic leaders of the Congressional trade committees issued a statement urging President Donald Trump to keep the US in the bilateral free-trade pact with South Korea. "North Korea's latest nuclear test underscores yet again the vital importance of the strong alliance," said the statement issued by Utah Republican Orrin Hatch and Oregon Democrat Ron Wyden, the chair and ranking member of the Senate Finance Committee, and joined by Texas Republican Kevin Brady and Massachusetts Democrat Richard Neal, the leaders of the House Ways and Means Committee. Trump administration officials said over the weekend that they were considering giving Seoul notice this week that they wanted to pull out of the five-year-old pact. While acknowledging some "frustrations" and the need to "improve" the pact, the four lawmakers wrote that "to be effective and constructive, however, we must not withdraw from the agreement while we do so."
- The imbalance in U.S.-South Korean trade is likely to continue improving, says the American Chamber of Commerce in Korea, reaffirming its support for the US-Korean free trade pact. President Trump is threatening to scrap the pact to reduce the deficit, which has widened--particularly in the auto sector--since the deal took effect in 2012. Amcham says US exports of manufactured goods to South Korea increased by 21.8% in 1H. "With a more focused approach on reducing the trade deficit, AMCHAM is optimistic about additional positive results," Amcham adds, insisting that termination of the deal would do more harm than good to the US economy.

Sep 05 - Sterling Dips As UK Services PMI Slightly Below Forecasts (Dow Jones)
Sterling falls slightly as U.K. services PMI falls a little more than had been expected, with the August reading at 53.2, down from 53.8 in July and compared with the expectations in a WSJ poll for 53.4. GBP/USD falls to $1.2915, from around $1.2921 beforehand. EUR/GBP rises to 0.9200, from 0.9194. Analysts expect Brexit uncertainties to drive sterling's price more than economic data.

Sep 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets were volatile, with U.S. crude rising on production shutdowns while international Brent was pulled down by a flight into gold futures following a powerful North Korean nuclear test explosion.
- Gold prices hit their highest in nearly 10 months after North Korea's latest and most powerful nuclear test drove investors towards safe-haven assets.  
- London copper hit its highest in three years in early Asian trading as investment flowed into industrial metals amid surprisingly robust global factory growth.  
- U.S. corn futures fell on Friday on rising expectations of plentiful supplies from what should be a bumper Midwest harvest beginning later this month, analysts said.
- The yen edged higher against the dollar, as investors trimmed their exposure to riskier assets after North Korea conducted its most powerful nuclear test.
- North Korea's weekend nuclear test will likely make the Trump administration delay plans to withdraw from a free trade pact with ally South Korea, says the New York-based research and consultancy firm Eurasia Group. At a time when U.S.-South Korean solidarity is needed to respond to the nuclear test, an American withdrawal from the deal would fuel anti-U.S. sentiment in South Korea, more questions about Mr. Trump's political acumen and benefit North Korea trying to undermine the U.S. alliance, the firm says in a report Monday. Washington is weighing giving notice to Seoul of plans to pull out of the 5-year-old pact that Mr. Trump blames for a U.S. trade deficit, with a decision arriving as soon as this week.

Sep 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- U.S. crude futures fell in Asian trading, partly reversing sharp gains from the previous session, amid ongoing turmoil in the oil industry with nearly a quarter of U.S. refining capacity offline.
- Gold inched lower as mild profit-taking set in after recent rallies and as investors awaited U.S. jobs data for direction on interest rates, but safe-haven demand kept prices near 9-1/2 month highs as tensions over North Korea lingered.
- Copper firmed in early Asian trading, gaining momentum from a positive outlook for Chinese industrial activity.
- U.S. corn nudged lower but was still poised to record its first weekly gain in more than a month, buoyed by strong Chinese economic data and signs of robust overseas demand for American supplies.
- The dollar stayed off this week's lows in cautious trading as investors awaited key monthly U.S. employment data after other tepid economic data cast doubts on whether the Federal Reserve will raise interest rates again this year.
- The Senate Banking Committee plans a vote Sept. 7 to advance the nominations of Randal Quarles as the Fed's vice chairman for supervision and Joseph Otting as Comptroller of the Currency, according to a notice. Quarles, who would be Trump's first appointee to the central bank, was picked for a role that would make him the most influential US financial regulator. Otting would head up the office that oversees federally chartered banks. Their nominations would proceed to the full Senate after the Banking Committee's vote. Both nominees are expected to be confirmed by the Senate, installing more industry-friendly voices at the country's top bank regulators.
- Senators appear poised to urge the Pentagon to create a "contractor responsibility watch list" targeting companies with a history of "poor performance on space procurement or research" contracts. The pending Senate Defense Department authorization bill for 2018 envisions blacklisting companies with shoddy contract performance, felony or civil judgments or alleged security violations and foreign ownership issues. Criticizing the Air Force for lacking "tools necessary to effectively hold contractors accountable," the proposed language prohibits awarding or amending contracts with companies on the list without specific approvals from senior generals.
- Apple tells the FCC it opposes charging higher fees for faster internet access, a change that poses a direct challenge to the company's ability to continue to charge more for iPhones and generate revenue from services. The company said lifting the current ban on "paid prioritization arrangements" could allow broadband companies to favor one provider's content or services over another. It also said it could create barriers to entry for new online services--many of which are sold through the App Store. FCC Chief Ajit Pai, who was appointed by the Trump administration, plans to roll back the agency's net neutrality rules.
- Nordic markets close higher, with Sweden's OMXS30 index ending the day 0.7% higher, the pan-Nordic OMXN40 index up by 1.2% and Oslo's oil-heavy OBX index gaining 1.4%. "European stocks moved higher, as basic resources shares rose following better-than-expected manufacturing data from China, but retail shares struggled after a warning from French supermarket chain Carrefour," Saxo Bank says in a note. "Miners climbed after an official gauge of China's factory activity rose in August. China is a key buyer of industrial and precious metals, making mining companies sensitive to developments in the world's second-largest economy." Oil's focus remains squarely on the ebb and flow of news out of Texas where cataclysmic flooding has knocked a quarter of U.S. refining capacity off-line, it adds.

Aug 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Gasoline prices hit $2 a gallon for the first time since 2015 as flooding from storm Harvey knocked out almost a quarter of U.S.  refineries, while crude prices stabilised following a slump the previous day.
- Gold fell as the dollar gained on positive U.S. economic data, but the yellow metal held above a key $1,300-an-ounce level as safe haven demand amid tensions over North Korea capped the losses.
- London copper led industrial metals higher in Asia, setting the scene for a third monthly gain in a row after healthy growth at China's factories in August fed expectations of stronger metals demand.
- U.S. corn eased for a fifth straight session, lingering near a nine-month low hit in the previous session and heading for its biggest monthly slide in nearly three years, on abundant global supplies.
- The IPC index of leading stocks closes down 0.2% at 51,194 points, while the peso firms against the US dollar, quoted in Mexico City at 17.73 versus 17.8620 on Tuesday. The peso was hit early in the week after Trump tweeted about possibly terminating Nafta. Trump again assailed the trade pact Wednesday, but speaking in Missouri indicated talks will continue. "We're working right now on Nafta--the horrible, terrible Nafta deal that took so much business out of your state and out of your cities and towns, and we're working on it. Let's see what happens," he said.
- Russian and Chinese officials are predicting they will sign a wide-ranging agreement this fall, setting the stage for cooperation on satellites, controlling space debris and eventually possible joint missions to the moon and deeper into space. Beijing and Moscow announced a limited pact in 2014 to join forces on civilian space programs, but that produced narrow results. Earlier this year, the two countries agreed to work together on some rocket projects. But the latest pact, which could extend through 2022, comes as China seeks to recover from a major launch failure as it pushes to create its own space station, while Kremlin officials issue mixed messages about continuing to partner with the US to lengthen the life of the current international space station.
- The mood in Mexico has started to sour on whether a deal with US President Donald Trump is possible on Nafta. Trump's repeated attacks on Mexico are raising the political costs for Mexican politicians of being seen as too subservient to the US administration. Economy Minister Idelfonso Guajardo is now talking of a Plan B -- Life without Nafta. Mexico may be laying down a marker ahead of next round of talks, but one thing is clear: Trump's tough talk is not going down well south of the border (wall).
- New criminal charges against Brazil's President Temer would have little or no chances of being approved by Congress, political scientist Leonardo Barreto says. Attorney General Rodrigo Janot has indicated he is about to accuse Temer again after his first charges for corruption were dismissed by lawmakers a month ago. Barreto notes the first charges were based on a taped conversation where Temer seemed to condone corruption, something he denies. New ones, Barreto says, would need even stronger evidence. He adds support for Temer now in Congress is as strong as it was before the first charges, and even opposition lawmakers are wary of toppling a president just a year before scheduled general elections.
- Devastation caused by Hurricane Harvey reduces the odds of brinksmanship in Washington, DC next month over the debt ceiling or budget, according to Jan Hatzius, a closely followed economist at Goldman Sachs. Hatzius says the odds of a government shutdown are reduced to 35% from 50%, his call from earlier this month: "Allowing a partial government shutdown when federal relief efforts are underway would pose greater political risks than under normal circumstances, raising the probability that lawmakers will find a way to resolve disagreements." He says that lawmakers are likely to combine disaster relief funds with legislation to raise the statutory debt limit and/or pass funding for the fiscal year that begins Oct. 1. A combined bill that includes relief funds is more likely to pass, he says.

- Markets risk complacency about geopolitical risks, says Simon Derrick, Chief Markets Strategist at Bank of New York Mellon. Equity markets have recovered swiftly from falls Tuesday after North Korea's missile launch over Japan. For Mr. Derrick, this is evidence of a "relative insensitivity to geopolitical risk" that "has proved a winning strategy since 2003." Rather than worry how North Korea tensions could develop, investors therefore saw equity market falls "as a buying opportunity." This adds weight to a warning in the latest U.S. Federal Reserve minutes that: "vulnerabilities associated with asset valuation pressures had edged up from notable to elevated." However, he notes markets' "high sensitivity" to more direct financial risks like the eurozone debt crisis.

Aug 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices slid but gasoline spiked to their highest since July 2015 as flooding and storm damage in the wake of Hurricane Harvey knocked out almost a quarter of U.S. refineries, crimping demand for crude but raising fears of fuel shortages.
- Gold rose as safe-haven demand was buoyed by expectations that geopolitical tensions could persist, although further gains were capped as the dollar recovered slightly amid perception of a brief lull in tensions surrounding North Korea.
- London copper was treading water a whisker from its highest level in three years as a dollar rebound slowed a rally in prices based on China's robust housing and manufacturing growth.
- U.S. corn eased as expectations that the market will soon be flooded with ample North American production pushed prices towards an eight-month low.
- Trump is on his A-game responding to the Harvey disaster, and this may help relieve some of the political risk in the U.S, says Greg Gibbs, currency strategist at Amp GFX. However, uncertainty remains high as the U.S. spending bill/debt ceiling/North Korea issues remain key flash points in the near term. And key events on the economic calendar still await this week.
- The Ninth US Circuit Court of Appeals heard arguments Monday on whether President Trump's administration should be able to enforce its travel ban against extended family of US residents. The arguments were an offshoot of the Supreme Court's review of the travel ban; the justices are scheduled to hear arguments in October. Monday's hearing was meant to determine how to enforce the ban until then. Lawyers argue that a "close relative" should only include parents, children, siblings and in-laws. Lawyers for Hawaii and an imam in the state, who are challenging the travel ban, argue for a broader definition that includes cousins, nieces, nephews, aunts, uncles, grandparents and grandchildren. The three Ninth Circuit judges, all appointees of President Bill Clinton, seemed to prefer the more inclusive version.
- Nordic markets close lower, with Sweden's OMXS30 index ending the day down 1%, the pan-Nordic OMXN40 index down 0.9% and Oslo's oil-heavy OBX index off by 0.8%. "European indices took a bruising after North Korea's missile launch over Japan jangled investors' nerves and the euro rose," Saxo Bank said in a note. "Investors are also grappling with the impact of Hurricane Harvey, which slammed into Texas over the weekend, knocking nearly 15% of U.S. oil refinery capacity out of commission ... the heavy flooding could hurt even more of the country's energy infrastructure." Oil gave up earlier gains as the market reassesses the risk to refineries while also concluding that the peak season in terms of demand has ended, Saxo added.
- Lumber futures fall to their lower limit after the Commerce Department said it was delaying its final ruling on Canadian import penalties. The ruling was due by early September, but has now been pushed back to mid November at the latest. That means that the preliminary countervailing duty, one of two penalties imposed by the US, will be suspended for around 4 months, according to Random Lengths. The US is still collecting preliminary antidumping duties, however. Futures fall as traders bet that mills will lower prices on the cash market. CME September contracts tumble to the bottom of their daily trading band at the opening, before paring back some losses to trade down 1.9% at $373 per 1,000 board feet.
- President Trump was expected to launch a renewed pitch on tax reform and tax cuts this week, but that effort will now be overshadowed out by the storms and massive flooding in Houston and now the North Korean missile launch, according to John Brady, managing director at futures brokerage RJ O'Brien. "It takes tax reform and tax cuts and puts it firmly on page 11," he said. "Without question, geopolitical tensions in the Korean peninsula is the big story." Many market participants have been longing for big corporate tax cuts in 2017, and the confluence of events around the world makes this increasingly unlikely. Brady added that many of the sellers Tuesday morning were fast money, or leveraged accounts that typically must report returns for investors every month or so. "These guys have either been short volatility or long the market," he said.
- The latest deal between Freeport-McMoRan and the Indonesian government, requiring the US firm to nearly halve its ownership in the Grassberg copper and gold mine as well as pay higher royalties, could help elevate President Joko Widodo's political stature. He's tipped to run for another 5-year term in 2019. The protracted negotiations with Freeport were closely watched, as a gauge of how successful Widodo would be to end what's been perceived as a foreign company still benefiting from generous terms agreed under the presidency of long-time dictator Suharto.
- Dara Khosrowshahi, Uber's pick to be its next CEO, is a contrast to the woman he beat for the job, Meg Whitman, with respect to politics. While the Hewlett Packard Enterprise CEO once ran for governor of California on the GOP ticket, Mr. Khosrowshahi has consistently donated to Democrats, according to FEC data. This year he gave $5,400 to Democratic Minnesota congressional candidate Dean Phillips, a classmate of his at Brown University. He has also given to long-time U.S. Democrat Sen. Patty Murray of Washington; Bill Bradley's failed presidential campaign; and former U.S. senators Tom Daschle and Harry Reid of South Dakota and Nevada, respectively. The one outlier is Utah's U.S. Sen. Mike Lee, a Republican to whom he gave $5,000 in 2015.
- AUD/USD gains have stalled on news North Korea fired a missile near Japan. "It's very fluid in forex markets after North Korea shot a missile across Japan to land off the coast near Hokkaido," said Greg McKenna, chief market strategist at AxiTrader. "The forex market's focus has now shifted from the weakness of the USD to the risk-off tone in due to the North Korean actions," McKenna says. "What's important about the North Korean most action is that it ratchets up the pressure on President Trump and Japan to respond. And that may put them squarely in a face-off with China should they respond militarily," he adds.
- The latest North Korean missile, which was launched over Japan and follows escalating rhetoric between Pyongyang and Washington, may not so easily be shrugged off by markets, CMC Markets suggests. For Australian shares, it suggests a break through a 5650 support zone for the S&P/ASX 200 would suggest significant market concern. Ahead of the missile launch, IG had forecast the index would open at about 5715, a modest rise after sliding 0.6% on Monday to 5709.9. Futures now suggest an opening gain of just 1 point. Energy stocks are likely to face pressure after oil prices fell to the lowest in about a month.

Aug 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)  
- Flooding from tropical storm Harvey caused ongoing large-scale U.S. refinery outages, while crude prices rose on the back of supply disruptions in Colombia and Libya.
- Gold prices rose for a third day to its highest since November as mounting geopolitical tensions over a new North Korean missile launch stoked demand for safe-haven assets and weighed heavily on the dollar and equities.
- Chinese nickel futures led most base metals higher, helped by a resurgent market for steel.
- U.S. corn eased to hit an eight-month low as fears of U.S. production losses eased, despite the U.S. Department of Agriculture (USDA) pegging the condition of the crop below forecasts.
- The dollar hit a four-month low against the yen after North Korea fired a missile that passed over northern Japan, the latest act of provocation by Pyongyang that has ramped up global tensions.
- The latest North Korean missile, which was launched over Japan and follows escalating rhetoric between Pyongyang and Washington, may not so easily be shrugged off by markets, CMC Markets suggests. For Australian shares, it suggests a break through a 5650 support zone for the S&P/ASX 200 would suggest significant market concern. Ahead of the missile launch, IG had forecast the index would open at about 5715, a modest rise after sliding 0.6% on Monday to 5709.9. Futures now suggest an opening gain of just 1 point. Energy stocks are likely to face pressure after oil prices fell to the lowest in about a month.
- Global FX market are bracing for the U.S. reaction to North Korea's missile shot over Japanese territory, says Daniel Been, currency strategist at ANZ. Japan has described this as a clear escalation and this appears to be the longest range missile test, and the first to fly over Japan since 2009. Last time Japan took it to the UN Security Council, saying this time it is extremely problematic and dangerous, and a clear violation of UN Security Council violations, he adds.
- Peru's President Pedro Pablo Kuczynski saw his approval rating slide to its lowest level since taking office a year ago. According to pollster GfK, Kuczynski's approval is at 19%, down 13 points from July. The sharp decline in support for Kuczynski comes amid nationwide protests by public-sector teachers who are seeking higher pay. Since taking office last year, Kuczynski's support has eroded as he struggled with political opposition in Congress, leading to several cabinet changes as ministers were forced out of his administration.
- The Japanese yen has strengthened against the dollar in late New York trading amid reports that North Korea fired a missile towards the country. No damage has been reported from the missile, which landed in the water, a Japanese government spokesman said. The dollar slides 0.4% to Y108.88. Despite the risks to Japan, the yen is seen as a safe haven asset and often attracts investors in times of market stress.
- The Mexican peso fell 1.4% against the US dollar after President Trump tweeted that the US may abandon Nafta--days before a second round of talks to redraw the trade pact is set to start in Mexico City. The peso was quoted in Mexico City at 17.8615 to the dollar versus 17.6015 Friday. Mexico could also lose out to widespread flooding that hurricane Harvey is causing in Texas, which is the main recipient of Mexican exports to the US, says Banco Base. In local economic news, the statistics institute reported a wider-than-expected $1.52B trade deficit in July. The IPC stock index closed down 0.2%.
- Mexico's government said it would tie migration and security issues to Nafta's renegotiation, but as the talks began earlier this month, the administration of President Pena Nieto has failed to do so, notes former Foreign Minister Jorge Castaneda. "What we know about the talks is the exact opposite of an integral negotiation, or a so-called whole enchilada," he added. Meanwhile, it's US President Donald Trump who keeps on tying Nafta to those two issues. If one of the negotiating parties seems to prefer not to reach an agreement, as Trump suggests in his hostile tweets about Mexico, then it is "extremely difficult to negotiate under such conditions," he adds.
- The peso is under pressure from President Trump's recent tweets, but there's a familiarity to the selling. The peso fell to record lows early in the year amid Trump threats to pull the US out of NAFTA. The currency has since recovered--rallying 17% against the greenback this year--as the White House appeared to soften its tone. The dollar recently rose 0.8% against the peso and was essentially flat against the Canadian dollar.
- The Canadian government waved off President Trump's Sunday threat to terminate NAFTA as a moment of "heated rhetoric" typical of trade negotiations. "We will work with our partners at all levels in the United States to promote Canada-US trade, which support millions of jobs across the continent," says a spokesman for Canada's Global Affairs department in a statement.
- President Donald Trump's pardon of former Maricopa County Sheriff Joe Arpaio bucked suggested protocol but was well within presidential powers under the US Constitution to set aside punishment even for crimes against courts, legal experts say. The president's critics and some members of his own party criticized the pardon, saying it undermined the rule of law to reward a man who flatly ignored a federal court order and showed no remorse for behavior that amounted to racial profiling. Whether or not Trump's actions were prudent, they were almost certainly legal, even some of his critics have acknowledged. The Supreme Court has held that the president's clemency powers "cannot be modified, abridged, or diminished by Congress," and that he can pardon criminal contempt of court, a crime determined
by the judiciary without a jury.
- Amazon apparently thinks Cleveland rocks, as the company says it plans a new robotic warehouse for a nearby Ohio suburb. The new fulfillment center creates more than 2,000 full-time jobs, bringing the online retail giant closer to its pledge to create 100,000 full-time jobs in the US through mid-2018. While the pledge was seen as a way to capitalize on existing plans to promote better relations with President Donald Trump, so far AMZN and Trump still appear to be on rocky footing.
- Worsening tensions between the U.S. and North Korea would benefit the euro and Swiss franc, pushing EUR/USD even higher, says Rabobank. "Since the conflict is taking place on the Pacific Rim, the Swiss franc and the euro are likely to be seen as safe havens for investors every time tensions between the U.S. and North Korea--and/or China--escalate," it says. EUR/USD rose to a two-and-a-half-year high at $1.1965 overnight, according to Factset. Rabobank also expects U.S. treasuries to remain safe havens for U.S. and non-U.S. investors. It sees potential for risk aversion on financial markets "for the next few years."

Aug 28 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets were roiled after Hurricane Harvey wreaked havoc along the U.S. Gulf coast over the weekend, knocking out numerous refineries and some crude production.
- Gold rose to its highest in over a week, extending gains from the previous session, after U.S. Federal Reserve Chair Janet Yellen skipped any mention of monetary policy in a speech at a central bankers meeting in the United States.
- Most Chinese base metals futures were lower as investors took profits following hefty gains last week. U.S. corn edged up from a more than seven-month low as a weaker dollar lent some support, although gains were checked by easing fears of widespread production losses.
- The euro extended gains to a 2-1/2-year high against the dollar after the European Central Bank president held back from talking down the currency and as markets worried about the impact of Tropical Storm Harvey on the U.S. economy.
- The euro jumped to its highest level against the dollar in more than two and a half years after European Central Bank President Mario Draghi said nothing to talk down the euro at his speech in Jackson Hole Friday. The euro was also lifted by dollar weakness after U.S. Federal Reserve Chair Janet Yellen made no reference to monetary policy in her own Jackson Hole speech. Unicredit says investors "may be tempted to test new EUR/USD highs in the coming days," despite EUR/USD rising as high as $1.1965 overnight, its strongest since January 2015. This leaves Unicredit's $1.20 year-end target "firmly in sight." The euro last trades at $1.1936, with the $1.20 level likely to act as strong resistance.
- Yellen's staunch defense of the current U.S. financial sector regulatory settings in a speech at Jackson Hole effectively distanced herself from President Trump's anti-regulatory rhetoric, and it didn't really enhance her reappointment chances, says Rodrigo Catril, currency strategist at NAB. "To many it was seen as her valediction speech as Fed Chair," he adds. As Yellen was delivering her speech the USD came under pressure, he noted.
- The message from Draghi and Yellen from Jackson Hole on the risks associated with lax financial regulation when monetary policy is accommodative seemed well coordinated, says ANZ. They'd probably never admit it, but it certainly felt as though the message was being directed at President Trump and a U.S. administration that has talked about repealing large swathes of Dodd-Frank, it adds. Draghi also commented on the increased threat of protectionism.

Aug 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose as the U.S. petroleum industry prepared for potential output disruptions as Hurricane Harvey headed for the heart of the nation's oil industry in the Gulf of Mexico.
- Gold was unchanged, with investors awaiting directional clues from speeches due later in the day at a gathering of central bankers in the United States.
- Copper was trading close to its highest in nearly three years, tracking a firmer London session on the back of robust demand signs in China and falling stockpiles.
- U.S. soybeans edged lower, although the oilseed was poised to record its first weekly gain in more than a month as strong export demand provided support.
- The dollar was buoyant against the yen as some participants bought back the currency to square positions ahead of a meeting of central bankers in Jackson Hole, Wyoming.
- One sign bond investors are increasingly skeptical of the Trump administration's ability to push through its policy agenda: a recent rally in 30-year Treasury bonds. The yield on the 30-year Treasury fell Wednesday to 2.748%, its seventh lowest level of the year. "Even more than the 10-year, [the 30-year Treasury bond] follows the trajectory of President Trump's political support," says Jim Vogel, interest rates strategist at FTN Financial. While soft economic data likely pushed yields lower in June, Vogel attributes the August rally in long-dated debt to "the intersection of politics and U.S. fiscal/military policies."
- Some pundits in Brazil are reducing their forecast for interest rates as the Temer administration pushes an ambitious privatization agenda. Jason Vieira from Infinity Asset now sees the Selic benchmark lending rate reaching an all-time low of 6.5% sometime next year, down from 9.25% now and 14.25% when an easing cycle began a year ago. Vieira says the privatization will help plug a gaping budget hole in the long term, eliminating a key pressure on consumer prices and giving room for lower rates. Other market-friendly policies, including a possible elimination of subsidized corporate credit, will also help bringing down borrowing costs without fueling inflation, he said.
- Gold is down 0.29% at $1,286.85 a troy ounce on dollar gains and ebbing geopolitical risk. With this, gold further retreats from the three-month highs it hit Monday. The WSJ Dollar Index is up 0.08% at 86.11. USD gains make dollar-denominated commodities more expensive for holders of other currencies. A lack of fresh political news out of the U.S. allowed a slight rally in the dollar and for investors to take profit on gold's recent gains, said ETF Securities's Nitesh Shah. In Arizona Tuesday President Trump threatened to shut down the government in order to secure funding for a wall on the U.S.-Mexican border. The brevity of gold's gain shows that "clearly the majority of market participants do not yet believe that Mr. Trump will actually go that far," Commerzbank says.
- A speech by European Central Bank President Mario Draghi late Friday night Europe time at Jackson Hole in Wyoming might not be worth planning your evening around, some analysts say. "ECB head Draghi is unlikely to say anything new on the near-term monetary policy outlook," HSBC analysts say in a note Thursday, though they add that with the ECB's September meeting upcoming, Draghi might be unable to completely avoid the topic. "Our view is that any comments will be aimed at preventing a further rise in the euro, rather than providing anything for hawkish investors to latch on to," they add.
- South Korea Assembly Speaker Chung Sye-kyun remains open to the idea of changing the 5-year-old free-trade agreement with the US for the better. "Overall, the Korus FTA created reciprocal benefits, but there need to be some efforts for improvement--if necessary--based on reviews of matters affecting the operation" of the pact, he said during a meeting with American Chamber of Commerce members. Earlier this week, the countries held talks on the deal, which the Trump administration blames for a widened trade deficit between the two in recent years. The US is insisting on modifying the FTA, but South Korea opposes any change without recommendations from an objective joint study.
- Neither Jackson Hole nor early September's ECB meeting are expected to produce surprises. Yet investors remain cautious, highlighted by a weakened dollar-yen. "This is possibly due to Trump," says Masashi Murata, currency strategist at Brown Brothers Harriman in Tokyo. "That's why it is very hard to find any direction in the dollar-yen right now." Still, some investors look at now as a chance to take a long position on the greenback versus the yen. "And once it reaches up to Y110-level, they may sell." The dollar has been around Y109 much of the past few days. In the meantime, Murata says Trump is likely to continue causing "temblors on dollar-yen trends."
- Britain has started to lift some restrictions on the use of laptops on some inbound international flights weeks after the US dropped its ban on gadgets. The UK in March quickly followed the US in ordering a partial ban on large electronics carried in the cabin of some flights over terrorism concerns. Now London has rescinded a the ban on flights from Tunisia and Istanbul's second largest airport after additional security measures were put in place. Bans, for now, remain at the main Istanbul hub and some other of the country's airports as well as flights inbound from Lebanon, Jordan, Egypt and Saudi Arabia, the UK government says.
- Canadian bonds end a recent losing streak as fixed-income prices rose amid growing uncertainty on the future of Nafta following comments made by Trump. The yield for Canada's two-year bonds was recently at 1.259% from 1.269% late Tuesday, according to electronic trading platform CanDeal. The 10-year bond yield was at 1.883% from 1.929%. Bonds rose as Trump spoke at a rally late Tuesday, remarking that he is considering terminating Nafta as well as threatening to shut down the government over border wall funding. Canadian fixed-income continued to underperform US Treasurys amid ongoing muted summer trading conditions on the broader market.
- Loans and leases for business equipment rose 13% to $7.9B in July from a year earlier, says a survey of 25 major lenders by the Equipment Leasing and Finance Association. July's lending and lease orginations by the respondents were down 19% from a typically strong June. Financing volume for the year so far is up 6.2% from last year to $54.5B, as businesses continue to take advantage of low interest rates, tame inflation and a roaring stock market to lease or purchase equipment. "All eyes will be on Washington in the coming months to glean whether this benign economic condition continues," says association President Ralph Petta.
- Prioritizing payments on US debt while delaying others if Congress fails to raise the debt limit could imperil the country's AAA credit rating, Fitch Ratings says. The Treasury Department has said it has enough cash to keep paying the government's bills through September, but Secretary Steven Mnuchin has urged lawmakers to raise the limit before then. Federal officials have previously said the government could technically continue paying bondholders while delaying payments to others, including Social Security recipients, veterans and federal workers, if the ceiling isn't raised in time. Fitch says that "the economic impact of stopping other spending to prioritize debt repayment, and potential damage to investor confidence in the full faith and credit of the US, which enables its 'AAA' rating to tolerate such high public debt, would be negative for US sovereign creditworthiness."
- Analysts are attributing the day's modest risk-off moves in markets to comments from U.S. President Donald Trump threatening to shut down the government to secure funding for a wall on the southwest border. Although most expect the debt ceiling to ultimately be raised, "it's a reminder to everybody that the world is awash with debt," says Russ Mould, investment director at AJ Bell, pointing to concerns around U.S. auto delinquencies and PCP (car loan) packages in the U.K. "How sustainable are those debts if interest rates move towards anything we could conceive as being normal?" he adds.

Aug 24 - Any Euro Sell-Off on Draghi Could Be Short-Lived (Dow Jones)
Any knee-jerk sell-off in the euro if European Central Bank President Mario Draghi plays down prospects of tapering at his speech on Friday at Jackson Hole could prove short-lived, says Boris Schlossberg, Managing Director of FX Strategy at BK Asset Management. Mr. Draghi will have to "dampen any expectations of an immediate taper," he says, because the ECB will not want EUR/USD rising toward $1.20 in 4Q "for fear of making exports from the region uncompetitive." However, he has a difficult task. "Unless he unequivocally states that no taper is coming for the foreseeable future, the EUR/USD could shrug off any knee jerk sell-offs." EUR/USD last trades down 0.08% at $1.1801.

Aug 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil was steady, holding gains from the previous session after another fall in U.S. crude inventories indicated a tighter market, and as a tropical storm was heading for oil producing facilities in the Gulf of Mexico.
- Gold nudged lower, giving up some of its gains made after U.S. President Donald Trump's threat of a government shutdown, with investors remaining focused on a major central bankers conference in Jackson Hole.
- Chinese nickel futures surged to a near six-month high on the back of strong gains in overnight London Metal Exchange prices amid supply concerns and declining inventories.
- U.S. corn rose for the first time in four sessions, edging up from a near five-month low touched earlier in the session, after a widely watched crop tour reported lower yield estimates in a key producing region.
- The dollar edged higher against the yen, paring some of the losses it suffered after U.S. President Donald Trump suggested a shutdown of the government was possible and threatened to terminate the North American Free Trade Agreement.
- South Korea Assembly Speaker Chung Sye-kyun remains open to the idea of changing the 5-year-old free-trade agreement with the US for the better. "Overall, the Korus FTA created reciprocal benefits, but there need to be some efforts for improvement--if necessary--based on reviews of matters affecting the operation" of the pact, he said during a meeting with American Chamber of Commerce members. Earlier this week, the countries held talks on the deal, which the Trump administration blames for a widened trade deficit between the two in recent years. The US is insisting on modifying the FTA, but South Korea opposes any change without recommendations from an objective joint study.
- Neither Jackson Hole nor early September's ECB meeting are expected to produce surprises. Yet investors remain cautious, highlighted by a weakened dollar-yen. "This is possibly due to Trump," says Masashi Murata, currency strategist at Brown Brothers Harriman in Tokyo. "That's why it is very hard to find any direction in the dollar-yen right now." Still, some investors look at now as a chance to take a long position on the greenback versus the yen. "And once it reaches up to Y110-level, they may sell." The dollar has been around Y109 much of the past few days. In the meantime, Murata says Trump is likely to continue causing "temblors on dollar-yen trends."
- Britain has started to lift some restrictions on the use of laptops on some inbound international flights weeks after the US dropped its ban on gadgets. The UK in March quickly followed the US in ordering a partial ban on large electronics carried in the cabin of some flights over terrorism concerns. Now London has rescinded a the ban on flights from Tunisia and Istanbul's second largest airport after additional security measures were put in place. Bans, for now, remain at the main Istanbul hub and some other of the country's airports as well as flights inbound from Lebanon, Jordan, Egypt and Saudi Arabia, the UK government says.
- Canadian bonds end a recent losing streak as fixed-income prices rose amid growing uncertainty on the future of Nafta following comments made by Trump. The yield for Canada's two-year bonds was recently at 1.259% from 1.269% late Tuesday, according to electronic trading platform CanDeal. The 10-year bond yield was at 1.883% from 1.929%. Bonds rose as Trump spoke at a rally late Tuesday, remarking that he is considering terminating Nafta as well as threatening to shut down the government over border wall funding. Canadian fixed-income continued to underperform US Treasurys amid ongoing muted summer trading conditions on the broader market.
- Loans and leases for business equipment rose 13% to $7.9B in July from a year earlier, says a survey of 25 major lenders by the Equipment Leasing and Finance Association. July's lending and lease orginations by the respondents were down 19% from a typically strong June. Financing volume for the year so far is up 6.2% from last year to $54.5B, as businesses continue to take advantage of low interest rates, tame inflation and a roaring stock market to lease or purchase equipment. "All eyes will be on Washington in the coming months to glean whether this benign economic condition continues," says association President Ralph Petta.
- Prioritizing payments on US debt while delaying others if Congress fails to raise the debt limit could imperil the country's AAA credit rating, Fitch Ratings says. The Treasury Department has said it has enough cash to keep paying the government's bills through September, but Secretary Steven Mnuchin has urged lawmakers to raise the limit before then. Federal officials have previously said the government could technically continue paying bondholders while delaying payments to others, including Social Security recipients, veterans and federal workers, if the ceiling isn't raised in time. Fitch says that "the economic impact of stopping other spending to prioritize debt repayment, and potential damage to investor confidence in the full faith and credit of the US, which enables its 'AAA' rating to tolerate such high public debt, would be negative for US sovereign creditworthiness."
- Analysts are attributing the day's modest risk-off moves in markets to comments from U.S. President Donald Trump threatening to shut down the government to secure funding for a wall on the southwest border. Although most expect the debt ceiling to ultimately be raised, "it's a reminder to everybody that the world is awash with debt," says Russ Mould, investment director at AJ Bell, pointing to concerns around U.S. auto delinquencies and PCP (car loan) packages in the U.K. "How sustainable are those debts if interest rates move towards anything we could conceive as being normal?" he adds.

Aug 23 - Sterling Slides Further, Data Lifts Euro (Dow Jones)
Sterling falls further, reaching its lowest in eight weeks against the dollar while the euro breaks above 0.92, as investors continue to shun the currency due to Brexit uncertainty. GBP/USD falls 0.2% to a low of $1.2792, while EUR/GBP rises 0.4% to a high of 0.9215, as the U.K.'s release of policy papers on Brexit this week fails to reassure investors. Morgan Stanley likes GBP shorts, "even against an otherwise weak USD," adding it sees long EUR/GBP as the best GBP bearish trade. It cites concerns that "lack of clarity in respect of the U.K.'s post-Brexit position may start hitting investment plans." Meanwhile, above-forecast eurozone manufacturing PMI benefits the euro. EUR/USD up 0.2% at $1.1787.

Aug 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell, weighed down by concerns of oversupply as Libyan output improves and as U.S. gasoline inventories rose despite the peak  summer driving season.
- Gold prices inched higher as the dollar slipped after remarks by U.S. President Donald Trump raising the spectre of a government shutdown if needed to fulfil a campaign pledge to build a wall on the country's border with Mexico.
- London metals slipped as the dollar stood tall ahead of a meeting of global central bankers at Jackson Hole in the United States later in the week.
- U.S. soybeans rose to a two-week high as reports of lower-than-expected yields during a widely followed U.S. crop tour stoked fears that production would fall to match official estimates.
- The yen strengthens against the US dollar, with the USD/JPY pair last at around 109.35, from the upper 109-range earlier in the Asian session. The movement came at around the time of the Bank of Japan's daily bond-buying operation results, although some analysts point to President Donald Trump's remarks at a rally in Phoenix, Arizona. "There were some headlines around US politics. I don't know if that's the cause, but the move coincides with the headlines," says Shusuke Yamada, FX strategist with Bank of America Merrill Lynch. Overall, the yen's strength indicates investors are still cautious about US politics and tensions in North Korea. It also shows investors are cautious ahead of central bank meetings later this week. "There could be surprises either way."
- Inflation expectations fell in Buenos Aires province, the key battle ground where former president Cristina Kirchner is trying to stage a political comeback. People in Greater Buenos Aires expect consumer prices to rise 20% over the next year, according to the median response to a survey by Torcuato Di Tella University. That's down from 25% a month ago. The decline is potentially good news for President Mauricio Macri, whose ruling coalition is trying to prevent Kirchner from winning a race for a Senate seat to represent the province. Elsewhere in the nation, where Kirchner is exceptionally unpopular and Macri polls well, inflation expectations were also 20%, unchanged from a month ago.
- Argentina narrowed its primary fiscal deficit in July as it reduced costly subsidies that have been busting its budget for years. The deficit totaled 22B pesos ($1.26B) in July, compared with ARS24.3B a year earlier, the Treasury Ministry says. That puts the accumulated deficit for the first seven months of the year at 1.7% of gross domestic product. That also gives the government plenty of room to meet its 3.2% target for the first nine months of 2017. Argentina spent about ARS20B in economic subsidies in July, down 29% from the same month a year ago. While cutting subsidies has proven unpopular with Argentines who now pay higher gas and electricity prices, it is putting the budget on a more sustainable path and showing investors that President Mauricio Macri is serious about improving the country's long-term economic outlook.
- Even as Congress considers major revisions in how the Pentagon acquires space hardware, a Senate panel is advocating even more far-reaching changes in procurement rules covering the Special Operations Command. Buried deep in the Senate Armed Services Committee's 2018 military authorization bill, there is language urging that special operations be exempt from Defense Department-wide acquisition procedures. Within four months of passage, the legislation calls for the Secretary of Defense to report on the "feasibility and advisability" of giving the head of the command independent acquisition authority for equipment, supplies and services. Such a change would help speed up research, prototyping, development and fielding of "special-operations peculiar" items, according to the panel.
- U.S. corporate bonds should benefit from earnings growth, strong consumption data and a generally solid economic backdrop over the rest of 2017, but a "deteriorating political situation" could weigh, according to BNP Paribas head of U.S. credit research Uma Rickheeram. U.S. President Donald Trump is losing support domestically and internationally, which could be contributing to a loss of confidence, she adds. But barring major shocks, U.S. economic expansion could go on for the next 12 to 18 months.
- Yields on European government bonds aren't expected to move much Tuesday or the rest of the week, but if they do, they are more likely to go down than up, according to Societe Generale. Apart from the more risk-averse nature of the market after recent U.S-North Korea tensions, which typically benefits haven government bonds, low levels of new debt issuance during the summer period also tends to boost bonds. Yields on German bunds and U.K. gilts have been on a downtrend since July. Yields drop as bond prices rise.

Aug 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose, lifted by indications that supply is gradually tightening, especially in the United States.
- Gold prices were a touch lower, pressured by an uptick in the dollar, with investors focusing on tensions over North Korea and remaining cautious ahead of an annual central banking meeting in Jackson Hole later this week.
- London copper edged down from three-year highs touched the session before, but the resumption of a rally in iron ore prices offered support to the sector.
- U.S. corn edged higher, rebounding from a near two-month low in the previous session, as reports of variable yields from a widely watched crop tour raised fears that production will not match official estimates.
- Treasury Secretary Steven Mnuchin reiterates his preference for a "clean" increase of the federal borrowing limit without conditions attached, such as federal spending cuts. "This is not about spending money," he says at an event in Louisville, Ky. "This is about paying for what we've spent and we cannot put the credit of the US on the line." Mnuchin, appearing at the event with Senate Majority Leader Mitch McConnell (R., Ky.), also urges Congress to raise the debt limit by the end of September. Treasury has said it can continue to pay the government's bills through the end of next month, but may start to miss payments if lawmakers don't increase the ceiling by then.
- Tamas Varga, an analyst at oil brokerage PVM Associates, argues there are currently three key drivers of financial and oil markets, which have all tended toward the downside: Brexit, Trump and OPEC. Uncertainty around the Brexit negotiations between the UK and the EU, investor concern over instability in Washington and OPEC's efforts to rebalance the oil market amid declining compliance with its output cut deal and rising production in Libya and Nigeria are all weighing on markets, Varga wrote in a note Monday. First and foremost, OPEC "will need to deal with its overproduction soon otherwise last week's price level will look expensive in the not so distant future," he cautioned.
- Nordic markets close lower Monday with Sweden's OMXS30 index ending the day 0.5% lower and the pan-Nordic OMXN40 index down 0.3%. European stocks were held back Monday on renewed U.S.-North Korea tensions, as the U.S. and South Korea started joint military drills, Saxo Bank said in a note. A.P. Moeller-Maersk shares outperformed on the day, though, after the shipping heavyweight reached a deal to sell its oil and gas business for $7.45 billion to French oil producer Total SA. In oil, the market traded quietly, with West Texas Intermediate recovering some of its losses relative to Brent. "Ahead of the weekly inventory report on Wednesday, the upside for WTI seems limited to $50/barrel." Oslo's oil-heavy OBX index closed just lower.
- Congressman Jim Bridenstine, the Oklahoma Republican expected to head NASA, has a history of sharply criticizing both civilian and military space leaders for running "stovepiped" programs that fail to realize satellites and other spacecraft are "capable of doing multiple functions for many different agencies." In a speech earlier this year, he complained about "all the different chains of command" the military relies on in the space realm, so "you can't figure out who is in charge of anything." The likely nominee has urged top-level coordination from the White House to "maximize the utility of space." But when it comes to the agency he is in line to run, the three-term lawmaker has said NASA is "more popular than any other agency" and "reflects what is really phenomenal about the US."
- JPMorgan will donate $1M to the Southern Poverty Law Center and Anti-Defamation League "to further their work in tracking, exposing and fighting hate groups and other extremist organizations," following the recent clashes in Charlottesville, according to an internal bank memo sent today. Starting in September, the bank says it will match employees' donations to a range of human and civil rights organizations two-for-one, up to an additional $1M, according to the memo, sent by Peter Scher, the bank's corporate responsibility head. This follows bank chief James Dimon saying in an employee memo last week that he "strongly" disagreed with President Trump's reaction to Charlottesville and personally supported the disbanding of the president's strategic and policy council that he was a
member of.
- U.S. politics has been a focus for investors this year with Trump's inability to get his policy agenda moving forward, resulting in an unwinding of the reflation trade. While U.S./North Korea relations may maintain headline news and market volatility, the move higher in bond yields since the news that Stephen Bannon had left the White House suggests that some are seeing this as a turning point, says Skye Masters, bond strategist at NAB. "The view being that we could now see some stability in the administration and hopefully a focus back to resolving the debt ceiling issue and getting some sort of tax reform passed," Masters adds.

Aug 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets were stable, largely holding on to Friday's big gains even though rising U.S. output weighed on hopes the market will tighten after a 13 percent fall in U.S. crude inventories since March.
- Gold prices were little changed as investors sought further direction after a week of geopolitical uncertainty in the United States and Europe and ahead of a meeting of central bankers later this week.
- London zinc rose to its highest price in a decade and nickel also rallied as investors ploughed into metals used by China's steel sector, seeing robust demand even as capacity is constrained by Beijing's drive to reform bloated industries.
- U.S. corn fell nearly 1 percent as forecasts for rain eased fears of widespread production losses due to recent dry weather, pushing prices to around a seven-week low.
- The dollar steadied, edging away from four-month lows against the yen plumbed in the previous session as investors turned their focus from political turmoil in Washington to the Federal Reserve's annual central banking conference in Wyoming.
- The Cleveland Clinic has faced public pressure to disengage with Donald Trump and Thursday announced it would not hold its scheduled 2018 fundraiser at Mar-a-Lago "after careful consideration." Eileen Sheil, a spokeswoman for the Cleveland Clinic, said public pressure to relocate the event was among the reasons for the decision to pull out of Mar-a-Lago for 2018. "We have been well aware of the community concern, of course that was a factor," she said. The clinic's annual fundraiser at Trump's Mar-a-Lago Florida resort provoked an outcry early in the year from critics of the president's travel ban, who urged the Cleveland Clinic to move the fundraiser and condemn the White House immigration policy. The event went ahead as scheduled in February. At the time, the Cleveland Clinic said it was too late to reschedule.
- Pending FAA reauthorization legislation has reignited congressional debate over air-quality standards on board airliners, with several Senate Democrats pushing for stepped-up crew training, installation of carbon monoxide monitors and expanded federal research on the general topic. Since the early 1980s, the FAA and lawmakers have considered possible efforts to crack down on fumes and contaminants during flights. But scientific opinion about safety hazards has been mixed, leaving all sides unhappy and the airline industry lacking long-term direction about potential moves. Now, the latest regulatory drive seeks, for the first time, to reliably quantify potential health risks and calls on FAA regulators to mandate certain air-quality sensors. Critics of such changes counter that scientific evidence remains inconclusive and air-quality shouldn't be elevated above other, more-conventional safety issues.
- Gold prices fall into negative territory on reports that President Donald Trump's chief strategist Steve Bannon has left the White House. Gold for December delivery was recently down 0.1% at 1,291.40 after earlier hitting its highest level since November at $1,306.90. The Barcelona terror attack and uncertainty about the Trump administration's fiscal agenda had been supporting prices. Some say the long-term backdrop for gold is still positive even after the Bannon news. "I wouldn't read too much into that," said Bill O'Neill, co-founder of LOGIC Advisors. "There's still a myriad of potential events that can happen down the line that should prove bullish for gold," he said.
- Goldman Sachs economists say the crushing levels of public disapproval now gravitating toward President Donald Trump don't bode well for his legislative agenda. The bank says there's an even chance of another government shutdown, and note that if progress isn't made on tax cuts by October, they probably won't happen. One small positive observation from Goldman: They expect to see the debt ceiling being raised.
- Treasurys pull back, while stocks gain, on multiple reports that Steve Bannon is leaving his position in the Trump administration. Investors see Bannon as a leader of a nationalist wing of the White House, which has clashed with officials more aligned with traditional, pro-business GOP policies. The 10-year yield was recently 2.210%, up from an intraday low of 2.164% and 2.197% Thursday.
- Germany's DAX ends down 0.3% at 12,165.19, with the terror attacks in Barcelona and rumors Thursday that a key adviser in the White House could resign curbing risk appetite. Adidas drops 1.3% after US retailer Foot Looker says sales were way below forecasts. Stada shares jump 13% after the company says shareholders accepted Bain and Cinven's takeover bid. Hapag Lloyd gains 3.9% on signs improving world trade could help salvage Germany's beleaguered shipping sector.
- Argentina's peso, which had come under pressure in the weeks before a key primary election last Sunday, has strengthened since the vote and by Friday appeared to stabilize at about 17.50 to the US. dollar. That's far from the nearly 18 peso-dollar rate it hit before the vote and it shows how much more confident investors are that President Mauricio Macri will successfully overhaul Argentina's economy. Some analysts had predicted the peso would weaken to beyond 19 if Macri's ruling "Let's Change" coalition performed poorly in the vote and in a follow-up mid-term election in October.
- London's blue chips fall as fears about the direction of the Trump administration hit US shares and drag European peers with them. The FTSE 100 Index drops 0.9%, or 63.9 points, to 7324 as the Dow declines 0.1%, with Germany's DAX and France's CAC 40 also falling. "The President isn't just alienating the already hostile Democrats, but swathes of his own party, with more and more Republicans disturbed by his reaction to the white nationalist protests in Charlottesville last weekend," says Connor Campbell at Spreadex. On a quiet day for London equities, Randgold Resources is the top riser, up 1.2% as the gold price gains 0.3% on geopolitical concerns. Airlines fall on fears about tourism after the Barcelona terror attacks.
- Days after a key primary election showed that Argentines are unexpectedly supportive of President Mauricio Macri, the World Bank's president, Jim Yong Kim, flew to Buenos Aires to offer his own support for the president. "I am very impressed and enthusiastic about the reforms President Macri is pursuing," Kim says at a joint news conference with Macri. Kim's comments stand in sharp contrast to the frosty relationship that multilaterals had with Macri's predecessor, Cristina Kirchner, and are reflective of the country's improving ties with investors and business leaders around the globe. Over the next year, the World Bank expects to offer up to $1B financing for Argentina's public sector and an equal amount to private sector companies.
- The 16-year wait of over for Argentine lemon producers wanting to sell fruit in the US. After a visit to Buenos Aires by Vice President Mike Pence, Argentina says the US Department of Agriculture has given final approval to a request by President Mauricio Macri to open the market to local lemons. "We estimate annual exports to reach about 20,000 tons and total about $50M," Argentina's foreign ministry says. The issue has long been a thorn in the side of bilateral ties and Macri can tout the opening as a political victory. "Argentina and the US continue conversations to quickly open the market for sheep and cattle meat, as well as other fruit and citric products," the ministry says.
- With gold prices hitting their highest level since November Friday, gold investment firm Pure Gold Co. says it has seen a 65% increase in first-time investors buying physical gold this week. Prices are on track to end the week on a three-session winning streak, as the Barcelona terror attack and doubts about the Trump agenda have pushed investors into haven assets. Gold has risen roughly 12% this year, with much of that gain coming since early July.
- President Mauricio Macri obtains newfound influence over Argentina's judiciary, opening the door to an overhaul of key federal courts long suspected of corruption. Macri's ruling "Let's Change" coalition acquires enough seats on a key congressional magistrates council to influence which judges are appointed or removed from power. The council voted on Thursday to suspend a controversial judge who has often ruled in favor of Macri's top critic, former president Cristina Kirchner. Kirchner, who is under criminal investigation in several federal fraud and corruption cases, has claimed Macri is conspiring with judges to put her in jail. Anti corruption advocates say the suspension and possible impeachment of the judge could help clean up a court system that almost never imprisons anyone on corruption charges.

Aug 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped as part of a broad-based selloff across markets and despite signs that crude markets are gradually tightening.
- Gold was mostly steady amid weaker Asian stocks, with some investors gravitating towards safe-haven assets on political uncertainty in the United States and after a van mowed through crowds in Barcelona, killing 13 people.
- Shanghai metals futures opened lower across the board, weighed down by currency uncertainty and negative sentiment in metals markets overnight.
- U.S. wheat futures climbed off contract lows, but gains were modest as investors remained largely bearish towards the grain amid ample global supply.
- The dollar slipped versus the yen, hampered by renewed investor concerns over the Trump administration's ability to push forward its economic policy agenda.

- Further troubles in the Trump Administration risk hurting market confidence and business sentiment, says Paul Flood, a multi-asset portfolio manager at Newton Investment Management, which manages A$90 billion in assets. "It is better to look for opportunities outside of the US, where there is better momentum for growth or reform," given the run up in US valuations following the presidential election, says Flood. Overnight, US government bond prices briefly surged on unconfirmed rumors that US National Economic Council Director Gary Cohn was resigning after Trump's comments on Charlottesville. Prices for most US government bonds have since declined with yields higher in Asian trade.
- The risk-off tone in global market is a case of markets waking to recent White House events, ANZ Bank says. CEOs quitting forums, two business councils being disbanded and rumors of White House economic aide Gary Cohn's possible departure are acting to reinforce that policy uncertainty is not only high, but the whole US policy agenda faces challenges. It's only natural that markets questioned the ability of pro-growth tax reform to be delivered, ANZ adds. Market volatility has been remarkably contained to date given the degree of policy uncertainty, and the lift in volatility is just a case of some catch up, it says.
- The stock selloff isn't letting up in after-hours trading. S&P 500 futures were recently down 1.8% after a White House official said a planned advisory council on infrastructure won't move forward. The development was the latest setback for the Trump administration, which disbanded two CEO councils this week after executives criticized Trump's response to protests in Charlottesville, Va. Weak earnings sent the DJIA to its biggest decline in three months.
- Federal Reserve Bank of Minneapolis President Neel Kashkari says he can't see himself running for office for at least the next 20 years. But, the former Republican candidate for governor of California adds, "never say never." Kashkari, a former a top Treasury department official during the financial crisis, says he likes living in Minnesota. "I just got to the Fed," says Kashkari, who joined the bank in 2016. "I love it." Running for office again isn't out of the question in the future. "Maybe in 20 years, but for now I'm happy at the Fed," he says.
- Kaiser Permanente's Bernard J. Tyson is the latest CEO to communicate with employees about the events in Charlottesville and their aftermath, including criticism of President Trump's handling of the issue. In a note sent today, he writes that "the recent events in Charlottesville, Virginia and the president's response have been disheartening and unsettling." Tyson, who has previously written publicly about race relations and his experiences as an African American in the US, said Kaiser has long championed inclusion and remains "committed to being a safe place that embraces our country's diversity."
- In an otherwise quiet trading session, Treasurys briefly surged as unconfirmed rumors swirled that Gary Cohn, the National Economic Council director, was resigning in the wake of President Trump's Charlottesville remarks. The yield on the benchmark 10-year US Treasury fell as low as 2.210% before rebounding to trade recently at 2.229%. Two White House aides told The Wall Street Journal that Cohn hasn't resigned and is not planning to do so. Cohn is one of the president's closest advisers and Trump has said he is considering Cohn for the chairmanship of the Federal Reserve. Investors and analysts say the response shows traders are closely following events at the White House.
- Government services contractor CACI says it can still reach its FY18 organic growth target even if there is a government shutdown on Oct 1, though CEO Ken Asbury still believes a continuing resolution -- or stopgap budget -- is a more likely outcome. Two trade groups -- the National Defense Industrial Association and the Professional Services Council -- this week warned members to prepare for the event that the twin requirements for an agreement on the debt ceiling and a new budget aren't satisfied. CACI recovers sharp early drop after reporting forecast-beating quarterly profits, recently up 1.6% at $130.80, with most peers losing ground.
- As President Donald Trump finds himself ever more deeply mired in controversy over his handling of violence in Charlottesville, former Minneapolis Fed leader Narayana Kocherlakota tells Fed leader Janet Yellen to turn down any offer of a second term as chairwoman. "Being appointed by Trump to this position (any position) means - at least implicitly - that you approve of his goals for US," the former central banker warns. "Accepting Fed chair job from him would send a signal that she would regret," he wrote on Twitter. "Her chair term will IMO be remembered as outstanding. She shld not risk any mark on that record and so shld announce 2018 departure."
- The collapse of the White House manufacturing council could actually help advance tax reform, says Charles Gabriel at Capital Alpha. The perceived distance between President Trump and business executives could give the plans a more populist bent, shielding them from accusations of being a payoff to Corporate America. The flip side is that a more isolationist White House also heightens the 'tweet risk' for individual companies, says Gabriel.
- Central and Eastern European currencies will benefit if the U.S. dollar falls, Rabobank says. The dollar is bound to go down on the back of a smaller probability U.S. President Donald Trump can implement his proposed tax reforms, which would make it harder for the Federal Reserve to justify raising interest rates in December, the bank says. "The latest controversy surrounding President Trump implies that the prospects that substantial reforms will be implemented are looking even grimmer," Rabobank says. The Polish zloty, the Czech koruna and the Hungarian forint should benefit the most because of good GDP growth, the bank adds.
- New and vivid information has a disproportionate influence on how people form views or opinions, and hence, an issue such as the potential for a military conflict arises, one tends to exaggerate the immediacy of the threat, and react in ways that are not proportional to the actual threat, say NN Investment Partners' chief investment officer Valentijn van Nieuwenhuijzen and principal multi-asset strategist Patrick Moonen. However, they suggest not to let emotions take the upper hand. "When dealing with these events it is essential to have a framework for assessing the risk, and an anchor to prevent emotions from running away with the day," they say. NN IP's assessment of probabilities increased last week but not materially, therefore it did not see compelling reasons to reduce allocation towards risky assets.
- EUR/USD trades for now between $1.16 and $1.18 because as soon as it hits one side of the range it goes back to the other, says Audrey Childe-Freeman from FX Knowledge. EUR/USD is down 0.6% at $1.1694 Thursday after rising to $1.1792 in early trading, according to Factset, on the back of U.S. President Donald Trump's high-level business advisory groups falling and after the chance of a U.S. rate rise in December decreased even further. But as soon as the EUR/USD approaches $1.18, it falls, because "there is a ceiling building in the market" and "the dollar is looking oversold at those levels," says Ms. Childe-Freeman. EUR/USD "isn't driven by Europe, but by risk environment and by perception of what's going to happen in the U.S," Ms. Childe-Freeman adds.

Aug 18 - Global Commodities Roundup: Market Talk (WSJ Dow Jones)

- A stronger yen is putting pressure on Tokyo rubber futures, which is down around 0.9% on Friday, correcting from gains earlier this week. The yen was up around 0.2% against the US dollar earlier in the day, as global investors turn risk-averse, making the yen-denominated rubber prices more expensive. Meanwhile, declines in the Tokyo rubber also track weakness in Shanghai futures, with the most-active January rubber contract there falling around 2%. January Tokyo futures are down at Y215.3/kilogram.
- London spot gold prices are little changed in Asia after rising in the last two days on uncertainty over Fed's timing to raise interest rates further . Prices are not far from recent 7-week highs as political tensions continue to provide a floor. Despite some calm returning to markets, ANZ says it expects safe-haven buying to continue. It also notes that gold output is down 2% on year in the first 5 months of the year amid political risks and is unlikely to rebound. Spot gold is up 6 cents at $1,271.71/troy ounce.
- Chalco's shares are lower amid profit taking after a surge in 1H net profit. Shares are down 2.5% at HK$5.38 as investors continue to profit from a recent rally as shares hit a 7-year high earlier this month. The Chinese aluminium producer reported a net profit of CNY751 million late Thursday, up more than 100 times from a year earlier. The strong results come amid Beijing's effort to curb excess capacity and a continued recovery in global aluminum prices, it says. The average price of spot aluminum in 1H is up 21.7% on year to US$1,878 per tonne.
- Evolution Mining's shares continue to gain on its new dividend policy, unveiled Thursday. So what's next for the Australian gold miner? Evolution has grown by buying operating assets, and UBS says it "wouldn't be surprised if the next asset to join the portfolio is an undeveloped opportunity where Evolution can take leverage from reserve and resource growth and deploy its operational expertise." However, this is likely a medium-term goal. Evolution's near-term outlook remains focused on debt reduction, operational consistency and capital expenditure at the Cowal mine in New South Wales state, UBS says. EVN last traded up 0.4% at A$2.39.
- Crop chemicals company Nufarm's FY17 underlying net profit forecast missed Macquarie's estimate by 4% at the midpoint. The main culprit? Argentina. Macquarie thinks Nufarm's business there is suffering from competitive pressure, especially after a delayed start to the season, and that's casting a shadow over its entire operations in Latin America. "At its 1H result call, management said it anticipated Argentina would remain 'very challenging' in 2H and this looks to have played out," Macquarie says. Its 2H LatAm Ebit forecast drops to A$19M from A$27M, reflecting the lack of earnings from Argentina. NUF last traded at A$8.92.
- Macquarie was pleasantly surprised by Mount Gibson Iron's decision to join the ranks of dividend payers. On Wednesday, Mount Gibson said it would pay a final dividend of A$0.02/share after its net profit totaled A$26M in FY17. "With a cash balance over A$500M, we have now incorporated a dividend stream in our forecasts," Macquarie says. It has an outperform call on Mount Gibson, and raises its price target by 9% to A$0.50/share. MGX last traded at A$0.45.
- BHP Billiton's green light for a $2.5 billion Chilean copper project to extend the Spence mine's life by 50+ years puts an option into action, although Macquarie points out it looks to be costing about 12% more to construct and will deliver 8% less metal over the first 10 years than was forecast in late 2015. The project is immaterial to the investment bank's net present valuation at the group level, but it does note the significant upside potential under a slightly more bullish $3/lb longer-term copper-price scenario.
- With no significant capex until 2019, Whitehaven Coal could accelerate returns to shareholders starting from FY18, Citi says. It expects the dividend payout ratio to be toward the bottom end of a 20%-50% target range, because more than A$1 billion in tax losses mean no tax is payable until at least FY20. "This leaves the potential to consider other forms of capital management like share buybacks," Citi says. "After a 35% dividend payout ratio that we assume there is the potential to be able to buyback A$320M in FY18 and A$160M in FY19." Citi has a buy call on Whitehaven and is lifting its price target by 17% to A$3.85/share. WHC last traded at A$3.29.
- New Zealand's NZ50 is down 0.5% to 7827.22 in early trade, after the index hit three straight record highs this week. It comes after global equities dropped overnight; the Dow saw its biggest decline in three months. Spark is down 0.5% after its FY result, with earnings up, but also net debt higher and its chairman planing to retire this year.
- It's shaping up to be a rough day for Aussie shares, with futures pointing to a 0.9% drop at the bell for the S&P/ASX 200. Investors are turning away from risk, with Dow industrials tumbling to their biggest decline in 3 months, against a backdrop of recent events in the White House and news of attacks in Barcelona. Iron-ore surged higher overnight, while oil edged higher and base metals were mixed across the board, ANZ notes. Earnings season rolls on, with numbers coming from companies including Charter Hall Long WALE, Link and Primary Health. The ASX 200 slipped 0.1% Thursday to 5779.2.
- Evolution Mining has a track record of consistency, liquidity, scale and perceived 'safety' in comparison to other large-cap gold stocks, RBC says. But is that enough? Australian gold miners are starting to face cost pressures, and Evolution isn't immune from this trend. Also, FY18 could be a high point for its earnings, with RBC forecasting a net profit of A$330M. "Our fundamental valuation suggests little upside for Evolution from current levels," RBC says.
- BHP Billiton continues to pivot toward growth, or at least mine-life extensions, RBC says after the miner pushes the button on a $2.5B extension of the Spence copper mine in Chile. The green light should help at the margin to flatten the company's longer-term earnings profile, which tails off relative to its peers due to decline rates for its petroleum assets, the investment bank notes. And it adds the payback looks reasonable for a new copper project, at 4.5 years.

Aug 17 - Market Talk Roundup: Latest on Trump, U.S. Politics - A flood of resignation (WSJ Dow Jones)
- Oil prices edged up early, clawing back some ground after losses in the previous session.
- Gold rose as the dollar remained subdued after minutes from the U.S. Federal Reserve's July meeting hinted at a delay in further rate hikes, while palladium hit a fresh 16-year high.
- London copper, aluminium and zinc rose to multi-year highs, leading a broad-based rally in metals, on expectations that China's reform of its metals industry will curb supply against a background of robust demand.
- Chicago wheat futures edged up after deep losses the session before, when the market hit contract lows amid ample global supply.
- Trump scotching 2 CEO councils as some members were resigning in recent days and under pressure to do so is another sign his "policy agenda is going nowhere fast soon," says NAB strategist Taps Strickland. He added the Fed minutes overnight pointed out that "several participants noted uncertainty was tending to weigh down firms' spending and hiring plans."
- Some CEOs are weighing in on the events in Charlottesville. In a note to employees, Aetna CEO Mark Bertolini cites a statement from the two former President Bushes that "Americans must always reject racial bigotry, anti-Semitism and hatred of all forms," and says he is "ashamed of our President's behavior and comments." Bertolini, who is known for his sometimes-blunt public statements, takes a more confrontational stance than competitor Anthem's CEO, Joseph Swedish. In his own note to workers, which like the AET one quotes Martin Luther King Jr., the ANTM leader says the insurer joins "the many who have united over the past few days to condemn the bigotry, hatred and racism on display in Charlottesville last weekend" and mentions his own experience as the son of immigrants. But he steers clear of mentioning Trump.
- General Electric's new CEO John Flannery sent a message to employees this afternoon backing the company's commitment to "diversity and inclusion," while detailing the decision by chairman Jeff Immelt to leave President Trump's manufacturing council. "Following the President's deeply troubling statements yesterday, we decided that GE needed to leave," he said. Immelt told other committee members this morning and "we had discussions with many other companies on the various committees to discuss the possibility of disbanding the committees." Flannery noted that GE will still work with governments on policy issues on "any matter that could impact our employees, our customers, and our investors."
- The Canadian dollar ended a brief losing streak against the US dollar Wednesday as traders interpreted the latest minutes from the Federal Reserve's July meeting as dovish. The USD is around C$1.2623 from C$1.2756 late Tuesday, according to CQG. There were no major domestic drivers guiding the Canadian dollar today, as the FOMC's minutes highlighted a greater focus on soft US inflation amid a stalemate between officials on raising rates later this year. Also hurting the greenback was the termination of a pair of White House business advisory groups that weighed on the currency. The loonie is likely to see some volatility following the release of domestic manufacturing data Thursday morning.
- Corning joins other industrial companies fleeing the White House's American Manufacturing Council with a resignation--one rendered mostly moot by the council's disbanding earlier Wednesday. CEO Wendell Weeks says GLW's "participation was not a political statement, nor an endorsement of the Administration's policies or positions" but a commitment to jobs and innovation, adding he decided to leave after recent events "transformed the council's laudable mission of job creation into a perception of political support for the Administration and its statements." The CEO exodus started earlier this week after Trump equated white nationalists with counterprotesters. Weeks joined the council earlier this year at the invitation of Dow Chemical CEO Andrew Liveris.
- Boeing and Lockheed Martin have had two of the trickier corporate relationships with the current White House, a function of the combined $52B in 2016 sales to the US government. LMT keeps a "no comment" on whether CEO Marillyn Hewson would have remained on President Trump's manufacturing council had it not been disbanded. BA had maintained CEO Dennis Muilenburg would remain, but had no immediate comment Wednesday following the council's demise. BA shares dipped around 0.5% after news broke of the council's end, with LMT flat after regaining most of an initial dip.
- Treasurys have registered little response to the Fed minutes, which show a debate among officials over when to next raise interest rates. Though sure to provoke discussion, the minutes don't seem to offer much that investors didn't already know. Regardless of when the Fed next raises rates, it is widely expected to tighten monetary policy very gradually over the longer-term. Before the minutes, Treasury yields had ticked lower along with US stocks following reports that two advisory councils to President Donald Trump were disbanding. The 10-year yield was recently 2.231% vs. 2.239% before the minutes were released and 2.264% Tuesday.
- JP Morgan Chase Chief Jamie Dimon wrote that he "strongly" disagrees with President Trump's reaction to recent clashes in Charlottesville, according to an internal memo reviewed by the WSJ. Dimon wrote that he "personally supported" the decision to disband the President's Strategic and Policy Forum, of which he was a member. The Forum announced its decision to disband earlier this afternoon. "Racism, intolerance and violence are always wrong" Dimon wrote. "There is no room for equivocation here." Dimon added that: "It is a leader's role, in business or in government, to bring people together, not tear them apart." BlackRock Chief Larry Fink also sent a memo to staff that he "could no longer in good conscience participate in the forum" and intended to resign.
- The Trump administration's effort to roll back postcrisis regulations on Wall Street banks is a "very dangerous" move, said the No 2 leader at the Federal Reserve Board. Fed Vice Chairman Stanley Fischer said in an interview earlier this month with the Financial Times that efforts by Republicans to unwind the 2010 Dodd-Frank Act is "mind-boggling" and "short-sighted." Fischer particularly cautioned about recent suggestions from the Treasury Department to ease regulations, such as higher capital requirements for certain mega banks. "The pressure to ease up on small banks is fine with me," said Fischer in an interview posted Wednesday. "But the pressure I fear is coming to ease up on large banks strikes me as very, very dangerous."
- US stocks are paring gains after President Donald Trump announces he'll disband two advisory groups--the manufacturing council and the strategy & policy forum--following a string of high-profile departures. "Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both," Trump said on Twitter. S&P 500 up 0.1% versus up 0.3% before the decision.
- BlackRock Chief Laurence Fink told employees today that he planned to resign from President Trump's Strategic and Policy Forum because he "could no longer in good conscience participate." Referring to violence during a white supremacy rally in Charlottesville over the weekend and President Trump's varied responses to it, Fink said, "such racism and bigotry must not just be condemned, but must be condemned unequivocally." Fink said he had notified clients with executives on the forum and Stephen Schwarzman, its chair, of his plan to resign. "The diversity of America works because leaders from all walks of life have always been willing to step forward and reject intolerance without equivocation," he wrote.
- The renegotiation of the North American Free Trade Agreement could benefit German companies doing business in the US, Canada and Mexico, according to German industry association BDI. "A successful Nafta modernization could positively stimulate German industry investment in Canada, Mexico and the US," BDI CEO Joachim Lang says in Berlin. However, changes to the agreement shouldn't result in reduced market access, Lang says. "The goal must not be to burden cross-border trade with new barriers," he adds. In 2015, around 5800 German firms or firms backed by German capital were doing business in the Nafta region.

Aug 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up on a fall in U.S. crude inventories, although markets were still being weighed down by general oversupply.
- Gold prices inched up early after two days of losses, with investors awaiting minutes from the U.S. Federal Reserve's last meeting in July for clues on the pace of potential interest rate hikes.
- London zinc hit its highest in almost a decade, as Chinese infrastructure demand that has fed a rally in steel prices for months spills into markets for steelmaking raw materials.
- Chicago wheat futures edged higher as bargain-buying followed the deep losses in the last session that drove the market to its lowest since early June.
- The dollar was steady in Asian trade, holding onto most of its gains made after strong U.S. retail sales data kept alive the chance of another Federal Reserve interest rate hike this year.
- The benchmark IPC index closed up 0.3% at 51,339 points, while the Mexican peso slightly weakened against the US dollar, after US retail sales raised more than expected in July. America Movil gained 1.1%, while bread-maker Bimbo closed down 0.7%. The peso closed in Mexico City at 17.8080 to the dollar, up from 17.7870 Monday, after two consecutive sessions of gains ahead of the first round of negotiations between the US, Mexico and Canada to rewrite the North American Free Trade Agreement.
- Nordic markets close mixed Tuesday with Sweden's OMXS30 index ending the day 0.7% lower and the pan-Nordic OMXN40 index just above the waterline. A tentative start to the day saw stocks post minor gains as investors took heart from North Korea's decision not to follow through with its threat to attack U.S. island territory Guam following a war of words between the two nations, Saxo Bank said in a note. Some selling pressure in the basic resource and industrial sectors weighed on the Stockholm bourse while a 0.45% dip in the price of a barrel of Brent crude to $50.5 pulled Oslo's oil-heavy OBX index down by 0.7%.
- The US still hasn't developed an official position on whether it will keep, scrap or modify the North American Free Trade Agreement's arbitration system for solving international disputes between foreign investors and governments, a US trade official says. So-called investor-state dispute settlement is favored by international businesses but rejected by labor and environmental groups, some conservatives and many liberal lawmakers. "That is an issue that we are still consulting on, so we don't have a position that we can talk about at this point," the US official told reporters on a call. Republican lawmakers tend to back the investor-dispute system.
- The US side is ready to propose new and updated provisions for the North American Free Trade Agreement in "lots of areas," a US trade official told reporters. Formal negotiations on updating Nafta begin Wednesday in Washington, and the US is looking to get the talks moving on an "ambitious schedule" before political seasons heat up in Mexico and the US next year. "We are actually going to be quite ambitious in this first round," said the official, who declined to specify which areas would be formally "tabled." US trade representative Robert Lighthizer is expected to speak Wednesday about his goals for the negotiations.
- BlackRock Chief Laurence Fink calls violence in Charlottesville over the weekend during a white supremacist rally that left one woman dead "domestic terrorism," adding that the firm "rejects intolerance of any kind," according to a memo seen by WSJ. Fink says in the memo to employees Monday that the events of the weekend "where innocent people were the victims of hate-fueled violence, were profoundly troubling." Such violence, he wrote, "cannot be accepted, and it cannot be tolerated." Fink told employees that the firm tries to promote diversity and inclusion, and that such an effort requires "speaking out against prejudice and racism."
- Despite the fact that U.S. retail sales could extend the U.S. dollar recovery this week, there is still downside risk for the dollar given the U.S.-North Korea tensions and the fact that Fed policymakers are giving fewer signs of a rate increase this year, BK Asset Management says. North Korea plans to shoot missiles near Guam and USD/JPY is likely to crash because of that, BK says. "USD/JPY will fall quickly and aggressively as risk aversion hits the market." Until this week, investors sold off the dollar as the war of words between the U.S. and North Korea escalated. But now the dollar rebounds "as the silence gave investors the perfect excuse to take profits ahead of Tuesday's retail sales report," BK says. USD/JPY is up 0.7% at 110.41.
- Annual joint military exercises between the U.S. and South Korea later this month could rekindle U.S-North Korea tensions and bring renewed weakness to euro corporate bonds, Commerzbank credit strategist Marco Stoeckle warns. But this could create an opportunity for fund managers, who need to invest recent inflows. If geo-political tensions lead to fresh weakness, they could put money to work for higher returns, he adds. The military exercises are scheduled for August 21-31.
- Rising tensions between the U.S. and North Korea lately hit risk assets, but positive economic trends should prevail over the negative geopolitical development, says Rob Brauns, portfolio manager at BNP Paribas Asset Management. If so, bullish investors in euro credit will have reason to cheer: geopolitics took its toll on European corporate credit default swaps last week, increasing the cost of protection against defaults. But most analysts have a positive outlook for eurozone growth and companies' fundamentals.
- RBC Capital Markets says any medium-term increase in global bond yields must be driven out of the U.S, with European Central Bank action preventing bund yields from rising a lot. Rising U.K. gilt yields should also be driven by the U.S. RBC Capital Markets prefers spread exposure to outright positions at present, it adds.
- Brazil's Temer administration delayed until tomorrow the announcement of lower fiscal targets for this year. There's no official explanation for the delay, but local press is saying ministers can't seem to agree on a number. The current, bidding target is a budget deficit before interest payments equal to $44B, widely seen as too large for an emerging economy that should be running a surplus to pay down its escalating debt load. But revenue is below expectations thanks to a deep recession rendered even that low goal unfeasible, officials say. Local media report Finance Minister Henrique Meirelles advocates for lowering the target to a $50B deficit, but some ministers would prefer something around $53B.
- The Nasdaq Composite gained 123.36 points, or 2%, over Monday and Friday's trading sessions, giving the index its biggest two-day gain since Nov. 8, when Trump was elected. Tech companies posted big gains on Monday, lifting the index higher, as stocks broadly rallied. Among the biggest gainers was chip maker Nvidia, which was also the biggest riser among the S&P 500. The Nasdaq's two-day bounce back followed three straight sessions of declines last week on investor concerns over North Korea's nuclear program.

Aug 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices steadied in early Asian trade after sharp falls the session before to the lowest in about three weeks as a stronger U.S. dollar and a drop in Chinese refining runs hit the market.
- Gold prices fell in early trade as easing tensions between the United States and North Korea saw investors seek riskier assets like equities.
- Shanghai base metals futures fell, echoing weaker London prices overnight on a weaker dollar and mixed Chinese industrial data.
- Chicago corn futures lost ground as improved crop conditions and forecasts of more rains across the U.S. Midwest boosted expectations of a bumper crop.
- Canadian bonds eased as tensions between US and North Korea diminished, leading investors away from the safe-haven asset. The yield for Canada's two-year bonds was recently at 1.227% from 1.210% late Friday, according to electronic trading platform CanDeal. The 10-year bond yield was at 1.879% from 1.853%. Bonds traded quietly on Monday, but yields opened better offered and underperformed US Treasurys across the curve, as demand for riskier assets improved amid calmer geopolitical tensions. Inflation and upcoming talks on Nafta later this week is expected to keep Canada's bond market active.
- Brazil's fiscal troubles haven't spooked markets, with the real basically unchanged at 3.18 per dollar, but this will likely change if the Fed starts to increase its lending rate faster, says Ignacio Crespo, an economist at brokerage firm Guide Investimentos. "The international scenario has been very benign. That makes the domestic troubles less of a problem," he says. Brazil and other emerging markets are benefiting from high levels of global liquidity, Crespo says, but if the Fed starts to drain that pool of cash by increasing yields in the US, Brazil's domestic troubles would take center stage. Today the government is set to loosen its 2017 fiscal target as the budget deficit approaches 10% of GDP.
- Speaking in Colombia this morning, US Vice President Pence continues to walk back a threat by Trump to send in the US military on Venezuela's socialist government. Pence tells MSNBC the US is instead committed to finding solutions "economically and diplomatically." This, after other Latin American nations and even Venezuela's US-friendly opposition rejected the idea of US military intervention. Meantime, the White House also rejected a request by Venezuela President Maduro for a face-to-face with Trump, saying Maduro needs to restore democracy first. And the US suggestion it may implement an oil embargo on Venezuela has also been roundly criticized, since it could starve the nation's poor.
- Germany's DAX ends up 1.3% at 12,165.12, with stocks helped by the fading threat of military confrontation in North Korea. Financial stocks gain most after dropping most when tensions flared last week; Deutsche Bank rises 3.1% and Commerzbank adds 3.4%. RWE gains 2% after making upbeat comments about its 2017 outlook. Germany 2Q GDP data are due on Tuesday at 0600GMT.
- London shares gain as tensions between the US and North Korea recede somewhat amid prospects of a political resolution. The FTSE 100 Index lifts 0.8% to 7367.5 as investors in miners take advantage of a more trading-friendly start to the week. "We heard over the weekend that the US isn't interested in regime change when it comes to North Korea, and investors are bargain-hunting on the back of this," CMC Markets UK says. Among miners, Glencore rises 2.9%, followed by BHP Billiton, up 2%. Tour operator TUI also gains 5.2% on the back of an upgrade from Credit Suisse. Experian is the largest loser, down 1.2% after a Morgan Stanley downgrade.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 1% higher and the pan-Nordic OMXN40 index also up 1%. "European stocks on Monday partly recovered from last week's sharp losses after senior U.S. officials over the weekend sought to play down the risk of a nuclear conflict with North Korea," Saxo Bank said in a note. Late Sunday, U.S. Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson said the Trump administration was still trying to achieve the "irreversible de-nuclearization" of North Korea through diplomacy. Crude oil traded softer after West Texas Intermediate last week failed to stay above $50/barrel. Saxo added that activity remained light, with both WTI and Brent trading within relatively confined ranges. Oslo's oil-heavy OBX index was higher by 1.1%.
- Raytheon snaps up Bob Work for its board, with the corporate fate of the widely-respected former deputy defense secretary one of the most keenly-watched as the new administration pushes through new appointees. Former Boeing supply-chain chief Pat Shanahan replaced Work, who'd been at the forefront of efforts to boost the Pentagon's innovation agenda, and joins Letitia Long, ex-head of the National Geospatial-Intelligence Agency, on the RTN board. Other Obama-era appointees back in the corporate sector include ex-Air Force secretary Deborah Lee James on the Textron board, while Leidos added former Pentagon acquisition chief Frank Kendall to its director roster, with his deputy Katharina McFarland joined Engility.
- Treasurys have slipped a bit as investors emerge from the weekend feeling a little better about the geopolitical situation and willing to put their money in riskier assets. The move, though, is modest and yields face strong headwinds if they're going to climb much higher. After another soft inflation report Friday, investors are highly skeptical that the Fed will raise rates again this year. Monday is quiet in terms of economic data, but Tuesday will be more eventful with the release of monthly retail sales data. The 10-year yield was recently 2.215% vs. 2.191% Friday.
- President Trump sets his target on drug pricing again--but there appears to be little reaction yet among drugmakers' stocks. Merck's CEO, Kenneth Frazier, announced earlier that he would pull out from the President's American Manufacturing Council as "a matter of personal conscience," following Trump's initial response to the deadly violence in Virginia over the weekend. Trump was criticized for not immediately condemning white-supremacists for the violence. Trump fired back on Twitter this morning, saying now that Ken Frazier has resigned, "he will have more time to LOWER RIPOFF DRUG PRICES!" MRK stock up 0.5% in early trade.  Mylan adds 1.1%, Pfizer up .02%, Eli Lilly up 0.3%.
- Once North Korea-U.S. tensions are out of the way, the euro credit market should return to its bullish "old normal," according to J.P. Morgan strategists. This old normal is characterized by improving corporate fundamentals, after many years of falling earnings, and "stubbornly low" global inflation rates that have pushed back expectations for monetary policy tightening. The geopolitics-driven risk-off sentiment was mainly reflected in wider European credit default swap spreads last week. Spreads on both the iTraxx Europe and Crossover CDS indexes are tightening Monday.
- Those investors who bought protection against European corporate defaults recently may get frustrated by a lack of further weakness in the coming weeks and months, JPMorgan says in a note. Spreads on iTraxx indexes of European corporate credit default swaps widened last week on the back of rising U.S-North Korean tensions but tightened Monday. JPMorgan says the CDS market probably over reacted to the headlines, especially when compared with the much smaller moves in the run-up to the French presidential election earlier this year.
- S&P futures are up 12 points and Dow futures are higher as markets rebound after both major indexes ended the week down more than 1%, showing their biggest losses since March. Investors seems to be taking a cue from receding fears of an imminent conflict between the US and North Korea. Late Sunday, US Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson said the US was still trying to achieve the "irreversible denuclearization" of North Korea through diplomacy. As for corporate news this week, retail earnings will again be in the spotlight with Home Depot reporting Tuesday, Target on Wednesday and Wal-Mart on Thursday. Department stores Macy's, Kohl's and JCPenney had improved sequential results last week but not enough to keep investors from souring on the sector and punishing shares.

Aug 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped as a slowdown in Chinese refining activity growth cast doubts over its crude demand outlook, while rising U.S. shale output suggested supplies would likely remain high.
- Gold edged down from two-month highs, as the dollar inched up from last week's lows and investors kept a close watch on any developments on tensions over the Korean peninsula.
- London copper was little changed, holding below recent two-year peaks on a weaker dollar, as analysts flagged prospects of a correction given August's strong price gains and disappointing factory activity from China.
- Chicago wheat futures slid 1.2 percent, falling for a third consecutive session to a two-month low under pressure from abundant global supplies.
- The dollar edged higher against the yen, pulling away from last week's near 4-month low, with rising tensions between the United States and North Korea seen as the key to the near-term outlook.

Aug 14 - Vladimir's Venezuela: Leveraging loans to Caracas, Moscow snaps up oil assets 

Venezuela’s unraveling socialist government is increasingly turning to ally Russia for the cash and credit it needs to survive – and offering prized state-owned oil assets in return, sources familiar with the negotiations told Reuters. As Caracas struggles to contain an economic meltdown and violent street protests, Moscow is using its position as Venezuela’s lender of last resort to gain more control over the OPEC nation’s crude reserves, the largest in the world. Click here to read full stories.

Aug 12 - Trump Administration to Launch Probe of Alleged Chinese Technology Theft (WSJ Dow Jones)
- The Trump administration announced plans Saturday to pressure China over alleged intellectual property theft, adding the threat of trade retaliation to an ongoing campaign seeking greater cooperation from Beijing in the North Korean nuclear crisis.
- Aides said President Donald Trump will sign a directive Monday ordering his trade representative to start a formal probe into whether Chinese government agencies and companies were unfairly acquiring valuable patents and licenses from U.S. firms, either through outright theft, or by pressuring Americans to turn over their inventions as the price of
entry into China's market. "Such theft not only damages American companies, but can threaten our national security," a senior administration official said in a Saturday morning briefing for reporters.
- Officials at the briefing stressed that while they were casting a spotlight on what they consider a major irritant in bilateral commercial relations, they weren't rushing into action. They said Monday's directive would launch a study into whether a formal trade investigation was warranted, and that probe would take a year or more. They declined to discuss what sorts of penalties the U.S. might impose against China, saying that question was "premature."
- The administration made the announcement a day after Mr. Trump held a phone call with Chinese President Xi Jinping to discuss escalating tensions over North Korea's rapidly advancing nuclear weapons program. Mr. Trump has repeatedly said he would cut Beijing slack over trade issues if he felt the Chinese were being helpful in reining in Pyongyang.
- The Wall Street Journal reported earlier in the month that a new trade investigation over China's alleged forced technology transfers was in the works and had been planned for an early August announcement. But that was delayed until after an Aug.5 U.N. Security Council vote imposing new financial penalties on North Korea, which China supported. Asked if Mr. Trump discussed the pending trade investigation with Mr. Xi on Friday, an official pointed to the official White House summary of the call, which didn't mention trade issues. The White House aides said the new trade probe wasn't tied to the administration's North Korea strategy, despite the president's earlier linkage of the subjects. "These are totally unrelated events," one official said. "Trade is trade. National security is national security."
- The new probe does signal a bit of a hardening shift in Trump administration's China trade policy, as it is the first White House trade directive aimed directly at Beijing. During the 2016 presidential campaign, Mr. Trump regularly blasted the U.S.'s $347 billion trade deficit with China, and vowed to take swift, drastic retaliation if he were elected, from across-the-board tariffs to branding Beijing a "currency manipulator."
- But the early months of Mr. Trump's presidency have seen a considerably softer tone toward China over trade. He quickly dropped the campaign-trail threats, and during a genial April summit with Mr. Xi at his Mar-a-Lago Florida resort, the two countries launched a new "comprehensive economic dialogue" aimed at resolving bilateral commercial disputes amicably. A month later, China announced some modest market-opening moves, like ending a 14-year ban on U.S. beef imports, and Commerce Secretary Wilbur Ross declared economic ties between the world's two largest economies were "hitting a new high."
- But the first round of economic dialogue talks in mid-July were tense and ended up with no agreements. Officials said Saturday that impasse was one factor behind the decision to launch the new trade review. In focusing on China's voracious appetite for American intellectual property, the Trump administration responding to a longstanding complaint by Western trade groups, who say the country's industrial policies effectively force foreign companies in sectors such as autos to transfer technology to stay in the market.
- Beijing has been emboldened by the growing strength of its own companies to make more demands of foreign firms, industry executives say, and the government is careful to keep regulations vague. U.S. high-tech companies have struck a string of investments and technology-sharing agreements in software, semiconductors and other areas in the past couple of years, often under pressure from officials in closed-door meetings. China's government rejects assertions that it forces foreign companies to transfer technology or permits infringement of intellectual property. Premier Li Keqiang denied it was using industrial policies to strong-arm foreign companies into turning over technology, telling a World Economic Forum meeting in Dalian in June that "such cooperation is voluntary and helps companies expand in the Chinese market and even in third countries."
- While many U.S. companies and policy makers agree Chinese forced technology transfer is a problem, they also say it is difficult to figure out a solution. One challenge is that many U.S. firms are reluctant to lodge formal complaints, making it difficult for trade officials to make their case. "An important question going forward will be whether U.S. companies and trade associations who have highlighted the problem will actually come forward and assist our government in the investigation," said Michael Wessel, a member of the congressional U.S.-China Economic and Security Review Commission. Or, he added, "whether they will hide the facts fearful that our government won't follow through, that the Chinese will retaliate against their interests or that they'll have to admit what's happened to their critical assets."
- Another question is just what remedy the U.S. government might pursue if it felt it had a case. Options might include imposing new limits on technologies that U.S. firms could license to China, or imposing new limits on Chinese investment in the U.S. But those would likely draw complaints from U.S. firms, and may contradict other policy goals. Mr. Trump personally touted China's Foxconn Technology Group's announcement in July to build a new display panel factory in Wisconsin. The new China probe also marks a noticeable change in the process for how the Trump administration is processing trade policies, and suggests that a newly more organized and measured way to proceed with those complaints may be emerging.
- Earlier Trump trade threats were made seeking swift action, and were done without broad consultation from stakeholders, drew widespread concern from business groups and lawmakers. Among them, an April promise to impose new steel and aluminum tariffs by June -- a plan that remains stalled amid resistance. Mr. Trump also in April threatened to pull out of the North American Free Trade Agreement, but backed down after intense lobbying from allies, business groups, lawmakers and his own aides. He instead agreed to renegotiate the pact with Canada and Mexico, a process that begins Wednesday. In choosing the China trade probe, Mr. Trump is targeting an area that business groups and Republican and Democratic lawmakers have identified as a concern. His aides Saturday also stressed that in contrast with the rushed earlier attempts at handling trade matters, they were setting no deadline and that any investigation would closely follow intricate procedures, including discussions with Beijing.
- Before making any decisions on an investigation, the trade representative "would consult with the appropriate advisory committees," one official said, and "if the investigation is instituted, we would consult with China. We would give interested parties the opportunity to comment. There would likely be a hearing. And these investigations can take as much as a year before we reach a conclusion."

Aug 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell nearly 1 percent to hit two-week lows, dragged lower by persistent oversupply worries despite a bigger-than-expected drawdown in U.S. crude inventories.
- Gold prices held steady after touching their highest in over two months and were on track for a weekly gain, buoyed as rising tensions between the United States and North Korea triggered safe-haven buying.  
- Most Chinese base metals were trading lower, pressured by uncertainty over U.S.-North Korea tensions that was shifting investment into gold and low-risk instruments.
- Chicago soybean and corn futures edged higher as the market took a breather following last session's deep losses, but both commodities are poised for their third week of decline on a higher U.S. production outlook.
- The dollar skidded to an eight-week low against the yen as escalating tensions between the United States and North Korea triggered yet more investor flight to safety.
- Rep. Liz Cheney (R., Wy.) pushes back against West Virginia Gov. Jim Justice's proposal for some $4.5 billion of annual funding to support Eastern coal mines hit hard by competition from both natural gas and coal produced in western states like hers. "Such a policy would be flat wrong, unjust, bad economic policy and would be adopting the worse tactics of the Obama era--when the government wasted billions of taxpayer dollars attempting to pick winners and losers. What we need is continued regulatory and other relief by Congress and President Trump in support of our fossil-fuel industry and our free markets."
- Four U.S. Senators urged President Donald Trump on Thursday not to move forward with unilateral sanctions against Venezuela's oil and gas industry. Sens. John Cornyn (R., Texas), Bill Cassidy (R., La.), Thad Cochran (R., Miss.) and Roger Wicker (R., Miss.) warned that unilateral U.S. sanctions could open the door for Russia and China to gain great control over Venezuela's energy sector. They noted that Russia is consolidating control over assets in Venezuela and could one day acquire Citgo, which has large refineries in the U.S. The senators also warned that sector-wide sanctions would be damaging to U.S. energy companies and urged the president to "maintain our economic ties as leverage."
- Peruvian President Pedro Pablo Kuczynski's approval rating falls to its lowest level since taking office a year ago, according to a poll. Pollster Datum says Kuczynski's support is down to 34%, while his disapproval rating is at 62%. Kuczynski has struggled with a slowing economy, and strong congressional opposition that has forced some of his ministers to resign. Currently, he is facing nationwide protests by public teachers demanding better pay.
- US stocks fall on geopolitical tensions and disappointing earnings. The Dow falls 0.9% to 21844, the S&P sheds 1.5% to 2438 and the Nasdaq plunges 2.1% to 6217. Retailers stumble, with Macy's, the worst-performing stock in the S&P, down 10%, and Kohl's down 5.8%. But health-care products maker Perrigo soars 16% on an earnings beat and guidance raise. Crude oil slides 2.3% to $48.43. Gold gains 0.9% to $1291 while Treasury bond yields fall to 2.203% from 2.246% Wednesday. The WSJ Dollar Index falls 0.2%.
- US stock indexes extend declines, approaching their session lows, after Trump doubles down on threats to North Korea and says his "fire and fury" remark from earlier in the week may not have been tough enough. The S&P 500 falls 1.2%, on track for its steepest one-day decline since May 17. DJIA falls 0.7%, heading toward its worst day in about a month. The only sector in the S&P 500 posting gains: utilities, which many investors think of as bond proxies because of their heavy dividends. Meanwhile, the VIX surges 39%--heading toward its second biggest one-day jump of the year.
- Oil's move early this morning above $50 a barrel was short-lived, as it quickly fell back to its typical zone in the high $40s on declining stock markets. BTU Analytics' Erika Coombs says that while an extraordinary event like major Venezuela destabilization might provide lasting support above $50, for the time being "the recent rally in crude could be cut short as balances begin to tip back to being long." She notes efficiency gains by US producers and success by Nigeria and Libya in reviving production numbers, concluding "the ability for OPEC cuts to drive prices higher in 2018 continues to be in question."
- Financial support from Brazil's federal government for state governments may narrow deficit of states facing budget difficulties, but it won't eliminate the problems, Fitch says. The Brazilian states of Rio de Janeiro, Minas Gerais and Rio Grande do Sul are on track for spending to exceed income by an average of around 3.4% in 2017, according to Fitch. The three states have few other options to close their fiscal gaps because the law forbids federal banks from lending to the states if the proceeds are used to pay public employees' salaries. This "golden rule" requires all credit proceeds to be allocated to capital expenditures, Fitch says.
- London shares close heavily in the red as political tensions weigh and housebuilders fall after a downbeat sales survey. The FTSE 100 Index ends the session 1.4%, or 108.1 points lower to 7389.9. Jitters about next moves in the stand-off between Washington and Pyongyang kept traders on the sidelines. "Whenever dealers hear the word 'war' they usually run for the hills," says David Madden at CMC Markets UK. Housebuilders are among the Footsie's biggest losers after the latest report from the Royal Institute of Chartered Surveyors highlights a slowdown in sales in July as 'Brexit' uncertainty took its toll. Taylor Wimpey PLC falls 3%, Persimmon PLC drops 3% and Barratt developments PLC is off 3%. Coca-Cola HBC pops 9.2% as the bottling group posts higher 1H earnings.
- What happens to markets in the event of a potentially uncontained military conflict relating to North Korea, where global superpowers like Russia and China get involved? Nordea Markets projects that in such a scenario, the Fed gives up on shrinking its balance sheet and signals a 50 basis point rate cut, the ECB implements highly dovish forward guidance, the 10-year Treasury yield drops to around 1% or 1.5% and USD/JPY drops below 100.
- Belgian stocks fall again amid concerns among investors about the standoff over North Korea, with the Bel-20 index closing down 0.6% at 3904.93 and all but three shares ending lower. KBC recorded the session's biggest decline despite reporting solid 2Q results Thursday morning, ending 1.9% lower at EUR69.36. Umicore fell 1.8% to EUR64.06 and ING closed down 1.5% at EUR15.31. Galapagos closed up 8.3% at EUR67.83 following promising news on the development of drug.
- Brazil's government could reduce its fiscal target as soon as today, local media report, in a blow to Finance Minister Henrique Meirelles, who has pledged to rebalance public finances. The economy is performing much worse than Meirelles forecast a year ago, causing tax revenue to come in below expectations. Congress also barred some of the fiscal measures Meirelles proposed. The current fiscal target is a primary result--or the budget balance before interest payments--that is nearly $41B in negative territory, but analysts say the shortfall could reach $50B. That means no money left to pay down a ballooning debt. The target is biding and Meirelles needs Congress's approval to change it.
- The CBOE Volatility Index, or VIX, jumps about 20% to 13.37 as major US stock indexes slip and government bond prices rise. It's on track to close at its highest level in almost two months, as the US's heightened tensions with North Korea persist. This morning, a weak producer-price index report also dampened inflation expectations.

Aug 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil futures inched down despite official figures showing U.S. crude inventories fell more than expected, with an analyst saying the market had settled into a range.
- Gold held steady near two-month highs hit the session before, bolstered by safe-haven demand triggered by rising tensions on the Korean peninsula.
- China aluminium extended gains to strike its highest since 2012, with investors flooding into the market on prospects that capacity closures in the world's top producer would tighten supply.
- U.S. corn edged lower as traders readied for a widely watched U.S. Department of Agriculture report that is anticipated to show lower production as a result of recent dry weather.
- The Swiss franc eased versus the dollar, but still held on to the bulk of hefty gains made the previous day as heightened tensions between the United States and North Korea sent investors looking for havens.
- U.S. defense stocks marked up again in pre-open trade on the back of east Asia tensions, led by a 1.5% advance at Raytheon in the wake of its Wednesday evening investor meeting. RTN says Japan and South Korea are considering incremental missile defense purchases, moves that would also benefit Lockheed Martin among others. However, acquisition process for such systems can take two, three or even more years, notes RBC Capital Markets.
- S&P futures are down 9 points and Dow futures are also lower amid rising tensions between the US and North Korea. In a second day of specific threats aimed at the US, North Korea lashed out at President Trump and warned of an "enveloping fire" in the coming weeks targeting Guam. In US corporate news, Kohl's is up 3% in premarket trading after 2Q earnings this morning that beat Wall Street estimates. KSS CEO says "the traffic momentum that we saw in the combined March/April period accelerated in the second quarter." Fellow retailer Macy's is due to report 2Q results this morning as well, with Nordstrom due to release results after the close of trading.
- The euro credit market seems to be stuck between fundamentals on one hand and "fire and fury" on the other, according to ING strategists. The latter refers to U.S. President Donald Trump's warning to North Korea that it will face "fire and fury" if it threatens the U.S . Rising tensions between the two nuclear powers have triggered an increase in the cost of protection against corporate defaults as reflected in credit-default swap indexes. But euro corporate bond values have been resilient lately, ING adds.
- German government bonds look set to shed some of their large Wednesday gains, as investors' response to the U.S-North Korean tensions looks more like a "classical risk-off move" than the start of a trend, Commerzbank rates strategist Christoph Rieger says. Yields on 10-year German bonds rise by 1 basis point to 0.43% in early Thursday trading, having tumbled from highs of 0.48% Wednesday, according to Tradeweb. Yields move inversely to bond prices.
- The Dow falls 0.2% to 22049, the S&P 500 declines just under a point to 2474 and the Nasdaq drops 0.3% to 6352 over worries of a potential conflict between the US and North Korea. Earlier Wednesday, South Korea's Kospi index closed down 1.1% and Japan's Nikkei ended 1.3% lower. Cimarex Energy is at the top of the S&P with a 6.9% gain a day after posting its earnings. Crude oil gains 0.8% to $49.57. At the very bottom of the S&P is Dentsply Sirona, down 8.5% after releasing earnings before the market opened. Treasury yields fall to 2.249% from 2.282% Tuesday. The WSJ dollar index falls less than 0.1%.
- Canadian government bonds are up, following US Treasurys higher, as flaring tensions between North Korea and the US stoke demand for haven assets. The yield on the 10-year Canadian bond was 1.902% compared to 1.935% Tuesday, while the yield on the 2-year bond was 1.238% versus 1.276% previously. Haven assets like US government bonds, gold and the Japanese yen rose Wednesday while stocks mostly fell, after North Korea said it was examining a plan for a missile strike on the US military base in Guam.
- Investors flock to a fund tracking large and midcap Korean firms, sending options volume to about triple the average usually recorded, Trade Alert data show. The ratio of bearish options to bullish options on the iShares MSCI South Korea Capped ETF spiked to 4.55, above the 22-day moving average of 3.69, Trade Alert data show. EWY was down 2% a day after Trump bluntly warned North Korea against making further threats to the US, saying it would be met with "fire and fury." An options measure called skew, which measures the cost to protect against further stock declines, was near a year-long high.
- Nordic markets close mixed with Sweden's OMXS30 index ending the day 0.6% lower, the pan-Nordic OMXN40 index up 0.2% while Oslo's oil-heavy OBX index finished just below flat. European stocks were driven mostly lower as rising tensions between the US and North Korea sent a wave of risk-off sentiment across markets, Saxo Bank says. "Geopolitical tensions rise after US President Donald Trump warned North Korea on Tuesday that threats to the US would be met with "fire and fury"...dampening appetite for risk assets (equities, industrial commodities) in favour of traditional safe havens (gold, silver, bonds, Japanese yen, Swiss franc)." Denmark's Novo Nordisk tops the Stoxx Europe 600 index after lifting growth targets on expectations of robust sales of its type-2 diabetes drug Victoza and long-acting insulin Tresiba.
- London's top flight falls as investors run for cover on fears about a standoff between the US and North Korea. The FTSE 100 Index drops 0.6% to 7498.50 as market players seek safe-haven investments like precious metals. Silver miner Fresnillo gains 5.1% while gold producer Randgold lifts 2.9%. Defensive stocks like utilities also do well, with UK water company United Utilities rises 0.9%. Security group G4S is the biggest loser, declining 7.4% as revenue falls in the Middle East and India. "Emerging economies account for 40% of the sales stream and the minimal growth spooked dealers," CMC Markets UK says.
- Oil investors this morning are trying to make heads and tails of a rising threat from North Korea combined with a more hawkish-sounding President Trump. "War, at least conventional war, is generally bullish for oil," says Price Futures' Phil Flynn. He says oil's initial sell-off yesterday on Trump's "fire and fury" comment was a knee-jerk worry that war fears could hamper economic activity. "Yet if the war drums continue to beat we should see oil rise, especially because the uncertainty from the fallout of what war might bring." He notes the months leading up to Operation Desert Storm in the early 90's saw oil rally.

Aug 09 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude futures fell for a third day despite a bigger than expected fall in U.S. oil inventories reported by an industry group, with doubts lingering over OPEC's ability to restrain supply as promised.
- Gold prices rose amid rising tensions between the United States and North Korea after the North responded to warnings from U.S. President Donald Trump with a threat to strike the U.S. territory of Guam.
- Shanghai aluminium and copper roared to the highest in around five years as investors flooded into metals on expectations of capacity cuts in coal and aluminium in China.
- U.S. soybeans edged higher, extending gains into a third consecutive session amid forecasts for cool, dry weather in key U.S. growing regions.
- The yen hit an eight-week high against the dollar and made broad gains against other peers, reacting to the latest bout of geopolitical tensions stemming from the Korean Peninsula.
- Gold prices in are up 0.1% at $1,266 a troy ounce in electronic trading, after closing at $1,262.60 a troy ounce earlier in the session. Trump demands North Korea not "make any more threats" to the US, saying the US would respond "with the fire and the fury like the world has never seen." Gold is a popular destination for investors during times of political uncertainty.
- The S&P 500 and Dow Jones Industrial Average extend losses after President Donald Trump issues warnings to North Korea about its nuclear weapons program. North Korea will face "the fire and the fury," such as the world has never seen if it threatens the US, Trump told reporters in New Jersey. DJIA fell to a loss of 52 points, before rebounding and is now down 34 points. S&P 500 had dipped as well. The CBOE Volatility Index, or VIX, jumps 14% to 11.29.
- In news of note for agricultural suppliers and utility managers, federal climate analysts say the US continues to run hotter than average, at a pace that puts 2017 to date among the warmest in 123 years of record-keeping. In a regular assessment of US climate trends, they report above-average temperatures across the nation in the first seven months of 2017. Sections of the Northwest are running cooler than average so far, but warmer in the Southwest and the Rockies through to the East Coast due to record and near-record warmth earlier in the year. Florida, North Carolina and South Carolina had their warmest January-July on record, they say.
- US coal exports continue to soar under Trump, up 60% through May vs that period of 2016, at 37M short tons, the EIA says in its monthly Short Term Energy Outlook. It says export growth will probably slow down, but still sees a 17% increase for 2017, at 70M short tons. "The increase in coal exports contributes to an expected 58Mst (8%) increase in coal production in 2017," it adds. While Trump's support of coal is certainly helping the industry, a sharp rise in Asian benchmark coal prices last year has also been important, allowing US coal exports to compete in Asia.
- Base metals are doing well, with nickel up 2.5% at $10,640 a ton, zinc up 1.9% at $2929 a ton, and aluminum up 2.9% at $2,031 a ton at three-year highs. While its partly a case that "a rising tide lifts all ships," this is part of a broader reaction to a longer-term trend, SP Angel's John Meyer says. A lot of traders are afraid of the effect of environmentally-driven smelting-capacity cuts due to begin this winter, Meyer says, adding that many are bringing forward their purchases to avoid a panicked rush later on. "Capacity closures have so far not always meant production closures, but now the Chinese government is getting more serious," the analyst adds.
- Brazil's fiscal troubles are back in the spotlight after months of political gridlock that stalled economic reform. It seems increasingly unlikely that an already dismal fiscal target will be met. Brazil is aiming at a primary deficit--the budget balance before interest payments--equal to 2.1% of GDP, which means not a penny will be left to pay down escalating debt. But a lingering recession is sapping tax revenue, widening the hole. Itau bank economists say the government is counting on extra revenue from concessions and a tax-amnesty program to meet the target. But in a country plagued with red tape, they warn that any "disappointments and delays could jeopardize the target."
- Major oil firms operating in Venezuela have been pulling their expatriate staff out of the country amid concerns that violence related to a political and economic crisis could soon get out of hand. "Repsol, with stakes in the Carabobo heavy oil and Perla gas fields, is most exposed as Venezuela has typically accounted for about 10% of its production," says Tudor Pickering, noting that other firms evacuating workers or considering it include Norway's Statoil, Italy's Eni, France's Total, and Chevron. "Critically, oil production accounts for 95% of the country's forex earnings."
- Jacobs Engineering meets earnings estimates in its fiscal 3Q as it finalizes plans to buy a company to help it capture more government-services business. JEC's $2.85 billion deal to buy CH2M Hill comes as engineering and construction firms bet on a rise in infrastructure spending proposed by President Donald Trump. Construction stocks that soared after his election have gradually retreated as his plans have been slow to materialize. Shares in JEC are down 8% this year after reaching a 2017 peak in January. Still, JEC executives say the company's union with CH2M, expected to close later this year, will be the beginning of its "next exciting chapter."
- The PBoC resumes appreciation of the yuan ahead of the release of July trade data and as the greenback slipped anew overnight. Today's daily trading midpoint was put at CNY6.7184, versus CNY6.7228 yesterday. "The CNY is expected to remain relatively steady compared to regional peers" ahead of major events including the party congress, the US "semiannual FX policy report and Trump's China visit," says Gao Qi, currency strategist for emerging market Asia at Scotiabank.
- US legislators' confirmation late last week of a pair of Trump nominees to the Federal Energy Regulatory Commission will create a quorum that should allow delayed natural-gas pipeline projects to get rolling. BTU Analytics says the confirmations are welcoming as "they will allow a crucial step in the pipeline regulatory process to resume." But it adds "this doesn't mean pipeline developers and shippers should rest easy. A FERC quorum and approval is only half the battle and will not solve the larger challenges faced at the state level." Projects in the Marcellus and Utica regions that were thrown into limbo or saw construction-schedule uncertainties may yet face issues.

Aug 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged lower but still held near nine-week highs, supported by robust U.S. jobs data last week and a slight fall in the U.S. drill rig count, even as rising output from OPEC capped crude markets.
- Gold held steady near two-week lows, with the dollar remaining supported by expectations of monetary tightening in the United States following stronger-than-expected jobs data last week.
- Shanghai copper came within a whisker of its highest in four years after a rally in steel unleashed short-covering across metals, before prices quickly retraced in line with a stronger dollar.
- Chicago soybean futures rose nearly 1 percent as the market rebounded from last week's lowest since late June, although gains were capped by forecasts of crop-friendly weather in the U.S. Midwest.
- Net bullish bets on gold prices rose to the highest level since June 13 in the week ended Tuesday. According to CFTC data, bullish gold bets by hedge funds and other speculative investors outnumbered bearish bets by 122,773, the most since mid-June, when net bullish bets totaled 155,037. Gold prices rose to six-week highs Tuesday amid US political uncertainty, but retreated Friday after an upbeat jobs report fueled expectations of another Federal Reserve interest rate increase in 2017. Gold typically struggles to compete with yield-bearing investments when borrowing costs rise. Prices are up more than 9% for the year.
- Under fire by a new Trump administration banking official, a federal bank regulator defends its role in approving new banks. The Federal Deposit Insurance Corp. says its role in providing deposit insurance that's often required to open a bank is an "important safeguard" for the financial system. The agency was responding to accusations by acting Comptroller of the Currency Keith Noreika, who has claimed the FDIC has held up bank applications. "That's unconscionable for a regulatory agency," Noreika says in a podcast hosted by the Commodity Futures Trade Commission. Noreika calls for lawmakers to pass legislation that would allow agencies to bypass the FDIC in approving new banks.
- Gary Cohn, the director of the White House National Economic Council, says global central banks "did what they were supposed to do" after the 2008 financial crisis, and the challenge for economic policymakers now was to "transition the economy ... to a more normalized system," he says in an interview on Bloomberg Television. He says fiscal policy should be able to assist in that process by removing regulatory and tax barriers. "We can help by making it easier to make capital flow into the United States," he says. Trump has said he is considering nominating Cohn Fed chairman next year.
- The WSJ Dollar Index surges 0.6%, on track for its biggest daily gain since January. USD's rally began in early New York trading after a strong US jobs report but was supercharged after White House advisor Gary Cohn discussed the prospect for tax reform in a TV interview. FX traders homed in on Cohn's comments indicating the White House's tax plan will include incentives for US companies to repatriate overseas cash, which analysts expect to bolster demand for dollars. "There's been an accumulation of positive news for the dollar," said Credit Agricole's Vassili Serebriakov. Still, he cautions that with issues such as the debt ceiling likely to take priority, "the tax agenda is not going to be relevant until much later in the year."
- Brazilian lawmakers understand the need for fiscal reform, but many fear irking voters if they approve things like tougher retirement rules, says political consultant Thiago de Aragao. "They all acknowledge the importance of reform in private, but many talk it down in public," he says. Aragao thinks President Temer has the momentum to pass pension reform after defeating an attempt to send him to trial for corruption, but won't be easy. "The administration has proved it is capable of rallying lawmakers. Now they need to devise the right strategy to do it again." Temer got 263 votes that were enough to dodge the accusations, but needs 308 to pass pension reform.
- As Cigna becomes the latest health insurer to beat expectations on its 2Q earnings, it reports better-than-expected results in its individual business, while uncertainty in Washington hovers over the future of Affordable Care Act plans. The insurer says it saw results that were $4M better than expected from the ACA's risk-adjustment program. But CI warns that medical costs in individual plans tend to be higher in the second half of the year and it still expects a loss on the business for the year, though "a better result than last year," says CFO Eric Palmer. CI also declines to give any indication on developments regarding its litigation with former merger partner Anthem, or the likelihood of getting that deal's termination fee.
- One reason most banks got out of the physical commodities business? Sometimes the EPA comes knocking. The environmental watchdog is seeking $1M from Morgan Stanley, arguing that the bank sold gasoline in 2013 and 2014 that didn't meet pollution standards, MS disclosed today. The bank sold that business in 2014 and is out of the physical-oil business, like most of its peers. MS said discussions with the EPA are ongoing.
- Morgan Stanley said it got five more years from federal regulators to wind down private-equity and hedge fund investments that are banned under the Volcker Rule. At year-end MS had $1.9B worth of such investments, which are left over from before the crisis and span equity, debt funds, real estate and other alternative investments. Goldman Sachs, which has about $6B in non-Volcker-compliant stakes, already said it got the extension, as did Citi, which has about $400M in such investments.

Aug 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets dipped, with U.S. crude remaining below $50 per barrel, restrained by rising output from the United States as well as producer club OPEC.
- Gold held steady, close to a seven-week high hit earlier this week, as the dollar eased to hover near multi-month lows ahead of monthly U.S. nonfarm payrolls data due out later and amid continuing U.S. political uncertainty.
- Base metals mostly traded flat as investors digested bearish Chinese and U.S. economic data.
- Chicago soybean futures inched lower with the market poised for its biggest weekly fall in a year, weighed down by crop-friendly weather across key U.S. producing states.
- The S&P 500 and Nasdaq Composite extend declines while the Dow Jones Industrial Average falls into negative territory before rebounding after the WSJ reports that Special Counsel Robert Mueller has impaneled a grand jury in Washington to investigate Russia's interference in the 2016 elections. Strong corporate earnings have allowed US stocks to climb to fresh highs this year even as many investors have scaled back expectations for tax cuts and fiscal stimulus from Washington, citing gridlock in DC. The DJIA is up 7 points to 22023 after closing above the 22000 mark for the first time ever Wednesday. S&P off 0.2% and COMP is off 0.4%.
- Prospects of a Mexican credit downgrade evaporate as Fitch Ratings affirms its BBB+ sovereign rating and returns the outlook to stable from negative, citing reduced risks to growth and stabilizing public debt. "Mexico continues to deliver on fiscal consolidation, which together with the recent appreciation of the peso is expected to put the public debt burden on a renewed downward path in 2017 and beyond," Fitch says. S&P put its outlook on Mexico's BBB+ rating back to stable last month. Moody's, which has Mexico one notch higher at A3, maintains a negative outlook but affirmed the rating earlier this year. The three ratings firms changed the outlook to negative in 2016 on concerns ranging from rising debt, lower oil revenue, and the threat of protectionist US policies.
- Fannie Mae reports a 2Q profit of $3.2B and says it will send $3.1B to the Treasury Department in September "if the Federal Housing Finance Agency declares a dividend in this amount." Since being put into US government conservatorship during the housing crisis, FNMA and rival Freddie Mac have been required to return dividends to the US Treasury under normal conditions. But FHFA Director Mel Watt has said he might order the companies to retain their earnings -- despite objections from the Treasury -- prompting FNMA's careful language. FNMA's net interest income drops 5% from last year, partly due to lower refinancing activity. The company has been shifting its focus to mortgage guarantees rather than portfolios.

Aug 03 - GBP/USD at 10.5-Month High After UK Services PMI, Before BOE (Dow Jones)
Sterling adds to gains, rising to its highest in ten and a half months against the dollar after a purchasing managers' survey showed activity in the important U.K. services sector continued to increase in July. The PMI figure stood at 53.8 last month, marginally below forecasts for 53.9 but still showing decent growth, with a reading above 50 signalling growth rather than contraction. It was also higher than June's 53.4. Sterling rises 0.25% to reach $1.3267, its strongest since mid-September 2016, from $1.3232 beforehand. The euro falls 0.36% on the day to 0.8932, from 0.8947 beforehand. Focus for the pound is on Thursday's Bank of England rate decision at 1100 GMT.

Aug 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil dipped as a rally that has pushed up prices by almost 10 percent since early last week lost momentum despite renewed signs of a gradually tightening U.S. market.
- Gold prices fell as the dollar inched up from multi-month lows and as signs that the U.S. economy was strengthening turned investor focus on to risk assets.
- Chinese metals futures opened firmer across the board, boosted by a weak U.S. dollar.
- Chicago wheat futures lost more ground, falling for a fourth consecutive session and trading close to its lowest since late June on pressure from ample global supplies.
- Abe's cabinet reshuffle is likely to have little-to-no impact on Japanese markets because "people are disappointed in him, not necessarily in his cabinet," says Koji Fukaya, head of FPG Securities. Meanwhile, there is some expectations of new economic policy longer term. Stocks opened down slightly despite an uptick in dollar-yen from overnight lows, with the Nikkei off 0.2%.
- The Senate Agriculture Committee approves three nominees--two Republicans and one Democrat--to serve as commissioners on the Commodity Futures Trading Commission. The nominees were approved via voice vote, so there were no recorded dissenting votes. The nominees now proceed to the Senate floor for a vote, though it's unclear when that might occur, given a massive backlog of Trump administration nominees. Michigan Sen. Debbie Stabenow, the top Democrat on the Agriculture Committee, said last week that she wanted a full slate of nominees--which would include an additional Democratic commissioner--before proceeding to a floor vote.
- Brazilian markets react positively as investors grew confident President Michel Temer has gathered enough support to avoid being removed from office for a trial on corruption allegations. Brazil's main stock index, Ibovespa, finished the session 0.9% higher while the dollar weakened 0.3% against the Brazilian real. Local lawmakers were set to vote late Wednesday on whether Temer should face trial. Congress members, even in the opposition, say Temer will have enough votes to stop the legal process against him in Congress. The president has been charged for allegedly accepting bribes and has denied all the accusations.
- JPMorgan says in its 10Q that its estimate in excess of already established reserves ranges up to $1.9B as of June 30. That is down slightly from an estimate of up to $2.3B as of the end of 1Q, or March 31. JPM evaluates its outstanding legal proceedings each quarter to assess litigation reserves and adjust accordingly. Its litigation reserves have been trending downward in most of the past several quarters, including legal benefits, or gains, instead of expenses in some recent quarters. Questions remain over whether the Trump Administration will soften
its stance on bank regulations that was initially anticipated but have yet to occur.
- Brazil's government is set to defeat a motion in Congress to put President Michel Temer on trial for corruption charges by a wide margin, consulting firm Eurasia says. Temer only needs one-third of the lower house's 513 deputies, plus one, to either vote against the motion, or simply not show up, to avoid trial, Eurasia says. The consulting firm says it now looks like he could garner close to 300 votes, more than previously estimated, Eurasia says. Temer, charged with allegedly taking bribes, denies the accusations against him.
- Europe posed less of a risk to global supply chains in 2Q, according to Dun & Bradstreet Corp. The region's made up for 29.94% of global supply chain risks, slightly less than during 1Q. The main driver for the decline in supply chain risk in Europe is the election of Emmanuel Macron as French president in May, analysts wrote. His main opponent, Marine Le Pen, during the election campaign vowed to withdraw France from international trade agreements and the EU, and suspend the country's membership of the Schengen border-free zone. "Macron's victory brings greater clarity," analysts at Dun & Bradstreet said.
- Hospital losses from unpaid medical bills may rise in 2018 even if Republicans' effort to repeal the Affordable Care Act remains stalled, Fitch Ratings says in a new report. Unpaid hospital bills, known as uncompensated care, declined under the ACA as more patients gained access to subsidized health insurance under the law. But uncertainty about White House support for some ACA subsidies has prompted confusion in markets where subsidized insurance is sold. Some insurers have exited the ACA markets and others propose significant premium increases for 2018. "Uncompensated care could tick up in 2018 if fewer people buy plans," in ACA markets "due to higher premiums or a dearth of plan choices," Fitch says.
- The Senate Commerce Committee approves three nominees for the Federal Communications Commission, making it likely the agency will be up to full strength soon. The nominees could be approved by the full Senate in coming days. The FCC currently has three of its five seats filled, two by Republicans and one by a Democrat. By a voice vote, the Commerce Committee approved another term for Chairman Ajit Pai and a new term for former Democratic member Jessica Rosenworcel. It also approves a new GOP nominee, agency general counsel Brendan Carr. However, Commerce Committee Democrats make clear they only want to approve Carr for the remainder of a current term, and oppose giving him an additional five-year term now. Some worry that Carr, a former aide to Pai, might not be independent enough. Democrats also want to be able to pair Carr's renomination for a full term with the next Democratic nomination to improve the Democratic nominee's chances of Senate confirmation.
- A Canadian poll suggests a majority of its citizens say the country should consider changes to its supply-management agricultural regime if it means securing a better deal in the coming talks to revamp Nafta. Angus Reid Institute said over a quarter of respondents said Canada should offer to US and Mexico to scrap its supply-management regime, which has already earned criticism from President Trump, and 45% suggested Canadian negotiators should use the scheme as a bargaining chip in talks. Meanwhile, 29% said the system must be preserved. Under supply management, prices for dairy products, eggs and chickens are set based on the average costs of production. Production is controlled through a regulated quota system, and competition is thwarted through tariffs.
- Brazil's lower house of Congress might not be able to gather a quorum to vote Wednesday on whether or not to put President Michel Temer on trial for corruption. Lawmaker Silvio Costa admitted the opposition doesn't currently have the votes needed to approve a trial, but said more than enough lawmakers have agreed not to enter the session to deny a quorum. "Our fight today is to avoid the vote... if it happens today, the president will win," Costa says in a telephone interview. Temer, who has been charged with corruption for allegedly taking bribes, denies any wrongdoing.
- Analysts applaud Humana's announcement that it expects to alleviate the effects of a downgrade on Medicare's quality-measure star ratings, which should help earnings and enrollment next year. The company now expects 74% of its members to be in highly-rated plans in 2018, up from previous warning that it could be down to 37%. Citi says "this should enhance its competitive position in MA, certainly relative to prior expectations," and Leerink suggests "meaningful additional EPS revisions for 2018." Humana also expects it will be able to add Medicare membership next year, and CEO Bruce Broussard says during the earnings call that the company has a "good feeling about going into 2018." The company says it has managed to craft Medicare plans for next year with benefits similar to this year, despite needing to offset the effects of a returning health-insurance tax. HUM gains 4.3%.
- Brazil's economy is showing signs of improving, with unemployment, inflation and interest rates declining and industry starting to recover, and putting President Michel Temer on trial for corruption would put that at risk, his lawyer said Wednesday in Congress. Temer is accused of accepting bribes, and he has denied any wrongdoing. His lawyer, Antonio Claudio Mariz de Oliveira, spoke Wednesday at the start of the session that will vote on whether or not to allow a trial to take place. If two-thirds of the lower house votes to permit the trial, and the Supreme Court votes to accept the process, Temer would be removed from office for up to six months, and he would be removed permanently if tried and found guilty.

Aug 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell 1 percent, with rising U.S. fuel inventories pulling U.S. crude back below $50 per barrel, while ongoing high OPEC supplies weighed on international prices.
- Gold edged lower as the dollar firmed and as investors took profits after downbeat U.S. data propelled prices to a seven-week high in the previous session.
- London copper slipped but stayed within the reach of two-year highs hit earlier this week, as a slightly firmer dollar sparked profit-taking while a brightening view of China's growth prospects underpinned prices.
- U.S. soybeans edged higher, pulling away from a near one-month low touched in the previous session, though gains were checked as fears of potential losses from recent dry weather eased.
- Apple continues to add to its swelling cash reserves during the quarter, bringing the total to $261.5B. More than 90% of its cash is held overseas and investor hopes have been rising that the Trump Administration's plan for a tax holiday would allow AAPL to bring the cash home without paying steep taxes. CFO Luca Maestri says the company retired $3.5B of debt and issued the equivalent of $10.8B in debt during the quarter.
- Martin Marietta Materials said Congress' failure to agree to a budget, or reach an agreement over spending with the Trump administration, could imperil its financial projections for the year. Overall, the company expects increased spending on infrastructure -- but not as a result of a President Donald Trump's plan to pump $1 trillion into American roads, bridges and other public works projects. That plan has yet to materialize. The company cited increased spending resulting from an Obama era transportation spending bill and various state and local initiatives. An MLM executive praised the Trump administration's work on reducing regulatory burdens as helpful and "somewhat unheralded." MLM falls 6.4% to $211.91.
- Anthem is pulling back its Affordable Care Act exchange presence in another state, California. The state's insurance exchange, Covered California, announces Anthem will withdraw next year from 16 of the state's 19 pricing regions, where it has about 153,000 enrollees. It will remain in three regions, where it covers about 108,000 people, which is 41% of its current exchange enrollment in California, the exchange says. The pullback won't leave any counties at risk of lacking an exchange insurer for next year. ANTM has said it will pull out of three state exchanges--Ohio, Indiana and Wisconsin--and has plans to sharply reduce its footprint in Nevada. ANTM has said if uncertainty about the future of the exchanges continues, it may further pull back from exchanges and boost its rate requests.
- Phillips 66 tops 2Q EPS estimates. The oil company holds a 25% stake in the newly operating Bakken Pipeline, which includes the Dakota Access Pipeline that was marked by months of protests in North Dakota but ultimately given the go-ahead by President Trump. CEO Greg Garland says the Bakken was among projects placed into service during the quarter giving the company momentum. PSX also added two polyethylene units as part of a joint project with Chevron on the Gulf Coast, where the two companies hope to convert byproduct from shale drilling into plastic used in household products. PSX shares up 1.6% to $85.07.
- Gluskin Sheff's David Rosenberg says there's "beaucoup d'amour" in the US about Canada, due in part to recent Trump administration hijinks, and that's providing a lift to C$. "The adulation for anything Canada has grown even stronger--and several were GOP supporters too, who now seem fed up," Rosenberg tells subscribers of his daily note. He acknowledges he expressed some caution earlier about C$'s rapid rise to a 14-month high, or in C$1.24 level. In today's note, Rosenberg says any dip in C$ "should probably be bought," and that the currency has entered a new and firmer range. "The loonie has shifted from a C$1.30-C$1.40 range to a C$1.20-C$1.30 band. Trade according," he says.
- Pfizer CEO Ian Read suggests big deal-making is on hold for Washington to take up tax reform. On an earnings call, Read talks up the company's pipeline while saying the company will wait on a tax overhaul before looking at any big deal. "Right now, I believe we need to see tax reform or the absence of tax reform to understand what the asset values are. We then would look at deal-making, he said. Pfizer faces generic competition for some key products, such as erectile dysfunction drug Viagra, whose eventual sales losses could be offset through a deal or new drug launch. The company has said that much of its cash is overseas. PFE falls 1.2% to $32.76.

Aug 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- U.S. oil opened above $50 per barrel for the first time since late May, supported by strong fuel demand, but ongoing high supplies from producer club OPEC kept prices from rising further.
- Gold prices held steady near seven-week highs, after registering their biggest monthly gain in five in July, supported by a slump in the U.S. dollar and political uncertainty.
- London copper consolidated after hitting a more than two-year high in the previous session, as profit taking capped a rally spurred by a weaker dollar and solid global growth reports.
- U.S. soybeans fell 1 percent after the U.S. Department of Agriculture pegged the condition of the crop above market forecasts, dampening fears of potential yield losses as a result of recent hot, dry weather.
- Trump Participates in Swearing-in of White House Chief of Staff and Other Events to Watch Today
President Donald Trump participates in the swearing-in of White House Chief of Staff John Kelly at 10 a.m. before holding a cabinet meeting. The president meets with U.S. Ambassador to Israel David Friedman at 11:30 a.m. and Secretary of State Rex Tillerson at 1:30 p.m. He awards the Medal of Honor to former Army Specialist Five James McCloughan for conspicuous gallantry during the Vietnam War at 3 p.m. Vice President Mike Pence is in Estonia for meetings with officials and to participate in a briefing with the Baltic leaders on the North Atlantic Treaty Organization's Enhanced Forward Presence mission. The vice president is on foreign travel to Estonia, Georgia and Montenegro through Aug. 2.

Jul 31 - Euro Strength Blunts Amcor's Pain from Rising AUD (Macquarie Dow Jones)
Packaging company Amcor makes 95% of its sales outside of Australia and New Zealand, so the Australian dollar's recent rise to its highest level since May 2015 is negative for its dividend when converted back to local currency. But there's good news in the strength of the euro as around a third of Amcor's 1H revenue came from Western Europe. Macquarie estimates that a 1-cent change in EUR/USD boosts Amcor's net profit by around US$2.5M. "Hence relative to our EUR/USD 1.073 forecast in FY18, in isolation, spot euro would add 3% to FY18 USD EPS," Macquarie says. It keeps an outperform call on Amcor and A$17.17/share price target. AMC last traded at A$15.38.

Jul 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices hit a two-month high, lifted by a tightening U.S. crude market and the threat of sanctions against OPEC-member Venezuela.
- Gold prices held around their highest in nearly seven weeks as tensions on the Korean peninsula boosted safe-haven demand for the metal and as the U.S. dollar hovered close to multi-month lows.
- London copper rallied to within a whisker of its highest in more than two years after manufacturing data from top user China confirmed growth tempered slightly but stayed firm in July.
- Chicago wheat futures slid almost 1 percent, hovering near a one-month low set last week, as fears of decreased production of high-quality grains in the United States were offset by abundant global supply.

Jul 29 - Trump Set to Sign Russia Sanctions Bill (WSJ)
- President Donald Trump plans to sign a sanctions bill aimed at punishing Russia for its alleged interference in the 2016 U.S. election, the White House said Friday. White House press secretary Sarah Huckabee Sanders sent a statement to reporters late Friday saying the president has reviewed the final version of the bill "and, based on its responsiveness to his negotiations, approves the bill and intends to sign it."
- The measure, which also imposes sanctions on Iran and North Korea, passed the Senate on Thursday on a 98-2 vote. The same bill passed the House on Tuesday, 419-3. The overwhelming majority showed the president that there was enough strength in Congress to override a veto should he choose to block the legislation.
- While the measure was debated in Congress, White House officials wouldn't commit to whether the president would sign the bill, saying it may infringe on presidential authority. The bill included a provision that would require the president to consult Congress before relaxing any sanctions against Moscow or restoring Russia's control over diplomatic compounds in the U.S. that had been seized by the Obama administration as part of U.S. reprisals for the alleged election interference.
- Mr. Trump has expressed skepticism about U.S. intelligence findings that Russia meddled in the election. Russia has denied the allegations.  Should the bill become law, the president would have to notify Congress if he wants to lift sanctions on Moscow. Congress then would have 30 days to pass a resolution of disapproval to stop the president. Should Mr. Trump veto that resolution, Congress would have 10 days to override the veto.
- The legislation represents a political challenge for the president, coming as congressional committees and Special Counsel Robert Mueller are investigating Russia's actions last year in a probe that also is seeking to determine whether anyone in the Trump campaign colluded with Moscow. Mr. Trump and Russian officials have denied any collusion. A U.S. intelligence assessment in January concluded that the alleged Russian interference was directed from the highest levels of its government. Its tactics allegedly included hacking state election systems; infiltrating and leaking information from party committees and political strategists; and using social media and other outlets to disseminate negative stories about Democratic nominee Hillary Clinton and positive messages about Mr. Trump.
- Russia didn't wait for the White House to announce whether Mr. Trump would sign the bill to retaliate. Moscow struck back Friday, forcing Washington to cut its diplomatic presence in the country to 455 and close a U.S. diplomatic retreat outside Moscow. If the limit applies to overall staff, the result would be a dramatic reduction in the U.S. government's operation in the country, which includes the embassy in Moscow and consulates in St. Petersburg, Vladivostok and Yekaterinburg.
- The bill would tighten restrictions on the extension of credit to Russian entities and mandate sanctions on those deemed to be undermining cybersecurity as well as those engaging in significant transactions involving the Russian defense and intelligence sectors.
- It would allow some joint energy ventures to go ahead but would sanction new projects and joint ventures in which a sanctioned Russian person or entity holds a stake of 33% or more.
- The bill maintains a provision that says the president may impose penalties on firms backing a high-profile Russian pipeline project but stops short of mandating penalties. That provision has upset Europeans because it poses a potential risk to the Nord Stream 2 pipeline, a Gazprom project backed by a consortium of five European companies, to transport gas from Russia to Europe through the Baltic Sea.
- After European countries, including Germany and Austria, protested, lawmakers added a stipulation that the president may impose sanctions, but "in coordination with allies of the United States."
- U.S. energy companies had lobbied Congress against the bill, citing their concern over an earlier version that included measures to block partnerships with Russian individuals or companies, which they said could scuttle any U.S. business partnership that involved Russian entities.
- The U.S. Treasury Department recently imposed a $2 million fine on Exxon Mobil Corp. for signing eight documents relating to oil and gas projects in Russia that were also signed by Igor Sechin, who was under U.S. sanctions at the time.
- The legislation also imposes new sanctions on Iran's ballistic-missile program and the Iran's Revolutionary Guard Corps, and attempts to squeeze the cash available to North Korea for its nuclear and ballistic-missile programs.

Jul 29 - Trump's Pick to Shake Up the Fed (WSJ)
  Randal Quarles is expected to try to reduce central bank's influence on lenders. Randal Quarles became skeptical of government intervention during decades of work in the financial world. Now he is set to take the lead in shaping oversight at one of the greatest interveners of all: the Federal Reserve.
  Mr. Quarles, who would be President Donald Trump's first appointee to the central bank, is expected to be confirmed in coming months for a four-year term as Fed vice chairman for supervision. That would make him the most influential U.S. financial regulator and give him a voice on monetary policy. His de facto predecessor, former Fed governor Daniel Tarullo, engineered broad new curbs on risk-taking by the largest U.S. banks. Mr. Quarles, a 59-year-old amateur pilot and former government official who has made millions advising and investing in banks, has a record that suggests he will seek to reduce the Fed's influence on bankers' decisions, rather than expand it.
  "Some refinements will undoubtedly be in order," Mr. Quarles told the Senate Banking Committee on Thursday, referring to the U.S. regulatory regime. "The key question will be ensuring that...we do so while maintaining the robust resilience of the system to shocks."
  Mr. Quarles's approach may conflict with that of Fed Chairwoman Janet Yellen, who supported Mr. Tarullo's agenda. Her term as chair ends in February. Mr. Quarles has separately advocated that the Fed articulate a more rigid formula for setting monetary policy, an idea Ms. Yellen has criticized. Friends and former colleagues said that if Mr. Quarles does try to change direction at the Fed, they expect him to move slowly and methodically, and to seek consensus. Cerebral with a wry wit, Mr. Quarles spent nights as a young lawyer at Davis Polk & Wardwell LLP reading the firm's files on railroad reorganizations in the late 19th century.
  "I had been interested in the history of that era," he explained in a 2010 paper.
  When asked, "How are you?" he has a stock reply, former colleagues say: "Better than average."
  Mr. Tarullo, who left the Fed in April, cracked the whip on the largest U.S. banks in part by employing the element of surprise. In "stress tests" and "living wills" examining how banks plan for the worst scenarios, he and other regulators ratcheted up their expectations over time and publicly rebuked bankers for perceived failings -- scoldings that the regulators said were necessary to clean up what they saw as woeful risk management.
  Bankers have called for years for more predictability in the exams, in part to avoid further public thrashings. At his confirmation hearing Thursday, Mr. Quarles said the Fed should publish more information about the stress tests. "The benefits of the transparency outweigh any of the theoretical costs," he said.
  Mr. Quarles also said he would review rules about banks' capital levels as well as the Volcker rule, which restricts banks from trading unless it is on customers' behalf. He avoided specifics. "I don't have a view as to whether [capital requirements] should be higher or lower," he said. During his career, Mr. Quarles has repeatedly criticized unpredictable policy-making. "When governments have discretion, markets and citizens cannot be sure how the government will act, and that uncertainty results in inefficiency, delay and politicization," he wrote in the 2010 paper. He said in 2015 that regulatory policy since the 2008 financial crisis "tended to make the government a player" in the financial sector when "it should be a referee." At the same time, Mr. Quarles has separated himself from others who claim the "free market" mantle. As a senior Treasury official in the 2000s, he advocated allowing foreign governments to have more wiggle room in dealing with bond investors -- a policy opposed by some Wall Street money managers. He once called Timothy Geithner, President Barack Obama's first Treasury secretary and an architect of the 2008 bailouts, "a very strong choice" for the cabinet position.
  Ravi Menon, a Singaporean official who engaged in last-minute talks with Mr. Quarles on a U.S.-Singapore trade deal, wrote in 2004, "Right from the start, we took a problem-solving approach aimed at finding middle ground rather than trying to convert each other on ideological arguments."
  Still, Mr. Quarles's background has raised concerns among Democrats. As a banking lawyer at Davis Polk in the 1990s, he helped banks such as J.P. Morgan Chase & Co. navigate regulatory limits to expand their securities businesses. He joined executives from J.P. Morgan and HSBC Holdings PLC at the Salzburg Global Seminar, held in the Austrian Alps at the hotel where "The Sound of Music" was filmed, and co-led a discussion on the future of banking.
  During the financial crisis, as a partner at private-equity giant Carlyle Group, he lobbied successfully for regulators to allow him and other big money managers to pump money into troubled banks. "The primary purpose of this job is to stand up to the largest financial institutions in this country," Sen. Elizabeth Warren (D., Mass.) told Mr. Quarles Thursday. "You have no history of having done that."
  Despite the Democrats' concerns, Republicans alone have the votes to confirm Mr. Quarles for the job, and none criticized him Thursday. It isn't clear when they will vote on his confirmation. Mr. Quarles has had financial ties to some banks he could soon regulate. He married into Utah's Eccles family, which received a stake in Wells Fargo & Co. through the sale of a Utah bank in 2000. His financial disclosure, which was signed in June, said he owns Wells Fargo stock valued at more than $1 million and has exercised lines of credit of more than $1 million each from Wells Fargo and Morgan Stanley.
  Since 2014, he has helped manage the family's wealth at Cynosure Group, investing in financial companies including a Georgia bank holding company, Brand Group Holdings Inc. Mr. Quarles has pledged that if he is confirmed, he will unwind his bank holdings and pay back the loans to meet conflict-of-interest rules.

Jul 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

 - Oil prices edged lower but were still near 8-week highs, buoyed by a decline in U.S. inventories and OPEC's ongoing efforts to curb production.
- Gold steadied after retreating from a more than six-week high hit in the previous session, with investors looking for cues on the health of the U.S. economy from second-quarter gross domestic product data due later in the session.
- Copper prices drifted in early Asian trading with little movement in currency markets, a key driver over recent sessions.
- U.S. wheat remained steady and was poised to finish the week down 4 percent as fears of tighter global supplies waned despite the dry weather across North America.
- The dollar dipped against its major peers, its mild bounce earlier petering out ahead of the second quarter U.S. economic growth data due later in the session.

Jul 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were sitting just below 8-week highs, buoyed by hopes that a steeper-than-expected decline in U.S. crude oil inventories will reduce global oversupply.
- Gold rose for a second day, hitting a six-week high, on rising demand for the yellow metal as the dollar dropped to a 13-month low after the U.S. Federal Reserve indicated that it would keep to a slow path of monetary tightening.  
- London copper hovered below two-year highs touched in the previous session, supported by a weaker dollar and increasingly upbeat views about China's economic growth and metals demand.
- U.S. wheat rose 1 percent to rebound from a near one-month low touched in the previous session, with a widely watched crop tour showing extensive damage to yields from recent hot, dry weather.
- Barrick Gold posts 2Q earnings and sales that beat analyst estimates, bolstered by higher gold and copper production despite recent concerns over its Tanzania operations. The Toronto-based gold producer posts EPS of 22c on $2.16B of revenue, compared with analysts' forecast of 18c on $2.03B. ABX also announces plans to begin discussions with the Tanzanian government next week about the concentrate export ban, which slashed earnings of Acacia Mining, a company Barrick holds a 64% stake in.
- Barrick says production at its Bulyanhulu gold mine in Tanzania may not be sustainable after Sept. 30 because of the rate of cash outflow during an export ban on some of the company's gold and other mineral concentrate production in the country. Barrick owns three gold mines in Tanzania through its 64% owned Acacia Mining. Tanzania stopped exports at two of the mines earlier this year amid a tax dispute. Barrick said it would evaluate its gold production guidance if Acacia revises its annual outlook. Acacia accounts for about 10% of Barrick's 2017 gold production guidance.
- Tullow's chief executive sees limited effect in the short run from a move by European countries to phase out the use of the combustion engine. The UK is the latest country to plan a ban on new diesel and petrol cars after 2040. France and Norway have proposed similar measures. "We are going to see a move towards greener more electric vehicles in the coming decade," says the oil and gas exploration company's CEO, Paul McDade. "But you know if you look at the global use of hydrocarbons, personal transports are quite a small percentage of the overall." According to the Energy Information Administration, transportation was 29% of the share of energy used in the US in 2016, and petroleum products provided about 92% of the total energy for the sector.
- United States Steel isn't concerned that the Trump Administration is taking its time in deciding whether to impose more extensive duties on imported steel. Commerce Secretary, Wilbur Ross had earlier predicted the government's investigation would be completed by the end of June. X's CEO David Burritt says opponents of tariffs have stepped up their lobbying, but he remains confident the administration will "go broad and go deep," in imposing tariffs to discourage steel imports. US steel manufacturers argue that discounted steel from foreign countries weakens their ability to supply steel for national security purposes. "This administration understands what's at stake here," he tells analysts during a conference call. X up 8% at $26.43 after reporting better-than-expected 2Q results late Tuesday.
- Brazil's central bank will likely cut its Selic rate to 9.25% from 10.25% today, but it shouldn't, says economist Paulo Nepomuceno. He thinks the bank should make a smaller cut, to 9.5% given the uncertainties stemming from the country's political crisis. President Temer is at risk of being suspended to stand trial for corruption, in which case the future of his fiscal-austerity agenda will be up in the air. "Any basic scenario for Brazil today must include four of five possibilities," Nepomuceno says. So, he argues the central bank should slow down now and perhaps resume full-point trimming at its Sep. 6 meeting.
- Uncertainty over the fate of the North American Free Trade Agreement is already hurting US exports to Mexico, an American farm group told lawmakers. "We have strong but unconfirmed evidence that Mexico is slated to purchase between seven and eight cargoes of corn from South America beginning in August and September," Floyd Gaibler, trade director at the US Grains Council, told the House Agriculture Committee. "Given the political uncertainty, our customs have told us...they will resort to the more volatile and risky spot market."
- Anthem says that if it doesn't get more certainty about the future of the ACA marketplaces quickly, it will "further narrow our level of participation," in exchanges. During the 2Q earnings call, CEO Joseph Swedish strongly emphasizes the need for an answer about federal cost-sharing reduction payments and reiterates that without them the insurer may need rates that are around 18% to 20% above the increases it's already requesting, and some markets may not be able to sustain such hikes. He says "time is of the essence," and ANTM hopes for a decision on the payments at least in September. The insurer has announced it will exit the exchanges in three of the 14 states where it currently sells those plans.
- General Dynamics CEO Phebe Novakovic says the much-touted boost in Pentagon spending is taking longer than expected, a function of the slow congressional budget approval process and delays in appointing key DoD officials. "Both are proceeding more slowly than we thought might happen," she says on the 2Q call, echoing private grumblings from fellow defense executives. Empty Pentagon offices have made it tougher to process some contract awards. GD shares down 2.6% to $198.12 after a mixed 2Q, including a narrow beat on profit and 2017 guidance in line with expectations.
- EUR/USD falls 0.1% to $1.1642 as the U.S. dollar strengthens after the Senate finally passed a procedural motion to open debate on repealing and replacing Obamacare. But Rabobank says there's other news on the radar--U.S. and EU relations. The U.S. voted in favour of a bill that imposes new sanctions on Russia, Iran, and North Korea, the same bill that the EU has threatened will mean counter-measures. "It appears that U.S.-Russian relations are set to deteriorate further; U.S.-Iranian and U.S.-North Korean relations could not be much worse already, but what U.S.-EU relations will do remains to be seen," Rabobank says.

Jul 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices firmed to hold near eight-week highs hit in the previous session, on expectations of a drawdown in U.S. stocks and as a rise in shale oil production shows signs of slowing.
- Gold prices were steady as investors awaited a statement from the Federal Reserve for clues on the outlook for the U.S. central bank's monetary policy.
- London copper climbed to its highest in two years, as momentum from a weaker dollar and hopes that China will further ease its monetary policy helped fuel chart-based buys.
- U.S. wheat edged higher after earlier hitting a near one-month low, though gains were curbed by easing fears of tight supplies as a result of recent dry weather.
- Drama over Senate health-care legislation may put the shares of health-care companies back on a rollercoaster. "Expect high volatility and pressure on hospital multiples, and the same volatility with some relief rallies for UNH [UnitedHealth] should it appear that something actually could get passed," suggests Sheryl Skolnick of Mizuho. Hospital shares will likely be affected by investors' nervousness about the likelihood of Medicaid cutbacks. Insurers like UNH could see a rally if it appears the Affordable Care Act's insurance tax is likely to get repealed. But insurers with big Medicaid businesses could see risks similar to those for hospital stocks, and those with a significant position in the ACA's marketplaces may also find their shares sliding if legislation doesn't include provisions to steady exchanges.
- Echoing the views of health insurers, the American Academy of Actuaries push Republicans in the Senate, now debating health-care legislation, to include measures that would stabilize insurance marketplaces next year. In a statement, the actuaries said lawmakers need to fund federal cost-sharing payments, enforce the individual mandate that requires most Americans to have insurance coverage and boost funding "aimed at lowering premiums," likely through a program such as reinsurance. But it's far from clear that the Senate's current direction will lead toward such provisions -- staffers say Republicans are considering a "skinny repeal" that would strike the mandate but do little else.
- Even limited sanctions against Venezuela could disrupt the country's oil output and result in higher crude prices, Barclays analysts say. A sharp disruption could raise oil prices at least $5 to $7 a barrel if it were to last more than a few months. "It may be just the opportunity OPEC needs to exit its current strategy," Barclays says. Still, close ties between the US and Venezuelan oil industries mean there's reason to think there won't be any drastic moves. "In contrast to the energy-related sanctions imposed on Russia and Iran, the more entrenched connections between US companies and consumers and the Venezuelan oil industry lead us to believe that the US administration will take a cautious approach," Barclays says.
- The new premier of British Columbia, John Horgan, says it's "critically important" Canadian PM Justin Trudeau and Trump reach a deal regarding softwood-lumber trade before talks to revamp Nafta begin in earnest next month. "We need to get it off the table," says Horgan, who became BC premier last week. BC is Canada's largest producer of softwood lumber, which is used mostly in the construction of homes. US has imposed tariffs of up to 30% on imported Canadian softwood lumber in the latest flareup in decades-long US-Canada trade spat. Letting the lumber row drag any longer threatens to complicate the Nafta negotiations, trade experts in US and Canada have warned. Horgan is traveling to Washington this week, in which he will meet with Commerce Secretary Wilbur Ross, who is said to be keen to strike a
lumber deal.
- AK Steel CEO Kirk Reich says on 2Q call that recent steel price increases reflect higher costs of inputs such as coal and scrap rather than buyer nervousness about the potential impact of the US trade probe into imports. AKS up 12%--reversing its decline over the past six weeks--after forecast beating 2Q. Company also yet to decide whether to reopen an idled plant, which could depend in part on the Section 232 investigation into imports. US Steel up 5% ahead of its own report after the close, with Nucor 1.9% higher and TimkenSteel gaining
5.6%.
- The Trump administration's objectives for renegotiating the North American Free Trade Agreement match with, and in some aspects represent, a more positive scenario than Morgan Stanley's Mexico bull case. The objectives, released last week, include preserving tariff-free trade in the Nafta zone, plus new regulations to govern ecommerce, as well as labor and environmental rules inspired by the scuttled Trans-Pacific Partnership. In addition, a US proposal to lower corporate taxes could boost the manufacturing sectors in both countries, Morgan Stanley says. The blueprint for a Nafta revision, which is much softer than many in Mexico had feared, supports a bullish view on the Mexican peso, emerging market stocks, bonds and sovereign debt, "which (puts) Mexico in the sweet spot until the end of the year at least," the bank writes.
- Eli Lilly CEO David Ricks says he expects President Donald Trump to issue an executive order targeting drug prices. Ricks tells WSJ he doesn't know exactly what Trump has in store, but hopes it will include several items the pharmaceutical industry has pushed for: lowering patients' out-of-pocket costs by requiring insurers to pass through rebates that drug makers pay, encouraging more "outcomes-based" contracts that tie the price of drugs to how well they work in patients and funding FDA efforts to speed up approval of generic drugs to increase competition. Noticeably absent, however, are measures that critics of high drug prices say would be more effective, such as allowing the federal Medicare program to directly negotiate prices.
- Centene's higher-than-expected earnings reflect a bump from its Affordable Care Act exchange business. CEO Michael Neidorff says company leaders now expect that "margins will be at the high end of our guidance range." Centene says it had around 1.1 million exchange enrollees at the end of June and their demographics met its expectations. Centene reiterates its plan to expand its exchange business, saying that it expects to do well growing in places such as Missouri where it has a Medicaid presence. The company also says it likes being the only exchange insurer in a region, which ensures they have all the risk mix of the population. Centene says that "90% or more" of its exchange enrollees get federal subsidies. CNC gains 1.7% to $85.61.
- Centene says it expects "headline noise" around Republicans' legislative efforts on health care will persist, and says they are "a moving target with a long way to play out." The company lays out its priorities for a bill, which include repealing the health-insurance tax, a reinsurance program and a strong push for continuation of the federal cost-sharing reduction payments. CEO Michael Neidorff says that at the state and federal level, government "leadership understands that to eliminate the CSRs is to create havoc in the insured marketplace." He believes that "there is not the appetite" to strip health coverage from poor people and "in the end, they will do the right thing for this vulnerable population." Centene says it hasn't seen any slowdown of the Medicaid contract pipeline amid the legislative battle.
- As Venezuela's political crisis reaches a boiling point, Eurasia Group says US oil sanctions look "increasingly likely." President Maduro will go ahead with a Constituent Assembly vote Sunday despite protests from the opposition and international community, it says, and in doing so will cross a "presidential red line" set by Trump. "Among the menu of options, a ban on US imports of Venezuela crude oil is more likely than also sanctioning financial transactions, as the latter would have an impact on US jobs owing to the effect it would have on US-based service providers like Halliburton and Weatherford," the firm says.
- Companies and unions remained a small part of overall political spending in 2016, the Conference Board's Committee for Economic Development reports. Individuals made two thirds of contributions to Super PACs, while corporations gave 5.9%, mostly from closely held firms; unions gave 5.8%; and trade associations gave 0.8%. Direct spending by trade groups amounted to about 0.4% of all spending for 2016, while union direct spending made up 0.3%. Direct spending by "social welfare" groups that can hide their donors amounted to about 2%. The findings mirror a preliminary study of data through July 31 last year.
- Trump's criticism of the Washington Post have taken a turn toward another company also in newspaper owner Jeff Bezos' portfolio. "Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?" he muses. Bezos owns the Post separately from AMZN. On April 1, AMZN expanded its sales-tax collection to any of the remaining 45 states which have such levies that it wasn't already doing so in.

Jul 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices extended gains after Saudi Arabia pledged to curb exports from next month and OPEC called on several members to boost compliance with production cuts to help rein in global oversupply and tackle flagging prices.
- Gold prices held steady, after hitting a one-month high in the previous session, buoyed by political uncertainty in the United States, as investors awaited the Federal Reserve meeting for clues on monetary policy.
- London copper struck its highest level since mid February after a unexpected strength in China's economy and a weaker dollar fanned upside technical momentum.
- U.S. soybeans rose as much as 2 percent to hit a near two-week high after the U.S. Department of Agriculture said more of the crop had been damaged by recent dry weather than expected.
- Relations between the US and Mexican governments might be warming a bit, but with Nafta's renegotiation slated to begin in less than a month, most Mexicans view President Trump very darkly, a new opinion survey suggests. Nearly 9 of every 10 Mexicans view Trump unfavorably and only 3% favorably, according to the in-person poll of 1,200 people nationwide conducted for the El Financiero newspaper. The poll has a 2.8% margin of error.
- The benchmark IPC index closes up 0.2% at 51,665.6 points, while the Mexican peso weakens against the US dollar, as investors adopt a cautious stance ahead of this week's US Federal Reserve policy decision. America Movil gains 2.1%, while bread-maker Bimbo closes up 1.6%. The peso, closes in Mexico City at 17.7025 to the dollar, up from 17.6480 Friday. The Mexican currency recently hit a 14-month high against the greenback as the Trump administration softened its stance on Nafta.
- There's a generational divide when it comes to how Americans feel about CEOs speaking out on social and political issues, according to a new report by Weber Shandwick. Among the more than 1,000 US adults surveyed by the communications firm, 47% of those between ages 18 and 36 said CEOs have a responsibility to speak up on issues important to society, while only 28% of Gen-Xers and Baby Boomers agreed. Millennials also outpaced older generations in their awareness of CEO activism and their likelihood of buying from a company whose CEO speaks out on social issues--51% said they'd buy from a business led by someone who takes a position they agree with.
- Venezuelans who are against President Maduro are also widely opposed to economic sanctions that the Trump administration is threatening to level against Caracas unless it halts plans to rewrite the constitution, Torino Capital says. It cites a poll it conducted in partnership with Venezuelan pollster Datanalisis, finding 52% of opposition supporters against potential US sanctions. The poll also finds 63% of respondents saying Maduro's detractors should not promote US sanctions as a way to topple the government. A little more than half rejected the opposition's lobbying efforts to convince international financial institutions to blacklist Venezuela. While oil sanctions could be devastating for the Maduro administration, analysts warn they could also backfire by further crimping food imports and providing fuel for Maduro's routine accusations of a Washington-led coup.
- Venezuela's opposition begins the second and final week of what it calls "Zero Hour," as it tries with street protests to convince President Maduro to cancel a planned Sunday vote that could lead to a new Constitution. US President Trump is threatening sanctions that may include an oil embargo if Maduro doesn't cancel the vote, which many view as an attempt to create a permanent dictatorship. In a weekend Twitter message, Maduro indicated a willingness for a last-minute deal, saying "I recognize the opposition, and I know they have political strength." Saying his message was aimed specifically for opposition leader Julio Borges, Maduro urged "a peace deal."
- Fresh political issues in DC, and its resultant impact on the dollar in recent days, should soon take a back seat, says Michael McCarthy at CMC Markets. Data from the US and Japan this week "could dominate market thinking." Release include both economic and a pickup in the US earnings season. Then, of course, there's the FOMC. "The outlook for markets may change considerably, especially if recent US economic weakness persists."
- As the euro hits fresh 2-year highs versus the dollar, helping not just is US political worries but the prospect of ECB easing back on bond-buying, says Toshihiko Sakai at Mitsubishi UFJ. He notes ECB officials have said nothing regarding the common currency's strength, fueling speculation for central-bank tapering there. The euro got as high as $1.1684, according to EBS, and is currently around $1.1675, up 0.1% from late-Friday levels in New York.

Jul 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices gained after a steep fall the session before, buoyed by expectations that a joint OPEC and non-OPEC meeting later in the day may address rising output in Nigeria and Libya, two OPEC members so far exempt from a push to cut production.
- Gold prices touched their highest in four weeks, supported by political uncertainty in the United States that pushed the dollar to its lowest in over a year.
- London copper was marking time near its highest since early March on Monday ahead of the release of a spate of global manufacturing reports, underpinned by extended weakness in the dollar and prospects of tighter mine supply.
- U.S. corn futures fell 2 percent to hit a one-week low as forecasts for rain eased fears of potential production losses.
- Any US sanctions against Venezuela's oil industry will increase the country's chance of a debt default, Venezuelan bond traders say. Venezuela has resorted to ad hoc measures like drastically reducing its food imports to make its debt payments. The US is a key source of cash for Caracas, buying about half of Venezuela's exports. While the South American country in recent years has increased oil shipments to Asia, it can't rely on allies like China because much of the oil Venezuela sends there is used to pay down existing debt, which would not provide immediate funds for the cash-strapped Maduro administration. Lowering oil revenues would also further hinder President Maduro's ability to continue providing economic benefits to government factions.
- With the Trump administration threatening sanctions against the country, Venezuela's government seems more likely now to deliver on the creation of a so-called constituent assembly tasked with rewriting the constitution, Eurasia Group says. For President Nicolas Maduro, "backing down now would look like he is kowtowing to Washington," the risk consultancy says. Venezuela has not been a priority for the Trump administration, Eurasia notes. But while targeted sanctions against individual officials are likely to come first, Trump may not shy away from greater sanctions against Venezuela's oil industry. "He will likely deliver on those threats if the threat alone doesn't work," it adds.
- Luis Almagro, General Secretary of the Organization of American States, says he backs US plans to level targeted sanctions against Venezuelan officials, but doubts the measure will deter the South American government from going through with its controversial effort to rewrite the constitution. Almagro told that to US senators this week as the Trump administration warns of upcoming penalties against Venezuelan individuals and possibly even stricter measures to curtail the oil-export revenues Venezuela depends on. Florida Senator Marco Rubio has been among the loudest of US voices calling for tough sanctions against Venezuela but it remains unclear if Washington will implement any kind of oil embargo as Venezuela remains the US's third-largest foreign supplier.
- ING says U.S. dollar weakness is "economically unjustified," but more falls are likely because of U.S. political concerns. The latest in a series of bad news to come out of Washington relates to Robert Mueller's investigation of Russian inteference in last year's election, with media reports suggesting it could extend to President Donald Trump's finances. "In this environment, it's hard to see anything but the dollar staying on the back foot," says ING. The U.S. dollar is down against the euro and sterling on Friday, with EUR/USD up 0.1% and GBP/USD up 0.2%, although EUR/USD is also driven by broad euro strength.
- Up modestly by midday in Asian trading, the dollar has slid to session lows as European action has gotten under way as the currency continues to get roughed up. The WSJ Dollar Index set a fresh 9 1/2-month low Thursday as the euro logged its best level in late New York trading since January 2015 at $1.1632. The euro is now above $1.1665 while the WSJ Index is off 0.1%. Trump investigations continue to weigh, analysts say. "US political uncertainty is now having an outright dampening effect on investor sentiment," says Viraj Patel, forex strategist at ING in London. ANZ strategist Irene Cheung adds White House issues "could draw its focus away from economic reforms."
- Only a realistic possibility of an impeachment in the US could significantly derail stock markets there, says CMC Markets' Ric Spooner. Still, he cautions that possibility is still a long way off. Meanwhile, disappointment on Trump's stalled policy agenda is already priced in, contends Spooner, even as US stocks remain at record highs. "I think stock markets haven't in my view got much expectations that there will be any tax reform and stimulus."
- Nucor's CEO says there's strong support from the Trump administration for sweeping tariffs on imported steel, even after the administration missed its self-imposed deadline for completing its investigation by the end of June. "Our elected officials and the administration are beginning to have a better understanding of the consequences of imports." John Ferriola tells analysts during a conference call "What we are advocating in Washington is a very broad-based [tariff] ruling that will include virtually all of the steel products." The administration is
considering invoking a little-used provision of the 1960s-vintage Trade Expansion Act permitting tariffs on imports if they undermine national security. US steel companies argue that a flood of cheap foreign steel has weakened their ability to provide steel for defense and national security infrastructure.

Jul 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were little changed ahead of a key meeting of major oil producing nations next week, sitting below the $50 per barrel level that was briefly breached for the first time in 6 weeks in the previous session.  
- Gold held steady near a three-week high and was on track for a second consecutive weekly gain, underpinned by a weaker dollar and U.S. political uncertainty.
- A weak dollar helped lift copper prices in early Asian trading, reversing an overnight dip.
- U.S. corn edged lower, but the grain was on track to post a weekly gain of around 3.5 pct as forecasts for continued adverse weather stoked fears of production losses.
- Up modestly by midday in Asian trading, the dollar has slid to session lows as European action has gotten under way as the currency continues to get roughed up. The WSJ Dollar Index set a fresh 9 1/2-month low Thursday as the euro logged its best level in late New York trading since January 2015 at $1.1632. The euro is now above $1.1665 while the WSJ Index is off 0.1%. Trump investigations continue to weigh, analysts say. "US political uncertainty is now having an outright dampening effect on investor sentiment," says Viraj Patel, forex strategist at ING in London. ANZ strategist Irene Cheung adds White House issues "could draw its focus away from economic reforms."
- Only a realistic possibility of an impeachment in the US could significantly derail stock markets there, says CMC Markets' Ric Spooner. Still, he cautions that possibility is still a long way off. Meanwhile, disappointment on Trump's stalled policy agenda is already priced in, contends Spooner, even as US stocks remain at record highs. "I think stock markets haven't in my view got much expectations that there will be any tax reform and stimulus."
- Nucor's CEO says there's strong support from the Trump administration for sweeping tariffs on imported steel, even after the administration missed its self-imposed deadline for completing its investigation by the end of June. "Our elected officials and the administration are beginning to have a better understanding of the consequences of imports." John Ferriola tells analysts during a conference call "What we are advocating in Washington is a very broad-based [tariff] ruling that will include virtually all of the steel products." The administration is
considering invoking a little-used provision of the 1960s-vintage Trade Expansion Act permitting tariffs on imports if they undermine national security. US steel companies argue that a flood of cheap foreign steel has weakened their ability to provide steel for defense and national security infrastructure.
- The CEOs of drug makers Merck and Pfizer and glass maker Corning appeared at the White House with President Trump today to announce new GLW glass packaging for drugs and vaccines, vials that MRK and PFE helped develop and may use for some of their products. The companies say the new glass packaging has improved strength, durability and damage resistance compared with older products. Development of the product predates the Trump Administration, but the companies said a White House American innovation office facilitated the collaboration. Trump tested the new Corning vial by using a machine to apply pressure to it. It didn't break.
- Former Utah Gov Jon Huntsman would step down from Caterpillar's board if is he confirmed as U.S. ambassador to Russia, the company said. The White House announced Mr. Huntsman's nomination on Tuesday. "His service as a trade ambassador, a popular governor of Utah and his ambassadorships to Singapore and China provide the experience needed in a complex global environment," CAT said. "As a member of Caterpillar's board of directors, Gov. Huntsman has offered invaluable wisdom to our executives."
- United Auto Workers President Dennis Williams says the union will launch its own "Buy American" campaign soon, starting with a public contest around Labor Day to generate ideas for radio, television and social media spots. The UAW, whose anti-trade stance jibes with President Trump's America first agenda, has long pushed for consumers to buy American made products to support local jobs. Williams, speaking to reporters in Detroit, points to the Trump Administration's "Made In America" initiative which started this week highlighting US-built products as evidence of the buzz around the topic right now. "Consumers have power," Williams says. "They can't be lazy about this. If they want America to flourish and bring back good jobs, they have to be a part of this, as well."
- Canada PM Justin Trudeau enjoys a sizable lead over his political opponents and his government's approval rating is close to 50%, in part because Canadians are more confident about the economy, according to a poll from Ottawa-based Abacus Data. Nearing the Liberal government's two-year anniversary, the poll says 43% would vote Liberal if the election were held today, versus 31% for the Conservative Party. The approval rating of the Liberal government stands at 48%, compared with a 34% disapproval rating. Abacus says Trudeau's relatively strong performance is tied to country's improving economy, which in 1Q posted the best growth among G7, and prompted BoC to raise rates for first time in 7 years.
- The dollar extends losses after Bloomberg reports that the probe into ties between the Donald Trump campaign and Russia is now looking at transactions involving Trump's businesses, citing people familiar with the matter. The ICE Dollar Index is down 0.7%, compared to a decline of 0.2% before the story was released. The dollar has extended losses against the Japanese yen and euro. Jefferies' Brad Bechtel said the report "just increases the uncertainty" surrounding the administration and its pro-growth agenda.
- Gold prices reversed losses and are now up 0.4% at $1,246.40 a troy ounce after a Bloomberg report that the US special counsel investigating ties between Donald Trump's campaign and Russia in last year's election will also review transactions involving Trump's businesses as well as those of his associates. The dollar fell on the news as well, further bolstering gold's gains.
- For the first time in nearly a decade, members of the House and Senate aren't tussling over amendments seeking to benefit competing technologies intended to save flight data and cockpit voice recordings in the event of airliner accidents. Legislation to reauthorize the Federal Aviation Administration's powers past September calls for the agency, rather than lawmakers, to determine the benefits of various approaches. By the end of the decade, Airbus is committed to start installing what are called deployable recorders -- designed to pop out of an aircraft's tail in a crash -- on the assembly line. Rival Boeing and some FAA managers, who consider such systems unnecessary and prone to potentially hazardous malfunctions, instead favor streaming data off planes. International safety standards permit options.
- Indian outsourcer Wipro posted flat net profit for the quarter ended June 30 as it, like its local peers, faces challenges from a changing technological landscape and scrutiny of its use of the U.S.'s skilled-worker visa program. Net profit for was 20.8 billion rupees ($322 million), compared with 20.5 billion rupees a year ago. While Indian outsourcers are trying to offer clients the more-sophisticated services they seek, President Trump has criticized the companies' use of the H-1B program, on which they depend to send workers to the U.S., their
most important market.
- Gold prices are slightly lower, down 0.26% at $1,237.72 a troy ounce, coming off gains made in the past week amid a minor rally in the U.S. dollar. That decline results from golds antagonistic relationship with the dollar, which is up after traders bought into the currency after it had been weakened by a week of politics-driven pressure. The WSJ Dollar Index, which measures the dollar against a basket of other currencies, is up 0.23% at 87.23, although remains 0.78% down on-the-week. The dollar's earlier losses came after traders questioned President Donald Trump's ability to push through his legislative agenda, said Mr. Govett, pointing to the failure of Senate Republicans to repeal and replace Obamacare.

Jul 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices held steady, hanging on to gains made the previous session when falling U.S. crude stocks lifted the market, as analysts offered mixed supply outlooks for the commodity ahead of a key OPEC meeting next week.
- Gold prices edged lower, with the dollar steady as markets looked to a meeting of the European Central Bank later in the day for clues on the outlook for its stimulus programme.
- London copper marked time near its highest since early March, underpinned by brighter prospects for China's economy but awaiting a U.S. jobs report for cues on near-term direction.
- U.S. wheat fell more than 1 percent to hit a three-week low, weighed down by ample global supplies despite lingering fears for high quality crops.
- The euro held near a 14-month high against the dollar as investors look to hints from the European Central Bank on tapering of its stimulus, while the yen barely budged after the Bank of Japan kept monetary policy on hold.
The fate of Japan's monetary policy is now dependant on Trump and the US economy, some analysts contend. "If Trump makes no progress in his economic policy (because of scandals), the US economy could start weakening again," notes Mari Iwashita, chief market economist at SMBC Friend Securities. She adds expectations for additional BoJ easing could heighten if such concerns mount. "Because the Japanese economy depends on external demand, it will likely get hit if the US economy begins staggering."
- Though the Nikkei remains above 20000 this morning, investors are looking for downside protection amid the sharp drop in Abe's support, says Kyoya Okazawa, head of global markets for BNP Paribas in Japan. "His weak political capital could impact markets." Among investor concerns is that deflation will return, the yen will appreciate and the Nikkei will see corrections. These are potential tail risks, Okazawa says, although if Abe was to resign "the magnitude would be the same as Brexit or Trump's election."
- In the first half, Japan's trade surplus against the US dropped 5.4% on year to Y3.2 trillion ($28.6 billion). The surplus also shrank in 2H last year from a year earlier, the Ministry of Finance says. Still, the surplus has come under the spotlight after President Donald Trump named Japan one of the countries contributing to the US trade deficit, along with China. Japanese exports to the US rose 2.9% in the first half from a year earlier, backed by demand for SUVs and automotive components, while imports increased 10.7%, as Japan imported more liquified natural gas and grains.
- Leaders of the Air Line Pilots Association are stepping up the fight against legislative proposals to reduce mandatory flight-time requirements for newly hired first officers. The Senate Commerce Committee already has voted to allow more new copilots to start flying passengers with less than 1,500 hours in their log books. "ALPA will not relent in our drive to beat back" such provisions, says Tim Canoll, the union's president. The House is expected to side with ALPA, and union officials are increasingly optimistic of eventually reaching a compromise with GOP Senate leaders. Senate Minority Leader Charles Schumer has vowed to block any bill weakening the 1,500-hour requirement, which currently can be reduced only for ex-military pilots and college graduates.
- Proposals for an import tariff won't prompt auto makers to shift production to the US unless the duty is set above 40%, the author of a new study says. A border adjustment tax of just 15% would boost average vehicle production costs by $1,025, but not shift manufacturing from Mexico, the study says. "To force people to change the supply chain pro-actively, it's probably [a border adjustment tax rate of] 40-50%," Xavier Mosquet, a managing director at Boston Consulting, tells reporters. The study, which was commissioned by the Motor & equipment Manufacturing Association, an industry lobby, finds auto makers would pass along costs with higher sticker prices and reduced advanced technology content in vehicles.
- Two of the Trump administration's top financial nominees will move closer to Senate confirmation next week. The Senate Banking Committee will hold a July 27 hearing on the nominations of Randal Quarles to become the Fed's point man on financial regulation and Joseph Otting to head the Office of the Comptroller of Currency, according to a Senate aide. A spokewoman for the committee, which has yet to publicly announce the hearing, declined to comment. The hearing is typically followed by a committee vote to confirm nominees.
- United Technologies says layoffs for its Carrier plant in Indianapolis are continuing as planned. Some media outlets recently questioned whether UTX was living up to its fall deal with Trump, who spent months criticizing plans to move more than 2,000 jobs to Mexico. UTX agreed to a $7M incentive package from the state to keep about 800 jobs in the state with the remainder going to Mexico. It will also have 300 headquarters and engineering jobs still in the state. The layoffs will hit 600 workers over the next several months with about half of them leaving tomorrow.
- Rep. Debbie Dingell (D., Mich.) sounds an urgent need to keep the US ahead on developing self-driving cars during a legislation markup today. "Automated vehicles are going to be developed whether we like it or not," she says, adding that the question is whether the US will cede testing and development advances to China, Japan or the European Union. Auto makers, including GM and Ford in her home state, contend that onerous regulations and conflicting rules could send testing elsewhere. She takes pains to portray the current bill as putting "safety first and foremost as it must." The bill requires companies to submit safety certification assessments to regulators, but forbids the US Transportation Secretary from conditioning deployment or testing of automated vehicles on review of those assessments.
- Some Democrats on House Energy and Commerce subcommittee look to slow self-driving car legislation, flagging concerns over curtailing states' regulatory power. Democrats urge Republicans delay full-committee consideration of bill set for next week until bi-partisan deals are reached on those aspects. "I cannot endorse this legislation" absent bi-partisan agreement, says Rep Jan Schakowsky (D, Ill) during subcommittee markup. Bill aims to limit states' ability to enact patchwork of regulations that would potentially conflict with US rules, a key provision lobbied for by auto makers and tech companies. Bill also aims to buttress National Highway Traffic Safety Administration's ability to exempt vehicles from U.S. safety standards with demonstration safety not being sacrificed. Bill heads to House floor in September at earliest.
- Morgan Stanley CEO James Gorman said in his remarks on the Wall Street firm's earnings call that "US corporate taxes are too high." He added that "if the administration and Congress can achieve a sensible realignment of tax rates," with other developed economies, it would be a "clear positive for our business and corporate America." Earlier, at a recent industry conference, Gorman said that reducing the corporate tax rate from 35% to 25% would result in a 15% increase to MS's earnings.
- U.S. Senator John McCain introduces legislation to repeal the Jones Act, which requires all cargo ships travelling between U.S. ports to be American. The Act, which dates to 1920, mandates that such vessels be U.S.-made, U.S.-flagged and U.S. owned as well as being crewed by .U.S. citizens. This means such vessels operate at a cost at least three times higher than non-U.S. ships, which is passed down to cargo owners and consumers. "I have long advocated the repeal of the Jones Act, an archaic law that hinders free trade, stifles the economy and ultimately hurts consumers," McCain said after introducing his so-called Open America's Waters act of 2017. But supporters of the Jones Act have repeatedly fenced off such efforts citing national security risks and large scale layoffs at American shipbuilding yards.

Jul 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell after a rise in U.S. crude inventories and ongoing high output from OPEC producers revived concerns of a fuel supply overhang.
- Gold prices held steady, not far from the over two-week highs hit in the previous session, as the dollar crept up from multi-month lows even as fading prospects of a U.S. monetary tightening continued to pressure the greenback.
- London copper consolidated near four-and-a-half month highs, weighed down by a slightly firmer dollar but supported by a pick-up in China's industrial activity that helped drive second-quarter economic growth.
- U.S. corn edged lower, though losses were checked by fears that dry weather across a key producing region could stoke further production losses.
- Canada's chief envoy in Washington, David MacNaughton, says a dispute-settlement mechanism must be part of a renegotiated Nafta. The Trump administration is seeking to repeal the scheme in place, known as Chapter 19, so the ambassador's comments have already emerged as significant disagreement between the US and Canada ahead of next month's Nafta talks. "We think that it's critical to have some kind of a dispute resolution mechanism incorporated," MacNaughton said in an interview with Canada's CTV Network. "Whether or not that dispute resolution mechanism can be improved or modernized, I think we're up for discussions around that. But there needs to be some kind of a dispute resolution mechanism."
- Energy Secretary Rick Perry says at a Washington press conference a cleaner environment and a strong, prosperous economy will go hand in hand by using an "all of the above" energy approach that includes oil, clean-burning coal, natural gas, renewables and more. Speaking with the head of the International Energy Agency, Perry says the US won't chart the renewable-centric course proffered by allies like Germany. "Germany, in its current share of renewable energy, was driven to a surcharge in electric rates," he says. "German households now pay the highest electricity prices in Europe, as much as three times what we pay in the US."
- Harley-Davidson's disappointing 2Q retail sales and layoff announcement are dimming prospects of a so-called Trump bump for the Milwaukee-based motorcycle maker. After Trump's election last year, analysts thought HOG could benefit from a proposed border tax on imports and more purchases from construction workers who benefit from plans to overhaul the nation's aging infrastructure. HOG executives and union leaders have visited the White House as Trump mulled ways to boost US manufacturing and promote American-made products. "In terms of perception that would clearly benefit a company like Harley-Davidson, but clearly we're not seeing it," Wedbush Securities analyst James Hardiman says. Plans for a border tax and an overhaul of the US tax code have yet to materialize. Nor has an infrastructure-spending plan. HOG declined to immediately elaborate on how many workers it would lay off and at which US factories. HOG falls 8.1% to $47.75.
- The Trump administration didn't specify a clear plan for the investor arbitration system in Nafta when it published objectives for the pact's renegotiation on Monday. Today, House lawmakers got an earful from companies that want to keep the controversial provision, known as investor-state dispute settlement, or ISDS. "Even if ISDS is never used, it serves as an important insurance policy," said Dennis Arriola, executive vice president for corporate strategy at Sempra Energy. The chief executive of Kansas City Southern, Patrick Ottensmeyer, said his company needs the arbitration system to protect his firm's $4.5B in Mexican investments.
- Venezuelan bonds are steady after President Trump's threat late Monday to issue additional sanctions against the government if it makes good on promises to re-draft the constitution with the help of a new assembly July 30. Stuart Culverhouse of Exotix says extending existing sanctions--which now are mainly targeted at individuals--to include oil exports could precipitate a default "although it may not be immediate as the government finds ways around them and relies more on its friends." Bond prices would drop in the case of a default but prices will find support with the anticipation of an orderly restructuring under a new market friendly regime, he says, with recovery value at 70 cents on the dollar in a best case scenario.
- The euro and the Australian dollar are major beneficiaries of U.S. dollar weakness, both reaching 14-month highs. Unless U.S. data improve, the euro is headed for $1.16 and the Australian dollar for $0.80, says Boris Schlossberg, Managing Director of FX Strategy at BK Asset Management. The euro rises 0.85% to $1.1585; the Australian dollar jumps 1.56% to $0.7924, having earlier hit $0.7943, according to Factset. The U.S. dollar dropped after two Republican senators withdrew support for the bill to replace Obamacare. Mr. Schlossberg says the news exacerbated "already negative" dollar sentiment. Reserve Bank of Australia minutes overnight also boosted the Australian dollar, with the RBA estimating a neutral nominal cash rate around 200 basis points above the current level.
- Many of the provisions to renegotiate Nafta released by the US on are vague, including rules of origin. Mexican officials have said that they are open to reviewing rules of origin, as long as proposed changes don't threaten to hurt investment by making it easier for manufacturers to bypass Mexico if they're unable to import certain components from outside the region to make products bound for the US.
- During a call with analysts, UnitedHealth CEO Stephen Hemsley generally steers clear of discussing the furor around Republicans' start-and-stop efforts to pass a broad health overhaul. He refers briefly to uncertainty around national and state policy as a headwind for 2018 but says "at this stage in the national conversation, speculation about any outcome here would be just that." He also reiterates the company's opposition to the Affordable Care Act's health-insurance tax, which he said was a specific headwind for next year and which he said would, if not cancelled, "further destabilize the market, which is already fragile." UNH reports 2Q earnings that came in ahead of expectations and revenue that was roughly in line. UHN off 0.8% to $185.04.
- A set of simpler provisions for labor markets within Nafta could become a key tool to garner support from Democrat lawmakers and US labor groups, Mexican observers say. Mexico's low wages and the wide wage disparities between the two countries have long been criticized by Nafta's detractors. "A labor agreement within Nafta would only have teeth if it includes trade sanctions and clear enforcement rules" that go beyond national government jurisdiction, said Carlos Heredia, an activist and professor of Mexico's CIDE university who has long opposed Nafta's labor provisions.
- The USTR's objectives for Nafta negotiations are positive for Mexico as the US seeks to maintain duty-free market access for industrial and other goods. "They obviously went along with a free-trade discourse," says Carlos Vejar, a trade attorney at Holland & Knight. "That means there is no intention to impose tariffs or go into what Mexico was always afraid of - of moving back into a tariff system," he adds. The peso is slightly stronger against the US dollar at 17.5240 in Mexico City, near a 14-month high, but several analysts express surprise there wasn't a bigger reaction. Still, the peso is up 26% from its record low hit in January.
- The Trump administration's goal of eliminating Nafta's dispute-settlement system-- which allows Canada and Mexico to challenge anti-dumping and countervailing duties imposed by Washington--could prove to be a "dealbreaker" for Canada's Liberal government says Ottawa-based trade consultancy Export Action Global. The firm thinks the system, also known in trade circles as the Chapter 19 provision, is a crucial component of Nafta because it ensures US law "cannot be applied in a protectionist manner to block otherwise fair two-way trade." The dispute-settlement mechanism was key for Canada when it reached the 1988 free-trade pact with the US, or Nafta's predecessor. "It was a dealbreaker a generation ago for Canada and remains so today," firm adds.
- US home builder confidence fell to the lowest level in eight months amid rising costs for materials, fallout from the Trump administration's trade policies. National Association of Home Builders housing market index slipped two points to 64 in July, the trade group says. That was the worst reading since November. "Market prices increased due to lumber trade policies," said NAHB Chief Economist Robert Dietz. The Trump administration in April proposed a 20% tariff on Canadian lumber imports and in June said it was considering another layer of duties, factors behind higher prices.

Jul 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were stable, supported by strong consumption but weighed by ongoing high supplies from producer club OPEC and also the United States.
- Gold prices rose to a two-week high as the dollar dipped to multi-month lows amid fading prospects of further rate hikes by the U.S. Federal Reserve this year and doubts whether President Donald Trump would be able to push through healthcare reforms.  
- Copper prices edged up in early Asian trading, extending gains in the wake of strong Chinese economic data that boosted the outlook for metals demand.
- U.S. corn climbed 2 percent as forecasts for hot, dry weather across a key producing region stoked fears of further output losses.
- The Trump administration on Monday published its long-awaited negotiating objectives for a planned overhaul of the North American Free Trade Agreement, or Nafta. The objectives, required for a rewrite of the law, allow U.S. officials to begin formal talks with Canada and Mexico in as little as 30 days. The move also opens up what's expected to be a spirited debate in Congress, where majority votes would be needed in the House and Senate to pass any new deal. Here are some major takeaways:
- TPP By Another Name :
The Nafta objectives include a number of items already negotiated under the Trans-Pacific Partnership, which President Trump killed on his first full workday in the Oval Office. They include rules covering state-owned enterprises, e-commerce and financial services. These should be easy parts to negotiate, since all three nations already agreed to such measures under TPP.
- Environment and Labor :
The administration says it wants to make environmental and labor disputes subject to Nafta arbitration panels -- meaning that alleged violations can be punished by the imposition of tariffs. They would replace weak labor and environmental panels that were added to Nafta after the main accord was negotiated as a way to win congressional support for the trade pact. Businesses in all three countries are likely to object.
- Currency :
The administration wants to make Nafta the first U.S. trade pact to police "currency manipulation." That would be a big deal -- and one that may be easy to reach, because neither Canada nor Mexico face such accusations, which are usually leveled at Asian trading partners. The goal would be to establish this as precedent for future trade pacts.
- Tougher Enforcement :
One area where the plan does embrace the trade warrior agenda is a proposal to scrap a special Nafta provision that has made it easier for Canada and Mexico to avert U.S. trade sanctions, the so-called "Chapter 19 dispute settlement mechanism" that allows Nafta partners to challenge duties before a special Nafta tribunal available only to them. Canada in particular has made keeping Chapter 19 a priority. Chad Bown of the Peterson Institute for International Economics says the Trump administration's general focus on tougher enforcement will likely push Canada to dig in on keeping Chapter 19, making this one likely flashpoint of the talks.
- Investor Protection :
There is no provision of Nafta -- or other trade deals -- that irks critics more than the ability of investors to sue governments in arbitration panels over policies they deem antibusiness. A loss of sovereignty, the critics say. A necessary alternative to corrupt legal systems, counters business. The U.S. seeks a middle-ground that may not exist: The U.S. wouldn't eliminate the panels, but would constrain their power in the U.S.
- Who's Nafta For ?
The document does acknowledge some winners from Nafta -- notably "farmers and ranchers" who got "much needed market access" from the pact. That's a nod to the (heavily Republican) farm-state lawmakers who have made clear to Mr.Trump he'd better not mess with their success. It largely portrays the pact as a raw deal for "American workers," slammed by factories lost due to outsourcing. The broad goal is to help companies "grow their exports." Left unmentioned: American consumers, who, economists say, have gained tremendously from the pact through cheaper prices and greater variety.
- Which Trump Faction Won ?
All Trump trade pronouncements are scrutinized for which faction of his advisers won: the economic nationalists who shaped his campaign platform, or the globalists who run his economic team. The quick Kremlinology says it's the globalists, led by Gary Cohn, the former Goldman Sachs Group Inc. president running the White House National Economic Council. That said, the battle isn't over. Many of the provisions remain vague. And Mr. Trump has reserved the right to pull out altogether -- the goal of his nationalist advisers -- if he's not pleased with the final result.

Jul 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose, supported by a slowdown in the growth of rigs looking for crude in the United States and because of strong refinery demand from China.
- Gold rose as investors sought higher returns in alternative asset classes as the outlook for further interest rate hikes in the United States dimmed following softer U.S. economic data last week that also pushed the dollar to multi-month lows.
- London copper edged up to its highest in two weeks, supported by a weaker dollar and an upbeat second quarter for China's economy which brightened demand prospects for metals.
- U.S. wheat fell 1 percent to hit a 17-day low as rains across a key producing region weighed on prices, though forecasts for continued dry weather provided a floor to losses.

Jul 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets dipped, pulled down by high fuel inventories and improving industry efficiency, but were still on track for a solid weekly gain.
- Gold prices were largely unchanged as the dollar steadied ahead of key U.S. economic data, but the metal remained on course for its first weekly gain in three.
- London copper was marking time at the top of its recent range, with encouraging import data from China and improved prospects for the global economy supporting prices.
- U.S. wheat rose nearly 1 percent to move away from a two-week low touched in the previous session, but prices remained under pressure from forecasts for cooler temperatures that could help crops.
- A top Democrat on the Senate Banking Committee calls for the elimination of a pricing system used by stock exchanges that creates conflicts of interest for brokers. Sen. Mark Warner (D., Va.) tells SEC Chairman Jay Clayton in a letter that the SEC should prohibit the system. Known as "maker-taker," exchanges pay a rebate to traders who provide standing orders to trade, while charging investors who trade against those orders. Exchanges say it rewards traders who add liquidity to their platforms, while charging those who benefit from it. Critics say maker-taker pricing encourages brokers to send orders to less transparent private venues, which tend to charge lower fees than exchanges. They also claim rebates have enticed some proprietary traders whose activity adds little value.
- Nike chairman Phil Knight donated $100,000 to the House Speaker Paul Ryan's reelection committee this year, according to receipts filed with the Federal Election Commission. Knight, 79, also donated $5,000 to the Prosperity Action super political action committee, which lists its honorary chairman as Ryan. The NKE co-founder further pledged $33,900 to the National Republican Senatorial Committee during the period. Knight, a registered Republican, has been a prolific donor to political candidates including more than $330,000 in donations to Oregon House Republican candidates last fall, according to the Eugene (Ore.) Register-Guard. His individual contributions stand in contrast with disbursements from the Nike Inc. Federal PAC, which awarded roughly $22,100 in to Democratic-affiliated candidates and $14,500 to Republicans during the first five months of 2015, per the FEC.
- Even though possible catalysts for bank growth haven't panned out yet, that hasn't stopped Charlotte-based Novare Capital Management from getting overweight on large bank stocks. With an expectation for higher rates and following JPMorgan Chief James Dimon's calls for tax and regulatory reform, "we have a view we like in the space," says James Harlow, a vice president at the firm. "We need clarity out of politics in Washington," adds Brian Rudisill, a senior portfolio manager. Then there's an expectation that companies will spend money making acquisitions or expanding. Novare owns about $3M of JPM.
- A tariff on imported steel could raise costs for US auto makers, RBC Capital says. President Trump this week reiterated his plan to impose curbs on steel imports, without giving specifics. RBC says Ford, GM and FCA mostly use domestically sourced steel. A tariff or quotas on imported steel could lead to higher prices of domestic steel. It also could curb the price of foreign steel, creating a wider disparity in steel costs between US and foreign auto
makers, RBC says. "This could eventually lead to a reduction in U.S. built vehicles and U.S. auto jobs," opposite of the administration's intentions, the bank says.
- Tapping experienced NASA hand Scott Pace as executive secretary of the White House's newly revived National Space Council isn't likely to end the Trump administration's gridlock over space issues. Lacking a NASA administrator, new funding priorities and a clear-cut plan for getting astronauts to Mars in coming decades, NASA's career officials remain severely constrained in charting a different course. The agency soon will announce plans for more unmanned rovers to land on the surface of Mars, but money for eventual manned exploration of the Red Planet still hasn't been identified or earmarked. Reducing launch costs for national-security satellites is another longstanding, thorny issue confronting the policy group.
- The July reading of the University of Michigan's consumer sentiment index underscores a recurring theme: consumers have growing doubts that policy makers in Washington will achieve success in revitalizing a US economy that has grown slowly in recent years. The University of Michigan says the preliminary reading of its consumer-sentiment index was 93.1 in July, down from a June reading of 95.1 and a May reading of 97.1. Another widely-watched index of consumer confidence--the Conference Board's Consumer Confidence index--crested in March and has declined in recent months. "The data indicate that hopes for a prolonged period of 3% GDP growth sparked by Trump's victory have largely vanished," says Richard Curtin, the survey's chief economist, in a statement. Curtin says the level of the consumer sentiment index is consistent with a growth rate "just above 2%."
- Euro corporate bond spreads have tightened significantly from April onward, as Emmanuel Macron beat far-right Marine Le Pen in the French presidential race, but such a rally is unlikely to happen again in 2017, Bank of America Merrill Lynch strategists say. And valuations should be an impediment to euro credit performance in 2H. Euro investment-grade spreads are now tighter versus dollar spreads, having been level in mid-March. This could spur some global investors to switch from euro to dollar corporate debt, BAML adds.
- President Trump nominates Russ Behnam, an aide to Democratic Senator Debbie Stabenow (Mich.) to the Commodity Futures Trading Commission. Behnam is the first Democratic nominee for the CFTC put forward by the Trump administration. Two Republicans have been nominated for open commissioner slots, and Acting Chairman J. Christopher Giancarlo's nomination to be permanent chairman recently passed the Senate Agriculture Committee by a 16-5 margin. Current Democratic Commissioner Sharon Bowen has announced her intent to step down in the coming months, so Trump will need to nominate another Democrat soon. Senate Agriculture Committee Chairman Pat Roberts (Kans.) has expressed a preference to proceed with all the commissioner nominees at once. Bipartisan pairings typically make it easier to pass the nominees expeditiously through the Senate.

Jul 13 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices were stable as strong demand from China eased concerns of an ongoing fuel glut.  
- Gold prices rose after U.S. Federal Reserve Chair Janet Yellen said the central bank would only gradually tighten monetary policy, curbing speculation that interest rates would rise more than once this year.
- Chinese copper futures rose in early Asian trading, buoyed by a weaker U.S. dollar.
- U.S. wheat fell 2 percent to hit a two-week low after the U.S. Department of Agriculture raised its estimate for U.S. production this season, easing fears of tight supply after recent dry weather.
- The Trump administration notifies South Korea it wants to hold talks next month on amending a five-year-old bilateral trade pact, seeking ways to cut the US's $27.6B goods deficit with its Asian ally. Trump's trade representative, Robert Lighthizer, sends a letter to his South Korean counterpart calling for a special session to discuss amendments to be held within 30 days in Washington to "resolve several problems regarding market access in Korea for US exports, and, most importantly, address our significant trade imbalance." His letter didn't specify which sectors would be discussed, but the American auto industry in particular has complained about what it considers ongoing trade barriers in South Korea. The move is one of many taken by Trump to revisit American trade pacts. The review of the US-Korea Free Trade Agreement is likely to come around the same time the US opens talks in mid-August with Mexico and Canada to renegotiate Nafta.
- After another death linked to rupture-prone Takata air bags and an expanded recall this week, two Democratic senators write Transportation Secretary Elaine Chao and the acting NHTSA head urging all devices with drying agents be recalled. They also seek rupture rates for all affected vehicles. Sens. Richard Blumenthal (D., Conn.) and Edward Markey (D., Mass.), longtime critics of traffic-safety regulators and auto makers, express alarm that a subset of air bags with drying agents meant to help prevent explosions are now deemed risky. "NHTSA has been much too generous in allowing Takata until 2019 to prove that ammonium nitrate inflaters with a drying agent are not at risk of rupturing," they write. "Knowing now that even desiccated ammonium nitrate inflaters pose a safety risk, it seems obvious that ammonium nitrate, whether desiccated or not, should not be used as a propellant in any air bag."
- The health-insurance industry, which has generally taken muted stances on the Republican health-overhaul bills, is coming out with guns blazing against a provision proposed by Texas Senator Ted Cruz. The Cruz plan would let insurers that sell plans that conform to the Affordable Care Act's regulations also sell policies that don't. A letter from America's Health Insurance Plans says the setup "would create an un-level playing field that would lead to....unstable health insurance markets." The Blue Cross Blue Shield Association calls the plan "unworkable as it would undermine pre-existing condition protections, increase premiums and destabilize the market."
- Silicon Valley's campaign to defend net neutrality rules is at odds with many carriers' past policy positions, though telecom's heavy hitters are hardly downplaying the media blitz. Tech companies organized Wednesday's "Day of Action" to defend FCC rules designed to protect internet providers from meddling with their customers' bits. AT&T, though it opposes FCC rules on the books, said Tuesday it would "join" the campaign and wants rules for internet providers to come from Congress. Verizon stays on the sidelines but says the consumer protections at issue "deserve to be written in ink, not pencil," another appeal for legislative action.
- Asked directly whether she would stay on for a second four-year term as Fed chairwoman during congressional testimony, Yellen says that's "something I would discuss with the president." So far, according to Yellen, that hasn't been an issue. Yellen's term as chairwoman expires in February.
- Would Janet Yellen stay at the Federal Reserve if Donald Trump asked? The chairwoman hasn't answered the question before, and she wouldn't answer it today when asked during testimony before Congress. "What I've previously said is that I absolutely intend to serve out my term," she said. "I'm very focused on trying to achieve our congressionally mandated objectives, and I really haven't had to give further thought at this point to this question." Though Trump is likely to replace Yellen when her term expires in February, he hasn't ruled out asking her to stay on.
- Although revelations about communication between Donald Trump Jr. and Russia's prosecutor general further suggest an attempt to influence the last year's election, markets don't seem too bothered. "The pressure-cooker anticipation for the events" kept US stocks little changed Tuesday, says Jingyi Pan, a market strategist at IG Group. Stock markets in Asia lack clear direction Wednesday ahead of Yellen's Capitol Hill appearances. Gold, a traditional risk hedge, is only up modestly.
- The supposed cloud cast over markets the past 12 hours in the wake of the Trump/Russia probe comes as "markets have recently been reluctant to take defensive action against possible, as opposed to probable, risk events," notes Ric Spooner of CMC Markets. "This reflects the supportive macro background for shares created by low interest rates and improving world economic growth. However, there are concerns that the US administration is becoming increasingly mired in day-to-day difficulties, limiting the political capital it needs to achieve difficult economic reform and stimulus."
- New emails disclosed concerning Donald Trump Jr.'s 2016 meeting with a Russian lawyer fill in details that could be legally problematic for the president's son, say legal experts. The emails reveal two key pieces of information that had been obscured or contradicted by Trump Jr.'s previous accounts of his June 2016 meeting in New York City with Russian defense lawyer Natalia Veselnitskaya, who represents Russian state-owned corporations. The president's son knew that he would be meeting with a foreign national and that she was essentially a messenger for the Russian government. Federal election law makes it a felony to accept or solicit a campaign donation from a foreign national or foreign government. A donation can be "anything of value." The new emails don't amount to a slam-dunk indictment of Trump Jr., the legal experts say, but could help build a criminal or civil-enforcement case.
- The left-leaning activists at Fed Up were one of the strongest voices demanding a minority appointment for Atlanta Fed president, and that happened. Now the group is targeting the Richmond Fed's top slot, vacated in a leak scandal by Jeffrey Lacker last spring. Fed Up wants a minority in that slot too, and says it's especially important given that it views Lacker as insensitive to the concerns of minorities. The group also points out the Richmond Fed slot is the only current Fed gig not open to control by the Trump dministration, which has several governor slots to fill.

Jul 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose more than 1.5 percent, extending gains from the previous day as the U.S. government cut its crude production outlook for next year and as fuel inventories plunged.
- Gold edged up for a third day on a weaker U.S. dollar while investors awaited testimony from U.S. Federal Reserve Chair Janet Yellen and central bank officials expressed caution about further interest rate hikes.
- Copper prices climbed in Asia to the highest in more than one week amid a weaker U.S. dollar and concerns about industrial action that could further crimp mine supply.
- U.S. corn retreated from a one-year high touched in the previous session as traders squared positions ahead of a widely watched U.S. government report, though losses were checked as dry U.S. weather stoked fears of production losses.
- New emails disclosed concerning Donald Trump Jr.'s 2016 meeting with a Russian lawyer fill in details that could be legally problematic for the president's son, say legal experts. The emails reveal two key pieces of information that had been obscured or contradicted by Trump Jr.'s previous accounts of his June 2016 meeting in New York City with Russian defense lawyer Natalia Veselnitskaya, who represents Russian state-owned corporations. The president's son knew that he would be meeting with a foreign national and that she was essentially a messenger for the Russian government. Federal election law makes it a felony to accept or solicit a campaign donation from a foreign national or foreign government. A donation can be "anything of value." The new emails don't amount to a slam-dunk indictment of Trump Jr., the legal experts say, but could help build a criminal or civil-enforcement case.
- The left-leaning activists at Fed Up were one of the strongest voices demanding a minority appointment for Atlanta Fed president, and that happened. Now the group is targeting the Richmond Fed's top slot, vacated in a leak scandal by Jeffrey Lacker last spring. Fed Up wants a minority in that slot too, and says it's especially important given that it views Lacker as insensitive to the concerns of minorities. The group also points out the Richmond Fed slot is the only current Fed gig not open to control by the Trump Administration, which has several governor slots to fill.
- US stocks end mostly unchanged, bouncing back from losses suffered after Donald Trump Jr. released emails about meeting with a Russian lawyer to discuss allegedly incriminating information about Hillary Clinton during the 2016 presidential campaign. The Dow closes up less than a point to 21409, the S&P sheds less than two points to 2426 and the Nasdaq--helped by tech companies--gains 0.3% to 6193. The Dow had fallen more than 100 points late Tuesday morning after Donald Trump Jr. released the email chain on Twitter. Crude gains 1.6% to $45.10 and energy companies were the best performing sector in the S&P 500. Gold gains 0.2% to $1216 and 10-year Treasury yields settle at 2.356% compared with 2.371% Monday.
- Brazilian senators are poised to approve by a wide margin changes to the country's labor laws, according to analysts at Eurasia Group. Labor reform will bring relief to the corporate sector and its approval would suggest that other business-friendly reforms are still possible despite the country's political turmoil. However, its approval wouldn't necessarily help President Temer. "While the administration will spin a likely victory as a sign of strength, in reality the approval only suggests that lawmakers are responsive to the need of approving reforms able to generate conditions for an economic recovery," Eurasia says.
- The news about Donald Trump Jr's emails gives a boost to the bond market and bond prices are now headed for a second consecutive day of gains--a reprieve following a two-week selloff. "The more bad news for the Trump administration," the less likely he will be able to get any of his stimulative growth policies enacted, says Mary Ann Hurley, vice president of fixed-income trading at DA Davidson. "Investors should be concerned about their equity weighting" if the news about Russia link with the US elections continue to unfold, she says. The 10-year yield is 2.355%, down slightly from 2.371% Monday.
- US agricultural groups warn Commerce Secretary Wilbur Ross that new trade barriers to steel and aluminum imports could boomerang on the Farm Belt. "US agriculture is highly dependent on exports, which means it is particularly vulnerable to retaliation," say groups representing US farmers, dairymen, cattle ranchers and hog producers. Many nations that sell steel to US buyers are big customers for US-produced grain, milk and meat, and "the potential for retaliation from these trading partners is very real," the farm groups say. The Trump administration earlier this month missed its own deadline for finishing a major probe of steel imports, amid pushback from business groups worried about higher costs and trade reprisals.
- An index tracking news coverage of the global economy falls for the third consecutive month. Absolute Strategy Research, which compiles the ASR/WSJ index, says its measure dropped to 54.7 in June compared with a 57 reading in May and cites the inflation component--which has fallen 53 points since the start of the year--as "the biggest drag," on the index. In contrast, ASR says the labor component of the index still shows above-trend readings. Overall, ASR says its newsflow indicator has yet to reach levels consistent with a negative equity-to-bonds return ratio. In a nod to the global political climate, ASR adds that elections have kept policy uncertainty high, "even as uncertainty around protectionism or tax policy has fallen away."
- US stock indexes fall shortly before noon, with several traders pointing to the release of Donald Trump Jr.'s emails as the catalyst for the latest moves. In a statement describing the emails between Donald Trump Jr. and publicist Rob Goldstone, Donald Trump Jr. says he was offered a meeting to discuss information about Hillary Clinton that he "thought was political opposition research." The S&P 500 is down 0.4%, the Nasdaq Composite loses 0.1% and the Dow Jones Industrial Average falls 0.4%. Major indexes had largely traded in a narrow range prior to the release of the email.
- A bout of risk off positioning is hitting the markets at the moment after Donald Trump Jr releases email chain on setting up meeting with Russian lawyer. The news pushes down US stocks and helps the bond market recoup earlier losses. The 10-year yield is 2.368%, down slightly from 2.371% Monday.
- Global investment in the electricity sector has exceeded combined spending on oil, gas and coal supply for the first time in 2016, says the International Energy Agency, reflecting increased investor focus on renewable sources of energy. The growth in electricity investment also come as the share of clean-energy spending reached a record 43% of total supply investment, the agency says. It expects investment in upstream oil and gas sector to stabilize in 2017, led mainly by the US while the rest of the world remains largely stagnant. For 2016, total energy investment fell 12%, in its second consecutive year of declines.
- Regulation expert Neomi Rao will soon move to the Trump administration from her current post as associate professor of law at conservative George Mason University. The Senate confirmed her nomination to head a powerful federal office which reviews and assesses the costs and benefits of government rules. Rao has written and talked about what she sees as an overly broad delegation of authority to regulators, a philosophy that sorts well with the deregulatory agenda of the current White House. Already, Trump has moved to roll back a number of Obama-era regulations on energy and financial regulations, and Rao's office will likely assist in that effort. Sen. Elizabeth Warren said Rao's appointment will give corporations more power over DC rule-making and cripple the agencies' ability to enforce consumer-friendly laws and rules.

Jul 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices edged up, lifted in part by a strong demand outlook for the coming weeks, but overall market conditions remain weak on the back of ample supplies and a more subdued outlook for long-term demand.
- Gold edged lower on a firmer dollar and equities as the market awaited cues on the path of interest rate hikes in the United States ahead of Federal Reserve Chair Janet Yellen's testimony on Wednesday.
- Copper held largely steady in Asia amid modest support from investors after losing ground overnight on fresh signs of oversupply.  
- U.S. wheat rose nearly 1.5 percent as forecasts for further crop-damaging weather across a key growing region pushed prices towards a two-year high hit last week.
- The Pentagon finally sends its annual updates on the cost and performance of big weapons programs to Congress this week, providing a potential opportunity for the kind of "Trump tweet" that hasn't rattled the industry since the president took a swing at the new Ford-class aircraft carrier's catapult back in May. Crucially, the reports peg performance at December 31, providing runway for the type of "improvements" the White House has already cited in relation to the Lockheed Martin F-35 and the Air Force One replacement led by Boeing.
- A defamation lawsuit filed against President Trump by a onetime contestant for the "The Apprentice" shouldn't proceed while he is in office, attorneys for the president said Friday in a motion seeking to dismiss the case. The motion, filed late Friday in New York state court, based its arguments on the US Constitution's Supremacy Clause, which establishes that the constitution and federal laws hold primacy over state laws. The clause bars the state court from handling the lawsuit, brought by restaurateur Summer Zervos, the motion stated. Gloria Allred, who represents Zervos, had no immediate comment Friday. She has previously said that no man is above the law, including the president.
- The national debate over where Americans can carry guns has landed, quite literally, at the courthouse door. This year, lawmakers in Arkansas and Oklahoma passed bills expanding the right to bear arms to court buildings, for state employees or elected officials. Another bill, pending in Ohio, would allow any gun owners with concealed-carry permits to come armed into courthouses and other gun-free zones without facing criminal charges. Since 2013, more than a dozen mostly Republican-led states have considered measures easing courthouse restrictions, although generally guns are still banned inside individual courtrooms. Proponents of these eased laws say they are about securing the rights of law-abiding gun owners to protect themselves in public places. But the more expansive bills have met resistance from people concerned that allowing firearms in courthouses would invite trouble.
- Trump to Appoint Fed Bank Regulator (WSJ)
President Donald Trump plans to put his first mark on the Federal Reserve by nominating Randal Quarles, an investment-fund manager and former Republican Treasury official, to be the central bank's top official in charge of regulating big banks.
     The choice of Mr. Quarles, expected for months and confirmed by a White House official Monday, would put a more industry-friendly voice in perhaps the most powerful U.S. bank-regulatory post: Fed vice chair of supervision.
     That job was created by Congress in 2010 and was never filled during the Obama administration, although former Fed governor Daniel Tarullo filled the role de facto. If confirmed by the Senate, Mr. Quarles would take a lead role in carrying out the Trump administration's goal of rethinking many financial regulations adopted during the Obama era.
     Mr. Quarles would also weigh in on monetary policy as one of seven members of the Fed's board of governors, now short-staffed with only four members. His views in that sphere could put him at odds with his new colleagues, notably because he has criticized the Fed's policy of keeping interest rates near zero for years following the financial crisis, and advocated for a monetary-policy rule, or formula, to guide rate decisions.
     The Fed board has three vacancies, and the White House hopes to offer two more nominees as soon as possible, the official said. The administration has also begun the search for the next Fed chairman, though Mr. Trump hasn't ruled out nominating Chairwoman Janet Yellen to a second term, to begin when her current term expires in February.
     Mr. Quarles has donated to Republican candidates for years and served in the Treasury Department in both Bush administrations, working on both international affairs and as undersecretary for domestic finance, a senior job that involves coordination with the many U.S. agencies that oversee the financial sector.
     He left the government in 2006 and was a managing director at the Carlyle Group private-equity firm, investing in troubled banks. He is now managing director at Cynosure Group, a Utah investment firm.
     Mr. Quarles, in a March 2016 Wall Street Journal op-ed that he co-wrote, said he didn't support "arbitrarily taking an ax to big banks and irreparably damaging the economy." He endorsed a review of postcrisis regulations but warned that "the consequence of a dramatic increase in bank capital is an increase in the cost of bank credit."
     Analysts and government officials have said nominating Mr. Quarles, an establishment Republican, would be a sign that the White House favors more incremental rather than radical changes to the Fed, an institution that has long engendered mistrust among the economic nationalists who backed Mr. Trump during his campaign last year.
     Mr. Trump's team has advocated a rethink of Wall Street rules but has few officials in place at financial regulatory agencies. If confirmed, Mr. Quarles would immediately take over the job of overseeing the Fed's regulatory staff, which supervises some of the largest U.S. financial firms including J.P. Morgan Chase & Co., Bank of America Corp. and Citigroup Inc.
     He could push for changes in the way the Fed oversees those firms, but he couldn't change the rules on his own. For that, he would need the support of other members of the Fed's board and other agencies.
     The choice of Mr. Quarles "shows that we're looking for a change to the heavy-handed approach to regulation from the prior administration," the White House official said Monday. Mr. Quarles, the official said, "has a track record of working well with others to implement public policy."
     Obama administration officials have said stricter curbs on financial risk-taking were warranted in the wake of the financial crisis.
     Mr. Quarles would find some familiar faces at the Fed. He has worked before with Fed governor Jerome Powell, who is now the point person on the Fed's regulatory efforts and also served in the George H.W. Bush administration and worked at Carlyle Group.
     Mr. Quarles is married to Hope Eccles, who is a relative of Marriner Eccles, the New Deal-era Fed chairman whose name is on the building where Mr. Quarles would have his office.
     Ms. Yellen is set to testify on Wednesday and Thursday on Capitol Hill, where she will likely be asked about Mr. Quarles and the Fed's agenda. In the past, she has said she is open to changing some bank rules but not what she regards as core changes adopted after the 2008 financial bailouts. Ms. Yellen has objected to proposals to require the Fed to use a mathematical monetary-policy rule, an approach popular among some conservatives who argue central banks have too much discretion and should be more accountable to the public.
     Mr. Quarles said in the 2016 op-ed that low-interest-rate policies have "led to a rise in speculative positions" across the financial system and that a monetary-policy rule would reduce the incentive for big banks and smaller firms to take dangerous risks.
     The White House has been searching for a candidate with experience in small, locally focused community banks for the third opening, as a result of a law requiring that someone on the Fed board have experience in that industry.
     But finding a nominee has been difficult in part because of federal ethics rules that require Fed officials to divest of their interest in financial firms. Once a regulatory nominee is selected, the process for security and ethics reviews has been taking about two months.

Jul 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices recovered some losses after a 3 percent fall in the previous session, but markets remain under pressure from high drilling activity in the United States and ample supplies from producer club OPEC.
- Gold inched lower as the dollar steadied and as Asian equities firmed following stronger-than-expected U.S. jobs data late last week that reinforced expectations of another interest rate hike in the United States.
- London copper inched up after a solid U.S. jobs report buoyed hopes that an economic recovery is taking root in the world's top economy, spurring appetite for riskier assets.
- The dollar was on solid footing, after a bigger-than-expected increase in U.S. jobs suggested the Federal Reserve would stick with its tightening plans for the rest of this year.
- U.S. corn futures rose more than 1.5 percent to hit a one-year high as forecasts for soaring temperatures raised fears of potential crop losses.
- New York cocoa on ICE Futures dropped the most in 2-1/2-weeks on Friday, under pressure from currency-driven selling and broad-based commodities weakness, led by sliding crude oil prices.
- Malaysian palm oil futures hit their highest in a month and a half in early trade, aided by gains in rival oilseed soy on the Chicago Board of Trade (CBOT) and China's Dalian Commodity Exchange.
- A new report by A.M. Best highlights the growing importance of Medicaid in the bottom line of the health-insurance industry -- and the risk of that burgeoning role as Republicans debate bills that would cut back the program substantially. Managed Medicaid revenue and enrollment have grown consistently--for enrollment, 31.7% in 2014, 13.2% in 2015 and 4.1% in 2016. So has Medicaid's share of total premium, from 10.2% in 2007 to 26.5% in 2016. But margins have actually thinned, to 0.8% in 2016 from 2.4% in 2015 and 2% in 2015. The A.M. Best analysts suggest the dropoff in margins may partly reflect that new enrollees were seeking more medical services as time went on.
- A bill loosening Brazil's labor regulation is set to be voted at the Senate next week. If approved, it would indicate that economic reform sponsored by President Temer still has some support in Congress even after he was charged by the attorney general with taking bribes, something he denies. Pundits believe the labor reform will pass, but the political environment has been too volatile for comfort. The bill changes about a hundred of the labor code's 922 articles. Among other things, the reform backs up contracts signed by labor unions and employers and which now are constantly ruled against by judges. If approved, the law goes for Temer's sanction.
- Turnout will be key at the two important upcoming votes in embattled Venezuela. On July 30, President Maduro has called for a vote to elect an assembly tasked with rewriting the constitution, a move polls show most of the country is against. But on July 16, the president's detractors are planning their own unofficial referendum to delegitimize the constitutional redraft. The referendum faces severe logistical challenges, in that it won't have any backing from national electoral authorities. "But in a country with 19.8 million registered voters, turnout of several million would send a very strong signal," Eurasia Group says. It adds, however, that tension are likely to only rise given that president's plan is seen as his last chance to hold on to power democratically.
- The G20 summit is more than just a marginal issue for investors as the influence of politics on financial markets has increased since the financial- and debt crisis and since the election of Donald Trump as U.S. President, say Helaba economists. The most important issues Helaba economists look out for at the meeting are whether political gaps will be bridged or whether new cracks emerge, and whether there will be a trade war with the U.S. or whether signals emerge that point to a relaxation in trade tensions Helaba economists say. "The most recent speech of Trump in Warsaw has nevertheless given little hope for that," Helaba says. The summit of the world's 20 leading industrialized and emerging economies takes place in the German city of Hamburg on July 7-8.

Jul 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell by more than 1 percent, with U.S. crude futures dipping below $45 per barrel as news of a rise in U.S. production added to earlier reports that OPEC output was also on the rise.
- Gold fell, set for its biggest weekly loss in two months, as investors sought higher returns from a firmer U.S. dollar and rising Treasury yields and awaited American non-farm payroll data later in the day.
- Aluminium retreated in early Asian trading after a positive showing overnight, with investors focusing on robust global supply.  
- U.S. wheat fell 1 percent as prices continued to retreat from a two-year high touched earlier in the week, though the commodity was still on track for its fifth straight weekly gain.
- North Korea tensions include a bigger tail risk than usual for global markets, says Greg Gibbs, currency strategist at AMP in Denver. From a forex viewpoint, he contends the climate builds a case in favor of the euro over the greenback and Asian currencies as Europe is relatively well-placed to avoid disruption and may benefit from closer relations with China. Gibbs thinks China and Russia may see North Korea as a wedge issue they can use to drive a bigger gap between the US and its traditional allies, in particular Europe. Meanwhile, relations between the US and China threaten to deteriorate and may already be weighing on Asian currencies, he adds.
- Pledging to reorient the U.S.'s space programs and particularly reinvigorate NASA's human exploration efforts, Vice President Mike Pence used an appearance at Florida's Kennedy Space Center to assert that his boss, President Donald Trump, is committed to championing a new era of space endeavors. But the speech, devoid any scientific, policy or budgetary details or initiatives, raised a host of questions about how the White House seeks to accomplish that goal. While NASA and congressional leaders have been tussling for years about whether astronauts should return to the surface of the moon, the vice president declared without elaborating or identifying any timetable: "Our nation will return to the moon, and we will put American boots on the face of Mars."
- The decision by Brazil's police to shake up the team overseeing the sprawling Car Wash investigation, after reducing the number of top officers dedicated to the probe, undermines ongoing efforts to fight corruption, prosecutors in the southern city of Curitiba say in a note to the press. Earlier Thursday, the Federal Police announced it would integrate the Car Wash police task force into a larger antigraft group. The Federal Police denies any attempt to weaken the investigation, which has involved several high-ranking politicians and businessmen.
- Interior Dept. Sec. Ryan Zinke issues an order to speed up the federal permitting process for developing energy on government land, and he vows to hold more lease sales for oil and gas drillers. The department cancelled 11 lease sales last year, but the law requires them to be hold at least quarterly, the secretary says. He also cites an average 257-day wait to get permits to drill or build associated infrastructure like roads on federal lands--a wait he says will come down to 30 days. Interior's moves to streamline processes is aimed at generating more energy at home instead of relying so much on foreign countries. "It's better to produce here under reasonable regulations that watch it be produced overseas with no regulations," Sec. Zinke says.
- The May trade deficit with Mexico reached $7.3B, the highest since October 2007, when the deficit hit $7.5B, according to the US Commerce Department. The figures, not adjusted for seasonality, cover US trade in goods. One reason behind the widening trade deficit could be the strong dollar, which, despite weakening in recent months, remains relatively strong and makes US goods to other countries more expensive while foreign goods become cheaper internationally. Trade figures carry political implications as President Donald Trump seeks to revamp US trade deals with other countries.
- The jump of 10-year German government bond yields above the 0.5% level eats into what little is left of the so-called Trump reflation trade. The gap between 10-year Treasurys and bunds jumped to over 230 bps last December from around 165 bps before U.S. Presidential election in November. But the gap has gradually eroded, in line with decreasing confidence in President Trump's ability to push through a reflationary economic agenda. The gap stands at just 183 bps after the move in bund yields Thursday, compared with around 189 on Wednesday.

Jul 06 - Trump Travels to Poland, Germany and Other Events to Watch Today (Dow Jones)

- Oil prices recovered some ground on strong demand in the United States, but analysts cautioned that oversupply would continue to drag on markets after a steep fall in the previous session.
- Gold held steady, after hitting an eight-week low in the previous session, as the Federal Reserve minutes released on Wednesday showed the central bank was split on how inflation might affect the future pace of interest rate hikes.
- The dollar steadied against its peers after the Federal Reserve's policy meeting minutes took the wind out of its advance, with the market awaiting comments by central bankers and U.S. data for its next cues.  
- London copper steadied near one-week lows as the dollar eased back from highs triggered by a Federal Reserve meeting that clouded the outlook for the pace of future interest rate rises.
- U.S. wheat fell 3 percent, snapping a six-day rally in which prices soared more than 20 percent, though concerns over widespread damage across key U.S. producing regions due to hot, dry weather kept the grain near a two-year high.
- President Donald Trump departs on foreign travel to Poland and Germany. While in Poland, he will meet with President Andrzej Duda to discuss bilateral and regional issues; meet with Croatian President Kolinda Grabar-Kitarovic; deliver a "major speech;" and attend the Three Seas Initiative summit. Vice President Mike Pence participates in phone calls with Afghan President Ashraf Ghani (10 a.m. ET) and European Union High Representative for Foreign Affairs Federica Mogherini (10:30 a.m.) from the White House. Homeland Security Secretary John Kelly begins trip to Mexico City to meet government officials.
- German Chancellor Angela Merkel and China's President Xi Jinping pledged to boost economic cooperation between their countries as they met ahead of what is expected to be an unusually tense international summit on Friday. "We are very happy to see that thanks to efforts from both sides, Chinese-German relations have entered a new phase," Mr. Xi said Wednesday, according to a German translation of his remarks. U.S. President Donald Trump's "America First" policies, his threats to crack down on abuse of free trade, and his withdrawal from the Paris climate change accord have brought Germany and China, two of the world's largest exporters and both defenders of the climate agreement, closer together. This new closeness is expected to feature prominently later this week when Ms. Merkel chairs this year's G-20 summit of the world's largest economies, which will force her into a delicate balancing act between her commitment to the Western alliance and her professed aversion to Mr. Trump's international agenda. "Economic relations between China and Germany are of course very important," Ms. Merkel told a joint press conference with Mr. Xi. "We don't only exchange goods, but we're also cooperating more and more in technological areas."
 If the value of exports and imports are combined, China beat the U.S. and France to become Germany's leading trading partner for the first time last year. Germany exported EUR76.1 billion ($86.4 billion) of goods to China, making the Asian giant its fifth-largest export partner, and imports from China reached EUR93.8 billion, making it Germany's biggest supplier.
 The two-day G-20 summit starts Friday in Hamburg. European delegates have said they would confront Mr. Trump on his trade stance and on his decision to withdraw from the Paris accord.
  Ms. Merkel said she expected difficult negotiations.
  "It's not easy to bring together all 20 countries with all their developments and positions," she said. "I don't know yet what the final result will look like."
  Apart from conflicting views on free trade, climate protection is seen as the main stumbling block at the G-20 meeting. China, the world's largest emitter of carbon ahead of the U.S., has said it would stick to its commitments under the Paris deal, which saw more than 190 countries pledge to cut greenhouse-gas emissions.
  In separate comments published Wednesday, Ms. Merkel also took direct aim at Mr. Trump's trade policy. The U.S. view of globalization, she told the Die Zeit weekly, was "not about a win-win situation but about winners and losers... Not just the few should benefit from economic progress. Everybody should participate."
  Several commercial deals were signed on Wednesday, timed to the meeting between Ms. Merkel and Mr. Xi. These included an agreement between car maker Daimler AG and BAIC Motor Corp. to develop electric cars; strategic partnerships between industrial conglomerate Siemens AG and Chinese companies; and a Chinese order for 140 aircraft from Airbus SE. No figure was given for the value of the contract.
  Ms. Merkel also pledged that Germany would participate in China's planned revival of ancient Silk Road trading routes from China to Europe if the tendering process was transparent. Ms. Merkel didn't elaborate on what form this participation would take.
  The project to improve infrastructure along China's main international trade channels is expected to generate more than $900 billion in investments in roads, ports, pipelines and other projects.

Jul 06 - Brexit & Beyond: French PM Warns of Debt 'Volcano', Poland Preps for Trump, Eurozone Economy Speeds Up (Dow Jones)
  French Prime Minister Warns of Cuts to Tame Its 'Volcano' of Debt: French Prime Minister Edouard Philippe on Tuesday warned that the country is reeling under an "unbearable" debt burden and pledged austerity measures in a speech outlining policies for President Emmanuel Macron's five-year term in office.
  Poland Prepares 'Absolutely Huge' Welcome for Trump: Poland is working to put on a hero's welcome for Mr. Trump as he prepares to give a major speech to thousand of Poles in a Warsaw square. Behind that effort is a recognition across the continent that Mr. Trump has the potential to change the balance of power in Europe.
  Italy Formally Takes Control of Monte dei Paschi: The Italian government took control of Banca Monte dei Paschi di Siena on Tuesday, injecting EUR5.4 billion ($6.1 billion) into the troubled lender as part of a broad plan to bring one of Europe's weakest banks back to health.
  Eurozone Economy Picked Up Speed in Second Quarter: The eurozone's economic recovery likely accelerated in the three months to June, according to business surveys that have been a good guide to growth in the past.
  U.K.'s Economic Engine Loses Momentum: The engine of U.K. growth slowed in June as uncertainty over the general election and concern about Brexit negotiations held back spending, according to a survey on Wednesday.
  ECB Hasn't Discussed Halting Easy Monetary Policy, Says Key Board Member: The European Central Bank hasn't discussed making changes to its monetary policy, a key member of its executive board said, underscoring the central bank's patient approach to normalizing its expansionary programs.
  Legal Case Revives German Angst Over ECB Bond-Buying: For many in Europe, the European Central Bank's bond-buying program has played a key role in stemming the financial crisis and returning the region to solid growth. But some in Germany remain worried, writes Todd Buell.
  EU Promises Italy More Aid for Migrant Crisis: The European Union's executive branch Tuesday promised Italy an extra EUR35 million in a bid to quell tensions in the bloc over how to respond to an increasing number of migrants crossing the Mediterranean from Libya.
  New EU Digital Chief Expected to Forge Ahead With Tough Tech Rules:  A Bulgarian politician is set to begin a two-year term next week as the European Union's new digital chief, during which time she is expected to forge ahead with plans by the bloc's executive body to push through tough new rules that could constrain how American tech companies operate in Europe.

Jul 05 - The dollar slipped against the yen (Reuters)

- Oil dipped, pulled down by another rise in OPEC supplies despite a pledge to cut production, but geopolitical tensions in the Korean peninsula and the Middle East put a floor under prices.  
- Gold prices edged up as tensions on the Korean peninsula stoked safe-haven demand for the metal, while the release of minutes from the U.S. Federal Reserve's last meeting was also in focus.  
- The dollar slipped against the yen on concerns about rising tensions between the United States and North Korea while the Canadian dollar held firm after the nation's central bank chief backed an interest rate increase.
- London copper was treading water amid heightened risk aversion in Asia following a North Korean missile test, while strike threats at a South American copper mine lent support to prices.

Jul 05 - Sterling More Likely to Fall to $1.25 Than Rise to $1.30, ING Says (Dow Jones)
Sterling trades down 0.15% at $1.2900, having failed to sustain a rise above $1.30 following comments from Bank of England policymakers, including Governor Mark Carney, suggesting a near-term rate increase was possible. But ING analysts say the discrepancy between U.K. and U.S. data means the pound is more likely to drop to $1.25 than rise back above $1.30. "The combination of weak UK macro data and a US data-driven recovery in USD sentiment would suggest that GBP/USD's short-term gravitational pull is more like 1.25 (rather than 1.30)," it says in a note. A move below $1.2850 this week could confirm this view, it says.

Jul 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices retreated in Asian trade, halting a run of eight straight days of gains on signs that a persistent rise in U.S. crude production is running out of steam.
- Gold edged higher, supported by a ballistic missile test by North Korea and an easing dollar, but was still sitting near seven-week lows hit in the previous session.  
- The yen gained broadly after North Korea's missile launch deepened geopolitical concerns, while the Australian dollar slipped after the Reserve Bank of Australia wrongfooted speculators who had bet it would switch to a hawkish stance.
- Shanghai zinc futures opened more than 1 percent higher, tracking similar overnight gains in the London market amid expectations the metal's fundamentals had turned a corner, thanks to a robust outlook for Chinese steel.
- Israel Aerospace Industries appears to have the inside track to build the replacement for Spacecom's Amos-6 commercial communications satellite, destroyed last fall when a SpaceX rocket exploded during routine ground tests a day before its scheduled launch. AIA is in talks with Spacecom about a more-advanced configuration to replace the AIA-built Amos-6, according to industry officials, and the final design is expected to have some national-security capabilities. The discussions coincide with high-level deliberations between Israeli government officials and the country's leading aerospace companies over potentially enhanced taxpayer support for satellite research and development. As part of the policy debate, Israel's space agency also is likely to enjoy a funding boost.
- Analysts surveyed by the Bank of Mexico keep their growth forecast for Mexico this year unchanged at 2%, according to the median estimate of the 37 economists surveyed. Despite Trump's protectionist rhetoric, Mexico's economy showed a remarkable resilience in the January-March period, but analysts see an economic slowdown from 2Q. For 2018, economists are expecting a 2.25% growth. Economists see annual inflation ending this year at 6%, up from 5.9% in the previous survey in May. The Bank of Mexico has raised rates seven consecutive times since September to contain inflation, but indicated in June the tightening cycle has ended for now.
- Mexicans living abroad sent home $2.6B in May, a 4.5% increase from a year earlier, the central bank reports. In the January-May period, remittances were up 6.3% at $11.5B, a record for the period, although in Mexican peso terms the rate of growth has slowed as the currency has recovered 21% from record lows reached in January. Banorte sees remittances boosted in part by the tougher migration policies of the Trump administration that could have prompted migrant workers to send more money home, fearing a greater probability of being deported. "We continue to believe that the flow of remittances will be influenced by Trump's anti-immigration policy," Banorte says.
- Germany's DAX closes up 1.2% at 12486.29 after Merkel says tax cuts will be part of her party's agenda after September elections, fueling hopes consumer spending will boost the economy. The remarks come alongside strong June eurozone PMI data. Volumes were normal, despite the start to the school holiday season in the state of Hesse, and ahead of the US July 4 holiday Tuesday. Thyssenkrupp leads the blue chips to close up 4.9% after a report the company will decide on a merging its steel operations with Tata Steel Europe by end-September. Financial stocks also gain, with Commerzbank up 4.3%, and Deutsche Bank ending 3.7% higher. On Tuesday, investors will eye EU producer prices, German new-car registrations and the start to a meeting of G20 finance chiefs and central bank deputies.

Jul 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose, lifted by the first fall in U.S. drilling activity in months, although gains were capped by reports of rising OPEC output last month even as the group has pledged to cut supply.
- Gold edged lower as investors shunned safe-haven assets for equities, with Asian stocks remaining near two-year highs, and as the dollar rose from a nine-month low, reducing the demand for bullion.
- London copper was supported just below the $6,000 level, the first trading day of the second half of the year, as brighter factory demand from China underpinned prices.
- Chicago wheat futures jumped 2.7 percent to hit their highest in two years as forecasts for continued dry weather in key U.S. growing regions stoked fears of production losses.
- Nomura says regime change in Venezuela isn't a matter of if, but rather when. With the political and economic crisis weighing, the bank expects some kind of transition. "However, it is difficult to quantify whether it's within 6 hours or 6 months," the bank notes. With government deploying tanks into the streets this week to thwart an alleged call for rebellion by a security officer, Nomura say Venezuela's political stalemate could be reaching a breakpoint. The alleged defection also suggests more supporters of the ruling Socialist Party are likely to break ranks as President Maduro moves ahead with his controversial plan to scrap the constitution with the creation of a supreme governing body on July 30.
- The Trump administration's decision to delay the conclusion of its investigation into additional tariffs on imported steel likely slows down a parallel probe into tariffs on imported aluminum. The administration's action on steel duties has always been viewed as a road map for revising US trade policy for the aluminum industry, which has been suffering from the same global oversupply conditions as the steel industry. The aluminum industry is urging the administration to take a more limited approach to duties than the across-the-board duties being considered for the steel industry. The Aluminium Association says it's "following up with key decision makers in the Trump administration to keep the focus on China to remedy trade issues facing aluminum." The aluminum industry wants Mexico and Canada spared from any duties to protect key trading relationships.
- Facebook is punishing users who share a lot of fake news. Friday, FB said its research revealed a "tiny group of people" who regularly share a lot of posts containing "clickbait, sensationalism, and misinformation." FB has identified those spammers and will demote some their posts in the news feed. The posts affected will be links to individual articles -- not videos, photos, status updates and other posts. Publishers who see a lot of traffic from those types of users could see a drop in distribution, FB said. This is part of FB's effort to find technical solutions to root out misinformation. FB's efforts have been underway since the U.S. presidential election.
- The odds of the US slapping aggressive, across-the-board tariffs on imported steel appear to be weakening as President Trump heads to the G20 summit in Germany where other world leaders are expected to relay their opposition to tariffs. "Given Trump's apparent tendency to change his opinion after discussions with US allies, we would argue that any conclusions that 20%-25% tariffs are a done deal may be overly presumptive," says Axiom Capital Management. Commerce Department missed its self-imposed deadline today for making a recommendation on tariffs after acknowledging the complexities of the move and the effects on US trade. Axiom says the run up in US steel prices lately from the threat of additional tariffs could quickly evaporate if the Administration changes course.
- Brazil's Central Bank President Ilan Goldfajn reaffirms that austerity measures, particularly one reducing social-security entitlement, are the key to restoring stability after a historic recession. But pundits are increasingly ruling out any meaningful pension reform before next year's general election. A bill sponsored by President Michel Temer is unlikely to be touched by lawmakers before the Lower House decides whether to put him on trial for corruption, a discussion started yesterday and likely to last several weeks. Temer may also come out of this process too weak to advance such an unpopular matter, analysts say. Meanwhile, the budget deficit reached 9.2% of GDP in May, and gross debt jumped to 72.5% of GDP.
- Brazil's fiscal performance worsened considerably in May. Central-bank data shows a deficit of $9.3B in the primary result, which excludes interest payments to highlight the country's ability to pay down debt. That is a sharp reversal from a $3.9B surplus the month before and an ominous sign as economic reform meant to save taxpayer money is stuck in a Congress swamped by political crises. Policymakers are already talking about raising taxes later this year if it becomes clear fiscal targets won't be met, with potentially harmful consequences for an economy forecast to expand less than 0.5% in 2017 after two years of contraction.
- Americans became less confident about the economy in June, but not quite as much as we previously thought. The University of Michigan says its index of consumer sentiment was 95.1 in June, down from 97.1 in May--but up from the preliminary June reading of 94.5. That would suggest the hit to sentiment following former FBI director James Comey's June 8 congressional testimony, which had been flagged in the early report, faded somewhat in subsequent weeks.
- When the University of Michigan reported a preliminary June consumer-sentiment reading of 94.5, down from May's 97.1, it noted a sharp decline came after former FBI director James Comey's congressional testimony on June 8. "The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans," survey chief economist Richard Curtin said at the time. Watch the final sentiment reading for June, due out at 10am ET, to see if that trend held up for the month as a whole. Economists surveyed by WSJ expect a final reading of 94.4, down just a bit from the early estimate.

Jun 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude oil futures were on track for their biggest weekly gain since mid-May, ending five weeks of losses with prices underpinned by a decline in U.S. output.
- Gold held steady, supported by a plunging dollar and declining stocks but hawkish comments from major central banks suggesting a shift toward tighter monetary policies kept the bullion shy of major gains.
- The euro traded near a 14-month high and was on track for its best quarter in nearly 7 years, lifted by growing expectations that the European Central Bank is preparing to scale back its monetary stimulus.
- London copper was steady near the key level of $6,000 a tonne and looked set to rack up a 7-percent gain in the first half of the year, with prices supported by a weaker dollar and brighter factory growth China.
- U.S. spring wheat rose for a seventh straight session, trading near last session's three-year high as fears of output losses in key growing areas of the United States pushed the market towards its biggest monthly gain since 2010.
- Trump approves a pipeline that will carry refined petroleum products from Texas to Mexico. NuStar Logistics' New Burgos Pipeline received a presidential permit Thursday, according to the State Department. Trump had announced his approval of the project, without naming it, during a speech at the Department of Energy, saying it would run "right under the wall." The new line will deliver as much as 108,000 barrels per day of refined products, including liquefied petroleum gas and natural gas liquids, from Edinburg, Texas, to the Pemex Burgos Gas plant in Reynoas, Mexico. The new line runs along the same right of way as NuStar's existing Burgos pipeline. The Burgos line and NuStar's Dos Laredos pipeline, which also crosses from Texas to Mexico, also received permits Thursday, allowing those lines to carry a broader range of products.
- Is Trump really helping the oil industry with his continued promotion of oil exploration and development? He reiterates promises Thursday to increase offshore exploration, and unshackle oil and gas development from years of burdensome regulations, moves that could certainly boost jobs and economic growth in the short term. But it may also lead to more oil production amid tepid demand, leading then to more surpluses of supplies and lower prices that ultimately reduce jobs and GDP growth. Oil prices have fallen 20% since inauguration day to $45, and some say that's partly due to oil production surges in places like Texas that felt invigorated by Trump's election and support.
- Brazil's Supreme Court decides that plea bargains at the core of the country's historic anticorruption drive can't be modified by a judge, unless in extreme cases--for instance, if it becomes clear that the agreement was obtained under torture. Benefits offered by the prosecutor may also be erased if it is shown that the defendant didn't provide all the promised information and evidence. "It's a historic decision that makes plea deals much stronger," Attorney General Rodrigo Janot says to reporters after the vote. Earlier in the discussion, the court seemed to be leaning toward allowing judges to change the terms after the confession at will, which could make plea deals unworkable.
- Commerce Secretary Wilbur Ross says that after Census Bureau Director John Thompson retires on Friday, two longtime bureau employees will lead the agency on an interim basis. Ron Jarmin, the current associate director for economic programs, will perform the duties of director and Enrique Lamas, the associate director for demographic programs, will act as deputy director. "The Census Bureau, along with the 2020 Census, are in good hands with these two men at the helm until the Senate confirms new leadership," Ross says in a statement.
- Trump's energy speech was heavy on talk of ending the "war on coal" and bringing back American jobs, and light on references to energy-generating technologies like solar and wind power. One reference to renewable energy came when the president mentioned revitalizing nuclear power. In March, wind and solar accounted for 10% of total electricity generation in the US for the first time, according to the federal Energy Information Administration.
- President Trump says a "golden era of American energy is now underway," as he details a six-point energy plan:
1) To revive and expand the nuclear energy sector;
2) Treasury will address barriers to financing of highly efficient overseas coal energy plants;
3) Building a new petroleum pipeline to Mexico that'll go "right under the wall.";
4) Facilitating for a major US company to sell more natural gas to South Korea;
5) Energy Dept will approve two long-term applications to export additional natural gas from a Louisiana LNG terminal;
and 6) Will unlock offshore areas currently closed to development by creating new offshore oil and gas leasing programs.
- Trump announces plans for the Department of Interior to restart its process for approving areas for offshore oil and gas drilling, including potentially allowing exploration in Alaska's arctic waters and off the coast of the Atlantic Ocean. Under Obama, the department had moved to block drilling in some of those areas as part of a five-year process of evaluating potential leasing areas. The administration will now begin a process that could last a year or more to reevaluate all the potential leasing opportunities, according to Trump and administration officials.
- President Trump says in a speech today he's ushering in a "new American energy policy" that moves beyond mere American energy independence and leads to "American energy dominance." He says his administration is also ending "intrusive" EPA regulations that have reduced American jobs. Trump says a key plan is to significantly boost US energy exports. "We will export American energy all around the world and all over the globe."
- The EU has filed an appeal against a recent World Trade Organization ruling on large commercial aircraft subsidies. The case involves subsidies the EU says Boeing has received from the US and is the counter-case to an earlier one the US brought against European country support to Airbus. The appeal, widely expected, is against the WTO ruling that the US removed some, though not all subsidies to BA. The appeals process could drag into next year.
- The Senate Agriculture Committee advanced the nomination of J. Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission by a 16-5 vote on Thursday. All five dissenting votes were from Democrats, though Giancarlo won the support of others including the committee's top Democrat, Sen. Debbie Stabenow (D, Mich). The nomination now proceeds to the full Senate, though no vote has been scheduled yet. CFTC currently has just two members, and Democratic Commissioner Sharon Bowen recently announced her intent to step down, citing the slow pace of work on the commission.
- Investors should watch what Trump does rather than what he says--and his actions suggest he wants to bring capital to the US and enhance innovation, says Catherine Wood, CEO of US-based ARK Investment Management, during a panel discussion at the World Economic Forum in Dalian, China. "I think he's a negotiator. I'm much-more optimistic as I see the nuances in his remarks." She added that Trump's tax-cut plan and meetings with fintech executives mean a lot of campaign rhetoric which caused fear about protectionism may not be carried out.
- Global equity markets are caught between improving fundamentals and constraining valuations, but should offer positive returns in 2H and into 2018, says David Lafferty, chief market strategist at Natixis Global Asset Management. Based on slightly better relative valuations and less "Trump risk," Natixis retains its modest preference for European and emerging markets. But the remainder of this year will likely offer some negative surprises--which could include a Trump tax disappointment, a US debt-ceiling debacle, new evidence of slowing growth in China or geopolitical missteps in the Middle East or North Korea--and increased volatility, Lafferty says. Such political setbacks may provide a chance to rebalance into better valuations, assuming they don't undermine the upward trend in
economic activity, he says.

Jun 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude oil rose for a sixth straight session to its highest since June 19 on a decline in U.S. output, but ongoing worries about global oversupply continued to drag.
- Gold edged higher as the U.S. dollar weakened against other currencies on bets that central banks in Europe were preparing to scale back monetary stimulus, but the bullion's gains were capped by a surge in equities.
- The dollar wallowed at one-year lows against the euro and slipped against sterling in Asian trade as investors priced in tighter monetary policy in Europe.
- London copper punched through a key technical level as falling supply and a weaker dollar lifted prices to their highest since April.
- U.S. spring wheat futures hit a three-year high as dry weather threatened to reduce U.S. spring crop production, while Chicago wheat futures rose for a third consecutive session.
- The fate of Brazil's President Temer could start to be decided any day now in the Lower House. The country's Supreme Court says corruption charges pressed on Monday by Attorney General Rodrigo Janot against Temer will be sent straight to the House, skipping a potential defense hearing, which now is likely to happen at the Chamber. Lawmakers need to OK the charges, which haven't arrived yet, before a trial is launched. Temer has said he did nothing wrong. His survival will depend on a fractious Congress where support for him is showing signs of waning.
- Brazil's Federal Police late Tuesday said they had to suspend issuing passports due to a lack of funds for migration control and travel documents. One of the prosecutors leading Brazil's massive Car Wash graft investigation accused President Michel Temer, who is currently under investigation for corruption, of trying to suffocate the Federal Police, which carry out the country's many graft probes. The lack of funding could be harming ongoing investigations all over Brazil, the prosecutor said. Temer's office declined to comment.
- Textron appointing Lisa Atherton, head of its military helicopter business, to lead its defense unit following planned nomination of incumbent Ellen Lord as the Pentagon's chief weapon's buyer. Lord, an advocate of streamlining the arms export sales process, would become the second industry executive to join the Pentagon leadership, with former Boeing supply-chain chief Pat Shanahan nominated as deputy defense secretary. Senate Armed Services Committee approved Shanahan's nomination despite giving him a rough ride in his confirmation hearing last week.
- It wasn't so long ago Bank of Canada Gov. Stephen Poloz was warning about the risk posed by US trade-policy uncertainty, given Trump's push to revamp Nafta, and how that justified a cautious approach on rates. BoC's messaging has evolved this month, and that was evident in Poloz's comments on Nafta in CNBC interview. He says there could be a negative shock from a massive rewrite of Nafta, but it's "impossible to quantify." He says the Nafta overhang did fuel uncertainty among firms in 1Q, but nevertheless the economy grew 3.7% annualized. "We can't deny the data and just weigh it against something completely unknown thing. So we have to deal with what we have."
- Former Alaska Governor Sarah Palin is claiming in a federal lawsuit that the New York Times defamed her when it published an editorial--since corrected--suggesting she helped incite the 2011 assassination attempt against former Democratic Representative Gabrielle Giffords. In a complaint filed in federal court in Manhattan Tuesday, the 2008 Republican vice presidential nominee says she seeks "to hold The Times accountable for...publishing a statement about her that it knew to be false: that Mrs. Palin was responsible for inciting a mass shooting at a political event in January 2011." "We have not reviewed the claim yet but will defend against any claim vigorously," a Times spokeswoman said Tuesday evening.
- California on July 7 will add glyphosate -- the key chemical in Monsanto's widely used Roundup weedkiller -- to its list of chemicals known to the state to cause cancer, according to a notice from the state's Office of Environmental Health Hazard Assessment. Monsanto has challenged the move in court, arguing that California's decision relies on a flawed assessment of scientific research by the International Agency for Research on Cancer, which in 2015 deemed glyphosate probably has the potential to cause cancer. Monsanto lost a court decision in the matter, and though the company's appealed, there's been no court order to delay the California listing. Monsanto, citing reviews of U.S. and European chemical regulators that found no cancer link for glyphosate, says it will continue to fight California's move.
- As the EPA proposes to rescind the Obama administration's Waters of the U.S. rule, farm groups hail the downfall of a regulation that many had held up as an example of federal overreach and bureaucratic red tape, and an issue that helped turn out farmers for candidate Donald Trump in November. "We are thankful this Administration is working to draw clear lines in terms of what is and what is not jurisdictional under the Clean Water Act," says Wesley Spurlock, president of the National Corn Growers Association, saying the EPA's move give farmers a freer hand to manage water quality on their own.

Jun 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets were steady to lower after a report of rising U.S. fuel and crude inventories underscored concerns that a three-year supply glut is far from over.
- Gold prices firmed as the dollar struggled and shares weakened after a vote on U.S. healthcare reforms was postponed and European Central Bank President Mario Draghi hinted the ECB could trim its stimulus this year.
- The euro hit a 10-month high after the European Central Bank chief hinted the days of the ECB's aggressive stimulus are numbered, and as the dollar was pressured after a vote on U.S. healthcare legislation was delayed.
- London copper eased from near three-month highs hit the previous session, as prices consolidated after rising alongside a weaker dollar, with a tighter supply side underpinning gains.
- U.S. wheat edged up to extend two-day gains to more than 1 percent, with concerns that dry weather would hit crops in key producing regions.
- A barrage of environmental regulations on coal doesn't deserve the credit it gets for bringing down the industry, says Jamie Heller of Hellerworx. In a speech at the EIA Energy Conference in Washington, he says two other factors--competition from natural gas that helped collapse prices, and coal companies' "colossally bad decisions" several years ago to overspend on coking coal investments--are what really did in the industry. "While the environmental groups claim credit for having shut down a number of coal-fired power plants, and President Trump claims that with policy changes he's going to bring back the coal industry, I think this is all posturing."
- Venezuelan President Nicolas Maduro's attempts to remove a rebellious attorney general will only deepen the country's constitutional crisis and help an eventual political transition, Eurasia Group says. Venezuelan law says only congress--now controlled by the opposition--can remove Luisa Ortega Diaz, the fact that Maduro seems prepared to ignore as he pushes ahead with lawsuits against her. "Her removal will serve as an additional rallying cry for the opposition ... helping to prompt an eventual transition," the firm says.
- Potential changes to the US's H1B-visa policy for specialty workers would result in a short-term impact on Tata Consulting's business in the country, Girish Ramachandran, the president of the Asia Pacific region at Tata Consulting. "Of course, there would be an impact," Ramachandran said at the World Economic Forum's Annual Meeting of  the New Champions in Dalian, China. Tata Consulting, a unit of Tata Sons Ltd, has in the past years focused on hiring more local talent, Ramachandran said, a trend that is being mirrored in other markets that Tata Consulting is operating in.
- Exemptions from US motor-vehicle safety standards "are not willy-nilly," says Mitch Bainwol, head of a Washington lobbying group representing a dozen auto makers, in response to questioning from Rep. Debbie Dingell (D., Mich.) during a congressional hearing on self-driving cars. The National Highway Traffic Safety Administration currently allows companies to avoid complying with existing US regulations under limited circumstances in an effort to balance safety with encouraging testing and innovation. Bainwol pushes back against suggestions the process isn't rigorous. "You have to submit evidence to NHTSA. The notion that this is just the wild, wild, west is just not accurate," he says. Some critics have expressed skepticism, though. "Stop relying on voluntary guidance," says Alan Morrison, associate dean for public interest and public service at George Washington University's law school. "If the federal government doesn't get involved, the states are going to fill the vacuum." Auto makers' and tech companies' biggest concern is different self-driving-car regulations across state lines.
- States setting their own different standards for self-driving cars would be a "disaster," says David Strickland, the former head of National Highway Traffic Safety Administration during the Obama administration, who now represents car and technology companies as partner at law firm Venable. During a House Energy and Commerce subcommittee hearing, Strickland cites decades of federal standards preventing safety gaps across US. He testifies that "50 mini NHTSAs" could spell doom for the auto industry, which relies on uniform standards for testing and selling vehicles. Strickland represents Ford, Volvo, Uber, Lyft and Alphabet's (GOOGL) Waymo.
- Canada PM Justin Trudeau says at Ottawa press conference he has no qualms about running bigger-than-expected budget deficits. He says when the Liberals came to power in 2015, they sensed Canada was of falling into general malaise among households, and that threatened to put advantages the country holds -- such as diversity and inclusiveness -- at risk. "Something had to change," he said, "the middle class didn't feel good about their economic future or their [children's] future." Canada has bolstered spending on infrastructure on a multiyear plan, and cut tax rates for the middle class, but pledged to hold annual budget deficits to C$10B. Budget deficit for Canada's federal government expected to hit nearly C$22B for FY16-17, and C$25B in FY17-18.
- Democrats on Capitol Hill highlight a lack of leadership at the National Highway Traffic Safety Administration and tag emerging legislative effort on self-driving cars as partisan during a House Energy and Commerce subcommittee hearing. "Once again we have no one to testify here from the administration," Rep. Frank Pallone (D., NJ) says, pointing to a "leadership vacuum" at agency. "NHTSA must have an active role for self-driving cars to be actively deployed on our roads." The NHTSA head departed at the end of the Obama administration and hasn't been replaced. Rep. Doris Matsui (D., Calif.) says she's "disappointed" with the current legislative process. "We ought to be working together on bipartisan legislation rather than these piecemeal bills," she says. Intimating legislation could undo safety efforts in California, she says NHTSA should have resources to "fill the void." Funding for the agency is a longtime partisan battle. Current legislation envisions keeping regulation of self-driving cars with NHTSA to avoid a patchwork of state rules that car and tech companies want to avoid.
- Policy efforts from Canada's Liberal government to invest in infrastructure and cut tax rates for middle-income households are "bearing fruit," PM Justin Trudeau tells reporters. He cited the level of Canada's unemployment rate, at 6.6% in May from above 7% when Liberals took office, and the creation of 317K jobs over the past 12 months. At press conference in Ottawa, Trudeau asked why the government doesn't boast about impressive economic data, like Trump White House tends to do. He said he won't get too excited with month-over-month changes in data, and is more focused on what longer-term trends are indicating. He said the spending government is undertaking to improve job prospects and incomes "will take a long while to kick in."
- Energy Secretary Rick Perry says "we're done" with allowing energy policy-making driven by political agendas. Speaking at the EIA Energy Conference in Washington, he says people liked to "say they were for American energy independence and domestic energy development, they just didn't want to drill for it or mine for it, and they didn't want to transport it and they didn't want to sell it." This led to exploration on federal lands dropping, and exploration permit requests that "withered on the vine." But now, he says: "Those days are over, we're done with that type of approach. We want policies -- better yet, we want action -- that makes America safer, stronger and freer."
- The lumber market is sharply lower with the US Commerce Department announcing preliminary anti-dumping duties on Canadian lumber up to 7.72%, below expectations. The duties are part of an escalating trade dispute with Canada. Futures are down 5.4% at $355.50 per 1,000 board feet. Tall Tree Lumber Co says expectations were at 10% and that the news is seen as bearish.
- Speaking to reporters in Ottawa, Canada PM Trudeau says he's developed a "constructive and productive" relationship with the Trump White House, and hopes that will translate into a negotiated settlement on the decades-long softwood lumber row. On Monday, Commerce Department said it would issue antidumping duties that would mean some imports of Canada lumber would face duties as high as nearly 31%. Trudeau said Canada is ready to begin trilateral talks on Nafta, and in the meantime is focused on a possible agreement on softwood. Commerce Secretary Wilbur Ross said he was "optimistic" the two sides could reach lumber settlement, but until then Washington would apply duties and "stand up for American companies and their workers."
- The Conference Board at 10am ET will release its index of US consumer confidence, and economists surveyed by WSJ expect a June reading of 116. That would be the third consecutive decline after the gauge in March touched its highest level since the end of 2000. It would also follow the softening trend in the University of Michigan's consumer-sentiment index, which fell to 94.5 in early June from 97.1 in May. The Michigan survey noted a sharp decline in sentiment after former FBI director James Comey's June 8 congressional testimony, so watch today's Conference Board report for any hint that political tension in Washington is weighing on consumer onfidence more broadly.

Jun 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Crude oil futures rose for a fourth consecutive session as investors covered short positions, though worries over a festering supply glut kept a lid on prices.
- Gold held steady supported by an easing dollar, with investors looking to a speech later in the day by Federal Reserve Chair Janet Yellen for clues on the outlook for U.S. monetary policy.
- The dollar rose to its highest level against the yen in nearly five weeks ahead of comments from Federal Reserve Chair Janet Yellen that are expected to underline her positive view of the U.S. economic outlook.
- Copper prices eased in early Asian trading, hurt by weak U.S. durable goods figures and a firm dollar.
- U.S. soybeans rose half a percent, extending gains into a third session after the U.S. Department of Agriculture pegged the condition of the crop below market expectations.
- In a speech in Washington, Energy Secretary Rick Perry reiterates that as head of the Department of Energy, he encourages open-mindedness when it comes to issues like climate change and other controversial topics. "It's okay for us to ask questions, to be skeptical about information," he says. "Let's dig into this a little deeper, let's find the other side and talk about it." He adds that creating more energy, more jobs and a booming economy doesn't have to be bad for Mother Nature. "You can have economic growth and you can take care of the environment at the same time."
- Two separate hecklers have interrupted Energy Secretary Rick Perry in the early minutes of his speech at the EIA Energy Conference in Washington, calling him a climate denier. Perry tells one that she is wrong about him being a climate change denier. "I said I don't think it [carbon dioxide emissions from human activity] was the main dial [of climate change]. What are you? Are you one of those 100 percenters?" Perry says to her. She and the other heckler are eventually shouted out of the room by members of the audience, and Perry continues on. "We're gonna power through this" speech, he says.
- US Energy Secretary Rick Perry is set to speak this morning at the government's EIA Energy Conference in Washington, where he may provide details on the Trump administration's efforts to make changes to the Department of Energy. At the conference Monday, Oregon Republican Congressman Greg Walden said modernizing the department was important since it was created back in the late 1970s. "A lot has changed since the 1970s, and it's time to have a 21st Century Energy Department...I understand you'll hear it from Secretary Perry himself."
- On PBS NewsHour, Buffett again backs the US moving toward single-payer health care, saying that is "probably is the best system" for the country. He contends it would bring down costs, which the Berkshire (BRKB) chief has criticized. "We are such a rich country. In a sense, we can afford to do" go single-payer, he said. The longtime Democrat campaigned for Hillary Clinton but has mostly refrained from criticizing Trump since the election.
- The Supreme Court partially revives Trump's executive order suspending travel from six countries and halting refugee resettlement. But the court also says the travel ban "may not be enforced against foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States." What is a bona fide relationship? It's not entirely clear. Legal experts and even some of the justices said court's emphasis on a "bona fide relationship" would be fought over in the lower courts in the months to come.
- The Supreme Court's decision to review and allow partial enforcement of Trump's executive order banning immigration from six predominantly Muslim countries inspired dueling narratives that hinted at litigation likely to unfold over the summer. For Trump, the order amounted to a "clear victory for national security" that "allows the travel suspension for the six terror-prone countries and the refugee suspension to become largely effective," according to the president's statement after the ruling. Omar Jadwat, director of the Immigrants' Rights Project at the American Civil Liberties Union, which is representing groups challenging Trump's directive, said the high court's order, "properly construed, should really allow for only the narrowest implementation of the ban."
- The resilience of US equity markets to the distractions of the Trump administration is a positive backdrop for risk-sensitive AUD, Westpac says. Chinese markets are of course less helpful as the deleveraging push continues, but the uptrend in steel prices suggests potential for recovery in iron-ore prices, it adds. The rebound in Australian job creation keeps RBA rate cut talk at bay. But Westpac expects the ongoing rise in US interest rates to chip away at AUD/USD, leaving it around 0.73 by 3Q.
- Health-care delivery is of vital social importance, but the more important legislative initiative for investors remains tax reform, says David Joy, chief market strategist at Ameriprise Financial. To get there, the Trump administration first has to work through healthcare so its effect on the budget can be determined, Joy says. The transition to working on tax reform won't necessarily be derailed should health-care reform fail, but "clearly, legislative momentum would be lost and the room in the budget for tax reform would be diminished," he says. Success in health-care reform, on the other hand, "could re-energize enthusiasm for tax reform, and provide the boost to stocks that has been set aside since March," he says.
- The newest addition to the Senate Republican health bill is probably good news for insurers but not for hospitals, analysts say. The new provision says that if consumers haven't maintained coverage continuously and want to buy a plan, they need to wait six months. The idea is to prod healthy people to remain insured, which helps insurers, which fear an unhealthy pool of enrollees. But "it will do little to help hospitals," writes Sheryl Skolnick of Mizuho Securities. "Think about it: I don't buy insurance, I get sick, can't get coverage, so I go to the ER, resulting in a no-pay, high-cost outcome."
- Sen. Ted Cruz (R., Texas) wants to accelerate the permitting process for exporting natural gas to countries that don't have free-trade agreements with the US. His office announces the Natural Gas Export Expansion Act, aimed at boosting liquefied natural gas flows out of the US. The legislation seeks to amend the Natural Gas Act to expedite non-FTA export permits, treating them the same as free-trade nations. "Expedited LNG exports will strengthen our position against current and potential foes of America, and benefit our friends and allies around the world," Cruz's office says. The current review process for an application to export LNG to non-FTA countries can take years. One Texas company that filed its initial application in October 2012 didn't receive Dept. of Energy approval in April. The US is already expected to be a net natural gas exporter by 2018, as more LNG shipping terminals come online in Texas and Louisiana. Earlier this month, the first LNG shipment from the US arrived in Poland, which traditionally is supplied by Russia.
- There's persistent talk about a possible increase to the gasoline tax to fund infrastructure improvements, especially after President Trump said several weeks ago he was considering it. But House Energy and Commerce Committee Chairman Greg Walden says he isn't seeing anything concrete. "There's a lot of talk about 'How do we fund the nation's infrastructure?' Who should pay for it? And how do we pay for it?'" the Republican congressman says at the EIA Energy Conference in Washington. "I don't hear that [a fuel tax] coming as a refrain out of the administration or the House of the Senate, at this point. I wouldn't rule anything out."

Jun 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose more than 1 percent on a weaker dollar, but another rise in U.S. drilling activity stoked worries that a global supply glut will persist despite an OPEC-led effort to curb output.
- Gold prices edged lower as investors remained cautious ahead of a flurry of U.S. data due this week, with firmer Asian stocks also weighing on the market.
- The dollar drifted as U.S. Treasury yields stayed low amid fading expectations that the Federal Reserve will hike interest rates again later this year.
- London copper eased but remained within reach of the highest in more than two months, after expectations of the U.S. interest rate hike trajectory were tempered which weighed on the dollar.
- U.S. wheat futures fell 0.5 percent, retreating from a one-year high, although fears of global production losses underpinned prices.
- A draft of a Trump executive order on drug pricing is "a strong signal ... that the pharmaceutical industry will emerge from the current debate on drug pricing unscathed," Height Securities says. The draft includes policies "on the pharmaceutical industry's wish list," such as strengthening patent protection overseas and spurring government health programs to sign contracts that tie the price of a drug to how well it works in patients. And the draft is silent on what Height calls the "biggest lever to reduce drug prices"--allowing the federal Medicare health program for the elderly to directly negotiate drug prices.
- The International Federation of Accountants is calling upon G20 leaders to use an upcoming summit in Hamburg in early July to renew their commitment to international tax and accounting standards. "Unfortunately over the past years, some of the consensus has fallen away. On a regional and national level, these regulations are often not followed through," IFAC CFO Russell Guthrie says. One example is the introduction of rules on base erosion and profit shifting by the Organization for Economic Co-Operation and Development aimed at reducing tax avoidance. Earlier this month, more than 70 countries and jurisdictions signed an agreement limiting the ability of multinationals to exploit divergences between tax treaties, a practice known as treaty shopping. The US, however, wasn't among the signatories. "The current administration is going its own way, without much regard for international organizations," Guthrie says. "The US has not made a move on any of the BEPS-items," he adds.
- The euro looks "cheap" according to UBS, which says shrinking political risks within the eurozone make the currency look attractive. In particular French president Emmanuel Macron winning presidential elections and securing a majority in the parliament sweeps away fears of far-right parties gaining further momentum, which could impact the euro. "EUR/USD should grind higher over time, as Eurozone political risk has been reduced." Since the first round of the French election, EUR/USD has rallied 4% to $1.1189. But UBS is bullish on EUR/USD only from a long-term perspective, given resilient eurozone growth. Short-term it would rather "focus positions elsewhere" because "near-term risk-reward has  deteriorated." Long-term, UBS sees EUR/USD rising toward its estimate of fair value at $1.25.
- The upcoming federal election in Germany should ensure Deutsche Telecom issues new bonds to finance a potential T-Mobile US/Sprint merger instead of going for a rights issue, Commerzbank analyst Patrick Kohlmann says in a note. The reason is that the German government won't be "keen to justify a substantial U.S. investment" ahead of the election. The federal government holds 14.5% of DT and state-owned development bank KfW owns a further 17.5%. Instead, Dr. Kohlmann thinks a senior unsecured debt-financed merger or a 50% senior/50% subordinated debt-funded deal are more likely. The German election is due September 24.
- With the eurozone looking like a haven given political uncertainty in the U.S. and the U.K, buying long-dated Italian government bonds to pick up yields of 2-3% seems a "decent bet," AXA Investment Managers' fixed income CIO Chris Iggo says in a note. Italian government bonds start yielding more than 2% from 2028 onward and more than 3% from 2044, based on Tradeweb data. Even though Mr. Iggo and his colleagues "do worry about Italy," things should be calm over the summer.
- State-run Korea Gas Corp. , or Kogas, confirms its chief executive will accompany South Korean President Moon Jae-in to Washington next week, where more purchases of US shale gas by Seoul are likely to be discussed in the backdrop of the Trump administration's growing complaints about a widening US trade deficit. Kogas, the world's largest corporate buyer of liquefied natural gas, signed a deal 5 years ago with Texas-based Cheniere to import 2.8 million tons of LNG annually for 20 years starting this summer. South Korea posted a $23 billion surplus in trade with the US in 2016.
- The American Hospital Association had little to say about the Senate bill to repeal Obamacare--none of it good. The powerful trade group urged the Senate "to go back to the drawing board and develop legislation that continues to provide coverage to all Americans who currently have it." The Senate unveiled a bill that would delay a rollback of the law's Medicaid expansion as proposed by the House GOP, but would likely make steeper cuts to federal Medicaid financing overall, say hospital and physician group officials.
- The repeal of the health-insurer tax is "a key positive" for managed-care companies, according to Credit Suisse, though it warns the individual market still may have problems. Some are skeptical that a Medicaid cutback set for 2024 will ever take effect, they write. The bill contains "a harsh cut in 2024 that we don't see as feasible to enact and maintain," writes Sarah James of Piper Jaffray. She suggests it will be "punted each year" the way that cuts to doctor payments under Medicare under a previous payment methodology once were.

Jun 23 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil edged up, recovering some of the steep falls earlier in the week, but crude is still set for the worst first-half decline in two decades despite ongoing production cuts.
- Gold prices edged higher as the dollar softened and risk aversion due to geopolitical events buoyed the safe-haven appeal of the metal.
- Copper and other major base metals were little changed in early Asian trading, with investors marking time ahead of next week's U.S. inflation-linked indicators.
- Chicago corn was poised for its biggest weekly decline in a year with the market falling for a second consecutive week, weighed down by forecasts of crop-friendly weather in the U.S. Midwest.
- Sprint CEO Marcelo Claure says on CNBC a merger between his company and T-Mobile would create stronger competition for AT&T and Verizon. "This is a scale game," he says, standing outside the White House after a tech and telecom summit arranged by Trump. "If the government were to allow us to combine, we would still be No. 3." Claure says a combined company would have synergies of $30B-$40B in net present value. The companies contemplated a merger in 2014 but backed down in the face of regulator opposition. Talks have resumed recently, but the sides remain far apart on many issues, according to people familiar with the discussions.
- Initial response to the Senate healthcare bill from groups representing doctors and patients is negative, echoing the groups' reaction to the House bill. The American Psychiatric Association, which represents 37,000 physicians, urges the Senate to reject the bill, saying it "rolls back Medicaid expansion, caps the Medicaid program significantly...and removes protections for people with pre-existing health conditions." The American Lung Association said proposed cuts to Medicaid would hurt many adults and children with asthma, chronic obstructive pulmonary disease and other lung conditions. Shatterproof, a nonprofit that advocates for better prevention and treatment of substance abuse, says it will continue to pressure senators to reject the bill, which it says will have "devastating effects for Americans with substance use disorders."
- CAC-40 closes 0.1% higher after US Senate Republicans release their healthcare bill. Drugmaker Sanofi closes up 2.4% at EUR88.65, as health-spending cuts in the bill proved more modest than expected. Investors are watching for detailed French GDP figures on Friday at 0845 CET.
- Commerce Secretary Wilbur Ross says Amazon hasn't done anything that would trigger antitrust concern. According to a transcript from Fox Business Network's Varney & Co., he says acquiring Whole Foods is a "clever move ... . But I surely don't see any anti-trust implications in that." He adds  it's hard to predict the response to anything in a populist climate, "but I don't believe that Amazon has been using predatory pricing or any such thing to compete unfairly. And it seems to me what America is all about is competing fairly." AMZN said last week it was acquiring WFM for $13.7B, including debt, its first major foray into brick and mortar.
- Mexico's annual core inflation holding around 4.8% in mid-June is "a tentative sign that the effect of last year's depreciation in the peso is starting to fade," Capital Economics says. "Provided this continues, today's rate hike could prove to be the final move in the tightening cycle." The firm shares the consensus view that the Bank of Mexico will raise the overnight interest rate target by 25 bps to 7%. CPI rose 0.15% in the first half of June, carrying the annual rate to 6.3%, its fastest since early 2009.
- US policy makers' efforts to ease a series of post-crisis rules are aimed primarily at making the federal rulebook more "efficient," rather than a plan to broadly kill the 2010 Dodd-Frank law, Jay Powell, the Fed's point man on financial regulation, tells Senate lawmakers. "I don't think what we're talking about here amounts to... broad deregulation," Powell says in testimony before the Senate Banking Committee. The panel is drafting bipartisan legislation to make post-crisis regulations less burdensome on Wall Street in a bid to spur lending and generate economic growth.
- Shares of health-related companies are leading gains in the S&P 500 again as Senate Republicans roll out a bill that they hope will allow them to repeal and replace the Affordable Care Act. The S&P 500 health-care sector is up 1.4%, jumping past the broader S&P 500's 0.1% gain. At the top of the group: shares of biotechnology firms and drugmakers. Gilead Sciences jumps 4.6% to $70.62, Regeneron Pharmaceuticals adds 2.5% to $535.10 and
Bristol-Myers Squibb rises 2.8% to $57.66. Drugmakers' shares have rallied in recent sessions, as news reports have suggested the Trump administration --which has promised to address drug pricing-- will push for largely industry-friendly changes.
- The risk that the Federal Reserve may be moving ahead of the curve in its interest rate-rise path, given declining inflation rates and a shift in political risk from Europe into the U.S. argue for a tighter yield spread between 10-year U.S. and German bonds, Rabobank says. In fact, the Dutch bank says it wouldn't be unreasonable to reach a spread of 165 bps - a level last seen before the U.S. presidential election in November. The gap currently stands at 191.3 bps, down from 233.38 bps in late December. Yields move inversely to bond prices, so a tightening U.S-German spread means Treasurys would outperform.
- The resignation of several French ministers over the alleged misuse of European Parliament funds is unlikely to stall reforms, Barclays economist Philippe Gudin says in a note. Given that the party of President Emmanuel Macron, La Republique En Marche, commands a majority in parliament, the government will likely get the green light for a fast-track process when it comes to labor market changes. The bond market doesn't seem concerned about early setbacks for the Macron government either, as the gap between 10-year French and German government bond yields remains tight at around 33%, according to Tradeweb.
- The potential for Saudi Arabia to cut more oil production is stronger under Mohammed bin Salman, Saudi's freshly installed crown prince and force behind Amarco's planned IPO, says consultancy FGE. "The current policy of market management as well as market share is managed under MBS' watch, so we should be prepared for Saudi Arabia to do whatever it takes to keep the prices above $50 a barrel." It thinks that could include cutting daily production back to the November 2014 level of 9.4 million barrel. Last month's average was 9.94 million, based on OPEC data.
- U.S. Treasury Secretary Steven Mnuchin asks for South Korea's cooperation in imposing further economic and financial sanctions on Pyongyang in a phone call early Thursday with South Korea's new finance minister. Kim Dong-yeon reaffirmed that Seoul won't tolerate any development of nuclear weapons and ballistic missiles in North Korea, promising to cooperate closely with the United States and the international community in addressing the issue, a finance ministry statement says.
- The House Financial Services committee approves the final pieces of a flood-insurance overhaul plan, sending the package to the full House. Starting last week, the committee advanced a series of measures meant to lift the National Flood Insurance Program out of a deficit and revamp how the insurance program works, including getting private insurers to offer flood coverage. Republicans and Democrats are divided on many of the possible changes, but did agree in a bipartisan vote to pay out claims faster and raise penalties for fraudulent claims. The Senate banking panel is preparing its own plan to address the program, perhaps adding parts from the House plan that received bipartisan support.

Jun 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose after U.S. crude and gasoline stockpiles fell, but worries over whether OPEC-led output cuts would be able to rein in a three-year glut continued to drag.
- Gold prices rose for a second straight day, supported by an easing dollar and weakness in U.S. Treasury yields.

- London copper held on to hefty overnight gains, spurred on by data showing the metals's shift to global a supply deficit.
- Chicago wheat futures slid for a second session as the market took a breather after climbing to a one-year high earlier this week, with traders pausing to assess damage from unfavourable weather across the United States and Europe.
- Canadian PM Justin Trudeau tells lawmakers he spoke with Trump last week over the phone about why Canada should be exempted from any curbs on steel imports his administration may implement. The White House is expected in the coming days to reveal findings of a months-long probe into whether to halt steel imports from certain countries due to national-security concerns, through a rarely-used 1962 trade law. Trudeau says during the Canadian legislature's question-period session Canada "has no business" being viewed as national-security threat, given the close trading ties between the two countries. Two-way trade in steel between US and Canada reached roughly $8.8B last year.
- Traders bidding up biotech stocks as though the threat of significant drug-price regulations are moot following a New York Times article on Wednesday that says Trump administration is considering executive order that is largely pro-industry. Quantitative hedge funds playing big part in "leading the rally," which is also fueled by encouraging recent study data from Clovis and positive reaction to stock offerings from CLVS and AveXis, says Jefferies healthcare trading desk. And while "machines likely driving a lot of this move today," actively managed funds could become more aggressive "if investors get a sense that the rally here is sustainable," Jefferies says. "We think Biotech continues to climb here given the technical trading nature ongoing." Nasdaq Biotechnology index up 3.6%.
- The Trump administration's pullback on federal environmental regulations probably won't give a big boost to the oil and gas industry. Fitch says proposed rollbacks and delayed implementation of a number of environmental regulations--including rules on methane emissions and flaring--is likely to have "only a small effect" on oil and gas activity in the short term. The agency says a federal pullback also comes with the risk that state and local governments will push back, as some did following Trump's decision to quit the Paris climate accord.
- US Trade Representative Robert Lighthizer tells Congress that if China were granted "market economy" status by the World Trade Organization, "that would be cataclysmic for the WTO." China is currently branded a non-market economy by the Geneva-based organization, making it easier for the US and other countries to block cheaper Chinese exports. China has filed complaints at the WTO demanding a shift in that status. "This is without question the most serious litigation matter we have at the WTO right now," he said in response to a question about the matter during testimony before the Senate Finance Committee. China filed its complaint last December and it will likely take several years to work its way through the WTO legal system.
- Trump's trade czar says the administration hasn't come to a decision yet as to whether it will seek to negotiating binding rules to prevent currency manipulation as a part of an overhaul of the North American Free Trade Agreement. "We're still debating the issue of whether to put a currency manipulation provision in here," US trade representative Robert Lighthizer tells the Senate Finance Committee. "I'm still in discussions with the Secretary of the Treasury and members of this committee and certainly the Ways and Means Committee" in the House of Representatives, he says. In the past Treasury officials have worried such rules could reduce the options for setting US monetary policy, but proponents of currency provisions say the rules would be tailored to allow quantitative easing and avoid limiting US policy options.
- President Trump's trade czar tells US senators the US trade deficit suggests structural problems with the global trading system which the Trump administration is seeking to change. "The president's view and mine is that when you see a trade deficit in hundreds of billions of dollars... one must then be concerned that the deficit represents structural problems in global trade," said Robert Lighthizer, the newly confirmed US trade representative. Most economists say the US trade deficit stems from economic imbalances, especially US investment and savings levels, but the Trump administration hopes new deals with trading partners and punitive steps against countries blamed for violating trade rules will lead to more balanced imports and exports.
- President Donald Trump's top trade policymaker reiterated a pledge that the administration will ramp up enforcement actions against trading partners, saying that "we have a number of potential cases under review as we speak." Robert Lighthizer, in a prepared testimony before the Senate Finance Committee Wednesday, did not specify what sectors the cases involved. Mr. Lighthizer also noted that the administration's proposed budget seeks extra funds for trade enforcement.
- The Trump administration's top trade official told Congress Wednesday "we intend to move very quickly" on renegotiating the North American Free Trade Agreement. U.S. Trade Representative Robert Lighthizer provided the Senate Finance Committee new details on the planned timetable for rewriting the 24-year-old pact with Mexico and Canada. Mr. Lighthizer said the administration would publish its negotiating objectives on July 17, timing that would allow officials to launch the formal renegotiation in mid-August, according to congressional requirements. Mr. Lighthizer also said that due to high public interest, the USTR will hold three days of public hearings on the Nafta renegotiation from June 27 through June 29. Oregon Sen. Ron Wyden, the top Democrat on the panel, warned Mr. Lighthizer against moving too quickly, saying "I'm all for being swift, but I'm also a firm believer that you get results before you set a cutoff date," adding that there's a "serious danger that an artificial deadline" will weaken the American negotiating hand.
- The S&P 500 health-care sector index is up 0.9%, the best-performing group in the S&P 500 so far in the session, while the broader S&P 500 inches up 0.1%. Health stocks took a hit last year as scrutiny over drug-pricing tactics sent shares of biotechnology firms and drugmakers sharply lower, but have since rebounded to emerge as the second-best performing sector in the S&P 500 in 2017. But moves on Capitol Hill by GOP representatives to push forward another health-care bill could rattle the sector again.
- The city of San Bernardino, Calif, has emerged from bankruptcy after nearly five years. City officials said in a press release on Monday, adding that they've begun paying past debts as part of the chapter 9 process. The city of roughly 200,000 people, located outside of Los Angeles, filed for bankruptcy in 2012, suffering from double-digit unemployment and lower tax revenue from fallen property values. Throughout the case, San Bernardino officials found ways to save money aside from cutting the amount of debt it faced.
- President Donald Trump's administration is taking a much different tact with manufacturer's than its predecessor, Jay Timmons, president of the National Association of Manufacturers, said Wednesday, ahead of introducing Labor Secretary Alexander Acosta at his trade group's annual conference. "Much needed change has finally come to the department," Timmons said. During President Barack Obama's administration, businesses had "a rough relationship" with the Labor Department he said. "Regulations coming out of the Department of Labor were not good for business, they were not good for investment and jobs in this country."
- The Labor Department will have less of a role in designing and administering apprenticeship programs, Labor Secretary Alexander Acosta tells the National Association of Manufacturers. He points out that the Education Department doesn't directly accredit colleges. Similarly, he said his department shouldn't need to register every apprenticeship program. "We are going to work with a variety of third parties, like trade and industry groups, companies and unions, and empower these groups to design the apprenticeships," Acosta says, reiterating plans the White House announced last week. "We're saying you know more about what you do that we do." He said the department, however, will maintain some oversight to ensure quality.

Jun 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices dipped, trading around multi-month lows as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output.
- Gold inched up after hitting its lowest in five weeks in the previous session, buoyed as equities fell and the U.S. dollar eased from one-month highs following a tumble in crude oil prices.
- London copper was trading flat in early Asian trade, capped by a stronger dollar that pushed prices lower overnight.
- U.S. wheat edged down for the first time in five sessions to retreat from a near one-year high touched the previous day, though concerns over potential yield losses in France and the United States helped limit losses.
- The pound fell below $1.26 for the first time since Theresa May called the snap election.
- Saudi stocks opened higher in the wake of news that the king has named Prince Mohammed bin Salman--architect of Saudi Arabia's ambitious reforms program to reshape the kingdom's oil dependent economy--as the new crown prince and index compiler MSCI saying it will consider adding Saudi stocks to emerging-market measures as early as next year. The opening of the kingdom's stock market to international investors, to attract more foreign capital, is part of measures undertaken by Prince Mohammed. An emerging-market classification by compilers such as MSCI can help attract billions in additional inflows from funds which track such indexes. The main Tadawul stock index is up 1.8% at 7078.
- The naming of Mohammed bin Salman as Saudi Arabia's new crown prince could prove to be a bullish driver over time for the oil market. The 31-year old is the main architect behind the ongoing effort of taking Saudi Aramco public. As such, he would likely implement measures to lift oil prices in order to have a higher valuation before the IPO, rumored to occur next year. However, a persistent glut of oil and high production from non-OPEC nations still stands to counter the cartel's ongoing effort to push prices up. Oil prices didn't move after the announcement and remain down slightly on the session in Asia.
- One less risk factor for markets is Republicans keeping an Atlanta-area House seat in the most-expensive such election in US history. Traders were watching the race for a sign of a Trump backlash in a long-Republican district. Despite soft approval numbers for the president, Democrats to date have been unable to turn that into electoral gains.
- Donald Trump's tweet on North Korea may also be weighing on South Korean equities and the won in addition to an MSCI decision on China shares, says Sean Callow, a senior currency strategist at Westpac. The Kospi is down 0.8% with the USD/KRW down 0.1% at 1141.60 won. "Korea is the biggest story of the past couple of hours," says Callow. "While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out," Trump tweeted. The message implies Trump is ready to change policy and take a harder line, Callow says.
- Canada faces significant competitive constraints in the medium term due in part to policies the Trump administration is ushering in, says Eric Lascelles, chief economist at RBC Global Asset Management. In a blog post, Lascelles cites possible changes to US tax, environment and banking policies as working against Canada. Meanwhile, some regions in Canada are tightening labor laws, and the rise of US shale has undercut Canadian crude prices. "It's not an outright disadvantage for Canada, but it's all tilting toward the US's favor," Lascelles tells WSJ. He adds it's leading him to anticipate below-consensus growth over the next several years, starting with 2% this year and 1.5% expansion in 2018.
- Another day, another task force, but the new one on the futures of US sanctions convened by the Center for a New American Security includes a couple of notable corporate appointees presumably blessed by their internal compliance departments. Alongside the usual parade of financiers--looking at you, Goldman Sachs --and energy companies such as Chevron, there's GE's senior counsel Karan Bhatia, a Bush-era trade and transport official. And while Boeing has been at the tip of the spear in commentary on trade policy, the think tank has tapped Airbus Americas head of compliance Patricia Dudley, who's flying the industry flag.
- Brazil's government-supported labor bill had a surprising setback today at a Senate committee, where the bill, which reduces regulation, was rejected by 10-to-9 votes. It now goes to another committee tomorrow before moving to the voting floor, likely by next week. After the vote, Sen. Romero Juca, who supports the bill, says the result doesn't change its prospects. "The reform is important and we will approve it," he says. But markets didn't like the news. The Ibovespa stock index dropped to 60826 points after the vote from 61584, and the Brazilian real weakened to 3.34 to the dollar from 3.31.
- A number of environmental groups that have been accused Exxon Mobil of knowing about the harmful effects of climate decades ago and sowing doubt about the science didn't welcome the news that the company has joined a coalition of big industrial companies backing a carbon tax. The groups, which include 350.org, pointed to a provision in the carbon tax proposal that they say would give a form of immunity to energy companies for past advocacy efforts or pollution. Exxon has denied sowing doubt on climate change.
- An unexpectedly rough ride for former Boeing supply-chain chief Pat Shanahan during Senate confirmation hearing as nominee to become deputy defense secretary. Sen John McCain rails on Shanahan over arming Ukraine, and morphs a mini tirade into concerns over defense industry consolidation. "I am concerned that 90% of defense spending is in the hands of five corporations, of which you represent one," McCain says. "Frankly I'm not overjoyed that you came from one of the five." Shanahan says he'll recuse himself from any decisions involving BA, unless granted a waiver, though that still leaves his role in some acquisitions unclear as Boeing pursues big upcoming deals in missile defense and military jets.
- Many of the world's biggest oil companies today revealed their support for a carbon tax proposal authored by GOP stalwarts James Baker and George Shultz, both former Secretaries of State and Treasury in Republican administrations. Founding members of the Climate Leadership Council include BP Plc, Exxon Mobil, Royal Dutch Shell and Total SA, and the group also includes Johnson & Johnson, General Motors and other blue chip companies. The proposal, which would set a price on carbon and return the proceeds to taxpayers in the form of quarterly dividends, currently does not have widespread support in the Republican-led Congress.

Jun 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets held around seven-month lows as investors focused on persistent signs of rising supply that are undermining attempts by OPEC and other producers to support prices.
- Gold inched higher, supported by global political uncertainties, after touching a five-week low earlier in the session as a key U.S. Federal Reserve official reaffirmed its hawkish stance on interest rate hikes.
- London copper traded little changed, supported by upbeat sentiment over the global economy after confidence at Japanese manufacturers rebounded, but prices were capped by a stronger dollar.
- Chicago wheat futures rose 1 percent, gaining for a fourth consecutive session with prices underpinned by a further decline in the condition of the U.S. spring crop following weeks of dry weather.
- Top trade officials from the US and UK says they're eager to explore a bilateral free-trade agreement between the two countries -- but any possible deal is likely at least two years away from taking shape. "We're not allowed to conclude any negotiations as long as we're still part of the European Union," Liam Fox, the UK's international trade secretary told a US government-run investment conference just outside  Washington, in a joint appearance with Commerce Secretary Wilbur Ross. Fox says that means no pact before March 2019. But Fox made clear he was eager to begin exploring the prospects, adding that "we have a trade working group already set up" to explore post-Brexit trading relationships. "From the US side, we've made clear we're prepared to begin as soon as the UK is ready," Ross says.
- Of the 97 proposed changes including in Treasury's financial regulation white paper last week, 62 can be enacted simply through rulemaking, Goldman Sachs analysts say. And with 19 of 22 key regulatory leadership positions opening up over the next 18 months, the administration will get a chance to prove its "personnel is policy" line. The areas most dependent on congressional action are changes to the Volcker ban against proprietary trading and private-fund sponsorship, as well as any dismantling or reorganization of the Consumer Financial Protection Bureau.
- Whether they approve or disapprove of Trump and his policies, Americans appear to be giving CEOs broad latitude to work with the president and most want them to work with him at least some of the time. According to a survey of more than 800 adults by public-affairs firm Global Strategy Group, 26% say companies should work with Trump "all of the time" and 22% say they should never work with the president. The remainder say corporations should work against the administration some of the time and, on other occasions, with it. Both Democrats and Republicans say the businesses that pick and choose when to work with the president are responsible and fair.
- Political polarization in US and Europe is weighing on decision-making processes and could affect some advanced economy sovereign ratings, according to S&P Global Ratings. Disagreements between US political parties have stymied legislation in congress, especially on the fiscal side. The lack of a clear majority in UK government is likely to affect Brexit negotiations, S&P says. An anti-European party winning in the upcoming Italian general elections would weigh on country's financial and market stability. There is little appetite for major reforms to the architecture of monetary union in key Eurozone members despite pro-European victories in France and the Netherlands,  S&P Global Ratings credit analyst Frank Gill says.
- The US government switches sides in a case set to go before the Supreme Court this year on whether employers can require workers to sign arbitration agreements in which they must waive their right to collective action when pursuing work-related legal claims. The Justice Department under Obama had chosen to represent the National Labor Relations Board's position that such requirements are illegal. But in that case, NLRB v. Murphy Oil, Trump's acting solicitor general now reverses course and files an amicus brief saying it supports Murphy. The Supreme Court will take up three cases involving arbitration agreements with class-action waivers. Of the three, the government is only a party in the Murphy case. The NLRB may choose to take over the defense of its prior position from the DOJ, but the agency is now under Republican leadership and it may decline to do so.
- Energy Sec Rick Perry says on CNBC he believes climate is changing and man is affecting it. But he says it's okay to question how much impact man is having. "This idea that science is absolutely settled, and if you don't believe it's settled then you're somehow or another a neanderthal, that is so inappropriate," he says. "Being a skeptic on some of these issues is quite alright." Asked whether he believes carbon dioxide is the primary control knob for the temperature of the earth and climate, he says: "No, most likely the primary control knob is the ocean waters and this environment that we live in."
- Might investors need to start considering a possible changing of the guard in Japanese politics? Abe's "unchallenged leadership" since 2012 is starting to show some weakness, contends Amir Anvarzadeh at BGC Partners. The PM is pushing unpopular measures like casino legalization, changing  Japan's pacifist constitution and restarting nuclear-power plants. "Although we are a year away before new elections start to come into the market's view, his recent slip in the polls is indeed worth keeping a close eye on." Not to forget the BoJ's likely starting to taper next year, Anvarzadeh adds.
- The probe into links between the White House and Russia is reminiscent of the twists that the investigation into President Clinton took from Whitewater to Monica Lewinsky, says AMP Chief Economist, Shane Oliver. His view remains that the Democrats may find something to impeach Trump on when they get control of the House of Representatives after the November 2018 mid-terms, but in the meantime the Republicans are unlikely to impeach Trump. Rather anticipation of the likely loss of control of Congress after November next year will see Republicans pull together to pass their pro-business agenda including around healthcare and tax reforms, he adds. The shooting of Republican Congressional members only adds to this.

Jun 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped, weighed down by a continuing expansion in U.S. drilling that has helped to maintain high global supplies despite an OPEC-led initiative to cut production to tighten the market.
- Gold edged lower to touch a near four-week low as the dollar held firm, with the market waiting on comments from a top U.S. Federal Reserve official after last week's soft economic data.
- London copper traded little changed as broader financial markets gave no directional cues, with the potential for inventory builds as the monthly prompt date comes due potentially keeping a lid on prices.
- Chicago wheat futures slid as the market took a breather after rallying around 5 percent in the last two sessions on the back of dry weather hitting U.S. yields.
- Sterling held steady ahead of the start of Brexit negotiations, with investors also awaiting comments from a top Federal Reserve official to see whether the U.S. dollar's recent rise can be sustained.

- Mining company Gold Reserve says it has received its first $40M payment as part of the $1B that an arbitration court said Venezuela's government owes them for expropriated gold assets. Venezuela--short on cash and amid persistent debt default concerns--will pay off the remainder in installments over the next two years, the Spokane, Wash., miner says. But it notes that under an amendment to the settlement agreement, some of the payments may be collateralized with Venezuelan sovereign bonds, which markets currently rate as one of the riskiest debt classes in the world.
- "Today's moves actually limit the possibility for positive change on the island and risk ceding growth opportunities to other countries that, frankly, may not share America's interest in a free and democratic Cuba that respects human rights," Myron Brilliant, the chamber's executive vice president, said in a statement. "We remain committed to working with all relevant parties to remove the antiquated policies that hinder the empowerment of the American and Cuban people."
- Venezuela central bank's reserves are back to around $10B, meaning the cash-strapped country has all but completely used up the cash injection it received in late May after Goldman Sachs' asset management division bought Venezuelan bonds for $865M. Nomura also added $30M. Both banks paid less than a third of the bonds' nominal value. There are still $100M worth of those bonds unaccounted for and it is unclear if the government sold them. Opposition lawmakers have warned that they may not honor the debt if President Maduro's embattled government falls and they take over.
- Trump and cabinet officials are reportedly considering an executive order on pharmaceutical drug pricing, but it's still likely a "few weeks away," and when it comes it may be "quite vague," Evercore says. The administration isn't planning "broad action to curb drug pricing," and if anything "should be good news for the pharmaceutical and bio [technology] industries and investors because" nothing close to sweeping action is being considered, the investment bank says. Since transformative policy changes have to go through Congress, the president likely to seek a "quick 'win,'" such as by ordering the health secretary to consider "value-based pricing," arrangements touted by the pharma industry, where manufacturers get paid based on how effective they are in improving patients' health. Traders aren't paying attention to Evercore's rosy outlook, with the Nasdaq Biotechnology index down 0.5% on Friday, vs. a 0.2% decline in the S&P 500 and 0.3% slide in the Nasdaq Composite.
- At a conference in Ottawa, former Canadian PM Brian Mulroney relays to attendees a bit of what President Trump told him during a dinner in February at Mar-a-Lago in Palm Beach, Florida, regarding Trump's thoughts on PM Justin Trudeau. Mulroney says Trump told him, "I got along great with Justin, and I think we can do marvelous things together." He says this bodes well for Canada as it enters Nafta renegotiations in August. Ahead of the talks, his advice for Canada negotiators is to "keep our heads down and our mouths shut, and don't take the bait," on rhetoric from Washington. "Canada is not going to win a damn thing if we win a war [in the media]."
- California Attorney General Xavier Becerra cautiously lauds EPA Administrator Scott Pruitt's signal that the state's waiver to set tougher vehicle emission standards are safe from attack. Pruitt's comments are "good news for all Californians, and I hope Administrator Pruitt is good to his word," Becerra says. "If at some point down the line our efforts to combat air pollution are threatened, I am prepared to take any and all action necessary to defend our progress." Pruitt Thursday during a congressional hearing said the waiver was "not under review" and said the EPA was committed to recognizing role of states in tackling air quality. Many other states follow California's standards, including New York, making up large portion of US auto market. The Trump administration earlier this year reopened a review of US emissions standards, a move California decried.
- US House Speaker Paul Ryan will give what his office is billing as a major speech on tax policy June 20 to a group of manufacturers in Washington. Ryan's speech comes almost exactly a year after he and other House Republicans released their tax policy blueprint for lower tax rates and a broader tax base. That plan, especially a border-adjusted corporate tax, is under sustained attack from companies and from Republicans in the House and Senate. Ryan is attempting to revive momentum for that plan while also reaching a deal with senators and the Trump administration.
- A California waiver to set tougher vehicle emissions standards than the federal government suddenly looks safer after EPA Administrator Scott Pruitt signals revoking it isn't on the agency's agenda during a Thursday congressional hearing. "Currently, the waiver is not under review," Pruitt said in response to a question from Rep. Ken Calvert (R., Calif.). "It's important we recognize the role of the states in achieving good air quality standards. That's something we're committed to in the agency and the waiver is not currently being reviewed by the EPA." Revoking the waiver would be an unprecedented action likely to spark litigation. The issue became hot after the Trump administration reopened a review of US car emissions standards that the EPA had closed in January just before inauguration. California and the US for now are aligned on tough standards that auto makers are looking to ease.
- Former Canadian PM Brian Mulroney, who helped craft the North American Free Trade Agreement, says renegotiation of Nafta presents an "absolutely crucial" moment for the country, adding the Liberal government's political fortunes could be at stake. At an Ottawa conference, he says he's confident PM Justin Trudeau has put together a top-flight team to defend and champion Canada's interests, led by Foreign Minister Chrystia Freeland. Freeland, he says, "performed acrobatics" to get the EU-Canada trade deal finalized after it hit a potential unraveling. "We are not some pushover little country that you are going to ambush," Mulroney says. "We have a C$2 trillion economy with 36 million people. We have the strength to say no."
- US households' confidence dimmed in early June, and Washington might be the cause. The University of Michigan says its preliminary June reading on consumer sentiment was 94.5, down from May's final figure of 97.1. Economists surveyed by The Wall Street Journal had expected a preliminary June reading of 97.0. There was a large decline in sentiment observed since June 8, according to Richard Curtin, the survey's chief economist, which is when former FBI director James Comey testified before Congress about his firing in May. Curtin noted the largest confidence drop was among independents, followed by Republicans; Democrats saw the smallest decline.
- Gauges of US consumer confidence jumped after the November presidential election and have come down only a bit since then. That trend is seen continuing today when the University of Michigan releases its preliminary consumer-sentiment reading for June. Economists surveyed by WSJ expect an overall index of 97.0 -- which would be little changed from May's 97.1, April's 97.0 and March's 96.9. Still, a partisan divide lurks under the seemingly placid surface. In May, the survey's chief economist noted, pessimistic Democrats were "expecting a recession" and optimistic Republicans predicted "more robust economic growth." The latest report, coming at 10am ET, may reveal if that split has narrowed at all headed into the summer months.

Jun 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were not far off six-month lows, held down by an ongoing supply overhang that persists despite an OPEC-led effort to cut production and prop up crude markets.
- Gold edged lower to hit a three-week low and was on track for a second weekly fall, dragged down as upbeat U.S. economic data supported the dollar.
- London copper edged up but was still eyeing its biggest weekly drop since early May as markets priced in a higher U.S. interest rate environment that would support the dollar.
- Chicago wheat climbed to its highest since early May with the market on track for a second week of gains as dry weather in parts of North America threatens to reduce yields.
- Wesley Batista, CEO of embattled Brazilian meatpacking giant JBS SA, steps down from the board of Pilgrim's Pride, the US poultry processor majority-owned by JBS, as efforts continue to contain fallout from Brazilian corruption scandals. Colorado-based PPC says Batista resigned effective immediately and will be replaced on PPC's board with Denilson Molina, CFO of JBS' US foods division. In late May Batista's brother Joesley also left PPC's board, after negotiating a plea deal with prosecutors in Brazil related to corruption investigations involving politicians there, including President Michel Temer. PPC down 1.8%, but shares have soared 26% so far this year thanks to fat profits in the chicken business.
- White House budget director Mick Mulvaney says he hopes the Federal Reserve is able to successfully manage the reduction of its $4.5T portfolio of bonds and other assets. Fed Chairwoman Janet Yellen outlined plans Wednesday to start later this year allowing assets to mature slowly without reinvesting the proceeds. "She said she didn't think that would restrict their ability to still conduct monetary policy. I hope she's right," Mulvaney says during a briefing with reporters. "The growth of the balance sheet was an unprecedented experiment so the reduction of the balance sheet is going to be the flip-side of that same coin. And I hope they will manage it efficiently."
- Shares of Nucor fall 3.2% after the steel company gave a gloomy outlook for the current quarter, forecasting EPS of $1-$1.05, below analysts expectations of $1.22. NUE blames the 2Q profit warning on declines in its steel mills business and a slowdown in construction markets linked in part to foreign steel imports. Headwinds should clear soon, however. Steel imports to the US are already down over the past five months amid open trade probes by the Trump administration, NUE says.
- Canada's chief envoy in Washington, David MacNaughton, tells Canadian senators in Ottawa the fate of the Nafta renegotiations will depend on how quickly the US wants to move and how many issues it wants addressed. Washington is in the midst of a 90-day consultation period, and talks could begin as early as mid-August. "We can probably all agree fairly quickly on some things the three countries can do to modernize" Nafta, says MacNaughton, who's viewed as key Canadian player on Nafta. "The more issues you put on the table, the longer and more complicated the talks can become. We'll see how much US wants to put on table." The US would like talks completed by the end of 2017, with aim to avoid talks dragging on and affecting Mexico presidential election next year.
- The Senate Finance Committee advances Trump's nominee for Treasury undersecretary for international affairs, ex-Bear Stearns chief economist David Malpass. The veteran of the Reagan and G.H.W. Bush administrations wins broad bipartisan support, with the exception of two Democratic senators. Malpass is expected to take a more critical view of multilateral institutions than his recent predecessors, but former Republican colleagues say he'll also see a pragmatic use for them in projecting US power abroad. The committee's greenlight bodes well for full chamber passage.
- The path to rate renormalization and the Fed's balance-sheet reduction, will be shallow and gradual, says Rich Taylor, client portfolio manager at American Century Investments. A few days ago, there was a 55% chance of another increase in September; now, there's a 20% chance of a September increase and 32% chance of a December hike, Taylor says. With economic fundamentals basically unchanged and consistent with 2% growth, and core inflation still running below the Fed's 2% target, the rates market continues to be range bound. With a strong likelihood of continued political stagnation in addition to global geopolitical risks, "there are too many headwinds to achieving above trend growth and inflation in the near term," which should keep rates range bound for a while, he says.

Jun 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices wallowed near their lowest levels in seven months early, hurt by high global inventories and doubts over OPEC's  ability to implement production cuts.
- Gold edged up from a near three-week low hit in the previous session, supported by softer U.S. economic data and a fall in Asian shares following a report that President Donald Trump was being probed for possible obstruction of justice.
- London copper dipped to its lowest in a week after the U.S. Federal Reserve raised rates for the second time this year,  boosting financing costs for industry.
- Chicago soybean futures slid for a second day, while corn edged up after easing in the last session as ample supplies from South America and forecasts of rains in the U.S. grain belt weighed on prices.
- The dollar nursed losses, after weak U.S. inflation data left investors wondering if the Federal Reserve would be able to  follow up its latest rate hike with another later this year.
- The Senate Finance Committee advances Trump's nominee for Treasury undersecretary for international affairs, ex-Bear Stearns chief economist David Malpass. The veteran of the Reagan and G.H.W. Bush administrations wins broad bipartisan support, with the exception of two Democratic senators. Malpass is expected to take a more critical view of multilateral institutions than his recent predecessors, but former Republican colleagues say he'll also see a pragmatic use for them in projecting US power abroad. The committee's greenlight bodes well for full chamber passage.
- The path to rate renormalization and the Fed's balance-sheet reduction, will be shallow and gradual, says Rich Taylor, client portfolio manager at American Century Investments. A few days ago, there was a 55% chance of another increase in September; now, there's a 20% chance of a September increase and 32% chance of a December hike, Taylor says. With economic fundamentals basically unchanged and consistent with 2% growth, and core inflation still running below the Fed's 2% target, the rates market continues to be range bound. With a strong likelihood of continued political stagnation in addition to global geopolitical risks, "there are too many headwinds to achieving above trend growth and inflation in the near term," which should keep rates range bound for a while, he says.
- Argentina's former president Cristina Kirchner launches a new political party organization, the Citizens Unity Front, which she is expected to use to compete for a seat in the Senate this October. In a series of tweets, Kirchner criticized President Mauricio Macri's government, but she stopped short of formally announcing her candidacy. Pollsters say Kirchner would be a good candidate, with a solid 33% approval rating, likely enough to get elected in the province of Buenos Aires. But with a nearly 48% disapproval rating, according to consultants Management & Fit, Kirchner would be a weak presidential candidate in 2019 and she represents little political threat to Macri. Kirchner faces multiple corruption investigations but would obtain congressional immunity if she took office.
- Yellen says she's open to looking at ways to reduce regulatory burdens surrounding the Volcker Rule, as recommended by a report from the Treasury Department released Monday. Yellen notes the Fed has already suggested exempting small banks from the rule, as Treasury also did. But she said she was pleased to see the report--required by an executive order from Trump--endorsed a restriction on proprietary trading. "We do have some ideas for how we might simplify the rule, and certainly it's something we are quite open to looking at," she says.
- Does Janet Yellen want to stay on as Fed chairwoman after her term is up at the end of February? She wouldn't say today and, in any case, said, "I have not had conversations with the president about future plans." President Trump said earlier this year Yellen was doing a good job, though last year he said he would probably replace her when her term is up. Yellen did say the administration has been "working hard" to fill three vacancies on the Fed board. "I do very much hope that there will be nominations in the not-too-distant future and that the Senate will take those up expeditiously."
- Highmark Health's Delaware insurance unit is seeking a 34% rate increase for its Affordable Care Act marketplace plans next year, according to the state's insurance regulator. Highmark, which is expected to be the only exchange insurer in the state after Aetna's announced withdrawal, asked for the increase assuming the federal government won't make cost-sharing payments or enforce the individual mandate for most people to have insurance, the regulator says. Rate filings for ACA plans are being closely watched around the country as the Republican Congress tries to pass a health-care bill.
- The Senate Agriculture Committee will hold a hearing next Thursday on the nomination of J. Christopher Giancarlo to be chairman of the Commodity Futures Trading Commission. Giancarlo has been serving as the acting chairman since former Chairman Timothy Massad left at the end of the Obama administration. The CFTC currently has just two members, Giancarlo and Democratic Commissioner Sharon Bowen, three short of its full complement. The Trump administration has nominated two additional Republicans for commissioner positions, and is in negotiations over a Democratic nominee. Commissioner nominations typically proceed as bipartisan pairings.
- Farm groups are appealing to Congress to beef up funding for USDA's lending arm, with demand for farm loans in 2017 expected to match or exceed last year's record. Nearly two dozen farm groups penned a letter to congressional appropriators, requesting additional funding for the Farm Service Agency, which provides direct and guaranteed loans to US farmers. Last year, record loan demand prompted lawmakers to increase FSA funding by $1.4B, and farm groups anticipate demand will be every bit as strong--or stronger--this year, thanks to languishing farm incomes. "The outlook for 2017 grain and livestock prices appears to be no better than in 2016, likely meaning FSA loans will be even more vital to the financial viability of farm and ranch operations," the letter says.
- The Trump administration is using its budget proposal to put multilateral institutions such as the World Bank and the IMF on notice, says US Treasury Secretary Steven Mnuchin in prepared remarks to a House Appropriations subcommittee. "Treasury's international budget request should send a message that the international financial institutions need to operate more efficiently," Mnuchin says. "Just as our federal government is streamlining, so too must these entities." That may mean cuts beyond the proposed 15% reduction in promised funding for a key World Bank lending unit. "We will preserve investments where they make sense, but we must balance priorities in order to fund other parts of the government," he adds.
- IMF Managing Director Christine Lagarde said Wednesday that though she's happy to see strong economic data from the United States, she's worried about a combination of market enthusiasm and financial deregulation. She said she worried about asset valuations "probably pushed by a degree of exuberance that is difficult to explain at this point in time and proposed financial regulation modifications which if generalized to the entire banking sector in a country like the U.S. would be a cause for worry." She said some regulations could be eased for small banks, but she cautioned that going far beyond that "would be a factor of concern" when combined with the strong economy and asset prices. She was speaking at a conference in Frankfurt.

Jun 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices fell around 1 percent after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back on output.
- Gold inched up as the market waited for direction from the outcome of a two-day U.S. Federal Reserve meeting, with the central bank expected to hike interest rates and give indications on its monetary policy for the rest of the year.
- Copper prices eased in early Asian trading, with investors cautious ahead of the outcome of a two-day meeting where the U.S Federal Reserve is expected to hike interest rates and give clues on its policy outlook for the rest of the year.
- U.S. spring wheat futures rose 2.2 pct, with the market poised for its biggest two-day rally in as many years on concerns over dry weather hitting yields in the United States and Canada.
- The dollar eased with investors looking past an expected U.S. rate hike later in the day for clues on Federal Reserve policy for the rest of the year.
- Investors may be warming back up to Canadian markets after recent comments from Bank of Canada officials that signal a potential rate hike in the coming months. While some economists now expect a rate hike much sooner than previously expected, Scotiabank's Derek Holt notes that BOC Governor Stephen Poloz didn't provide a strong rebuttal to his deputy's recent comments. That could mean the BOC is still waiting for evidence of a business investment rebound amidst uncertainty stemming from the US election, as well as a much more robust Canadian export outlook. Also worth noting is the impact low rates have played on Canada's housing and household finances, which would be highly vulnerable if monetary policy tightens.
- Treasury Secretary Steven Mnuchin says his agency can fund the government "through September" if Congress fails to lift the federal borrowing limit before August. That seemed to be a shift from his comments Monday that Treasury can fund the government through "the beginning of September." The administration has offered few details on when it expects to run out of cash to meet the government's obligations. Congress leaves for a five-week summer recess July 28. He urged them to raise the ceiling before then to "send a message to the rest of the world and the markets that we take our credit very seriously."
- The expected tax overhaul by the Trump administration may end companies' ability to deduct their debt interest payments from their tax bills. "What we are hoping is that the interest deduction is grandfathered, says Harris Corp. CFO Rahul Ghai, speaking on the sidelines of the WSJ CFO Network in Washington D.C. Companies made the decision to take on debt under a different tax regime and with the assumption of certain benefits, he says. "The right thing to do is to make sure old interest is grandfathered irrespective of the future," he says.
- Duke Energy opposes proposals to pay for tax reform by cutting companies' ability to deduct interest payments, says CFO Steven Young. The utility borrows in debt markets to pay for grid and plant upgrades. If it couldn't deduct the interest, customer rates would rise, he cautions. "It's very critical to us," he says.
- Individual investors in the US say geopolitical risks ranks as the top threat to the investment climate in the coming year, according to a Wells Fargo/Gallup survey of 1,005 adults with total savings and investments of at least $10,000. Three-quarters of investors were "very or somewhat worried" about flare-ups in tensions around the world, while 69% said they were concerned about the political climate in the US and 49% said they were worried about the economy. "Given recent headlines, it's not surprising that investors are more concerned that geopolitical risks pose a greater threat to their investments than the economy. While the news may be concerning to investors, we advise clients not to let those anxieties impact their investment plan because that doesn't change the underlying positive fundamentals of the economy," said Brian Rehling, co-head of global fixed income strategy at Wells Fargo Investment Institute.
- Where next for Transdigm after the aerospace part maker's Monday selloff following a CNBC report that Sen. Elizabeth Warren had written to the Pentagon about its sales practices ? Except Warren's office declined to release any letter, or confirm its existence, unlike two House members who had already raised similar concerns. TDG sold off more than 4% at one point on heavy volume, ending a four-week rally that drove it to a seven-month high. Short sellers have been circling the company all year, and investors will now be wary of further shots from lawmakers across TDG's bows.
- Amgen finance chief David Meline said he is "very encouraged" by the prospects of the Trump Administration's plan for lower corporate tax rates but that efforts to implement it are behind schedule. "We are slipping on the schedule," Meline says at the WSJ's CFO Network annual meeting in Washington, DC. He said he considers a proposed 15% corporate tax rate just one scenario that he will weigh when making capital allocation decisions.
- Eastman Chemical supports tax reform but is worried about how it's going to be funded, finance chief Curtis Espeland says on the sidelines of the WSJ's CFO Network Annual Meeting in Washington, DC. One possible way of funding the tax overhaul is scrapping bonus depreciation that allows companies to accelerate deductions for capital investments. "Eliminating bonus depreciation won't support manufacturing growth in the United States," Espeland says. "It will incentivize people to build plants outside the US."

Jun 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up, lifted by statements that Saudi Arabia was making significant supply cuts, although rising U.S. output meant that markets remain well supplied.
- Gold held steady as investors remained cautious ahead of a two-day U.S. Federal Reserve meeting that is likely to provide hints on the central bank's interest rate policy for the remainder of the year.
- London copper eased from near a two-month high ahead of the U.S. Federal Reserve's interest rate decision due later in the week, while China zinc premiums surged on healthy demand and limited supply.
- Chicago wheat futures bounced back, rising nearly 1 percent as the condition of the U.S. spring crop was pegged well behind market expectations, stoking fears of production losses.
- The Canadian dollar rose to its highest level in nearly two months, buoyed by hawkish comments from Canada's central bank, while worries about UK political uncertainty dented sterling.
- US Commerce Secretary Ross is concerned about outsourcing high-tech products to foreign countries, including China. "I'm very worried about the semiconductor industry," he said at WSJ's CFO Network annual meeting in DC. Such shifts could leave the US vulnerable to interruption in critical supply chains. "Where are you going to get your product from?" he asked. "We have to be very careful about technology."
- Qatar is a major producer of helium, often used as a cooling agent in making semiconductors and fiber optics. But helium circulation has been hit after Saudi Arabia and others closed their borders to Qatar. Japan industrial-gas companies Iwatani and Air Water have said the helium they produce in Qatar hasn't been able to leave the tiny Persian Gulf country since the rift. The duo ship helium to the UAE through Saudi Arabia over land, where it's shipped by sea to Japan. "With the severance of diplomatic ties, that's become impossible," said Iwatani spokesman Masaaki Kichise. It still has a month's inventory and is considering securing more helium from the US, another major producer, he added. Air Water is planning to secure helium from the US and Australia, said spokesman Koji Aratani.
- Legg Mason & Co., a Baltimore asset manager, is not worried about Britain's exit from the European Union and the potential loss of so-called passporting rights allowing for easy access to Continental Europe. "We are not too fuzzed about Brexit," says finance chief Peter H. Nachtwey at the WSJ's CFO Network Annual Meeting in Washington. Legg Mason already has subsidiaries in Luxembourg and Dublin.
- Earlier this year Argentina eliminated a 35% tax on computer, laptop and tablet imports, leading prices to plunge. But the government has no plans to similarly cut import taxes on TVs, air conditioners or other appliances, meaning prices of such items will remain exorbitantly high. Taxes on such items mean these goods can cost up to three times more than in neighboring Chile or in the US. That stifles consumption and depresses retail sales. Cabinet officials, though, say the government could cut import taxes on smartphones later this year. "Cheaper TVs won't boost productivity but cheaper cell phones would," one official says.
- Argentina's economy appeared to strengthen in May, according to an index of leading economic indicators published by Torcuato Di Tella University. The index suggests that the odds the economy will fall back into recession have slid to 9% from 12% a month ago. Nine of the 10 indicators measured by the university, including a gauge of stock prices, are up from the previous month. The index seems to confirm government assertions that Argentina's economy is now back on track and will grow this year and each of the coming years, even if at moderate rates of about 3% annually. Such numbers, while not spectacular, will still benefit President Mauricio Macri as he tries to overhaul tax and labor regulations.
- The most powerful US retail lobbying group sends a letter to US Trade Representative Robert Lighthizer outlining the industry's top priorities in the expected Nafta renegotiation between the US, Canada and Mexico. The list includes keeping the agreement trilateral, making sure tariffs on all goods remain fixed at zero and not imposing new measures to origin rules that would disrupt the global supply chain. "Under no circumstance should the United States seek to impose new duties on imports from Canada or Mexico," Matthew Shay, CEO of the National Retail Federation says. The group also seeks to discourage changes to Nafta's enforcement protocol based on bilateral trade balances, quotas on goods such as winter fruits and vegetables imported from Mexico, or customs duties on electronic information transmissions.
- For a long time, Peruvians said crime was their biggest concern. But that appears to have changed following a large graft scandal involving Brazil's Odebrecht that has led to corruption allegations against a former president and other government officials. A survey by Peru's statistics agency INEI says that 48% of the population identify corruption as the country's biggest problem, followed by crime, poverty, lack of employment and the quality of public education.
- Last week's trade deal that limits the amount of refined sugar Mexico can send to the US is expected to raise US prices, while greater supply in Mexico is likely to have the opposite effect at a time when inflation is at an 8-year high. Domestic sugar prices in the CPI peaked up 41% last August, and were up an annual 23% in May--Citi notes. Although sugar has only a 0.18% weighting in the index, items that use sugar, especially soda, account for 1.9% of the CPI. The fact Mexico didn't bring high-fructose corn syrup imports to the negotiating table "reinforces out takeaway of the agreement leading to potential excess supply of sweeteners in the Mexican market," says Citi.
- A lawsuit filed Monday by attorneys general in Maryland and the District of Columbia allege government payments to President Donald Trump's hotels and other businesses violate the US Constitution. The lawsuit, similar to one filed in New York by a government watchdog group in January, pivots on Trump's decision to place his business assets into a trust, rather than divest upon taking office.
- The head of a US Department of Justice division that monitors the country's bankruptcy courts told Congress last week that reclassifying marijuana wouldn't make the division more lenient on companies in the marijuana industry that file for bankruptcy. At a hearing, US Trustee Program Director Cliff White emphasized that as long as the drug is illegal in the eyes of the federal government, his office will try to block companies with marijuana assets from using the bankruptcy system to get a fresh start. White said his office has seen an increase in the number of companies in the marijuana industry file for bankruptcy in recent years.
- Government lawyers said Friday that the US Constitution permits President Donald Trump's hotels and other businesses to accept payments from foreign governments, in response to a lawsuit alleging such payments violate the Constitution. Instead of divesting after he was elected president, Trump put his business assets into a trust and let his two adult sons run the Trump Organization. Citizens for Responsibility and Ethics in Washington, a watchdog group that tracks corporate influence in politics and public policy, seized on Trump's refusal to divest in a January lawsuit filed in federal district court in Manhattan, one of several cases targeting Trump's business ties and conduct during his presidential campaign.
- Kansas' move last week to put an end to four years of extensive tax cuts is good for the state's credit, according to a report by Moody's Investors Service. The cuts had contributed to a $500M budget gap that led the state to put off pension contributions and draw on rainy day funds, according to the report. Those moves were "essentially policy choices, not acts of desperation driven by economic hardship," the ratings agency says.

Jun 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices rose as futures traders bet the market may have bottomed after a recent steep fall, even as physical markets remain bloated by oversupply, especially from a relentless rise in U.S. drilling.
- Gold inched up as Asian stocks fell and the dollar eased ahead of a U.S. Federal Reserve policy meeting that could give clues on the pace of interest rate hikes over the rest of the year.
- Copper prices climbed for a forth consecutive session, underpinned by strong demand from top consumer China and concerns over tight supplies from Chile.
- Chicago wheat futures slid for a second session, giving up some of last week's gains as the U.S. government forecast higher production.
- Sterling steadied as British Prime Minister Theresa May scrambled to pick up the pieces and reunite her Conservative Party after a disastrous election that could disrupt Brexit negotiations.
- A Brazilian electoral judge finishes an exposition he started Thursday morning showing how millions of Brazilian reais skimmed from state oil company Petrobras were used to finance the winning Rousseff-Temer ticket in 2014 presidential election, an allegation both deny. The judge, Herman Benjamin, called for the election to be nullified and Temer, who replaced Rousseff last year after she was impeached, be overthrown. But at least four of the court's seven judges have signaled they aren't convinced, and pundits are expecting a final ruling later today keeping Temer in the presidency, which could breathe life into his economic-reform agenda.
- London shares close higher, with the FTSE 100 index up 1% at 7527.33, benefiting from falls in the pound after the UK election resulted in a hung parliament, with no one party achieving an overall majority. This leaves uncertainty over the make-up of the next government and over Brexit negotiations. Resultant sterling falls boost the stocks of internationally-forcused companies in particular. Fresnillo and Antofagasta rise more than 3.5%, while Standard Chartered gains 2.8%. This is offset by falls in domestically-focused companies, such as housebuilders, retailers and domestic banks. Taylor Wimpey loses 3.3%, RBS is down 2.4% and M&S down 1.8%.
- Germany's DAX ends up 0.8%, nudged higher by building economic optimism and market hopes for a less disruptive Brexit after the UK election. HeidelbergCement leads the pack, gaining 3.3% on analyst rating increases. Lufthansa gains 2.2% on expectations the UK's indecisive vote makes it more likely the country will remain closer to Europe's single market after Brexit. RWE falls 1.3% and E.On slips 0.3% after strong gains this week on news of a multibillion euro tax refund.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 0.7% higher and the pan-Nordic OMXN40 index up 0.8%. "The major European stock benchmarks rose as UK stocks gained on a slide in the pound after the surprise UK general election result," Saxo Bank says in a note. "Former FBI Comey's testimony to Congress offered little evidence on alleged obstruction of justice by President Trump." Crude oil got a small bounce from shortcovering while the risk of Middle East tensions escalating further also attracted some demand ahead of the weekend, Saxo added. Oslo's oil-heavy OBX index rose 0.3%.
- China's steel exports decreased 26% in May from a year earlier, as stronger demand from domestic steel users discouraged producers from sending steel out of the country. May exports were up 8% from April and Jefferies predicts that 2H exports will probably increase amid seasonally slow domestic demand. But the firm notes the "continuation of materially lower exports highlights a structural shift driven by supply-side reform and mounting global trade barriers." Imports of Chinese steel to the US have plunged over the past year because of steep tariffs. The EU Friday levies duties on imported Chinese steel for what it says are unfair government subsidies on steel exports. The EU already has antidumping duties on Chinese steel, but it's the first time the EU has deployed antisubsidy duties against Chinese steel, which now accounts for just 4% of imports of hot-rolled coiled steel into the EU, Jefferies says.
- Over the next 12 to 24 months, the UK's march toward its withdrawal from the EU in March 2019 will have hurt the nation's economy and lead to heightened volatility in its financial markets, says Peter Donisanu, investment strategy analyst at Wells Fargo Investment Institute. The firm has a bearish view on UK bonds and currency, but a neutral view on UK stocks, reflecting the positives of better-than-expected European economic and earnings fundamentals, balanced against the negatives of historically stretched equity-market valuations, Donisanu says. The British pound, which had strengthened against the US dollar heading into the election, is likely to weaken through year-end as interest-rate differentials continue to expand when the Fed tightens monetary policy as developed-market central banks abroad generally stick with accomodative monetary policy, he says.
- Brazil's Federal Police says it raided the offices of the group of embattled meatpacker JBS Friday as part of an investigation by the country's market regulator into possible insider trading, according to a statement. Brazil's market regulator CVM has been investigating suspicious trades made by the group before the revelation of a plea deal by its main shareholders involving prominent Brazilian politicians. JBS denies any irregularity in its financial operations.
- Trump tweets his support of House Republicans' passage of a Dodd Frank repeal-and-replace bill a day earlier. "Congratulations to Jeb Hensarling & Republicans on successful House vote to repeal major parts of the 2010 Dodd-Frank financial law. GROWTH!" the message said. The bill is unlikely to become law. Trump has criticized Dodd Frank broadly before, but his administration hasn't provided many details. That could change early next week when it is expected to release a Treasury department report evaluating bank rules.
- The UK general election results create an uncertain political environment, but don't fundamentally change the UK outlook in the shorter term, says Noland Carter, chief investment officer and head of Heartwood Investment Management. The asset manager is underweight UK stocks as it believes that other developed markets hold more attractive
value, and is taking no immediate actions in portfolios, Noland says. From the market's perspective, a worst-case scenario of "a high-tax, high-spend economic program, which would create an unfriendly environment for UK-based corporates," has been avoided, he says. Markets are taking the news of a hung parliament reasonably well, and there's been no "knee-jerk reaction" so far, he says. Within the UK market, the manager's bias is toward large companies, which have performed well over the last year and benefited from the depreciation of sterling, he says.
- Treasury yields have drifted higher, as some uncertainty is lifted with the Comey hearing, ECB meeting and UK elections in the rear-view mirror, and as debt auctions loom early next week. After a lengthy price rally, the 10-year yield seems to be stabilizing around 2.2%. That is still a low level for the postelection period, especially considering expectations that the Fed will raise rates next week. Hopes for fiscal stimulus are at a low point, and it could take a run of better economic data to lift growth and inflation forecasts again. The 10-year yield was recently 2.211% vs. 2.195% Thursday.
- Safety trades won out this week as investors geared up for several potentially market-moving events including the UK election, former FBI Director James Comey's testimony, and a European Central Bank meeting. Investors piled $16B into bond funds in the week through Wednesday, the biggest inflows for bond funds in 122 weeks, according to EPFR Global. Meanwhile, investors withdrew $1.3B from equity funds and put in $0.8B into gold funds--marking the largest inflows for gold in 11 weeks, according to Bank of America Merrill Lynch.
- US stock futures rise in morning trading, rebounding from overnight lows. Traders say global markets aren't panicking because Brexit is still going to happen, albeit with a weaker UK negotiating hand following the failure of Conservatives to win a majority in Parliament. That's leading both the pound and UK companies that rely on exports lower. The FTSE 100, which generates more than two thirds of its revenues overseas, is up 0.6%. US stock futures are up, which John Brady, of futures brokerage R.J. O'Brien, attributes to continued support from central banks. "It's hard to argue stocks are cheap here, but they're not majorly, maniacally expensive. With the lack of other alternatives, and with central banks remaining so cautious, there's no reason not to buy risk assets," he says.

Jun 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices stabilised following steep falls earlier this week, but they were still pressured by evidence of an ongoing fuel glut despite efforts led by OPEC to tighten the market by holding back production.
- Gold edged down ahead of the UK election verdict with early results suggesting no clear winner which could push the country into a new bout of political turmoil before Brexit talks.  
- Copper firmed in early Asian trading, helped by supply concerns in Chile and recent data pointing to robust import demand from China.
- Chicago wheat futures edged higher with the market on track for its biggest weekly gain in eight months, underpinned by hot and dry weather threatening to reduce production in North America.
- The pound fell sharply after British Prime Minister Theresa May's Conservative Party lost its parliamentary majority in a general election, throwing the country's politics into turmoil and potentially disrupting Brexit negotiations.
- The latest positioning data available for fast-money investors like hedge funds showed they weren't as negative on the pound as earlier this year. Leveraged funds slashed their negative sterling positions in the 2 months through May 23, when the number of net-short futures and options contracts on the pound hit the lowest level since shortly before the Brexit vote. The latest data, as of May 30, showed a slight uptick in the number of net bearish contracts, though it remained well below 2017's highs. Data released later Friday will provide a more-accurate picture of pre-vote positioning. Leveraged funds have been net bearish on the pound almost continuously since late 2015, CFTC data has shown.
- In the wake of Tories poised to not keep its parliamentary majority, PM May's "hard-Brexit strategy has failed and the public has rejected her popularity," says Naeem Aslam, chief market analyst at ThinkMarkets UK. The pound dropped sharply, briefly breaching $1.27, and he says sterling could test $1.22 in coming weeks. "The outcome has created maximum uncertainty, and it is only going to get worse from here if we do not get any clarity." Aslam is focused on the spread between Treasurys and UK gilts, the latter falling as results come in. "Investment wisdom dictates that the Brexit negotiation process is going to be an uphill battle," says Aslam. "This means opportunity is knocking as the yield gap would widen further. The gap is already at its record level and we expect this to build more steam from here onwards."
- Instead of the UK election, Japanese institutional investors remain focused on ECB, says Daiju Aoki, regional CIO for UBS. While policy makers didn't do anything unexpected, "they are focused on inflation." Meanwhile, investors are looking at "policy momentum" rather than uncertainties between the UK and eurozone. "It's a pound issue rather than euro," Aoki adds. Japanese investors remain positive on the euro, he says, with euro-selling this morning in Asia "no surprise" following the ECB meeting. The euro has pulled back below $1.12.
- Volatility to persist for the pound with PM May likely to not "have the last say" on Brexit, says Chang Wei Liang, a forex analyst at Mizuho in Singapore. It's "an outcome that is not only bitter to accept but could potentially risk fracturing her Conservative base." The currency slumped from around $1.2950 before the release of exit-polling data to $1.2720 afterward before rebounding to $1.28. It subsequently fell below $1.27 in the past hour before bouncing
back to just under $1.28.
- Chart support for the pound is at $1.2709, and the currency nearly got there in the initial knee-jerk selling after the release of UK exit polls. Sterling has rebounded a bit since and remains above that technical level. Only "a clear break below this support would indicate deepening market concern over the election result," says Rick Spooner, chief market analyst at CMC. That as more broadly, he posits, "The possibility of a reduced Conservative majority or even a minority government is unlikely to have a significant impact on broader global markets. The biggest market moves are likely to be confined to the UK economy." The pound has eased in recent minutes, falling to $1.2720.
- If the exit poll's prediction comes true and the UK election delivers a hung Parliament, the result would be "a very bad" deal for Britain in its ongoing divorce with the EU because it would weaken the British negotiating position in Brussels, says Stephen Gallo, European head of currency strategy at BMO. That would further hit sterling, he added. The pound fell nearly 2% versus the dollar after the exit-poll release to around $1.2750. "Confirmation would
open up a door to $1.25 as soon tonight."
- The pound's 1.5% drop right after the release of the UK election exit poll may have been exaggerated, according to Stephen Simonis Sr., chief currency consultant for FXDD Global, because "this move happened at 5 pm NY time after markets have closed.," which is "an extremely illiquid time." He adds: "this move seems extreme. Certainly, electronic stop losses were triggered along the way to further exaggerate the move." Also: "we don't think a minority government will hurt Prime Minister May's position at the Brexit negotiations. The Tories still have the most seats in Parliament and she will negotiate aggressively on the UK's behalf."
- Many analysts and investors predicted the pound would fall to $1.20 if the UK election delivered no clear majority for any party. So far, it's only fallen to $1.28 from around $1.30, after the exit poll suggested this is the likely outcome, but a bigger drop may still happen. "Should the poll prove accurate, it is likely that the pound will give up the bulk of its post-election announcement gains. After this, retreating back to the low 1.20 levels versus the [dollar] is a very real possibility," says Dean Turner, economist at UBS Wealth Management. "Nevertheless, sterling has steadied following the initial sell-off and there are few signs that anxiety has spread into other markets just yet," he adds.
- New Zealand shares fall in early trading after an exit poll showed the governing Conservative Party could lose its majority following the UK election, adding to global political uncertainty. The NZX-50 index was down about 0.2% to 7443 on a morning that was light on local company news. Among the biggest movers were outdoor retailer Kathmandu, which was 1.5% lower to NZ$1.95, and retirement-village operator Metlifecare, which was 1.4% lower to NZ$5.46.
- With the exit poll showing the Conservative Party will win only 314 out of the British Parliament's 650 seats, this situation could be reminiscent of 1974, says Nomura analyst Jordan Rochester, when the Labour Party formed a minority government. "This could be a 1974 scenario with a true hung parliament and failed coalition talks with the Conservatives attempting to govern with a minority but let's wait for the real results before diving too deep into that scenario," he says. That government, under Prime Minister Harold Wilson, only lasted between February and October, when a second election delivered a narrow majority for the Labour Party.
- The British pound weakens nearly 2% after an exit poll suggests Prime Minister Theresa May's Conservative Party may have lost its majority in the general election. "The market is not in panic mode, but it is shell shocked by this result," City Index says. The firm says uncertainty over the results, which won't be confirmed until Friday, is likely to put further downward pressure on the British currency overnight. She sees $1.253--which would mark a 1.7% slide from current values--as a key level. "The outcome of this election is impossible to predict, and we can't see how the pound could stage a recovery on the back of this," she says.
- The Brazilian electoral court judge who is overseeing a trial that could oust President Temer agrees there was an "abuse of economic power" in the 2014 elections, adding further to expectations he will vote in favor of canceling the leader's mandate. Justice Herman Benjamin is set to cast the first vote against Temer as early as Thursday night but analysts say the president still has a good chance of being absolved by the majority of the court. Temer and Rousseff, who won the 2014 election with Temer as her running mate, are under investigation for illegal campaign financing. They both deny wrongdoing.

Jun 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Crude futures edged up in early Asian trading following heavy losses in the previous session after official data showed that U.S. inventories rose for the first time in 10 weeks, reawakening concerns of a supply glut.
- Gold edged lower as investors awaited cues on market direction amid a number of geopolitical events later in the day that could boost the safe-haven demand for the metal.
- London copper rose to a one-week high after China trade improved in May which alleviated concerns over the health of the world's second-biggest economy.
- Chicago corn rose for a fifth consecutive session and traded near a one-year high hit in the previous session as concerns over dry weather across the U.S. Midwest triggered short-covering.
- Sterling traded near a two-week high, supported by expectations that Prime Minister Theresa May's party will win a majority in Britain's general election, while the euro held steady ahead of a European Central Bank policy announcement.
- From gold to industrial metals, investors are trading cautiously early in a day lined up with key events. But this could well be the lull before the storm leading to near-term volatility. Though former FBI director James Comey's prepared statement has been released ahead of his Congressional testimony, investors are probably waiting to see if there's anything more in the actual testimony later this evening that could implicate US President Trump, says OM Financial's Stuart Ive. He expects the ECB to broadly maintain monetary easing later Thursday, while the UK election may too fuel some uncertainty. Any hint of further weakness in China in its latest trade data could also drive down industrial metals.
- London spot gold prices ease marginally Thursday as the markets await key events. Investors will be closely monitoring the UK elections and the ECB meeting before taking positions. Analysts see a strong upside potential for gold to breach above a psychological threshold of $1,300 per oz, having already pushed past $1,280/oz this week to hit a 7-week high. Next week's Fed meeting will also be a crucial determinant of near term gold prices because of an expected rate rise and direction on monetary policies for the year. Spot gold is 36 cents lower at $1,286.40/oz.
- Former FBI director Comey's inquisition may now turn out to be the least interesting event for markets, NAB says. The prerelease of his prepared testimony overnight suggests while he will confirm Trump leaned on him to end the inquiry into National Security Advisor Michael Flynn, he will stop short of suggesting the president may have obstructed justice. Still, the broader Russian probe will run and run, and this particular millstone around the neck of the Trump administration looks unlikely to be lifted anytime soon, NAB adds.
- The Sierra Club blasts a memo from Attorney General Jeff Sessions ordering Justice Department prosecutors to halt extracting payments to third-party groups as part of settling ​future ​corporate wrongdoing cases. The memo has been interpreted to mean terms such as Volkswagen's agreement to invest $2B in electric-vehicle charging stations as part of its emissions-cheating settlement would be forbidden in the future--a relevant rollback given the Justice Department's pending civil case against Fiat for similar alleged transgressions. ​Daimler's Mercedes is also facing government scrutiny on diesel emissions. ​​"Jeff Sessions and the Trump administration are once again undermining critical policies that benefit the public through cleaner air and water​," said Sierra Club Environmental Law Program Director Pat Gallagher. ​Sessions's memo is "nothing more than an effort by the Trump administration to let companies like Fiat​ ​Chrysler and Mercedes off the hook.​"​ ​Memo leaves untouched policy of seeking payments to government for environmental remediation​.
- The Mexican peso firms in Mexico City to 18.2295 to the US dollar from 18.2490 Tuesday on continued momentum from the US-Mexico agreement in a sugar trade dispute, and Sunday's ruling-party election victory in a key state that for now lowers perceived risk of a less market-friendly candidate winning 2018 presidential elections. "It is unlikely for the market to be concerned about the presidential election until perhaps April-May of 2018," Nomura says. "We think political risk premium is now significantly lower than before this past weekend." The IPC stock index rises 0.1% to 49,275 points.
- When the White House earlier this week announced Joseph Otting as the nominee for Comptroller of the Currency, a top banking regulator, its official statement said he is "a graduate of the School of Credit and Financial Management at Dartmouth College." A spokeswoman for Dartmouth says an education program by that name once rented space at the Ivy League school, but it doesn't have any official affiliation with Dartmouth. Don't be surprised if Senate Democrats ask Otting about this issue during his confirmation hearing.
- Gold prices extend losses and settle lower following the early release of former FBI director James Comey's testimony to Congress, after three straight sessions of gains. Comey is scheduled to testify Thursday, but a dearth of revelations from the documents eased some investor concern about further political turmoil, and led riskier assets higher. Gold rose to six-month highs this week, trading at levels not seen since before the presidential election, on political uncertainty ahead of central-bank meetings, the UK election and Comey's statements. Gold is "now again paying attention to upcoming Fed meeting," RBC says, since central bankers are expected to raise short-term interest rates.
- Three insurance M&A deals that were "at a handshake" ahead of the US presidential election "went pencils down about a week or two after," due to uncertainty about taxes, said John Purcell, co-head of North American insurance at JPMorgan, at an S&P Global conference in New York. "The velocity of deal activity has slowed a bit," he says. But he's still working on insurance deals, he says, especially with companies that are shrinking.
- On the banks of the Ohio River, President Trump promises lofty infrastructure improvements -- including a facelift for US waterways critical to the nation's grain industry -- but remains vague on details. Trump points to decaying US locks and dams, which ferry crops to ocean ports, and tells a gathered crowd they are "going to see some amazing things happen over the next long period of time." But some farm groups worry about the particulars, including that a proposal by the administration to impose fees on grain traders and other river users as a means to fund repairs could result in lower prices paid to US farmers for their crops.
- The only criticism Trump's proposed top financial diplomat, David Malpass, faces during his short Senate nomination hearing was on the administration's dollar policy. Oregon Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, says mixed messages from Trump and Mnuchin leave the public bewildered. "Is the administration for a strong dollar or a weak dollar?" Wyden asks rhetorically. "Nobody knows," he answers himself. Malpass didn't comment. But he says in his opening remarks part of his mandate is "protecting the trustworthiness of the US dollar." And for many years Malpass has advocated global exchange-rate stability. What that will mean in practice, however, is still unclear.
- David Malpass, Trump's candidate for top financial diplomat, faces little questioning in his Senate confirmation hearing, signaling his nomination should face scant opposition when lawmakers decide to approve him. Although the world is wary of the administration's America-first approach to economic policy and he favors downsizing some multilateral institutions, Malpass is viewed by some as more of an internationalist within the Trump team. Malpass tells the Senate Finance Committee he'd help "domestic industries remain competitive while encouraging foreign investment in the US that creates more jobs here," and that Washington's "international policies need to work toward broader prosperity."
- United Continental President Scott Kirby says he doesn't have any idea what would happen to international travel demand if the US banned passengers' carriage of electronic devices in aircraft cabins. "It will depend on what the rules are and what the government says about it," he says, speaking at a Deutsche Bank conference. "I don't think I have the right clearance level to know what the risk is," Kirby says. "We would always defer to people who have better intelligence." He says one big effect would be operational, as airlines would have to go through all the carry-on bags to weed out personal electronic devices. "I certainly wouldn't not take a trip if I can't take my iPad with me," he says, in reference to a global trade group's study that says 15% of business travelers would reconsider their travel.

Jun 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dipped, with Brent crude futures around $50 per barrel, as fuel markets remained oversupplied, although tension in the Middle East and falling U.S. inventories lent some support.  
- Gold edged lower, although still holding near its highest in seven months, supported by a weaker dollar ahead of key political and economic events that are expected to stoke bullion's safe-haven appeal.  
- London copper edged higher in early trading in Asia as some investors switched into commodities from equities.
- Chicago wheat gained more ground, trading near last session's two-week high on worries about dry weather threatening production of high-protein wheat in the United States.
- The longer-term outlook for the dollar-yen may well depend on how much it can recover after congressional testimony from former FBI director James Comey later this week. Against many other major currencies, the dollar has already given up the gains made on hopes for fiscal stimulus since the U.S. election. The dollar's fall against the yen overnight put the pair below its important 200-day moving average around 110.42. Without a quick recovery above that, the pair is likely to fall more amid concerns about U.S. political instability, a factor that could further dent investors' hopes for U.S. fiscal stimulus. The USD/JPY is at 109.49, slightly up from 109.40 late Tuesday in New York.
- Rising political uncertainty continues to provide support for gold. Thursday remains key, with former US FBI Director James Comey set to give testimony about his dealings with Trump, while voters head to the polls in the UK, ANZ says. This comes as the diplomatic crisis in the Middle East involving Saudi Arabia and Qatar intensifies. This has seen a continued rise in safe-haven buying of the precious metal. A weaker USD is also playing its part in pushing gold higher.
- Minor early losses for New Zealand's NZ50 index, which is down 3 points to 7491.67, as investors brace for a trio of risk factors Thursday. "While it was a relatively quiet overnight session for data, there was a risk-off feel," ANZ says. On Thursday, the UK goes to the polls, there's an ECB meeting and former FBI director James Comey will give public testimony on the agency's Russia investigation. Overnight there were also rumours that China was ready to buy more US Treasuries under the right circumstances, ANZ says.
- USD remains under downside pressure against most major currencies and US 10-year Treasury yields fell by roughly 4 basis points to 2.14% in US trading. CBA says doubts about the Trump administration's ability to deliver an aggressive fiscal stimulus package through the US Congress anytime soon will continue to undermine the USD and US Treasury yields. With no policy-relevant US economic data releases the rest of the week, the USD focus is on former FBI Director James Comey's questioning by the Senate Intelligence Committee on Thursday into alleged ties between Trump's 2016 campaign team and Russia, CBA adds.
- Is there a constitutional right to follow President Donald Trump on Twitter? It's a question that no one thought to pose until recently. Pushing the issue are the First Amendment advocates at Columbia University's Knight First Amendment Institute, a months-old research, education and litigation center. The free-speech institute says it sent a letter to the Trump administration claiming that a number of individuals have been blocked from Trump's @realDonaldTrump account because they "disagreed with, criticized or mocked," the president. The institute offers examples of prolific anti-Trump tweeters who say they were blocked from @realDonaldTrump in recent days. The institute says the Constitution requires those accounts to be unblocked. The White House didn't respond to a request for comment.
- Powering through worries of a renegotiated Nafta, Mexico's light-vehicle production and exports both jumped in May. Production at the country's foreign-owned assembly plants surged 17% compared to a year ago and exports rose 14%. Through the first five months of the year, both production and exports also are up more than 14%, compared to 2016. Mexico's Nafta partners continue taking most of the exports, with greater than 3/4 of exported vehicles sold to US consumers and nearly 9% more to Canadians.
- An index tracking news coverage of the global economy falls for the second consecutive month and is now back to pre-US election levels. Absolute Strategy Research, which compiles the ASR/WSJ index, says its measure dropped to 57 in May compared with a 59.1 reading in April and believes the decline suggests news relating to the reflation trade has subsided. "We think disappointed expectations around policy could have played a strong role," ASR says. The move is historically consistent with a fall in the equity-bond returns ratio, ASR says. A measure of 50 tends to be associated with stock returns keeping pace with those of bonds year-over-year, according to ASR. The analysts add that the stimulus newsflow component of the index shows market "chatter" particularly around fiscal policy, has fallen into negative territory, which signals a tighter stance for the first time since October.
- GM CEO Mary Barra says the Trump administration's withdrawal from the Paris climate accord hasn't changed GM's plan to reduce emissions and other environmental commitments. "We understand the science and believe in the science," she says ahead of GM's shareholder meeting. She cites increased use of renewable energy at GM's factories and development of green cars like the Chevy Bolt. "We're going to take these steps regardless. We have voiced that opinion to the administration even prior to their decision." Barra is on Trump's business advisory council.
- Time to ponder a sub 2% yield again? Jack McIntyre, of Brandywine Global Investment Management, says he would not rule out that the 10-year yield could fall to as low as 1.8%. "With the uncertainty of fiscal stimulus, political uncertainty in general and concerns over the growth and inflation outlook, this will get investors wanting to own Treasurys," he says. Some traders say from a technical view, the yield has room to slide. The 10-year yield has fallen below its 200-day moving average around 2.17% and investors using historical patterns to trade could buy and push the yield to 2% or lower. But some are skeptical whether a sub-2% yield would stay for long, saying US fundamentals don't support the yield moving below 2%.
- Risk aversion boosts perceived safe-haven currencies, taking USD/JPY to a six-week low around JPY109.56, and EUR/CHF to a four-week low around CHF1.0844, according to Factset. Markets are wary before Thursday's European Central Bank meeting, U.K. election and testimony from former FBI Director Comey before U.S. Congress. John Hardy, head of forex strategy at Saxo Bank, says falling U.S. bond yields since Friday's weaker-than-forecast U.S. jobs data have pushed the dollar lower against the low-yielding yen. But he also notes yen strength unusually coinciding with relative strength in emerging market currencies and strong global risk appetite. "The apparent theme is that the market is celebrating the lack of policy tightening as the inflationary threat is failing to materialise, while refusing to fret over the risk of economic weakness."
- If political fissures widen between Qatar and Arab states, buyers of Qatar's LNG may reconsider their ties with the gas producing nation, says Bernstein Research. In such a case, US, Australia and some other emerging global gas hubs such as Mozambique would stand to benefit. So far, gas and oil exports out of Qatar have not been affected by the severance of diplomatic ties.
- With geo-political tensions continuing to provide support, London spot gold nudges higher from six-week highs. OM Financial's Stuart Ive says focus this week will be on ex-FBI director James Comey's testimony that could increase the political heat on US President Donald Trump, possibly driving gold prices higher. He says the uncertainty over UK elections as well as Middle East tensions are additional factors aiding gold's momentum. Investors are not reacting to a marginal increase in proposed tax rates on gold jewelry under India's looming goods and services tax. Spot gold is up 0.3% to $1,282.40/oz.

Jun 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices fell for a third day, hit by concerns that a political rift between Qatar and several Arab states would undermine an OPEC-led push to tighten the market.  
- Gold touched its highest in more than six weeks as Asian stock markets and the U.S. dollar weakened ahead of a UK national election and a European Central Bank meeting scheduled for Thursday.
- London copper was steady, supported by a weaker dollar, although signs of slowing growth in China and the U.S kept a lid on prices.
- Chicago wheat rose for second session and spring wheat prices hit a one-year high as adverse weather in the United States, Canada and the Black Sea region threatened global supplies.
- US Agriculture Secretary Sonny Perdue says US and Mexican officials are close to resolving a dispute over Mexican sugar exports, in what's been seen as a warm-up to the upcoming Nafta renegotiation. "Obviously these negotiations are tough, they've been tough, both sides have been very firm in some of their requirements," Perdue says during a trade visit to Canada. "I'm hopeful that both sides understand it's in both our interests to come to a resolution on this rather than reintroduce tariffs which confound and distort the market in other ways." Commerce Secretary Wilbur Ross said earlier he was confident a sugar deal would come Tuesday, after extending a previously-set Monday deadline for negotiations.
- The International Civil Aviation Organization, a UN body, says security and safety risks must be balanced when considering restrictions on fliers' personal electronic devices in aircraft cabins. The body's president, speaking to a big airline industry trade-group meeting in Mexico, says ICAO has established a cargo-safety group to consider the combined safety, security and facilitation aspects of the possibility, which is under consideration by the US Department of Homeland Security to reduce risk from improvised explosive devices hidden in laptops or tablets. The US government has said some sort of expansion of an existing and limited ban on electronics is likely, but it hasn't said when or on what routes.
- The US Chamber of Commerce's Institute for Legal Reform is renewing a campaign to require plaintiffs to disclose third-party financing arrangements in all civil cases filed in federal court. Lisa Rickard, president of the Institute for Legal Reform, sent a letter late last week to the office of the US courts asking the committee on rules of practice and procedure to consider baking in such a disclosure requirement to the federal rules. The proposal would require revealing any agreements that would give a person other than the plaintiffs' attorney "a right to receive compensation that is contingent on, and sourced from, any proceeds of the civil action, by settlement, judgment or otherwise." The would-be rule is identical to one proposed by the Chamber in 2014, which didn't advance very far in the rule-making process.
- Bill Ford says President Trump's withdrawal from the Paris climate accord won't "change anything for us." Ford, an outspoken environmentalist and great grandson of the Ford's founder, says he isn't fazed by Trump's protectionist policies, noting that the 114-year-old car maker is "pretty good at navigating choppy waters." Speaking at an event in Washington DC, Ford says the company is actively "weighing in on issues" and has a place at the table with both the Trump administration and congress. "Being in business for well over 100 years we've had to deal with every kind of regime possible."
- Imports of foreign-made steel to the US rose 24% in April from a year earlier to 2M tons, suggesting that importers may be building inventories in advance of additional US tariffs on steel later this year. Imports of semi-finished steel, which is primarily consumed by domestic steel mills, rose 86% in April and were up 84% during the first four months of 2017, says Bradford Research. April shipments of steel from domestic mills rose 0.7% from a year earlier, but were down 3.4% from March.
- White House and congressional proponents of putting a nonprofit corporation in charge of the nation's airways stress anticipated efficiencies and faster system. Compared to Canada's privatized system, they assert the Federal Aviation Administration spends proportionately nearly three times as much on what typically turn out to be less advanced improvements. But Paul Rinaldi, president of the union representing US controllers, sees uncertainty from looming budget battles on Capitol Hill as an even stronger reason to make the switch. "The status quo or doing nothing is unacceptable" he argues.
- Peru's Finance Minister Alfredo Thorne denies pressuring Comptroller General Edgar Alarcon to approve a government contract for an airport project in exchange for a budget transfer. A television program broadcast a recording Sunday where Thorne is heard telling Alarcon that the comptroller's office can help authorities advance the project with a positive report on the Chinchero project. He says President Pedro Pablo Kuczynski was holding off on transferring funds to the comptroller's office until the men spoke. The conversation was held before the comptroller's office issued a report last month citing irregularities in the contract, which led the project to being put on hold. Thorne says he has nothing to hide and that the recording was edited. Delays to construction projects caused by corruption concerns have led to a sharp slowdown in Peru's economy.
- Chile's central bank says the economy will likely grow 1%-1.75% this year, while adding that further cuts to its benchmark interest rate are unlikely. The central bank says the growth forecast takes into account weaker-than-expected economic activity in 1Q due to a mine strike. Next year, it sees growth of 2.5%-3.5%. The central bank adds that its current interest rate is compatible with inflation at 3%, the midpoint of its 2-4% target range. "In the most likely scenario, new movements to the rate won't be necessary." The rate was cut a quarter percentage point last month to 2.5%.
- It's like the rally never happened. Bank stocks are now cheaper versus the overall market than they were before the election, as investor exuberance at the prospects of tax reform and deregulation have hit a political reality in which neither seems near-term likely. KBW Nasdaq index, down 2% this year, is trading at 72% the S&P 500 on a price-to-earnings basis, versus 76% on Oct 31, according to KBW. The KRX index of smaller, regional banks is at 87% versus 91%. KBW smells a bargain: "It is hard to argue for further underperformance for the sector, [given] interest rates are higher and regulation isn't getting worse."
- Marc Kasowitz, the lawyer tapped by President Donald Trump to represent him in the investigation into possible Russian interference in the election, has been his legal bulldog for years, called upon to address grievances involving journalists, a reality-TV contestant and former business partners. But as the president again turns to the 64-year-old New York litigator, this loyal advocate will face a task unlike the legal fights he has waged for Trump in the past, in a political city that's unfamiliar territory.
- Trump's decision to pull the US out of the Paris Climate Agreement won't change long-term energy and industry trends, according to research from MSCI. A reduced regulatory burden could help the US energy sector in the short term, but a focus on increasing domestic production will likely lead to continued global oversupply of oil and natural gas, MSCI says. Meanwhile, renewable power generation will continue to get cheaper and is still expected to fall below the cost of coal power by 2020. The auto sector will continue to move towards more efficient vehicles, despite the US's more permissive stance, because Europe still accounts for a fifth of global light-vehicle sales, the research says.
- Commerce Secretary Wilbur Ross has set today as the deadline for solving a longstanding dispute over sugar trade with Mexico, threatening to slap on punitive tariffs on Mexican imports if the two sides fail to reach agreement. A Commerce spokesman said early Monday that Ross "remains hopeful there will be a negotiated solution," adding that Mexican Economy Minister Ildefonso Guajardo was in town for previously scheduled business meetings, and was also talking with Ross on the subject. Some US sugar producers have accused Mexican producers of unfairly dumping their products in the American market. The negotiations have been cast as an early test of the tenor of bigger trade talks pending: renegotiation of the North American Free Trade Agreement, which is scheduled to start in August.

Jun 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil markets rose more than 1 percent, pushed up by tensions in the Middle East where top crude exporter Saudi Arabia and other Arab states cut off ties with Qatar, and as signs of falling OPEC supplies tightened the market.
- Gold held steady after hitting its highest in over six weeks earlier, buoyed by disappointing U.S. jobs data that appeared to dilute the prospects for an aggressive string of interest rate hikes in the United States.
- London copper was steady, supported as the dollar weakened following a disappointing U.S. jobs report, while zinc and nickel prices tracked renewed weakness in steel markets.
- Chicago wheat futures rose for a second session, with prices underpinned by forecasts that hot and dry weather could hit U.S. production.
- Joining the chorus of US companies criticizing Trump's decision to abandon the Paris Climate Agreement, Citigroup global public affairs head Edward Skyler writes in a blog post the bank was "outspoken in our support for the US to remain" in the agreement, and is "disappointed President Trump chose to leave." Skyler says the bank remained committed to providing $100B in financing for clean energy, infrastructure, and related tech projects. Previously, CEO Michael Corbat had been among a group of chiefs who signed a letter urging Trump to stick with the pact. In January, Corbat was also among the banks publicly criticizing the president's travel ban executive order.
- Cybersecurity and healthcare experts in a report to Congress call for incentives to retire aging and insecure medical devices. The report, required by the Cybersecurity Information Sharing Act of 2015, makes multiple recommendations to boost cybersecurity in the nation's $148B medical device market. New incentives could be similar to the 2009 "Cash for Clunkers" program, which offset the cost of new cars with federal vouchers for drivers who traded in older, less-fuel efficient autos, the report says.
- Hedge funds and other speculative investors cut bullish bets on the dollar to their lowest level since mid-September in the week through May 30, Commodity Futures Trading Commission data shows. Bullish dollar bets fell to $7.9B this week from $8.9B the week earlier. Investors have lately been unwinding their bullish dollar bets, which totaled $26B at the start of the year, amid uncertainty over the US economy and President Donald Trump's stimulus plans. In other currencies, investors added to bets on a stronger euro.
- A new foreign-exchange system unveiled by Venezuela's cash-strapped government this week officially devalued its bolivar currency yet another 64%. President Maduro had presented the new measure as a solution to the country's chronic dollar shortages that have led the local currency's value into a steady free fall. But the system in its first week appears to be more of the same: a discretionary and opaque method of dollar distribution that appears unlikely to satisfy the needs of the crippled economy. The government sold less than $30M in its first hard-currency auction.
- The US manufacturing sector shed 1,000 jobs last month, the Labor Department reports, breaking a five-month streak of factory employment expansion. A weakening automotive industry and a still-high trade deficit are colliding with the enthusiasm for manufacturing that accompanied the Trump administration into office in January. "While the administration has initiated several trade reviews that could level the global playing field, they have yet to bear fruit," says Scott Paul, president of Alliance for American Manufacturing, a lobbying group with ties to the United Steelworkers Union. Workers and company executives alike continue to wait for the president to follow through on pledges to invigorate domestic manufacturing with more spending on public infrastructure and pro-employment tax reforms. Paul says these initiatives are beginning to look like "a fading possibility."
- The Justice Department said the executive branch can ignore congressional requests for information made by members of the minority party, in an internal opinion released Thursday that gives the Trump administration legal justification to withhold records from Democrats seeking to conduct their own inquiry into Russia-related and other matters. The Justice Department's Office of Legal Counsel, a unit that answers legal questions for government agencies and the White House, said congressional authority to oversee the executive branch may be exercised only by committees and subcommittees controlled by the party in power. Democrats have been sending White House and executive branch agencies letters on a near-daily basis on issues ranging from the Russia investigation and ethics issues to health care and environmental concerns.
- Oil prices are 3% lower since Trump said the US is leaving the Paris climate change deal, which begs the question: Is this why oil companies like ExxonMobil and ConocoPhillips wanted the US to stay in the accord? The conventional wisdom view was XOM, COP and others wanted the US to stay in the accord because they recognized climate change was real, and wanted the US to have more sway in global decision-making on fossil fuels they profit from. But maybe they just feared a reduced focus on renewables and climate change, combined with increased oil pumping, could keep oil prices low, hurting company's profits even more.
- Blue Cross and Blue Shield of Oklahoma has filed to offer Affordable Care Act plans in the state for 2018, according to the Oklahoma state insurance regulator. The insurer's moves are being closely watched because Blue Cross is the only ACA insurer left in Oklahoma, after others exited. Blue Cross parent Health Care Service Corp. earlier this year said it hadn't made final decisions about its ACA exchange footprint. Many insurers are struggling to make calls about participation amid uncertainty about the ACA's future. Regulators are worried about the possibility of bare regions around the country, where no ACA plans will be available. Already, 25 counties in western Missouri are likely to be in that situation, after Blue Cross and Blue Shield of Kansas City said it doesn't plan to offer ACA plans next year.
- Under Armour chief executive Kevin Plank criticizes Trump's withdrawal from the Paris Climate Agreement, saying "climate change is real" and that "we at Under Armour are disappointed by the administration's decision." The sportswear executive came under fire in February after expressing support for Trump, who he called an asset to the nation as a business leader in a television interview with CNBC. Plank has previously participated in a White House summit of manufacturing executives with the Trump administration. UAA didn't immediately respond to questions regarding whether Plank's disagreement with the Paris withdrawal would affect his decision to meet with Trump in the future.
- The Trump administration's decision to exit the Paris climate accord may encourage companies to postpone the business decisions needed to adjust to future needs, and will likely have negative economic implications, says Jens Peers, chief investment officer, sustainable equities and fixed income, at Mirova, an asset management company owned by Natixis Asset Management. Other countries could choose to add a carbon tax on US imports, making investments in any export-orientated production capacity potentially less attractive, Peers says. In addition, research and development spending on low carbon solutions may slow in the US, which could put US companies four or more years behind those of other nations if the economic model really goes low carbon for climate or financial reasons, he says.
- President Trump isn't the only US leader with a beef against Germany. Energy Secretary Rick Perry says he doesn't appreciate being lectured by Germany about the Paris accords on climate change when the country is pulling out of nuclear power and in some cases replacing it with coal-fired power. At a recent meeting in Rome, "the Germans were very adamant about Paris and staying in Paris, yet their emissions are headed in the wrong direction. They're taking nuclear plants off, they're backfilling with coal-burning plants," says Perry in a WSJ interview.
- Energy Secretary Rick Perry wants four nuclear reactors under construction in Georgia and South Carolina by Southern Co. and Scana to be completed. But he says it's the job of Toshiba and its US nuclear unit Westinghouse Electric, currently under chapter 11 bankruptcy protection, to make it happen. In a WSJ interview, Perry declines to put pressure on Toshiba, saying "I shouldn't be telling them how to run their company." He refrains from turning the matter into a political issue, saying he has had good talks with Japanese officials and "everybody's appropriately focused on it."

Jun 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil prices dropped amid worries that U.S. President Donald Trump's decision to abandon a global climate pact could spark more crude drilling in the United States, stoking a persistent glut in global supply.
- Gold fell to hit its lowest in a week, with stock markets climbing and the dollar firming after upbeat U.S. private sector job figures appeared to boost the prospects for an interest rate hike this month.
- Copper and nickel prices inched down, undermined by concerns over weakening demand and oversupply.
- Chicago wheat futures lost more ground with the market poised for its biggest weekly loss since late March as forecasts of dry weather across the U.S. grain belt are expected to boost the harvest.
- The US withdrawal from the Paris climate accord may have handed China an unprecedented opportunity to lead global climate affairs, says Wood Mackenzie principal consultant power and renewable Frank Yu. "We are going to see closer cooperation between China and the European Union in accelerating the energy transition into a low-carbon economy," says Yu. China would accelerate the development of its national carbon trading market, while lending more support to climatically-vulnerable countries, he adds. Many US companies would also likely relocate their renewable technology centers to Asia, a move that could lead to the cost of renewables falling faster in Asia and displace dirty fuels such as coal, Yu says. He adds that green capital funds are also likely to sharpen their focus on Asia, benefiting nations like India, Indonesia and Vietnam in meeting their renewable goals.
- BlackRock CEO Laurence Fink also disagrees with Trump's decision to withdraw the US from the Paris climate accord but will remain a part of an administration's advisory forum Trump has turned to for advice on policy and economic matters. "I believe there is the potential to have a positive impact," with Fink adding in a statement that "I do not agree with all of the President's policies and decisions, including today's announcement." Earlier this year, BLK said the disclosure of climate risks would be among its key engagement priorities with executives. The world's biggest money manager was among the large investors which earlier this week backed a shareholder proposal at Exxon that called for the company to share more information about how climate change and regulations could impact operations.
- Tim Cook has joined the chorus of business executives criticizing Trump's decision to withdraw from the 2015 Paris Accord. "Climate change is real and we all share a responsibility to fight it," he said in a note to Apple employees obtained by WSJ. Cook added he spoke with Trump on Tuesday and encouraged him to keep the US in the climate agreement.
- Australian mining and energy giant BHP Billiton adds to a chorus of companies expressing disappointment at the U.S. decision to withdraw from the Paris climate accord, but adds the move doesn't impact its long-held support for the agreement. It says the Paris deal provides a solid foundation for a global response to climate change. "We have been clear in our actions and commitments," says a spokeswoman, adding BHP believes the dual objectives of limiting climate change and providing reliable and affordable energy are essential to sustainable development.
- Agricultural giant Cargill calls President Trump's move to pull the US out of the Paris climate accord "extremely disappointing," and says its own efforts to address climate change and emissions will continue. "Exiting international accords like the Paris Agreement will negatively impact trade, economic vitality, the state of our environment, and relationships amongst the world community," says Cargill CEO David MacLennan. Cargill, sometimes under pressure from environmental groups and sometimes in collaboration with them, has taken steps to curb deforestation and generate more power for its food plants from renewable sources.
- Mark Zuckerberg lambasts Trump's decision to quit the Paris climate accord. The move "is bad for the environment, bad for the economy, and it puts our children's future at risk," the Facebook (FB) CEO says in a post that didn't name Trump. Zuckerberg has criticized Trump's immigration policies and isolationist tendencies in the past.
- Investors concerned the Trump administration's decision to withdraw from the Paris Agreement may signal "further anti-renewable action," may want to invest in solar and wind companies with global exposure to dampen domestic risk, says Garvin Jabusch, chief investment officer at Green Alpha Advisors, a money manager focused on investing in solutions to climate change, resource scarcity and other systemic risks to the global economy. "Stepping away from the accord now puts the US at a disadvantage four years down the road when the next set of Paris negotiations take place," Jabusch says. "It also threatens the long-term prospects of US businesses." Despite the decision to withdraw, however, wind and solar will remain a driving force in the nation's energy development, he says.
- Labor Secretary Alexander Acosta says removing the US from the Paris climate accord will support domestic manufacturing employment. "The US's withdrawal from the Paris climate accord is this administration's bold commitment to promoting pro-growth principles and rebuilding America's manufacturing base, which was under siege by the Paris accord," he says. Manufacturing was an important source of job growth early in the recovery, but gains have slowed sharply. Manufacturing employment rose just 0.3% in April compared to a year earlier, versus a 1.6% increase in overall US payroll. May figures will be released Friday. AFL-CIO President Richard Trumka denounced the move, calling it "a decision to abandon a cleaner future powered by good jobs."
- Sheryl Sandberg is a little behind on her reading. The Facebook COO was asked to respond to comments by former Democratic presidential candidate Hillary Clinton about fake news on the social network during last year's election. Her response? "I haven't seen the transcript (so) I can't react to the specific comment." Sandberg, one of Clinton's most ardent backers, adds FB is doubling down on fighting fake news and users don't want those stories on the social network.
- Trump says the US will withdraw from the 2015 Paris climate accord, citing disadvantages to US workers and the blocking of the development of "clean coal" technologies. In response to the announcement from the White House, World Coal Association CEO Benjamin Sporton says, "this decision is the result of a failure to build a genuine coalition on climate action that recognizes the role of all technologies, including low emissions coal, to achieve climate objectives." However, in the US coal has been primarily edged out by innovations in shale oil drilling that have unlocked an abundance of cheap natural gas, driven down energy prices and forced several coal producers out of business.
- In President Trump's remarks as he pulls out of the Paris Accord he avoids altogether the debate over whether climate change is a real problem, or just a "hoax" as he once called it. Instead, he frames his decision around the fairness of the deal itself, using the same type of language he's used regarding trade deals like NAFTA. "The bottom line is the Paris Accord is very unfair at the highest level to the United States," Trump says. For example, he says India makes its participation in the Paris deal "contingent upon receiving billions and billions and billions of dollars in foreign aid from developed countries," while China can do "whatever they want [in terms of emissions] for 13 years. Not us."
- Trump says the US will withdraw from the 2015 Paris climate accord, which is aimed at curbing greenhouse-gas emissions, believed to be a key driver of climate change. But Trump says the US will try to negotiate a deal that "is fair to US workers." Trump says the current agreement "blocks the development of clean coal in America."

Jun 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)

- Oil futures rose from a three-week low touched the previous session, buoyed by expectations the United States could pull out of a global climate accord and by a report that showed U.S. crude stockpiles had fallen more than expected.  
- Gold held steady, after hitting a five-week high in the previous session, supported by geopolitical tensions and a weaker dollar, but expectations the U.S. Federal Reserve will hike interest rates this month weighed on prices.  
- Nickel prices fell further to hover around 11-month lows, dragged down by worries about oversupply and fears of tepid demand from steel mills in top metals consumer China.  
- Chicago soybean futures edged higher, rising for a second session as a port strike in Argentina threatened to disrupt supplies from the world's third largest exporter of the oilseed.
- The Australian dollar tumbled on Thursday after a private survey showed China's manufacturing activity unexpectedly shrank in May, casting a cloud over the global economic outlook.
- Brazil's political turmoil made a major appearance in the central bank's rate decision today. The Selic benchmark rate was cut to 10.25% from 11.25%, extending a cycle that began in October. But now that President Michel Temer could be ousted pending an electoral-court decision coming up next week, markets fear for his fiscal-reform agenda, which is key to tame long-term inflation, economists say. In a statement, the central bank says "high levels of uncertainty regarding the evolution of reforms and adjustments in the economy can have detrimental effects on economic activity."
- Elon Musk, CEO of both Tesla and SpaceX, threatens to quit White House advisory councils if President Trump decides to leave the Paris Agreement on climate change. "Don't know which way Paris will go, but I've done all I can to advise directly to POTUS, through others in WH & via councils, that we remain," Musk says on a Twitter post. Asked what he would do if the president decides to leave the accord, Musk responds, "Will have no choice but to depart councils in that case." While Musk has faced past criticism for working with the White House, he has said he wants to use the position to advocate for his point of view with President Trump.
- The Fed's latest beige book report notes worker shortages "across a broadening range of occupations and regions." One point of interest from the San Francisco Fed: "Recent changes in immigration policy created substantial labor supply shortages for low-skilled workers in the agriculture sector; as a consequence, some growers discarded portions of their harvest."
- ​From stalled tax reform to an uncertain geopolitical landscape, there are plenty of reasons for companies not to do deals. But corporate chiefs "still feel pressure to grow and position themslves, and M&A is an important part of that," Goldman Sachs Co-Chief Operating Officer David Solomon says. "CEOs by nature have to act. They have to take the current environment." He says internal GS data about the M&A pipeline "feels a little bit better the last month or two than it did in the beginning of the year." Global M&A is about flat YTD at $1.3T, down about 11% in the US. GS is the top-ranked adviser, landing on 140 deals worth $340B, according to Dealogic.
- A shareholder resolution seeking to pressure Exxon into disclosing more about how its assets would be affected by climate change passed with 62% of votes cast, a strong signal that major asset managers are concerned and interested in the topic. More than two thirds of investors approved XOM's pay practices, and the company's directors were elected with 93% of the vote.
- As President Donald Trump leans toward unwinding emissions reductions the US agreed to as part of the Paris climate accord, there's already backlash from environmental advocacy groups. Public Citizen says such a decision would be "an epic blunder," while the Sierra Club's executive director calls it a "historic mistake." Bradley Campbell, president of the Conservation Law Foundation says it "puts the US on the wrong side of history and at odds with nearly 200 other countries that understand the threat climate change poses." The president tweeted earlier today that he would announce his decision on the accord over the next few days.
- Canadian Defense Minister Harjit Sajjan is latest Canadian official to condemn Boeing's  decision to push the Commerce Department to launch a trade probe against Montreal's Bombardier on allegations it received government subsidies. In response to the Commerce probe, Canada says it's reviewing potential deals with BA--most notably the possibility of purchasing 18 of the company's F/A-18 Super Hornet jets. The BA aircraft would help meet Canada's short-term air-force needs given an aging fleet. "The interim fleet procurement requires a trusted industry partner," Sajjan says in prepared text of speech delivered at a Canadian defense and security conference. Pursuing trade action against Bombardier "is not the behavior we expect of a trusted partner. We call on Boeing to withdraw" its trade complaint, Sajjan adds.
- Exxon Mobil reiterates its view of how climate change will affect its business, saying even under scenarios where carbon emissions are severely restricted, $11T in oil and gas spending will be required. In such a scenario, XOM believes it is positioned to win out over other companies. Climate activists have questioned that conclusion, also reached by other big oil producers, noting it can't be true that everyone will be the "last man standing."
- Defense analysts have struggled to interpret how the State Department managed a total $110B in potential arms sales to Saudi Arabia which was announced during the recent presidential visit. But Lockheed Martin CEO Marillyn Hewson gives some insight. Hewson tells an investor event that the $28B in potential business for her company includes support deals stretching out 30 years. "If we saw everything... we could see new business potential of up to $28B over the life of these programs," she says. "None of it will be really near term."
- President Trump says in a morning Twitter message he'll be deciding soon on the Paris Agreement, a landmark climate accord among nations that was signed by former President Obama to reduce carbon emissions. "I will be announcing my decision on the Paris Accord over the next few days. MAKE AMERICA GREAT AGAIN!" he says. The tweet comes after a report earlier in the day from new outlet Axios that cited sources saying Trump had decided to withdraw from the accord. If the US were to pull out of the accord other nations may eventually follow, some say. But other analysts say it would only rally stronger support for the deal among other nations, leaving the US as a "rogue" on climate change.
- Finance chiefs at multinational firms are altering their tax plans or delaying decisions amid potential changes to the U.S. tax system, a survey by Taxand, a global network of tax advisory firms, has found. In a survey of finance chiefs and tax directors during a conference in Frankfurt, 55% said U.S. reform plans have resulted in them changing course or postponing decisions. According to the participants of the survey--a total of 136 finance and tax chiefs working at  multinational companies in the Americas, Europe and Asia--the transition towards a new tax system to be the most challenging issue international firms face.
- The pound has found some support in Asian trading following a selloff stoked by the latest YouGov poll in the UK showing the Conservatives' lead having shrunk further ahead of next week's election. A YouGov poll last week had a sharply narrowed gap between the Tories and Labour, which sent sterling lower then as the result raised questions about how big PM May's party may win. She called the snap vote amid presumptions that a new election would strengthen her hand in Brexit negotiations. Instead, it appears the reverse may happen. That, as a result, has some of the recent bullishness regarding the pound getting unwound. It's broadly 0.3% lower, but the pound has rebounded some in Asia after the initial post-poll selloff about 3 hours ago.

May 31 - Trump is pulling U.S. out of Paris climate deal (Axios.com)
- U.S. President Donald Trump has decided to withdraw from the Paris climate accord, Axios news outlet reported on Wednesday, citing two unidentified sources with direct knowledge of the decision.
- Trump who has previously called global warming a hoax, refused to endorse the landmark climate change accord at a summit of the G7 group of wealthy nations on Saturday, saying he needed more time to decide. He then tweeted that he would make an announcement this week.
- Fox News also cited an unidentified source confirming the pullout.
- The accord, agreed on by nearly 200 countries in Paris in 2015, aims to limit planetary warming in part by slashing carbon dioxide and other emissions from the burning of fossil fuels. Under the pact, the United States committed to reducing its emissions by 26 to 28 percent from 2005 levels by 2025.
- Axios said details of the pullout are being worked out by a team that includes EPA Administrator Scott Pruitt. The choice is between a formal withdrawal that could take three years or leaving the U.N. treaty that the accord is based on, which would be quicker but more extreme, according to Axios.
- The decision to withdraw from the climate accord was influenced by a letter from 22 Republican U.S. senators, including Majority Leader Mitch McConnell, calling for an exit, Axios reported.
- Former President Barack Obama, who helped broker the accord, praised the accord during a trip to Europe this month.