Forex & Commo Market News
Mar 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- With the global economy improving, it will only be a matter of time before investors shake off the disappointment over the GOP's health-care failure, says Masayuki Kubota, chief strategist at online brokerage Rakuten Securities. The latest data suggest world trade recovery continued in 2017, with many indicators pointing to even-more-robust growth. "The markets will go up again once they retrain their focus on Trump's economic-stimulus package," says Kubota.
- Canadian bonds rose alongside US Treasurys today amid mounting uncertainty stemming from the failure of the US House to pass healthcare reform last week. Canada's two-year bonds were yielding at 0.730% from 0.751% on Friday, according to electronic trading platform CanDeal. The 10-year bond was yielding at 1.606% from 1.643%. There was little out in Canada today to spur domestic activity as investors focused on the growing demand for global safe haven assets amid mounting skepticism about President Trump's economic policies. Overall, Canadian government notes outperformed US Treasurys beyond the two-year note.
- The NZD/USD trades in a narrow range between 0.7038-0.7068 early in Asia, but is weaker against EUR, JPY and GBP. The euro continues to find strength with improving data such as the March IFO business climate index pushing higher in Germany and against the USD which has been treading water since Trump pulled his repeal of Obamacare. Although UK PM Theresa May is expected to formally trigger Article 50 later this week, the GBP is benefiting from similar dynamics to the euro, with the NZD/GBP trading at 0.5609.
- Two hospital companies were the S&P 500's best performers today, gaining after the failure of a House Republican bill to gut the Affordable Care Act. HCA Holdings (HCA) climbed 5.2% and Universal Health Services (UHS) was up 3.4%. Some analysts had pinpointed hospitals as among the companies most at-risk if the bill were to be passed, given the potential for a drop-off in insured patients. After the bill's failure last week, Mizuho lifted its ratings on HCA and UHS to buy. The analysts wrote: "With the failure of the GOP to move the ACA repeal out of the House, our covered hospital companies have moved into a nicer, friendlier neighborhood."
- Potential changes to the US tax code could result in some real estate investment trusts choosing to terminate their REIT status and be taxed as traditional corporates, said Fitch Ratings in a report. "Lower corporate tax rates arguably reduce the appeal of the REIT tax election, particularly if companies are allowed to fully expense capital costs during the year of investment," said Fitch. This would allow REITs to replicate the tax benefits of being a REIT without having to comply with the mandatory dividend distribution requirements (90% of their earnings to shareholders), which would weaken their credit profile, added Fitch. That said, companies are unlikely to make hasty decisions based on rules that could be reversed in a subsequent administration.
- Trump signs a bill to overturn an Obama-era regulation that sought to require firms bidding on government contracts to disclose past labor-law violations. The president says overturning the rule will help boost job creation. The yet-implemented regulation would have required companies bidding on federal contracts to disclose labor-law violations they have had for the three years before placing a bid. Those violations could include failures to pay overtime wages, hiring discrimination, safety violations or a refusal to collectively bargain with workers. Business groups have criticized the rule, calling it the "blacklisting" regulation because of the risk employers face of being barred from future contracts. The rule was never implemented because a federal judge temporarily blocked it from going into effect in October. Canceling the regulation is part of the Republican-led Congress's effort to pull back some rules passed by the Obama administration through the rarely-used Congressional Review Act.
- Qatar Airways Chief Executive Akbar Al Baker, often quick to speak out against those attacking his rapidly growing airline, isn't doing so over last week's US electronics ban. The ban has drawn fire by some arguing it targets Gulf airlines. Al Baker doesn't sign on. "No, I don't think it is targeting the Gulf airlines," he says, calling it a security issue the carrier is fully complying with and won't fight. So far it doesn't seem to be affecting business, he says, though it is in the early days.
- Livestock futures fall after countries including China and Chile lifted their restrictions on Brazilian meat imports over the weekend. Slaughter and meat production numbers are above last year's levels, weighing on futures as traders prepare for more supply in the domestic market. Meatpackers slaughtered an estimated 613,000 last week, according to the USDA, considerably above expectations. CME April lean hog futures down 1.8% to 66.050c a pound while April live cattle futures fall 0.5% to $1.21450. Boxed beef prices also appear to be coming to the end of their multiweek rally, falling almost $2 to $219.63 per 100 pounds as of Monday morning.
- State revenue forecasts for the upcoming fiscal year call for faster growth than in the current fiscal year, but growth is still weak compared with historical averages, according to a new Rockefeller Institute of Government report. States have been dealing broadly with weak tax revenue due to a range of factors, including low oil prices. Rockefeller Institute says states project median 3.5% FY18 sales-tax growth and median 4.1% FY18 income-tax growth, both slight improvements from FY17. "The overall picture is of continued, but sluggish, growth in fiscal years 2017 and 2018," the report says.
- The CAC-40 closes slightly lower, -0.1% at 5017, as markets continued to give up ground because of doubts about the viability of the Trump administration's economic program. Nokia led the gainers, up 1.5%, followed by hotel group Accor, up 1.2%. Steelmaker ArcelorMittal was the deepest in the red, down 4.9%, amid declines for other steelmakers. On Tuesday, investors will note French housing starts for February at 0800 GMT ahead of US consumer confidence for March.
- The Bel-20 closes slightly lower, down 0.2% and in line with other European markets. Belgian steel companies are hardest hit, following a fall in metal prices and global pessimism over the prospects for President Trump's infrastructure initiative. Steelmaker Aperam SA is the biggest loser, down 3%, followed by steel wire maker Bekaert SA, down 1.6%. Belgian retailer Etablissementen Franz Colruyt is the biggest gainer, up 1%, followed by UCB SA, up 0.8%
- London shares close lower, with the FTSE 100 down 0.6% at 7293.50, tracking equity decline globally after Trump's healthcare reform plans failed Friday and prompting concerns about whether planned reflationary policies will succeed. IG says however that "dip buyers are starting to appear." Amid limited company and economic news, gains for sterling also hurt shares, with miners among the biggest losers. Antofagasta is down 4.7%, Glencore down 4.4% and Anglo American down 3.9%. Babcock shares lose 4.3% after news the firm's Magnox contract with the UK's Nuclear Decommissioning Authority will be terminated at the end of August 2019. Lloyds shares lose 1.6% after a downgrade by Berenberg. Retailers gain, however, led by Next, up 2.5%. Focus this week is on the UK's expected triggering of Article 50 to start Brexit.
- Oil prices rose, supported by a weak dollar, but crude continued to be weighed down by surging U.S. production and uncertainty over whether an OPEC-led supply cut is big enough to rebalance the market.
- Gold prices held steady as investors looked to see if U.S. President Donald Trump would be able to enact promised tax cuts and infrastructure spending, with the dollar drifting from multi-month lows in the previous session.
- London copper held above more than two-week lows hit the previous session, with worries easing over President Donald Trump's ability to push through economic reform.
- U.S. soybeans rose nearly 0.5 percent to move away from their lowest in more than five months as investors looked for bargains, but plentiful global supply kept a ceiling on gains.
Mar 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices are facing more downward pressure as a hiccup in Donald Trump's pro-growth policy agenda has seen investors sit back to reassess the impact on commodity markets, says ANZ Research, but it adds that oil may still find some support as OPEC's compliance committee is expected to recommend extending the production cut deal to the end of the year.
- The dollar's post-election rally "was extremely large and a role of dice really," says Sean Callow at Westpac in the wake of the greenback's ongoing declines. "Markets were looking for a very-speedy resolution to the health-care issue" as a precursor to tax and infrastructure legislation. That's been thrown into question in the wake of voting being shelved for now on health care.
- As Asian traders start the week with fresh doubts about Trump administration efforts to get its initiatives enacted, "the risk is that business and consumer sentiment reverse recent gains," says Martin Whetton, a senior rates strategist at ANZ Research. "For markets, that doesn't sound like an ideal situation." Stocks are broadly lower in what looks to be a risk-off session which also sees the dollar and sovereign-debt yields falling. The Nikkei is now off 1.2% and again threatening to breach 19000. Meanwhile, commodity stocks are weighing in Australia, with BHP Billiton and Fortescue down some 3%.
- Hideyuki Ishiguro, senior strategist at Daiwa Securities, says uncertainty regarding US policy has increased in the wake of the Republicans' failure on health-care reform. As such, market participants are starting to question the Trump administration's ability to implement its policies. "It's not going to be easy, even if they move on to the next agenda such as tax cuts." The Nikkei is set to open down about 1% in minutes, with a weaker dollar also weighing on equities in Japan, while Australia's S&P/ASX 200 is down 0.5% after earlier being off as much as 1% earlier.
- Oil prices fell, pulled down by rising U.S. drilling activity and by doubts whether an OPEC-led production cut initially due to end in mid-2017 would be extended.
- Gold rose over 1 percent to touch a one-month high as the dollar slid after President Donald Trump's failure to pass healthcare reform raised doubts over his ability to push through his economic agenda.
- London copper slipped for a third day as risk appetite fell after President Donald Trump's failure to push through healthcare reform fanned concerns over his ability to realise his economic agenda.
- U.S. soybeans edged lower, hovering close to a five-month low amid ample global supplies of the oilseed and strong South American production.
Mar 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- The House delaying a vote on a Republican health-care plan until Friday is a "slight disappointment" to investors, says Shusuke Yamada, FX strategist with Bank of America Merrill Lynch in Tokyo. Investors are expected to sit on the sidelines, although protracted delay with the bill could have wider implications on other Trump plans, including corporate-tax reform--the real focus of markets. "The sooner they get health care done, the sooner they can start working on the tax plan," says Yamada. "So further delay will make investors only more cautious and skeptical about the prospect of near-term tax reform." The dollar has rebounded on word of the Friday vote plan and Trump saying he's ready to move on if the bill fails, rising 0.4% to Y111.40.
- Sean Callow, a senior forex strategist at Westpac, expects the yen and Swiss franc to further strengthen when the market catches up with worries about whether Republicans can get a health-care bill passed. That vote, originally slated for Thursday, has been put off until Friday. For now, Callow is surprised about the upbeat mood of the markets, especially on the equities (the Nikkei is up 0.6% amid a rising dollar). "There aren't more nerves about the delays." The dollar is up 0.3% during Asian trading at around Y111.30 and 0.2% higher at CHF0.9947.
- The dollar has gotten a bid within the past hour as Asian trading ramps up Friday, with the greenback rebounding some as Trump is ready to move on from health-care reform if a vote now set for Friday doesn't succeed in the House. A Republican bill which intends to undo much of Obamacare was slated to come up Thursday, but support remained questionable. There's been market concern this week whether health care--the first major item to come up in this new legislative session--could bottle up other Trump policy plans, sending risk assets lower midweek. The WSJ Dollar Index is up 0.2% in Asian trading, with the greenback rising above Y111.30 after falling below Y111 in overnight trading.
- The EUR/USD is a tad lower now at 1.0772 (from 1.0783 later Thursday in New York), as investors cautiously await the fate of the US health-care bill. With its upside weighed down after rising on speculation about European Central Bank tapering, the EUR/USD direction "largely depends on the status of the US bill," says Toshiyuki Umekawa, senior vice president of forex division at Mizuho Bank. Republican lawmakers postponed at the last minute a vote planned for Thursday on legislation to overhaul the Affordable Care Act, designed as a replacement to Obamacare. The is first real legislative test of US President Donald Trump's administration. Any failure of the bill would throw into double Mr Trump's ability to implement other bills, particularly infrastructure spending bills and tax cuts. The EUR/USD may move in either direction depending on the headlines coming out of Washington regarding this bill, says Umekawa, who tips the pair's upside resistance at 1.0850.
- The timing of a US health-care overhaul may be increasingly uncertain, but one thing is looking likelier now: more volatility in financial markets. Republicans postponed a vote on legislation to repeal the Affordable Care Act, after last-minute talks failed to garner majority support for the bill. The House vote was seen by investors as a test of the Trump reflation trade. "Financial market volatility is set to rise from the extreme lethargy that has been seen in the past three months," ANZ says. "That means potentially more action in equities, interest rates and currencies, as analysts and market participants attempt to ascertain the real state of play." The AUD/USD was last at 0.7630.
- Among oil folks, the most unbridled, gushing support for Trump comes from small-business operators of so-called stripper wells, who are seeing methane rules and other regulations being rolled back. "Trump has provided an overwhelming sense of relief that while we're fighting OPEC and price wars, we don't have to also fight our own administration," National Stripper Well Association government affairs chief Tim Charters tells WSJ. The group's yearly gala is today and tomorrow in Oklahoma City, and Charters says it's confident "we've turned the corner" on the oil bust amid stable prices and Trump. Stripper wells--15 bpd or less--produce 1M bpd of the US's 9M bpd.
- New Zealand PM Bill English unveils a plan to have 90% of the country's exports covered by free-trade agreements by 2030, bucking a trend toward protectionist rhetoric in countries including the US. Around 53% of NZ's goods are currently exported under free-trade deals with China, Thailand, Singapore, Malaysia and--most-recently--South Korea. NZ wants to style itself as a food bowl for Asian consumers. "We have fewer than five million people but produce enough food to feed nearly ten times that," English says. NZ's plan comes weeks after the US nixed the Trans-Pacific Partnership and the G20 recently dropped a pledge to oppose all forms of trade protectionism. "I am often bemused by opposition to free trade," English says.
- Aviation authorities on both sides of the Atlantic are taking steps to get more in sync with regard to future technical standards designed to usher in widespread use of commercial drones. The European Defense Agency, for example, is urging the region's civilian aviation regulators to adopt standards developed by a US advisory panel. Likewise in the US, technical experts advising the Federal Aviation Administration on collision-avoidance standards are taking steps to share data and work more closely with their European counterparts. Despite such progress, industry officials fret that the Trump Administration's government-wide regulatory freeze may hamper further cross-Atlantic cooperation in many areas, including oversight of unmanned aircraft. The drone lobby isn't powerful enough, by itself, to carve out an exemption from sweeping White House directives to curtail the flow of new regulations, according to veteran lobbyists and former high-ranking American aviation regulators.
- The CBOE Volatility Index, or VIX, closed above 13 today for the first time after 55 sessions, breaking an unusually subdued spell for the gauge. The index--based on options prices on the S&P 500 index--is still at lows, closing at 13.12 today. Stocks fell today as the House of Representatives postponed a key healthcare vote.
- US stocks dipped into negative territory in the last half hour of trade after House Republicans postponed a planned vote on the health bill. Progress on the bill, slated to replace the Affordable Care Act, is being widely watched by investors and traders as a barometer for President Trump's ability to push through other policy changes like tax cuts and deregulation. S&P 500 down 0.2%, Nasdaq Composite off 0.2% and Dow Jones Industrial Average down 0.1%.
- As the spectrum auction concludes next month, industry watchers and advisers expect telecom M&A to kick off. Parties involved in the current auction are banned from speaking to one another about deals, but once the auction ends, they are able to strike up deals. "We believe a recent shift towards unlimited data plans will create the need for more capacity and support M&A," says a report from MarketScope Advisor. The report also says that a "reshaped Republican-led Federal Communications Commission will be more supportive of mergers/acquisitions."
- While health care sucks up the most Washington oxygen, another Obama-era rule is on its way to the ash heap as Senate votes to roll back last year's FCC internet privacy rule. The joint resolution, which rescinds the last administration's rule making broadband providers ask for permission before collecting subscriber data, helps cable providers and incumbents like AT&T and Verizon pursue a bigger slice of the online ad market. Republican FCC Chairman Ajit Pai had already stayed the rules, but expected approval by the House and president would prevent any similar rules from going at any point in the future.
- Oil prices edged up, supported by a fall in Saudi exports to the United States, but overall markets remained under pressure on the back of a world market awash with fuel.
- Gold prices edged lower against a backdrop of a rising dollar as markets waited to see whether U.S. President Donald Trump succeeds in pushing through healthcare reforms, viewed as a potential bellwether for his ability to impose his economic and political agenda.
- London copper was set to drop 2 percent for the week, with striking union members agreeing to return to work at the world's top copper mine, in Chile.
- U.S. soybeans fell 0.5 percent to hit a four-month low as ample global stocks continued to weigh on the oilseed, which was poised to finish the week in negative territory for a third consecutive week.
Mar 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Asia's high yield issuers are pushing out more deals, undeterred by the Trump-induced volatility seen in recent sessions in global credit markets. Xinjiang Guanghui, a Chinese energy and property firm, is out with a $200-$300 million 3-year bond shown at a yield of 8%. Zhuhai Huafa, also a mixed-purpose firm with a focus on property, is in the market with a $100 million 3-year tap of an existing deal, indicated at 3.75%. The China/Macau hotel and property firm Emperor International is marketing a 5-year deal, with a tranche in Hong Kong dollars (shown at 4.8%) and a tranche in dollars (indicated at 5.25%). Finally, the Indonesian agri-food concern Japfa Comfeed is seeking $100 million via a 5-year bond indicated at 5.875%. roceeds will refinance a 2018 bond with a 6% coupon.
- The governors of California, Oregon and Washington have issued a joint statement voicing their opposition to a possible Trump executive order which would call for the withdrawal and rewriting of the Clean Power Plan, an Obama policy to cut greenhouse-gas emissions. "Any attacks on the Clean Power Plan would move our nation in the wrong direction and put American prosperity at risk," the trio contends. "We will assert our own 21st-century leadership and chart a different course."
- Japanese stocks may struggle to gain due to continuing skepticism over U.S. President Donald Trump's ability to push through his legislative agenda, after the Japanese stock benchmark index posted the biggest loss since Nov. 9. Despite a modest recovery in the S&P 500 and Treasury yields, the dollar remained under pressure, which tends to be negative for Japanese stocks. Nikkei futures ended Wednesday's night session at 18920, compared with the earlier day-time close at 18910. Nikkei ended down 2.1% on Wednesday at 19041.38.
- Bank of Nova Scotia warned prior to the release of Canada's 2017 budget plan there would be little to get market participants excited. The firm's call proved prescient. Little in the budget changed the overall macro picture for Canada. The bulk of the budget was dominated by small measures, with tens of millions allocated over a number of years. In many ways, this was a placeholder budget for the Liberal government, until it gets a clearer sense where the Trump administration moves on trade and tax relief, and whether senior Republicans in Congress succeed with their proposed border-adjusted tax--which would hit Canadian exports and pose a blow to the trade-dependent economy.
- Bank stocks are losing steam as the "Trump trade" starts to unwind. Five of the six biggest US banks lost ground today, and Goldman Sachs (GS) shares fell 1% to $231.07. The exact triggers aren't clear, but a flattening of the yield curve -- with 10-year Treasuries yielding less relative to shorter-term debt -- is never kind to bank stocks. Plus, congressional Republicans are struggling to find enough support within their own ranks to pass a health-care bill, raising questions about their ability to push through tax reform, financial deregulation and other things that had sent bank stocks soaring after the election. KBW Nasdaq Bank Index is off 5% this week.
- A representative of the National Center for Public Policy Research, a conservative think tank, took Starbucks to task for its promise to hire refugees, citing a study that showed brand perception levels dropped in the wake of the pledge, and criticized the company for being too political. CEO Howard Schultz said the company's stance on social issues "isn't based on politics but on principles and core beliefs" and that there is "zero evidence" of any effect to the brand or business "as a result of being compassionate."
- A big question this year is whether the equity-market euphoria and bond-market skepticism reflect the correct read on US policy risks. The equity market finally blinked Tuesday as difficult health-care negotiations continue to delay tax reform, says BofA Merrill Lynch Global Research. It's unclear for now whether that warrants a more defensive credit stance, but volatility should be higher going forward, BofA says. "We should see more days like" Tuesday, when the Dow fell 1.1%, its biggest percentage point decline since October, it says. A stock-market correction is the biggest near-term risk to high-grade spreads, and one could be triggered by a rise in US policy risks, particularly related to tax reform, it says.
- Eurozone funds have continued to register net outflows in March as political uncertainty weighed during the month but the outcome of the Dutch election and the widening gap between French presidential candidates Emmanuel Macron and National Front leader Marine Le Pen could curb outflows from the eurozone, say BBVA analysts. BBVA also says investor appetite for emerging markets and U.S. has returned. For emerging markets, the upward trend in commodity prices and the cautious tone of U.S. Fed officials in tightening process has been supportive of inflows, even though last week oil prices dropped and the Fed's hike diminished the appetite. As for the U.S., inflows remained in both equity and bond funds, BBVA says.
- The alcohol industry is lobbying to stop Utah Gov. Gary Herbert from signing a bill lowering the state's legal threshold for drunken driving to a .05 blood-alcohol level from .08. Utah would be the first state to do so. The American Beverage Institute, an industry group, has opposed similar proposals in Hawaii and Washington state as part of a broader effort to push back against what the group has described as "an unprecedented and coordinated attack on moderate drinking." The group plans to run an ad in USA Today later this week, saying, "Utah: Come for Vacation, Leave on Probation."
- Alexander Acosta, Trump's nominee for Labor Secretary, pledges to follow the White House's order in reviewing a landmark retirement-advice rule, stressing that specific standards laid out in the president's executive order determine the Labor Department's approach to the rule. Speaking at a Senate confirmation hearing, Acosta says those three criteria are: Whether the rule reduces investment options, increases litigation and financially affects retiree investors. The Labor Department has proposed to delay the implementation of the rule from April 1 to give the department time to review the Obama-era regulation. Trump's executive action directs the department to repeal or revise the regulation--known as the fiduciary rule--if any of the criteria laid out in that executive order is found, Acosta says. "So that criteria really regulates and determines the Department of Labor's approach to the fiduciary rule," he says.
- Bank of Canada Deputy Governor Lawrence Schembri highlighted how the US shift toward protectionist trade policies could raise inflationary pressures in Canada. Schembri said during a speech in Vancouver on Wednesday that "inward looking" trade policies would dampen global trade and either directly or indirectly reduce Canadian exports and business investment. "Canada, however, has resisted this protectionist tilt," he said. Schembri points to recent changes to immigration policy and a new free trade agreement with the EU as positive steps aimed at increasing growth over the medium-to-long term.
- BMI stays bullish on the Mexican peso. After the peso strengthened around 15% to the US dollar since late January, Fitch believes the negative sentiment towards the currency in the wake of Trump's triumph in the US election is overdone. "Softening rhetoric towards trade with Mexico and Nafta by Trump administration officials reaffirm our view that Mexico will surprise to the upside this year, even if a trade deal has yet to materialize," BMI says. However, the firm sees some downside risks in the near term, as trade policy uncertainty will persist until the latter part of the year and renewed tensions can't be discounted. The peso is often used as a hedge, making it subject to bouts of financial volatility. BMI maintains its end-year forecast of 19.50 to the US dollar; the peso's currently at 19.08.
- Oil prices recovered from losses chalked up the session before, but the market remained under pressure as bloated U.S. crude inventories and rising output dampen OPEC-led efforts to curb global production.
- Gold prices held below a 3-week peak hit in the prior session, as the dollar recovered from seven-week lows and markets looked to see if U.S. President Donald Trump could push through a healthcare bill.
- London copper crept higher, edging away from two-week lows hit the previous session as broader investor sentiment revived, while disruptions piled up in the zinc market.
- U.S. soybeans edged lower as forecasts for ample global supplies kept the oilseed near a three-month low.
Mar 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- The USD/JPY falls to the level in late November (and briefly hit 111.43 earlier Wednesday), in yet another sign that investors are growing skeptical about a spike in the U.S. yields and dollar on expectations for US President Donald Trump's stimulus plans, says Mizuho chief market economist Daisuke Karakama in a note. Purchasing power parity suggests the USD/JPY should trade within a 95-105, and Karakama says he "can't help feeling" that the USD/JPY will head towards this range. "We are still seeing excessive yen weakness/dollar strength at this stage," he says.
- The AUD/JPY is down 1.8% over the past 24 hours (to 85.49). This reflects a sudden change in market preference for safe-haven assets such as the yen over the currencies of major commodity producing countries the Australian dollar, which are closely linked to global growth expectations. The CAD/JPY is also down 1.2% to 83.43. Skepticism has grown over US President Donald Trump's ability to implement tax cuts and infrastructure projects, which could boost US growth and bolster commodity demand. This as Trump struggles to round up support for a health-care bill in Congress, prompting questions about lawmakers' support for his other, more stimulative, programs.
- Rubber futures slump in both Shanghai and Tokyo amid the broad risk-off trade which developed overnight as aspects of the Trump Trade unwind some. But Gu Jiong, an analyst at Yutaka Shoji, notes as rubber's market is smaller than others, moves are often exacerbated. The Tocom benchmark natural rubber contract is down 4.8% at Y250.3/kilogram; Gu says support stand around Y$245.
- The Aussie dollar's broad gains the past 3 months could be threatened by doubts about the Trump trade, says Greg McKenna at AxiTrader. "If markets are going to unwind the Trumponomics positivity, the Aussie dollar's rally is over" as the currency is seen as a proxy for global growth--specifically China's. It's down across the board in Asia trading, including 0.3% against the US dollar. It's gained 8% the past 3 months against the greenback.
- A proposed border tax by the current administration would drive the price of goods up and consumer spending down, says Kohl's CEO Kevin Mansell. "At the end of the day in my mind, to tell American consumers, that they ought to pay 20% more for things like clothing and home goods, doesn't make any sense to me," he says at the Shoptalk conference in Las Vegas. "I don't think that's a good path at all." He says that any time the cost of goods go up, it reduces demand. President Donald Trump has floated the idea of a border tax for imported goods in an effort to drive more manufacturing back to the US, something retailers have said would be disastrous.
- Twitter is pushing harder on violent extremism. In 2H, TWTR suspended 376,890 accounts for promoting terrorism. This represented about 60% of all accounts suspended for this reason since Aug. 1, 2015, TWTR says in a report. TWTR relied on its internal spam-fighting tools to find about three-quarters of the accounts suspended in 2H, according to the report. Fewer than 2% were dismantled at the request of government officials.
- Skittishness about the implementation of Trump's agenda will remain the focus for markets, and likely weigh on the AUD/USD on Wednesday, ANZ says. House Republican leaders are trying to pass a health bill this week, with Trump warning the GOP that it risks losing seats in 2018 if it doesn't follow through on campaign promises to repeal the Affordable Care Act. "With risk appetite at extended levels it is likely that the AUD will continue to move lower in the near term," ANZ says. "All eyes will be on global equities for a sentiment gauge." The AUD/USD is at 0.7688 early.
- After a brief break, bond yields renew their slides again hitting fresh session lows as US stocks extend a selloff. The 10-year yield falls to near 2.42%, the lowest since the end of February when it traded below 2.4%. With short bets remaining elevated, further short covering is likely to propel the yield lower still as the Trump trade dials back. The yield is 2.423% vs. 2.472% Monday. Dow is down more than 200 points, or about 1.1%.
- The latest Republican tweaks to their House health-overhaul bill wouldn't mean major new effects for health insurers, analysts suggest. The big question remains: what will become law in the end? The picture is still muddy, but some push the safety of companies with limited exposure to the bill's effects, such as Humana and Aetna. JPMorgan thinks "the market remains too complacent about the possibility that Republicans can pass legislation that would materially reduce funding for Medicaid/exchange subsidies." Leerink makes similar recommendations, warning that investors need to worry about companies with big Medicaid exposure, such as Molina and Centene, as well as hospital stocks.
- The FTSE 100 closes 0.7% lower at 7378.34 at the end of a broadly negative day of trading for European stocks. A combination of stronger-than-expected UK inflation figures--released at 0930 GMT--and weaker US stocks has served to drive late sell-offs in Europe. The pound has risen 1% versus the dollar during the course of the day. IG attributes the fall to a cocktail of contributors, pointing to the ongoing spat between Trump and the FBI, a lower-oil-price-driven sell-off in the mining sector, and a Merrill Lynch report highlighting banks as being among the most popular fund manager investments. Wednesday sees Kingfisher results and eurozone current account data, due at 1000 GMT.
- The Trump Administration's broad mandates to roll back regulations across the government are posing unexpected challenges for routine aviation industry sessions to develop technical standards. Notice of meetings to carry out such everyday work must be published in the Federal Register, but in many cases the White House directives have held up those required public notices. As a result, participants at the meetings have been blocked from taking official action on standards ranging from battery safety to wake-turbulence calculations. "We're in uncharted territory," says Karan Hoffman, a manager with the Federal Aviation Administration's main technical advisory organization. A senior FAA official says "I have faith" the confusion and impediments to action will be resolved by the summer. Even high-level FAA policy advisory groups have been bogged down by the regulatory turbulence.
- Today's selloff in the dollar, stocks and commodities has taken the TD Securities Trump Trade Index to its lowest level since August. The index is comprised of ten components that have been sensitive to the political fortunes of President Trump, whose promises of ramped-up fiscal spending have helped boost everything from stocks and industrial metals to the US dollar. Its decline reflects growing doubts about how quickly the White House will be able to push through pledged infrastructure spending and tax cuts, analysts at TD Securities said. Among the Trump trade components in retreat today was the US dollar, which fell to its lowest level since November 11 as measured by the WSJ Dollar Index. Copper was down nearly 2% and the S&P 500 fell 0.7%.
- Oil prices dipped as rising crude stocks in the United States underscored an ongoing global fuel supply overhang despite an OPEC-led effort to cut output.
- Gold prices rose to a three-week high as risk-averse investors dumped equities amid a weaker dollar .
- London copper prices dropped along with other commodities on growing doubts about U.S. President Donald Trump's economic agenda.
- Chicago wheat slid for a third consecutive session, trading near the previous session's six-week low as forecasts for rain improved the prospects for the U.S. winter crop.
Mar 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- The FTSE 100 closes 0.07% higher at 7429.81 at the end of a day that was generally slightly negative for most other European bourses. London stocks close in the green partly thanks to the downtick in the pound versus euro and dollar, which followed the news that UK Prime Minister Theresa May is to trigger article 50 on March 29. Otherwise, it's been a quiet day with few results or data releases. No companies move by 2% or more, although UK banks move lower, and a 1% slip in the price of copper stings miners. Tuesday sees a glut of UK data, with producer-price index figures and consumer-price index data among those in the release.
- Morgan Stanley initiates coverage of Berkshire Hathaway with an equal-weight rating, arguing that "Berkshire's diverse businesses with sustainable competitive advantage should drive superior growth, but this is largely priced in after a 20% post-election run." Few analysts cover BRK despite the conglomerate's massive size because the company gives no special access to analysts and pays no dividends, making it less appealing to some investors. BRK could benefit from fiscal stimulus and tax reform, Morgan Stanley says, adding that a 20% corporate tax rate could boost BRK earnings by 14%.
- Egypt has received its first two oil shipments from Saudi Arabia's state giant Aramco after deliveries were suspended for several months, the country's oil minister Tarek El-Molla says. Cairo will receive another two deliveries towards the end of the month, he says. Saudi Arabia agreed in April to provide Egypt with 700,000 tons of refined oil products a month for five years, but Aramco stopped deliveries in early October amid political tensions between the two countries.
- New York state's attorney general--to date one of Trump's most vocal antagonists--is preparing to escalate his office's litigation against the president's administration. Democrat Eric Schneiderman has hired one of the top public-corruption prosecutors under former Manhattan US Attorney Preet Bharara to focus specifically on issues involving the Trump administration. Howard Master, who prosecuted the Manhattan US attorney's case against longtime New York state Assembly Speaker Sheldon Silver, is expected to work on both continuing and new White House-related matters for the attorney general, as well as on high-level public-corruption cases.
- Heartwood Investment Management says it remains cautious on UK assets, and expects higher inflation to weigh on real income growth there this year. Britain will notify the EU on March 29 that it will begin the process of exiting the bloc, UK Prime Minister Theresa May's spokesman says. That will mark "a period of ongoing uncertainty for UK businesses and markets," says Michael Stanes, investment director at Heartwood, a subsidiary of Swedish bank Handelsbanken. But it may also bring some relief that the process is finally underway, he says.
- Markets may be "too concerned" about the possibility of protectionist U.S. policies, according to David Hussey, managing director at Manulife Asset Management. Recent communications from a senior U.S. official suggest there's no way protectionism is on the agenda, he says, noting any changes will likely be marginal. "A light version of protectionism is most likely...it won't derail the equity story," he says.
- Oil prices rose on expectations that an OPEC-led production cut to prop up the market could be extended, while strong demand would also work to slowly erode a global fuel supply overhang.
- Gold prices edged lower, failing to break a key resistance but hovered near a two-week high hit in the previous session on prospects of a less-hawkish Federal Reserve policy.
- London copper prices fell on technical selling sparked by hopes unions and miner BHP Billiton would hold further talks that could lead to the restart of output at the world's biggest copper mine.
- Chicago wheat futures edged lower, easing for a second session after forecasts for much-needed rains for the U.S. Plains winter wheat crop.
- The dollar was on the defensive in Asian trading, after Chicago Federal Reserve President Charles Evans reinforced the perception that the U.S. central bank won't accelerate the pace of its interest rate hikes.
Mar 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- US lawmakers are pushing for action after a government accountability report found lapses in oversight of antibiotic use in agriculture. Senators and representatives including Elizabeth Warren (D-MA) and Dianne Feinstein (D-CA) wrote to the US Department of Agriculture and the Department of Health and Human Services to ask what steps are being taken to tighten data collection, drug labeling and farm-level investigations of foodborne illnesses. The report concluded that there were lapses in the way those agencies tracked the use of medically important antibiotics in food animals. Antibiotic resistance is considered a major threat to global health, and the CDC said that two million people people a year in the US alone get sick and 23,000 die from antibiotic-resistant bacteria.
- Inflows to US equity fund and exchange-traded funds in the week ended March 15 accelerated to the highest weekly pace since their peak in the week ended Nov. 16 following US elections, but inflows to fixed-income funds remained muted, says BofA Merrill Lynch Global Research. In the latest week, $15.5B flowed into US equity funds, up from $8.7B in the prior week, while just $1.7B flowed into fixed-income funds, up from $1.3B in the prior week, it says. That moderate inflow was due to weaker flows into high-yield and leverage loans, which offset strong flows to high-grade and government bonds, it says.
- University of Michigan says the partisan divide in its consumer sentiment survey remains strong. Democrats had an expectations index of 55.3, signaling a deep recession, while Republicans had an index of 122.4, indicated an era of robust growth. "Optimism promotes discretionary spending, and uncertainty makes consumers more cautious spenders," Richard Curtin, the survey's chief economist, said. "This combination will result in uneven spending gains over time and across products."
- Islamic Republic of Iran Shipping Lines is looking to list on the London Stock Exchange, but the move will likely be shelved as long as the US maintains sanctions against Tehran's missile program. Most sanctions over Iran's nuclear ambitions have been lifted, but a return of Iranian companies to the market for the first time since 1979 is still difficult. IRISL, has placed a $625M order to renew its ageing fleet of container and dry bulk vessels, but it has to spend as much as two times more to obtain the needed capacity to compete as an ocean going operator. IRISL executives are looking to the Milan Exchange as an alternative, but any listing is at least 18 months away.
- The past few months of trade pickup in Singapore could help bring Singapore's 2017 exports to expansion after 4 straight years of decline, but the protectionist threat looms large, United Overseas Bank says. "We are carefully watching the negative impact from the anti-globalization rhetoric that has been fueling developed markets' sentiments," it says, focusing in on the US. The US is the second-biggest destination of goods produced in Singapore and further protectionist measures will only hurt the path of Singapore's export recovery. The comments come after Singapore's main nonoil domestic exports rise 21.5% on year in February, the strongest on-year growth rate in 5 years.
- A border adjustment tax probably won't do drivers any favors, and it may not be good for Republicans either. The border adjustment has been discussed as part of a corporate tax overhaul proposed by House Republicans. If implemented, a border adjustment tax could push oil prices up $10 to $15 a barrel, said Ethan Bellamy, an analyst with Robert W. Baird & Co. "If you get $10 higher WTI overnight, that could send gasoline prices higher and I think that's a threat to Republicans in the midterm election," he said while speaking at DUG Rockies, an oil and gas conference in Denver.
- Who in the Farm Belt wins under the Trump administration's budget proposal to trim about one-fifth of the USDA's annual budget? Stifel analysts think it could be big grain traders like Archer Daniels Midland (ADM). Stifel sees the cuts mainly targeting USDA's statistical capabilities, rather than meat plant inspections and crop research, which could reduce the flow of myriad agricultural data from Washington. And that could work in favor of companies that buy grain from farmers, who get an on-the-ground view into crop conditions and transport factors that can be hard for hedge funds and other financial speculators to match.
- House Agriculture Committee ranking member Collin Peterson (D, Minn.) thinks President Trump just hung farmers out to dry. He's irked by the president's proposal to slash $4.7B from USDA's budget, including cutting staff at the agency's county offices, which help growers navigate a bevy of farm programs. "The good news is this budget will be ignored, as it should be," says Peterson, adding that the budget reflects a lack of understanding about the impact of USDA's programs in the Farm Belt. "I urge the Administration to spend more time in rural America to gain an understanding of how things work."
- House Agriculture Committee Chairman Michael Conaway says that the Trump administration's budget could "hamper some vital work" undertaken for farmers by the USDA. "America's farmers and ranchers are struggling, and we need to be extremely careful not to exacerbate these conditions," the Texas Republican states. Conaway states that the current farm bill saved more than $100B. Discussions surrounding the 2018 farm bill are just getting underway in Washington.
- Oil prices fell, with already-bloated markets pressured by rising U.S. drilling activity and steady supplies from OPEC countries despite touted production cuts.
- Gold prices hit a two-week high as the dollar held near five-week lows reached in the previous session, finding support from the U.S. Federal Reserve's conservative guidance on the path of rate hikes this year.
- London copper slipped on jitters that Beijing would set down tougher measures to cool its housing sector, although trade was thin as markets digested the results of a meeting of G20 financial leaders.
- Chicago wheat hit its highest in a week on concerns over a lack of moisture for the U.S. winter crop.
Mar 17 - Oil prices were little changed in early Asian trade as the market looked for clues on how effectively OPEC production cuts are working to absorb a global supply overhang.
- Spot gold had edged down 0.1 percent to $1,224.90 per ounce.
- London copper was steady, remaining on course to mark its biggest weekly advance since mid-February on a weaker dollar and ongoing mine supply concerns.
- Chicago soybean futures lost ground with the market set for a second week of declines as a record Brazilian supplies hit the market and near-perfect weather in Argentina boosts supply prospects.
Mar 16 - Trump's pick to lead U.S. CFTC unveils major new policy agenda
The top U.S. derivatives regulator laid out plans on Wednesday for a sweeping overhaul of the agency that will include everything from cutting regulation to restructuring the unit that conducts surveillance for market abuses. In a wide-ranging policy speech that drew a rare standing ovation from more than 1,000 industry participants, Acting Commodity Futures Trading Commission Chairman J. Christopher Giancarlo, who was nominated by President Donald Trump as permanent chairman late Tuesday, said it was time for the CFTC to "reinterpret its regulatory mission" by focusing on fostering economic growth, enhancing U.S. markets, and "right-sizing" its regulatory footprint. Click here to read full stories.
Mar 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Earlier dollar declines, which came after an expected U.S. interest rate increase, proved short-lived, as the currency recovered some of its losses in European trade. The Federal Reserve signalled a gradual increase in rates. Analysts said the dollar had fallen in a "buy the rumor, sell the fact" reaction. USD/JPY was last flat at 113.44, having hit a two-week low around 112.91. EUR/USD was last down 0.2% at $1.0711, having risen to a five-week peak of $1.0748. The euro also benefited from relief after the Dutch elections, where Prime Minister Mark Rutte saw off a challenge from the far-right PVV party. GBP/USD was down 0.3% at $1.2259, before a Bank of England decision at 1200 GMT. Overnight, the Bank of Japan left policy unchanged, as expected.
- Increased demand for exports from emerging markets will trump any protectionist measures against them, predicts Jim McDonald, chief investment strategist at Northern Trust. "Stronger growth out of the United States will not come at the expense of emerging-market countries."
- Asked to predict the future, German manufacturers are split over what to expect from Trump's trade policies. But nearly 30% expect they will increase production levels stateside. A survey by Germany's Ifo Institute of 2,700 companies in the German manufacturing sector--46% of which export directly to America--found 45% of those surveyed expect new customs duties. Meanwhile, 37% anticipate other new trade barriers, 36% predict increases to current ones and 28% expect no change at all. (The survey allowed companies to enter more than one response). Of the manufacturers which export directly to America, 28% said they will likely produce more in the US or expand subsidiaries there once new trade policies are in place.
- Farm and agribusiness groups project confidence after officials from 11 organizations met with administration officials, including National Economic Council Director Cohn, on trade. Trump's tough talk on NAFTA and exit from the TPP stoked nervousness among farmers who helped put the real-estate magnate in office. But today's meeting made clear that the administration aims to expand US food and agriculture exports, say the groups--which representing growers and processors of soybean, corn, wheat and other crops. They estimate 95% of the potential customer base for their products lie outside the US.
- Wall Street is anticipating a slew of deals between television station owners if the FCC in a Trump administration seeks to change regulations regarding the size and reach of local broadcasters. One such move is reinstating the so-called UHF discount which would reduce the reach of a UHF station compared to a VHF station by 50%. That would mean broadcasters such as Sinclair Broadcast Group, 21st Century Fox and Nexstar Media Group that own a large amount of UHF stations and are near the national ownership cap that prohibits a company from reaching more than 39% of TV homes, would find new wiggle room. There's debate over whether the FCC or Congress has the power to change the rule.
- Fed Chairwoman Janet Yellen calls the central bank's regulatory calendar "relatively light at this point," in a press conference following an interest rate increase and policy statement. She says the Fed doesn't have a lot of time-sensitive regulations on its docket at present and "there is nothing right now that we need to get out that is a significant rule." Many rules are on hold with the new administration, but her comments could still come as a surprise to those waiting for the specifics of the Fed's large counterparty exposure rule, which the central bank is expected to be finalizing soon. The Fed has been silent on its status, having already taken a series of industry comments since proposing it last March.
- Fed Chairwoman Janet Yellen said that she would look at any proposals put forward by the Trump administration related to a "21st Century Glass-Steagall Act," but since the administration has not put forward any such proposal, she did not see anything "concrete to react to." She did say that postcrisis financial regulations had helped to ensure that the shadow banking system was "appropriately capitalized," and their "management was strengthened." She noted that a lack of a separation between investment and commercial banking at bank holding companies had not been a primary cause of the financial crisis.
- Fed Chairwoman Janet Yellen says the Fed does not currently have any "time-sensitive" regulations that "need to get out." In response to a question about whether the Fed would abide by the requests of some congressional Republicans to refrain from issuing new rules, Yellen says that the Fed has "an obligation to write the rules that Congress dictates in laws that they pass."
- Fed Chairwoman Janet Yellen says she had a brief meeting with President Trump, though she didn't offer any details about what they discussed. Speaking at a press conference following the Fed's two-day policy meeting, Yellen said she had met a couple of times with Treasury Secretary Steven Mnuchin and was introduced to President Trump. "I had a very brief meeting and appreciated that as well," she said of her interaction with Trump. Yellen said she and Mnuchin had "very good discussions" about the economy, regulatory objectives, the work of the Financial Stability Oversight Council and global economic developments.
- To comply with government ethics rules, Donald Trump's cabinet and White House appointees must sell more than $1B in assets, much of which are relatively hard-to-sell holdings such as stakes in private-equity funds. Luckily for fund-stake sellers, such as Education Secretary Betsy DeVos, there's never been a better time to sell second-hand private-equity investments. Once an arcane bargain bin, the market for so-called secondaries has become a hot corner for Wall Street. Investment bank Greenhill estimates there is more than $100B of uninvested cash in secondaries funds. DeVos's for-sale fund stakes, which ethics filings show are worth at least $175M, is right around the average size of secondaries deals last year, according to Greenhill. "There are 100 firms that could purchase this portfolio," says Greenhill's Stephen Sloan, who says the investments should attract wide interest when they are shopped.
- The rate increase announced by the Fed was fully expected, but doesn't necessarily signal a campaign of further hikes through 2017, says Peter Andersen, chief investment officer at Boston advisory firm Fiduciary Trust Company. The Fed will continue to be data dependent, "modeling the impact of future US economic data, but also what's going on in Europe--Brexit progress, and the elections in the Netherlands, France and Germany," Andersen says. Those elections are traditionally outside the Fed's immediate focus, but surprises in Europe could impact the U.S. economy, he says.
- Pacific Alliance, a group of four pro-trade Latin American countries, announced this week they are looking to deepen commerce with other nations by creating associated members, leading to free trade deals. And the first country that could sign a deal with the group could be New Zealand, officials say. "We think the time is right for New Zealand and the Pacific Alliance to do a trade deal," said New Zealand Trade Minister Todd McClay. "We are complimentary economies... New Zealand is very much a stepping stone now to Southeast Asia." The Pacific Alliance includes Mexico, Chile, Colombia and Peru. Mexico's Economy Minister Ildefonso Guajardo agreed that New Zealand would be a good first choice for signing a trade deal with the group.
- President Donald Trump is asking Congress for billions of dollars in new spending for his promised border wall with Mexico and stepped up immigration enforcement, with new money requested for officers, jails, judges and lawyers.The administration's funding request will come in two parts. First, the White House is asking Congress for money for the current fiscal year -- what's known as a supplemental request. That will include $1.5 billion to design and begin building a wall with Mexico this year, officials said. It is also expected to include about the same amount for other immigration enforcement. Then, for the coming 2018 fiscal year, which begins Oct. 1, the administration is asking for more than $4.5 billion in new spending.
- Crude oil prices rose to extend gains from the previous session after official government data showed U.S. stockpiles had eased from record highs.
- Gold hit a one-week high after the U.S. Federal Reserve signaled a cautious stance on interest rate policy this year, pushing the dollar to its lowest in a month.
- London copper hit its highest in more than one week as the dollar dropped after the U.S. Federal Reserve raised interest rates as expected but showed no signs of speeding up its pace of tightening.
- Chicago wheat futures rose for a second session, buoyed by a weaker dollar and concerns over potentially crop-damaging cold and dry weather in the United States.
- The euro stood tall after Dutch election exit polls pointed to a comfortable win by the prime minister over his far-right rival, while the dollar wallowed at a one-month low after the Federal Reserve sounded less hawkish than anticipated on future rate rises.
Mar 15 - Trump to nominate CFTC acting head Giancarlo as permanent chairman
President Donald Trump plans to nominate J. Christopher Giancarlo to lead theCommodity Futures Trading Commission, the regulatortasked with policing the massive over-the-counter derivatives market, the White House said on Tuesday. Giancarlo, a Republican, has been acting chairman of the CFTC since Jan. 20 and was widely expected to be tapped for the permanent position of chairman. He became a CFTC commissioner in 2014.
Mar 15 - Oil prices rebounded from three-month lows after industry data showed a surprise drawdown in U.S. crude stockpiles and as Goldman Sachs put a positive spin on OPEC's compliance with output cuts.
- Gold prices edged up on uncertainty over the outcome of the Dutch elections, while markets awaited clues on the pace of U.S. interest rate hikes this year.
- London copper marked time ahead of the outcome of a U.S. Federal Reserve meeting that is expected to dictate the direction of the dollar, with dissipating concerns over mine supply dragging on prices for the metal.
- U.S. soybean prices rose for the first time in eight sessions to pull away from their lowest in nearly three months, though expectations of plentiful South American supply capped gains.
Mar 14 - Crude oil prices hovered near three-month lows in Asian trading, with investors waiting for key reports and data that may shed light on a supply overhang in the global market.
- Gold prices were steady as investors awaited the start of a two-day U.S. Federal Reserve meeting where the central bank is widely expect to raise interest rates.
- London copper edged higher on expectations of stronger demand for the metal after China, the world's biggest copper user, reported better-than-forecast industrial output data and fixed-asset investment figures.
- U.S. soybean prices dropped to a two-month low, dragged down by expectations for record South American production in a global market that is already amply supplied.
- The dollar inched up against a basket of currencies as U.S. Treasury yields extended their rise ahead of an expected interest rate rise by the Federal Reserve.
Mar 13 - Oil prices dropped to their lowest in three months despite OPEC efforts to curb crude output, dragged down as U.S. drillers kept adding rigs.
- Gold prices inched up on safe-haven demand ahead of elections in Europe, moving further away from 5-week lows touched late last week in expectation of an imminent rise in U.S. interest rates.
- London copper futures rose for a second straight session, propped up by a firmer euro and supply disruption concerns following an indefinite workers' strike at Peru's top copper miner.
- U.S. soybean prices inched away from two-month lows touched in the previous session, though gains were checked by forecasts of ample South American supply.
Mar 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- As the Republican health-overhaul plan threatens the Affordable Care Act's Medicaid expansion over time, analysts at Stifel do a rundown of how many expansion members each Medicaid managed-care company currently has. The counts: Centene has around 1.1 million people, driving an estimated $4.5 billion in premiums. At Molina, it is around 673,000 lives, $2.8 billion in premiums. For WellCare, the counts are 200,000 people and around $720 million in premiums. The Republican bill would dial back federal funding for new expansion enrollees after two years.
- Analysts see a silver lining for Medicaid managed-care companies if Republicans pass their health overhaul--while Medicaid enrollment could shrink, states might increasingly turn to managed-care companies as they seek to hold costs down. The new approach would switch federal Medicaid payments, which go to states, to a per-capita sum. Analysts at J.P. Morgan say "Medicaid HMOs have 2020 enrollment risk that may be offset by longer-term market share acceleration driven by block grants." Stifel favors Centene as "a beneficiary of private sector solution trends already under way in Medicaid."
- Standard & Poor's said "it's difficult to overstate" Medicaid's importance to state budgets and House GOP plans to replace the Affordable Care Act "would result in fiscal strain that would increase over time." States would see less federal Medicaid funding under the proposal, the ratings firm said. For those eligible for Medicaid as a result of the ACA, proposed changes would leave states to find more money to keep them insured or force states to eliminate the coverage, said S&P. Hospital associations said they cannot support the ACA replacement legislation because of risk to insurance coverage.
- Craig Phillips, a former managing director of BlackRock has been named counselor to the US Treasury Secretary overseeing financial policy and regulatory reform, the Treasury Department said. That puts Phillips in a key role in the early days of the Trump administration, when other important Treasury Department posts remain unfilled. Phillips was a donor to Democrats in 2016 but also has become a key advisor to Treasury Secretary Steven Mnuchin, and has experience in Washington having run a government advisory business for BlackRock.
- Fewer people will have health insurance under the House Republican blueprint to replace the Affordable Care Act, a "credit negative" for hospitals, said Moody's Investors Service. Federal Medicaid funding under the GOP proposal likely won't keep pace with the program's costs "forcing states to make changes that would likely be credit negative for hospitals, including lowering payments to hospitals and other providers, reducing coverage or benefits and reducing targeted payments to safety net hospitals," Moody's said. Consumers who get smaller subsidies to buy insurance under the Republican proposal will likely drop coverage, Moody's said.
- PHH, a mortgage lender challenging the constitutionality of the Consumer Financial Protection Bureau, said in a new court filing today that the agency had "many constitutional problems" and must be shut down entirely. Ahead of a re-hearing in May of a high-profile court case, PHH responded to a request from judges to address questions including whether the CFPB's single-director structure was unconstitutional, and if so, how it should be resolved. An earlier court decision declared its independent structure unconstitutional but said it could be remedied by giving the president power to remove the agency's director at will. The US appeals court is scheduled May 24 to re-hear the case, now entangled in a bitter partisan fight over the agency's future.
- Hedge funds and other speculative investors boosted bullish bets on the dollar to $15.6B in the week through March 7, rising from $12.8B the previous week, CFTC data shows. It's the first meaningful increase in long dollar bets since the start of the year, when investors began to doubt the so-called "Trump trade" that had sent the greenback to 14-year-highs after the November election. Investors are growing optimistic on the dollar again as the Fed indicates it will raise interest rates next week. In other currencies, investors added to bets against the euro, Japanese yen and British pound. Speculators remained bullish on the Canadian dollar and Australian dollar.
- The Motor and Equipment Manufacturers Association wants a meeting with US Vice President Mike Pence and other top Trump officials to discuss trade and other policies. The industry group, in a letter to Pence dated March 1, said it "strongly supports the administration's vision of strengthening manufacturing jobs throughout the US." MEMA requested a meeting with Pence "in the very near future," to confer with him on trade issues, tax reform and regulatory streamlining. The North Carolina-based lobbying group also petitioned Commerce Secretary Wilber Ross for a meeting in a separate letter co-signed by 53 parts suppliers, including Delphi Automotive Plc, Denso Corp. and Robert Bosch GmbH.
- Canada PM Justin Trudeau repeated a warning today about a border adjusted tax he gave at the CERAWeek conference last night in Houston. He told reporters, "Extra barriers or impediments to the smooth flow of goods would hurt our businesses, and limit our capacity to continue to be extraordinarly competitive as a North American entity on the world stage." Some market watchers believe Canada could get an exemption from Washington on the proposed levy on imports, once renegotiations on Nafta begin, given the close supply-chain integration between two economies.
- Dow Chemical CEO Andrew Liveris, selected by President Trump to head the administration's manufacturing council, said Trump is acting aggressively to reinvigorate manufacturing in the US. Speaking at the CERAWeek conference by IHS Markit, Liveris said the administration would take executive action next week to further that effort. He also said that managing workers displaced by automation and technology are one of the thornier issues facing the initiative. He cited private investment in re-education for displaced workers and in programs to provide alternative routes for students to a four-year degree as part of the solution. Liveris, who steered DOW to invest in operations around the world, also said globalization had left some workers behind and companies must better integrate them into the global economy.
- US annual budget deficit remained near its highest level in three years during February amid weaker growth in federal revenues. Government spending exceeded revenues by $192B in February. Broader measures show the deficit is rising as government revenues decline and long-term costs associated with an aging population rise. Over the past 12 months, the deficit stood at 3.1% as a share of the economy. A year earlier, that figure stood at 2.2% of gross domestic product. One big factor weighing on government finances is weak corporate profits tied to a sluggish global economy, a depressed energy sector, a strong dollar and other factors. Government revenues declined 1.1% in the past 12 months compared with the prior year while spending rose 3.8%.
- Republican Senators Lisa Murkowski of Alaska and John Cornyn of Texas, states that are major fossil fuel producers, say they believe human activity is having a major impact on climate change, a stance that puts them at odds with the Trump Administration. Scott Pruitt, the newly minted EPA head, said Thursday he did not believe carbon dioxide emissions are driving global warming. "I have no doubt that humans impact the climate," Cornyn said at the CERAWeek conference by IHS Markit in Houston. Murkowski, also at the conference, said climate change has had a dramatic effect in her state. But both senators said the federal government should not mandate emission reductions, but instead allow private sector innovation to address the issue.
Mar 10 - Crude prices inched up after dropping to their lowest in more than three months the session before, pressured by concerns that a global supply glut is proving stubbornly persistent.
- Gold fell below the key level of $1,200 an ounce and was on track for its worst week in four months, pressured by a stronger dollar ahead of the closely-watched U.S. non-farm payrolls report due later in the day.
- London copper steadied after six straight sessions of decline but was on track to log its steepest weekly loss since August after an influx of deliveries into exchange warehouses this week doused near-term supply concerns.
- Chicago soybean futures were poised for a weekly decline, pressured by forecasts of a record Brazilian crop.
Mar 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Emirates Airline President Tim Clark says the airline will go forward with a planned flight starting this month linking Athens and Newark. Some New York and New Jersey lawmakers have appealed to President Donald Trump to block the route. "We are not changing it," Mr. Clark says, adding ""we have breached no terms of the air services agreement that allows us to do that."
- Welcome back to the 1980s. Peter Navarro, director of the White House's National Trade Council, tells The Wall Street Journal in an interview that Donald Trump's administration will push Japan to buy more US-made goods to fix trade imbalances. The remark is almost certain to make waves in Tokyo's policy circle, where many have grown nervous about the possible revival of bilateral trade friction. The memories of it remain fresh in the minds of many Japanese --such as calls in the mid-1980s by Yasuhiro Nakasone, then prime minister, on consumers to each spend $100 on US goods.
- U.S. coal usage has been under pressure for years because of cheap natural gas. It's something closely watched by David Tudor, CEO of the Associated Electric Cooperative, which uses coal to generate much of the electricity it provides its members. He thinks coal will see more competition, particularly from wind turbines, and says many peers already have closed coal-fired power plants. But he also sees a possible reprieve on the horizon given the recent presidential election. "Who knows what's going to come out of the EPA or the Trump administration," Mr. Tudor said while speaking at CERAWeek, an energy conference in Houston. "Maybe we've just gotten lucky ... . Worst case, we've gained four years."
- GE Capital executive David Nason's withdrawal from the race for Federal Reserve Vice Chair in charge of bank oversight leaves big banks still in limbo over who will be their top overseer. Cowen's Jaret Seiberg says the development opened the doors for less pragmatic candidates who might crack down on big banks. KBW's Brian Gardner says Nason was probably sunk because of his ties to "Never-Trumper" former Treasury Secretary Henry Paulson, and Team Trump could still pick a moderate. The White House says it still has "many candidates". Meanwhile, banks will keep guessing.
- A survey shows 34% of Japanese corporate executives expect U.S. President Donald Trump to have a "more positive than negative" effect following his economic stimulus proposals. According to a Nikkei survey conducted Feb. 15-March 3 covering 140 major Japanese companies, the ratio of positive responses, including a solid "positive," rose by 9.6 percentage points from the previous survey, which was conducted before Trump's inauguration. But 36% replied Trump would have a "negative" or "more negative than positive" impact on their businesses. Of a total of 71 companies with operations in Mexico, 94% said there was no change to their plans to invest there.
- With the White House embroiled in various controversies, choosing the next NASA administrator and the top deputy has slid to the back burner. But on both sides of Capitol Hill, Republican lawmakers continue to advocate that Rep James Bridenstine, a GOP member from Oklahoma, get the agency's top job. Sen Ted Cruz, a Texas Republican who chairs a subcommittee with NASA oversight responsibilities, is among those recently talking up such a nomination. Praising the Oklahoma legislator as "a smart, talented and principled leader," Sen Cruz said he would bring "tremendous leadership" to the job. But even the staunchest supporters acknowledge it's hard to read what President Trump ultimately will decide.
- The federal board overseeing Puerto Rico's finances called for emergency spending cuts to correct a cash shortfall. The financial oversight board installed by Congress says that the territory could face a $190M deficit by July and had understated expenses this year by as much as $810M. Money for pensions, schools and police could run out "in a matter of months," the board said in a letter to pro-statehood Gov. Ricardo Rossello. The board urged the governor to put public employees on furlough and slash government contracts. The governor had previously declined many of the board's proposed austerity measures as he seeks to renegotiate $70B in debt.
- Stock market gains over the last few months have been driven more by economic data than any expectations for US policy under the new administration, according to Valentijn Van Nieuwenhuijzen at NN Investment Partners. Levels of activity, improvement in the labor market and inflationary trends are better than we have seen in recent years, while capex and productivity are coming back a little bit, he says. This means stocks should be resilient even if President Trump disappoints on deregulation or infrastructure spending. "We're convinced the rally we've seen in equity markets is not a Trump rally, its an economic data rally related to improved earnings momentum," he says.
- The confirmation hearing for Labor Secretary nominee Alex Acosta is set for March 15, according to the Senate committee overseeing the process. The 1:30 pm hearing will give senators a chance to quiz Acosta, a long-time federal attorney and law school dean, on his views of labor policy. Acosta is President Trump's second choice for the job. Fast-food executive Andrew Puzder dropped out amid personal controversies. The Labor post is among the last cabinet positions left unfilled. If Acosta is confirmed, his agenda is expected to be amending Obama-era regulations, such as the expansion of overtime eligibility and rules governing financial advisers.
- Oil prices climbed after sharp losses the session before, buoyed by strong compliance with touted international production cuts, although a surge in U.S. crude inventories continued to drag.
- Gold prices inched down to the lowest level in five weeks, pressured by an uptick in the dollar ahead of U.S. non-farm payrolls data on Friday.
- London copper fell after solid U.S. jobs data increased the likelihood of an interest rate hike this month and on signs that disruption at the world's biggest copper mine may soon ease.
- U.S. soybeans fell for a fourth consecutive session to hit a two-week low amid expectations of ample South American production.
Mar 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- The confirmation hearing for Labor Secretary nominee Alex Acosta is set for March 15, according to the Senate committee overseeing the process. The 1:30 pm hearing will give senators a chance to quiz Acosta, a long-time federal attorney and law school dean, on his views of labor policy. Acosta is President Trump's second choice for the job. Fast-food executive Andrew Puzder dropped out amid personal controversies. The Labor post is among the last cabinet positions left unfilled. If Acosta is confirmed, his agenda is expected to be amending Obama-era regulations, such as the expansion of overtime eligibility and rules governing financial advisers.
- Private-prison operator GEO Group says it will sell 6 million of its shares as it capitalizes off a share run-up in recent months. GEO shares have grown 87% from before election day through Tuesday. Last month, Attorney General Jeff Sessions revoked an Obama administration directive to gradually reduce the number of contracts with for-profit prison operators, saying it would interfere with meeting the demands of the prison population. GEO is selling its shares at $41.75 per share and would raise about $250.5M. Shares fell 4% to $42.95, still well above the levels they were at before the Obama-administration directive knocked them from about $30 to below $20.
- A report out today from LinkedIn says January and February together were "the strongest consecutive months for hiring since August and September 2015." That finding caught the attention of the White House, with President Donald Trump tweeting it out this morning on his @realDonaldTrump account. "Two months doesn't make a trend, but it seems like the stronger hiring is being driven by elevated business confidence due to the new administration's promises to lower taxes and reduce regulations," LinkedIn said. "It's unclear if this trend is sustainable, or merely a temporary blip on the radar, but we're keeping an eye on it." Labor Department will release its official February jobs report on Friday morning and the ADP private payrolls data is out shortly.
- Is Donald Trump making separation of powers great again? A former top German politician said as much Tuesday night, giving America's institutions a vote of confidence and suggesting that their strength means one shouldn't be too worried about the new president. "With regard to America, I'm not as concerned as others," said Friedrich Merz, a one-time rival to Angela Merkel in her center-right CDU party. Mr. Merz now serves as Chairman of Blackrock in Germany and chairs the Atlantik-Bruecke, a non-profit organization that promotes US-German relations. "The separation of powers in America is working, the media is working," he said. He noted that the FBI had contradicted President Trump, adding that such action would be "unimaginable" in Russia or Turkey. "Separation of powers is made for people like Trump," he quipped. Mr. Merz spoke Tuesday night to a club of journalists in Frankfurt.
- Asian credit markets are seeing some selling Wednesday as traders reconsider the robustness of the Trump reflation trade. "The trend in global credit is profit taking with some concern that people have become too optimistic about the growth outlook in the US, because Trump is getting too distracted," says a bond strategist, referring to Trump allegations that former President Obama tapped Trump's phone calls. The yield on Singapore 10-year government bonds rises 5 basis points, and those for local currency China government bonds gain 1 basis point. The yield on offshore bonds for Chinese e-commerce firm JD.com tightened about 4 basis points after Moody's on Tuesday placed the issuer on review for an upgrade. Citi on Tuesday said it would include Chinese domestic bonds in some of its emerging markets indexes. This is having little impact on bonds as yet, said the strategist, as the inclusion is only expected to take about a year.
- The Singapore dollar is flat against the US dollar as the greenback gave up some of its overnight gains amid cautious trade ahead of Friday's jobs report and next week's FOMC meeting. "We expect good data print to keep USD supported, but further USD upside will require more-concrete details from Trump's fiscal-spending and tax-cut plans and further upside revision to" the dot plot, says Maybank. The greenback is at S$1.4107, versus Tuesday's close of S$1.4109.
- The leader of the nation's largest federation of labor unions used an audience on Tuesday with US President Donald Trump to push for polices aimed at improving workers' wages. AFL-CIO President Richard Trumka said he discussed trade, infrastructure and issues facing workers, including stagnant wages and jobs going overseas. "I also talked to the president about policies that allow Wall Street and corporations to take advantage of workers while lowering wages and stripping workers of rights," Trumka said in a statement released by the federation. The union president was a vocal supporter of Democrat Hillary Clinton last year. But Trump won one-time union strongholds of Michigan, Wisconsin and Pennsylvania in November's election. He has made an outreach to unions since arriving in the White House. The president hosted leaders of construction workers unions in the Oval Office during his first week on the job.
- Oil futures fell in Asian trade after industry data pointed to a potential ninth straight week of inventory builds, renewing concerns about an oversupply of oil despite output curbs by OPEC and non-OPEC members.
- Gold prices inched up, but remained near four-week lows hit in the previous session as expectations for a U.S. rate hike in March gathered momentum.
- The dollar was a touch lower, its modest advance from the previous day bogging down as investors started to take a wait-and-see attitude ahead of Friday's U.S. jobs report.
- London copper climbed as traders took profit on short positions ahead of China trade data, after large inventory flows into exchange warehouses sent prices to a five-week low.
- U.S. soybean futures edged lower, with expectations of silo-bursting Brazilian supplies keeping prices near their lowest in more than a week.
Mar 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Food retailers could reap the most from Trump administration tax policies among companies in the consumer-staples sectors, says CFRA Research. Kroger, Whole Foods and Sprouts all have high effective-tax rates without significant exposure to foreign markets and imports, which the president is targeting. KR's tax rate of 33% is well below Trump's proposed 15% levy on corporate profits, for example.
- A majority of business-travel managers say the Trump travel bans have heightened their awareness of threats during trips abroad. In a poll of 125 corporate travel managers by the Association of Corporate Travel Executives, 55% of respondents said they travel with a greater sense of fear when they leave the US. Some 22% said employees traveling for business have reported delays or harassment crossing the US border since the initial travel ban was issued in January. On Monday, President Donald Trump signed a revised, less ambitious version of the ban that blocks new visas for people living in six Muslim-majority countries and suspends admission of refugees to the US. The ACTE poll was conducted after the revised ban.
- Canadian PM Justin Trudeau plans to dine Wednesday evening in Toronto with executives and board members of BlackRock, the world's largest asset manager, according to an itinerary released by his office. No further details were made available. Trudeau and BlackRock CEO Laurence Fink met roughly a year ago when the Canadian leader was in New York. Fink also has close ties to Dominic Barton -- the McKinsey managing director and Liberal government economic adviser. Trudeau's BlackRock dinner comes as Canada set to unveil 2017 budget plan on March 22. Among the features expected in budget plan is details related to launch of a promised infrastructure bank, which requires capital from private-sector investors to get off the ground. US data indicate investors, much like BlackRock, committed $59B last year to private infrastructure funds.
- Senator Sherrod Brown (D, Ohio) and Congressman Brad Sherman (D, Calif.) reintroduced a bill aimed at allowing Wells Fargo customers who were impacted by the bank's sales practices scandal to sue, rather than being forced into arbitration. Customers typically signed contracts containing clauses requiring them to take complaints to private arbitration instead of court, which can be less favorable to individuals. Legislators pressed the bank to allow customers to sue and in December introduced legislation that would allow them to bypass arbitration. The bill was reintroduced into a new administration. It will work with a new oversight rule from the CFPB to boost protections for consumers. This bill would allow customers impacted by the WFC sales tactics to go to court even if they signed contracts that included arbitration.
- Argentina's economy will be growing by 3% in 2Q 2017 and by 4% by the time mid-term elections take place in October, says Ramiro Castineira, head of Econometrica, an economic research firm. Growth in 4Q "will depend on the results of the election," Castineira says. Such growth would likely favor President Mauricio Macri and his "Let's Change" coalition, which is seeking to expand its minority presence in Congress.
- The discussion over federal tax reform, particularly a border adjustment tax, is being watched closely by ConocoPhillips. COP CEO Ryan Lance, speaking at the CERAWeek energy conference in Houston, said he thinks the Trump administration will facilitate the expansion of the US oil industry, but worries about a border adjustment tax that could disproportionately affect certain sectors, like oil and gas. "You can't have haves and have nots," Lance said. "Don't make us be the ones to pay for it in terms of tax reform."
- Colombian officials are scrambling to show the world they are continuing their tough crackdown on narcotics after an embarrassing increase in the cultivation of coca - the plant that is the base for cocaine - was recorded in a recent U.S. study. On Tuesday, Colombian Defense Minister Luis Carlos Villegas met with US officials, including William Brownfield, assistant secretary of the US Bureau of International Narcotics and Law Enforcement Affairs, and vowed that Colombia would continue its aggressive interdiction program that he noted has cost many Colombian lives. He also asked for continued US assistance in controlling demand. "What needs to be done is to coordinate with the US so there is success in the fight against consumption," he said. Last year, according to the US report, the amount of coca being grown in Colombia grew by 42%, to 392,900.00 acres.
- European pharmaceutical stocks slipped after President Donald Trump tweeted that he was working on a "new system where there will be competition in the drug industry" that would get drug prices "way down." Trump has previously made his ambition to curb drug prices clear, but is yet to provide details on how he will do so, and pharma stocks fell less dramatically than they have done following earlier drug price-related tweets from the President. Biggest fallers are Novartis, down 1.7% and Novo Nordisk, down 1.4%.
- Gluskin Sheff's chief economist David Rosenberg isn't buying the momentum story in Canada's economy. Despite a string of better-than-anticipated indicators, Toronto-based Rosenberg tells clients there are myriad reasons why the outlook remains cloudy. Among his arguments: capital spending is tepid, as firms remain on tenterhooks about Trump administration changes to trade; private-sector demand was flat in 4Q once government spending, net exports and inventories were stripped out; and households are tapped-out and debt-constrained in an "unprecedented" way. There's absolutely nothing going on domestically in the Canadian economy "worth writing home about," he says.
- Democratic senators write to EPA Administrator Scott Pruitt urging him to leave be agency's final determination in Obama administration's waning days locking in tougher vehicle-emissions standards requiring auto makers to sell cars and trucks averaging 54.5 miles a gallon by 2025. "These automobile emissions standards are economically feasible and technologically achievable for the auto industry," they write in letter, part of effort led by Sen Edward Markey (D, Mass) a longtime industry critic. Letter also signed by Senate Minority Leader Charles Schumer of New York and Sen Bernie Sanders of Vermont. Letter comes as EPA moves toward putting aside final determination and reopening a review of the standards, which opponents view as a prelude to rolling them back.
- President Trump says in a Tweet he is working on a plan to bring down drug prices through competition. "There will be competition in the Drug Industry," he tweets. It is unclear what the president has in mind. Evercore ISI notes that there already is competition for many branded and generic products in formularies for Medicare's Part D drug benefit. Evercore ISI asks whether the president has in mind introducing such a formulary to Part B. "Reality is, we just don't know until something definitive is put out," Evercore says.
- Fiat Chrysler Automobiles' chief executive is looking to President Trump to boost US exports to China, where foreign-made vehicles face a steep tariff. "The problem is one of establishing proper trade levels between the US and China. Cars are one piece of it," CEO Sergio Marchionne told The Wall Street Journal on the sidelines of the Geneva auto show. Marchionne said trade barriers prevent his company from exporting more premium Jeeps from the US to China. "Obviously it's choked a lot of our upper-end business in China. We should sell a lot more Grand Cherokees in China, which are built in the US," he said. Noting FCA has localized production of entry and mid-level Jeep SUVs in the Chinese market, the CEO said it was a difficult issue for one company to tackle. "We'll leave it to Mr. Trump," he said.
- Oil prices were little changed for a third session, with investors searching for direction as concern over rising U.S. shale output offsets production cuts by OPEC and non-OPEC members.
- Gold prices were little changed, hovering above a two-week low hit on Friday, amid expectations of a U.S. interest rate hike this month and ahead of key economic data due later in the week.
- The dollar steadied as investors widely expect the Federal Reserve to raise interest rates next week and are waiting for clues on the likely pace of hikes, including this week's U.S. job data.
- London copper edged up, but was still near one-month lows struck after heavy inflows into London Metal Exchange (LME)warehouses doused supply concerns from disruptions at major mines.
- U.S. wheat rose for a third day as forecasts for potential unfavourable weather pushed the grain near a 18-day high.
Mar 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- President Trump was scheduled to meet with FCC Chairman Ajit Pai this afternoon, but White House officials were vague about the possible topics. Trump was sitting down with Pai "to discuss how to best solve the issues and concerns facing Americans every day," according to a White House official. That suggests a number of potential subjects, from rollbacks of Obama-era privacy and net neutrality restrictions to broadband infrastructure incentives and robocall blocking. Pai also is thought to be under consideration for another term on the 5-member FCC. The panel has two vacancies currently. Trump met with a number of his agency appointees on Monday.
- Senator Daniel Sullivan said he will soon introduce a bill to reform the 1970 National Environmental Policy Act, which governs the permitting process for major energy infrastructure projects. Among the reforms to the permitting system in the forthcoming legislation, the Alaskan Republican said there would be proposed changes to the Federal Energy Regulatory Commission, which issues permits for major energy projects like natural gas pipelines. He said the bill would be comprehensive and aimed at providing certainty and defined timelines to the permitting process but provided few details about specific changes. Sullivan said he wants to eliminate the "mountain of paperwork" generated by the process and give responsibility for permits to one federal agency. He said he had discussed the bill with President Trump and wants to build broad support for it, including from labor unions.
- Senator Daniel Sullivan says he will soon introduce the Rebuild America Now Act to reform the country's regulatory and permitting system for infrastructure projects. The Alaskan Republican announced the legislation during the annual CERAweek conference in Houston. Speaking to a room full of energy executives, Sullivan said he was optimistic the US is on the cusp of a "energy industry renaissance." He said the Trump Administration wants to partner with energy companies to reform a broken permitting system. The forthcoming legislation will be aimed at streamlining and quickening the permitting process for energy infrastructure projects, Sullivan said.
- Despite President Trump's scaled-back travel order, the restaurant industry is still concerned about its economic impact. "We must balance our safety and security with the importance of the economic contributions of travel and tourism to our country as we are already seeing negative effects the previous executive order is having on our economy," Cicely Simpson, executive vice president of the National Restaurant Association, says.
- J Christopher Giancarlo, the acting CFTC chairman, just tapped a new general counsel for the top US swaps regulator: Daniel Davis of the law firm Proskauer Rose. The move is significant because it's Giancarlo's first hire from outside the agency and another signal that the acting CFTC chief is expected to become the Trump administration's full-time chief by hiring agency outsiders for top roles. Trump administration is preparing to nominate Giancarlo for the full-time role, though the timing of any announcement is unclear, The Wall Street Journal has previously reported.
- The Trump administration's potential changes in tax deductions for interest expenses may incentivize U.S. companies to repatriate cash and use it for bond buybacks amounting up to 3% of outstanding debt, Axa Investment Managers strategists say. This translates to $250 billion of buybacks, or up to a third of annual dollar investment grade corporate bond net supply. And it would provide a degree of technical support comparable to non-domestic demand for dollar investment grade bonds in 2016, the strategists add.
- Auto makers walking a fine line on emissions regulations, lobbying Trump administration for changes without undoing a "one national program" of near-uniform rules they've long coveted, people familiar with the matter say. Car executives and lobbyists have asked to reopen a midterm review of future targets for 2025. Review was closed by Obama administration a week before Trump's inauguration. But EPA officials also now taking harder look at waiver allowing California to both set its own greenhouse-gas tailpipe emissions regulations and enforce another zero-emissions vehicle program. Car makers currently wary of EPA moving to revoke California waiver amid industry lobbying efforts to win changes to federal emissions regulations to which state now adheres, the people say. California
cooperation avoids patchwork of state rules around US that industry loathes.
- Trump's trade tsar Peter Navarro, at a NABE policy conference, signals how the administration might call out China in its next currency report due out in mid April. That's been a quandary for the Treasury Department given the president has repeatedly called Beijing an FX manipulator even though the country has spent a $1 trillion to keep the yuan afloat. Navarro differentiated between the value of the exchange rate and manipulation. The administration can technically say China is manipulating given that it still controls the currency's value. He acknowledged capital outflows are putting downward pressure on the yuan, but said that was a secondary pressure. The primary pressure that should exert itself over time, he says, is the US trade deficit with China: Evidence the exchange rate should still adjust upward.
- CERAWeek added a high-ranking Trump Administration official to the massive energy conference's line up this week in Houston. Scott Pruitt, the new head of the EPA, will speak at the energy conference on Thursday. In past years federal officials like the head of the EPA and US Energy Secretary have been mainstays at the annual energy confab, but until this weekend no Trump pick had agreed to participate. Pruitt will surely be a hot ticket when he talks because the energy sector is eagerly awaiting clarification about how the EPA will implement--or scale back--regulations that effect emissions into the air and water. Many in the oil and gas space have cheered the idea of rolling back regulations, while others in the renewable power and technology side could see business negatively impacted if the EPA changes direction.
- President Donald Trump's proposal to spend $1 trillion to improve U.S. infrastructure could be the biggest mover of oil prices, if solid evidence emerges that it is likely to come to fruition, says Jonathan Chan, a commodities analyst at Phillip Futures. "But it remains to be seen what President Trump will do and can do to push through the plan," he says. Mr. Chan adds that even though the market will also be closely watching for any possible extension of OPEC's output-cut deal, traders can expect that the cost of oil will largely be influenced by fundamentals and Saudi Arabia's eagerness to push up prices before listing its state-owned energy company.
- Amid today's modest pullback in Asian trading for the dollar, "a risk-off sentiment, along with a chances of an increased frequency of Fed rate increases (which will be negative for the US economy), is driving the pressure" on the greenback, says Masahi Murata, a senior currency strategist at Brown Brothers Harriman. That as he thinks it's looking less likely that fiscal stimulus and tax cuts from Trump will come this year.
- Oil prices fell in Asian trade, wiping out some of the gains of the previous session amid worries lower growth targets in China could cut oil demand and ongoing concern over Russia's compliance with a global deal to cut oil output.
- Gold was little changed, supported by safe haven interest amid rising geopolitical tensions over North Korea and a weaker dollar.
- London copper edged, supported by protracted disruptions at the world's two biggest copper mines and a decline in the recent strength of the dollar.
- U.S. soybeans edged higher as adverse weather in Brazil slowed exports, though gains were curbed by ample global supplies.
Mar 03 - Oil markets rose as the dollar edged away from a multi-week high, but prices are being held in check by unchanged Russian output for February, a sign of its weak compliance on a global deal to cut supplies.
- Gold edged down after falling more than one percent in the previous session, and was on track for its first weekly decline since late January on expectations of a U.S. rate hike in March.
- London copper slipped, but was set to close the week little changed as a stronger dollar overwhelmed ongoing supply disruptions and evidence of improving demand.
- Chicago soybean futures edged higher, rising for three out of four sessions, with delays in Brazilian shipments underpinning sentiment, although bumper global supplies kept a lid on the market.
Mar 02 - Crude oil fell for a third consecutive session as a record build-up in U.S. stockpiles weighed on the market, with producers boosting shale oil production.
- Gold prices slipped as the dollar firmed on hawkish comments from U.S. Federal Reserve officials that stoked expectations of a U.S. interest rate hike in March.
- London copper climb towards its highest in more than a week, buoyed by improving manufacturing reports out of Asia and the United States that brightened the outlook for demand.
- Chicago wheat rose for a third session, climbing to a two-week high on large purchases by top buyer Egypt and as dryness stressed crops in parts of the U.S. Plains.
Mar 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Despite the more even tone of President Donald Trump's address to Congress, the restaurant industry still has "serious concerns" about potential barriers to international commerce. "The restaurant industry relies on free and fair trade policies and we strongly urge the President to consider the negative impact trade barriers will have on restaurants, consumers, and our economy," said Steve Danon, a spokesman for the National Restaurant Association. The group cited data from the Food and Drug Administration that 15% of the US food supply chain is imported.
- Risk sentiment in euro corporate bonds already looks poised to weaken as important elections in Europe get closer, and the U.S. president's inability to deliver details on his tax plan may dampen it further, Commerzbank says. Markets could soon "lose patience," given that crucial details and a reliable timescale on tax reform are still missing. This could drive euro credit spreads wider in March, the German bank says.
- Donald Trump's White House is actively engaging with the business community to seek opinions on relevant policies, says BP PLC CEO Bob Dudley, fresh from a trip to Washington. "The White House is wide open for in the last eight years" Mr. Dudley says. He gave as an example a constructive discussion over investment requirements in the Gulf of Mexico that doesn't necessarily make sense at current oil prices. Mr. Dudley says officials seemed open to discussing such regulations. "I came away shocked," he says.
- Asian shares end largely mixed following US President Donald Trump's speech to Congress, with the focus turning to the Federal Reserve's next meeting in March. Trump refrained from commenting beyond his previous stance on currency manipulation and free trade, with no details on tax reform or border taxes. The S&P/ASX 200 ends 0.1% lower as a stronger dollar weighs on commodity prices. The Nikkei Stock Average however ends 1.4% higher, with the USD/JPY pair up 0.7% at 113.57 yen. A weaker yen makes the country's exports more competitive. Hong Kong's Hang Seng Index ends 0.2% higher with the Shanghai Composite registering similar gains after a private gauge of factory activity in China showed an expansion.
- The FTSE 100 opens higher and was last up 0.64% at 7310.2, with European bourses shifting out of Tuesday's stasis and broadly moving higher. These gains come after President Trump's overnight congressional speech which, while light on detail, appears to have provided investors with enough impetus to buy into the construction sector. The President's pledge to spend $1 trillion on infrastructure, plus strong CRH results, see builders up. CRH shares are up 2.5%. Miners also see relief from the pressure of recent days, with metals prices moving higher. Royal Mail is down 1.5% on news that regulator Ofcom is considering changing postal rules to reflect online shopping habits. London traders may react to lending, mortgage, monetary supply, and manufacturing purchasing managers index data, due at 0930 GMT.
- The FTSE 100 is called to open 20 points higher by 7283, according to London Capital Group. Other European bourses are also expected to tick higher, with President Trump's congressional address failing to spark much market reaction. The President's pledge to spend $1 trillion on infrastructure, plus CRH results, will put the construction sector in the spotlight at the open. Corporate results also come from ITV and Man Group, as well as Admiral Group - after regulation-driven volatility which rocked the stock earlier in the week. U.K. lending, mortgage, monetary supply, and U.K. manufacturing purchasing managers index data are due at 0930 GMT.
- Base metals are up slightly in late Asia trading while Trump again talked up greater infrastructure spending during his speech to Congress. "The big question that Trump did not answer is when will the spending materialize," notes Gnanasekar Thiagarajan, director of Commtrendz Research. Copper is up 0.7% at $6,015/ton and zinc gains 0.8% to $2,853.50.
- Spot-gold prices fell marginally in Wednesday Asian trading in the wake of Trump's speech. "There was nothing much in it for bullion markets," notes Gnanasekar Thiagarajan, director with Commtrendz Risk Management. "The market is not very excited because it lack[ed] specifics in terms of timeline" for things like infrastructure spending. If that comes to pass, it could boost appetite for riskier investments like equities and metals while reducing the
attraction for safe havens like gold. Spot gold is down 0.4% at $$1243.67/troy ounce.
- The Trump trade, which has triggered a drift higher in equities since Election Day, is likely to keep investors in buying mode despite concerns around the continued lack of policy clarity. "The price action of the stock market is pushing people to take risks because, for people like us, if you are underexposed then your performance will lag behind a lot and then you've got some guys like Warren Buffett criticizing you with your poor performance," says Alex Wong, director of asset management at Ample Capital.
- While investors are largely unmoved by Trump's address to Congress, they are still broadly positive despite the lack of details on his plans for infrastructure spending, tax reform and trade relations. "There's always some risk of implementation, but the market is still bullish and people are not willing to reduce their exposure too much," says Alex Wong, director of asset management at Ample Capital. "So, they just hold their positions and try to
ride the upside.
- The dollar-yen extends its lead against other crosses, with the pair up 0.7% at 113.48 yen, following market focus on the US Fed's March meeting. That's compared with the US Dollar Index's 0.4% rise. Odds of a rate increase in March rise to 62% from 31% previously, after New York Fed chief William Dudley says the case for raising rates "has become a lot more compelling." Some of the gains can also be attributed to a recovery in the greenback. The dollar saw some selling in the previous trading session, on positioning trades ahead of the speech. Meanwhile, the USD/TWD and USD/SGD pairs are each trading up 0.5%.
- Crude oil prices rose as the dollar trimmed gains and a speech by U.S. President Donald Trump offered little on plans by his administration to boost U.S. oil production.
- Gold fell as the dollar gained after comments from U.S. Federal Reserve officials raised expectations of a rate hike in March.
- London copper was marking time during a key speech by U.S. President Donald Trump, with prices supported by an upturn in manufacturing growth in top metals user China.
- Chicago corn rose for a third consecutive session while soybeans gained more ground, underpinned by expectations of higher U.S. biofuel production, although gains were capped by confusion over the government policy.
Feb 28 - U.S. crude oil edged higher for a second day, underpinned by high compliance with OPEC's production cuts even as the market remains anchored by rising U.S. production.
- Gold was steady, after falling from a 3-1/2-month high in the previous session, as investors awaited a speech by U.S. President Donald Trump later in the day for more clarity on his economic policy.
- The dollar drifted, with its earlier advance halted by investors taking a wait-and-see approach ahead of U.S. President Donald Trump's closely-watched Congressional address later in the day.
- London copper was steady as investors looked towards a speech by U.S. President Donald Trump for more clarity on his economic policy, while persistent concerns over supply from large mines in Chile and Indonesia continued to buoy prices.
- Chicago wheat futures edged higher on Tuesday on expectations of strong demand for U.S. cargoes after a recent decline in prices, with the market poised for its biggest monthly gain in 17 months.
Feb 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Defense stocks all up well ahead of the broader market before initial indications expected Tuesday on the first Trump military budget, with consensus around a mid-single digit rise over fiscal 2017. Raytheon leading the pack with a 1.6% advance at $155.92 after finally securing its Qatar air-defense contract, but Lockheed Martin and Boeing are not far behind. One blot is that expectations are also growing that the temporary budget now in place could end up lasting a year, freezing spending at 2016 levels and leaving some new programs on the shelf. Analysts Byron Callan at Capital Alpha boosts the chances of this occurring to 65%.
- This could be a big week for a gold rebound that already has it back near its pre-US election highs. Gold rises 11% since its mid-December bottom, with investors refocusing on political uncertainty rather than the optimism and interest rate hikes that had sent it to a 10-month low. Money managers are buying again, but not in droves, many waiting for big events including President Donald Trump's speech to Congress Tuesday, says Ole Hansen at Saxo Bank. If Trump sticks only to more rhetoric and fails to outline action, it will scare investors about his effectiveness and could send gold another leg higher, Hansen says. Friday brings a speech from Fed Chair Yellen, then a wave of European
elections follow, notes Standard Chartered. Gold trades down $1.10 at $1,257.20. Trump's speech Tuesday could send it to $1,278 this week, Hansen says.
- The bond market pulls back slightly, reflecting some mild profit taking after last week's biggest weekly price rally since July. Traders say latest polls in France deflates some concern about a possible victory by an anti-euro candidate, driving some to pare back haven flows in Treasury debt. Analysts say political risk in Europe is likely to continue to fuel market swings. This week's key focus is President Trump's address before the Congress Tuesday night. Fed Chair Yellen is also scheduled to speak Friday, the last chance for her to speak about monetary policy before the start of the blackout period leading into the March policy meeting. The yield on the 10-year note is 2.333%, up from 2.317% Friday which was the lowest close since Nov 29.
- Warren Buffett tells CNBC that low interest rates have pushed stocks up and cannot rise too much more while rates in Europe and Japan remain very low. "Europe is a big factor," the Berkshire Hathaway Chairman and billionaire investor says. "You never can do just one thing in economics. You've always got to say, 'And then what?' And if I were the Fed, I'd say, 'And then what if I got too big a spread against Europe?'"
- Warren Buffett tells CNBC his three criteria for judging President Donald Trump in four years. First, how does he keep the US safe from weapons of mass destruction? Second, how did the economy do? Third, how widespread was participation in economic growth? Even if the administration succeeds on these fronts, the Berkshire Hathaway chairman says it is "unlikely" he would vote for President Trump in the next election.
- Warren Buffett says in a CNBC interview that Secretary of State Rex Tillerson is "the kind of person I would choose" for the job. Buffett campaigned for Hillary Clinton and criticized President Donald Trump before the election, but his comments have been more conciliatory since. Buffett says he doesn't know Tillerson well, but that the appointment "makes a lot of sense" and that Tillerson will work for the US, not for his previous employer Exxon Mobil. "I don't worry at all about the fact that somebody comes from the oil industry or that they've got a lot of money. ... I do think most people rise to the occasion to quite a degree."
- Warren Buffett on CNBC repeats his opinions that the American economy will grow no matter who is president and cautions against making investment decisions based on politics. "Probably half the time in my adult life I've had a president other than the one I've voted for, but that has never taken me out of stocks," he said. "If you mix your politics with your investment decisions you're making a big mistake."
- Indonesian shares closed Monday lower, taking leads from other regional bourse ahead of President Trump's speech in the US Congress. The JSX index fell 0.1% to 5382.87, with 161 decliners and 152 gainers. Foreigners chalked up IDR199.05 billion in net sales as they reduced holdings in Bank Rakyat Indonesia (BBRI.JK), United Tractors (UNTR.JK), and Perusahaan Gas Negara (PGAS.JK). Domestically, investors are waiting for the February inflation data, which will be released Wednesday.
- This week will be make or break for bets that massive fiscal spending will lift US risk assets and the dollar, known as the Trump trade. The new administration has to deliver this week, says Steen Jakobsen, chief economist and chief investment officer at Saxo Bank. "By this time, the Bush administration, the Obama administration already had detailed plans for what they wanted to do in place," he says. Trump "has to deliver something more substantial than promises and rhetoric." Faltering US inflation, a less aggressive Federal Reserve and a softer US dollar likely mean that the rally in emerging market equities can be sustained, and the global hunt for yield trade will be back on. Jakobsen says he's been overweight fixed income since December and also long gold. He also like the South African rand, Australian dollar, and the British pound.
- The USD/JPY, now at 112.210, lacks clear direction in mid-afternoon Asia trade, ahead of President Donald Trump's address to Congress scheduled on Tuesday. "Investors are largely taking a wait-and-see stance today and tomorrow," says Yuzo Sakai, manager of FX business promotion at Tokyo Forex & Ueda Harlow. But volatility is set to increase depending on remarks from Trump. He adds that the USD/JPY pair may fall below 111, if Trump's comments disappoint investors, while the pair may gain to 114 on any positive surprise, says Sakai.
- Traders in Asia shy away from risk ahead of US President Donald Trump's speech to Congress Tuesday, when he may--or may not--speak on tax reforms. The US Dollar Index pares gains to trade up 0.1% at 101.160 from a high of 101.270. Japanese stocks also partially retrace with the Nikkei Stock Average down 1%. "Fulfilling high hopes for a tax plan and Obamacare reform would be USD positive. However, that may require specifics, which may still be half-baked," says Tim Condon, head of research for Asia at ING.
- Oil prices rose, with the market set to rise for five out of seven sessions as a global supply glut appears to ease, but rising U.S. production limited gains.
- Gold prices held firm near 3-1/2 month highs hit in the previous session, with investors waiting for greater clarity on President Donald Trump's economic policy.
- The dollar recouped some ground after dipping to a two-week low against the yen in Asian trading, but it lacked momentum as investors awaited this week's speech by U.S. President Donald Trump for clues on tax reform.
- London copper prices inched towards the key level of $6,000 a tonne, with supply concerns simmering amid production stoppages at the world's two biggest copper mines.
- Chicago wheat futures slid for a third consecutive session to hit a near one-week low, with lack of demand for U.S. shipments amid abundant global supplies weighing on the market.
Feb 24 - Oil prices held gains on data showing U.S. stockpiles rose for a seventh straight week but at a pace that was well below expectations, and news of oil being sold out of storage in Southeast Asia.
- Gold prices held steady near 3-1/2-month highs hit in the previous session amid tempered expectations of a U.S. rate hike in March and as investors awaited clarity on President Donald Trump's economic policy.
- The dollar clawed back some ground after skidding to a two-week low against the yen, but was still on track for weekly losses after the Federal Reserve meeting minutes disappointed dollar bulls.
- London copper prices found modest support after a big fall overnight amid fresh doubts over Chinese demand and some upward movement in the U.S. dollar, but were still on track for a weekly decline of around 2 percent.
- U.S. soybeans edged higher after earlier hitting a six-week low as ample global supplies pushed the oilseed towards two-week losses of nearly 5 percent.
Feb 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- A handful of currencies, including the South African rand, Taiwan dollar and Brazilian real, have recouped losses suffered in the wake of the US presidential election. The rand lost 10% against the dollar in the weeks following the November election, but today the rand is at its strongest level since August 2015. The Brazilian real has recently hit its highest level since mid-2015. The Mexican peso, Australian dollar and Korean won have also staged big recoveries but remain weaker than pre-election levels. Investors dumped EM assets after Trump was elected, worried about protectionism and a surging dollar. But uncertainty over tax reform and stimulus plans has weighed on the dollar this year.
- President Trump's tough stance on immigration, made more clear this week with memos suggesting undocumented workers are more likely to be deported under his administration, could be a drag of a half-percentage point or more on overall economic growth, Oxford Economics says. A crackdown on illegal immigration outlined this week could reduce growth of inflation-adjusted GDP by 0.2 or 0.3 percentage point this year due to reduced demand and significant supply chain bottlenecks, the note says. "More generally, the administration's tough stance on immigration, legal and illegal, could cut the economy off of important sources of revenues from labor, education and tourism," economist Greg Daco writes. The total drag on growth is "north of" 0.5 percentage point.
- On Thursday, President Trump reeled in one big name who had yet to join the parade of corporate executives visiting the White House: Jeff Immelt. General Electric's CEO joined a group of manufacturing leaders who met during the morning with senior administration officials to discuss issues like taxes, regulatory reform and trade. The group is scheduled to meet with Trump at 10:30am. GE is among the big corporations counting on the administration to deliver a major overhaul of corporate taxes. Immelt, who backed Sen Lindsey Graham in the Republican primary, nonetheless has a history with Trump: GE used to own NBC -- the network on which Trump rose to reality TV stardom with "The Apprentice."
- Leveraged French corporates with a high domestic exposure should be more vulnerable to a potential growth shock if far-right presidential candidate Marine Le Pen wins the elections, according to corporate credit analysts at Morgan Stanley. However, owning French bonds which are exposed to the U.S. could also mean trouble, given the Trump administration's potential protectionist bias, adds the U.S. bank.
- Treasury Secretary Steven Mnuchin says the Treasury Department should study the viability of issuing longer-dated bonds with 50-year and 100-year maturities. "Whether we can raise 50-year or 100 year-money at a very slight premium, that's something that makes sense for Treasury to look at," he tells CNBC.
- Treasury Secretary Steven Mnuchin says he expects US interest rates to remain relatively low on a historical basis even if the Federal Reserve gradually raises rates as markets currently expect. "We're in an environment where we are at historically low interest rates," he tells CNBC. "If you look at this on a historical basis, we will probably have low interest rates for a long period of time."
- Treasury Secretary Steven Mnuchin tells CNBC that the Trump administration is committed to boosting US economic growth to at least a 3% annual rate, which hasn't been reached on an annual basis in more than a decade. But he says it won't happen right away. "It's going to take time to get there," he says, adding 3% growth is a more realistic target "towards the end of next year." Mnuchin also says he expects interest rates to remain at historically low levels "for a long period of time."
- Restaurants, farmers, food companies and construction outfits worry about how the Trump administration's efforts to tighten immigration in the US could hurt their labor supply. Foreign-born workers make up about three-quarters of the roughly 1.1 million workers on US farms, and nearly half aren't legally authorized to work. In the construction industry, 13% of workers in 2014 were undocumented, along with about 9% of workers in the leisure and hospitality industry. Economists predict a massive labor shortage if millions of undocumented immigrants were deported.
- The European Central Bank's top economist says some of the noises coming from U.S. President Donald Trump's administration on international cooperation are "worrisome." Peter Praet says in remarks in London that some of Mr. Trump's complaints about international trade and multilateral institutions reflect "simplistic narratives," though he adds that economic imbalances between countries and regions are real enough. Mr. Praet says that for now, European policy makers are in wait-and-see mode. "We still have to see how this new administration is going to behave, or act."
- German consumers look less optimistic for March than they did for February as they seem to take to heart a change of power in the US and higher inflation in January, the GfK market-research group says in its monthly survey. The forward-looking indicator is set to decline to 10 from this month's 10.2. That's slightly below economists' forecast for 10.1, according to a WSJ survey.
- Oil futures climbed nearly 1 percent after data showed a surprise decline in U.S. crude stocks as imports fell, supporting the view that a global glut is ending.
- Gold prices were steady, supported by uncertainty surrounding U.S. President Donald Trump's economic policy after Wednesday's Federal Reserve minutes failed to give the market much direction, despite its support for interest rate hikes.
- The dollar drifted as impact from the Federal Reserve's policy meeting minutes and supportive comments from a top U.S. official faded, while the Australian dollar slipped in the wake of downbeat economic data.
- London copper prices drifted lower, with the U.S. dollar firming as the market reassessed minutes from the Federal Reserve's last policy meeting that kept the prospect of a March rate hike in play.
- U.S. soybeans edged up from a three-week low, but were capped by plentiful global supplies and an expected forecast for increased plantings in a widely watched U.S. government report.
Feb 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- It is still too early to forecast the effect the Donald Trump presidency will have on the U.S. oil
sector, according to Sarah Emerson from U.S.-based consultancy ESAI Energy. Speaking as part of a panel discussion at International Petroleum Week being held in London, the executive said that Mr. Trump's economic policies, specifically in terms of tax reform, were still up in the air and until this was in place there is no way of knowing how it will affect oil production. However, the streamlining of permitting for oil and gas licences and a roll-back of regulations on climate change policy by Mr. Trump was almost certain to have a swift impact she added.
- The Mexican peso soars by more than 2% against the dollar to its highest level since November after Mexico's central bank announced new moves to stem volatility in the currency. The peso fell to record lows after the November election amid Trump's protectionist and anti-immigration rhetoric. The volatility prompted the Bank of Mexico to step in multiple times to prop up the currency. The central bank now plans to implement a currency hedge program of up to $20B in the coming months. One dollar recently bought 20.03 pesos, the weakest level for the dollar since Nov. 10. Still, the peso remains down about 8% since the Nov. 8 election.
- Commodities, which are generally seen as a way to diversify holdings in a portfolio, are once again beingput to use by bullish investors now that correlations across asset classes are breaking down, say Citi analysts. Major commodities are no longer closely tethered to equities, bonds and the US dollar, making them a better investment for those looking for diversification tools. "Lack of intra-market cross-correlations among commodities are another signal for making commodities a more attractive portfolio diversifier, with rebalancing commodity structures periodically or by fostering long-short positioning," analysts say. Enthusiasm following Trump's election and the OPEC deal are also driving investors into commodities, Citi says, with about $10B in inflows to passive commodity indexes and related ETF products, leading holdings this quarter to the highest since June 2014.
- Canadian Foreign Minister Chrystia Freeland says trilateral negotiations between the US, Canada and Mexico to revamp Nafta haven't started and are "quite far" from beginning. Freeland, who spoke at a conference on the future of North America in Toronto alongside her Mexican counterpart Luis Videgaray, added any talks on Nafta would involve all three member nations at the same table. Freeland's comments come a week after Trump said the US would be "tweaking" its trade relationship with Canada during his first official meeting with Prime Minister Justin Trudeau. Freeland declined to comment further, as Wilbur Ross, the nominated Commerce Secretary, has yet to be confirmed by the Senate. She added the Trump Administration would likely need some time to discuss internally its plans to change Nafta.
- A 2007 Supreme Court case gave the Environmental Protection Agency the legal authority to address greenhouse gas emissions. President Donald Trump's EPA chief, Scott Pruitt, danced around the legality of this in his first interview since being nominated. He said to a Wall Street Journal editorial writer last week that he will conduct a "very careful review of a fundamental question: Does EPA even possess the tools, under the Clean Air Act, to address this? It's a fair question to ask if we do, or whether there in fact needs to be a congressional response to the
climate issue." He didn't question whether EPA had the legal right to but instead the logistical manner in which the federal government may go about addressing it.
- Chief executives of US exporters including Caterpillar, Boeing, General Electric and Dow
Chemical are lining up to support the US House Republican tax overhaul plan, which includes a tax on imports known as a border adjustment tax. "Our tax code also penalizes American workers who make products or provide services sold abroad, while favoring their international competitors," the CEOs wrote in a letter to congressional leaders, on behalf of a group of companies calling themselves the American Made Coalition. The letter affirms support among major US exporters for the plan pushed by House Speaker Paul Ryan. Major importers, including retailers and energy firms, have expressed opposition to the border adjustment tax.
- A muddy outlook on French election continues to drive investors to cut exposure to French government debt and embrace German bunds and US Treasurys. The bond market continues to recover from earlier selling as latest polls show right-wing presidential candidate Le Pen extends lead in the first round of voting. Many analysts see her odds of winning the second round as less likely, but any news that clouds the election outlook led investors to cut exposure. Investors are demanding the highest premium to hold the two-year French bond relative to the two-year bund since 2012. John Stopford, co-head of multi-asset at Investec Asset Management, says he expects the yield premium still has room to rise given the uncertainty, and that this factor is likely to bolster demand for Treasurys. After hitting 2.461%
earlier, the 10-year Treasury yield is now at 2.418% vs 2.425% Friday.
- With stocks trading at all-time highs and higher-than-historical valuations, investors must find a way to reconcile the S&P 500's performance with corporate earnings, Goldman Sachs says. The S&P 500 has climbed 10% since Election Day, but sell-side analysts have cut adjusted EPS forecasts for 2017 by 1%. "We are approaching the point of maximum optimism regarding policy initiatives," the firm says. "The tailwind to corporate earnings from tax reform will be constrained by the unwillingness of certain Congressional Republicans to significantly expand the federal budget deficit."
- Gold has been a "star performer" this year, according to JPMorgan analysts, surpassing all other major asset classes since the beginning of the year, including emerging markets indices and the S&P 500 through Feb. 14. The precious metal has been boosted by a weaker US dollar this year and some unwinding of "Trump trade" that drove risky assets higher following the US election. Meanwhile, expectations for rate increases this year remain largely unchanged compared to December. Analysts expect Trump's policies will keep real yields low, supporting attractiveness for holding gold as an asset. "Western investors have been ramping up exposure to the metal through increased futures length as well as a build-up in ETF holdings," analysts write. However, physical demand from key consumers India and China remain weak.
- China could become the U.S.'s largest customer for oil and gas in the future and solve one of Donald Trump's major problems, the growing trade gap between the two countries according to a senior Chinese oil executive speaking under Chatham House rules at the International Petroleum Week. The official told delegates that it would be the logical move for the two countries to cooperate. U.S. oil and gas production is growing, but it is still not at the stage where large-scale exports are possible. However, he added that he was convinced this would change in the next 10 years and the increased flow of U.S. oil and gas in China's direction would bring trading relations to a more equal footing.
- Oil prices held near multi-week highs after OPEC signalled optimism over its deal with other producers to curb output to clear a glut that has weighed on markets since 2014.
- Gold slipped as the dollar firmed, with investors looking to minutes from the U.S. Federal Reserve's latest meeting for clues on the timing of interest rate hikes.
- Copper prices slipped as some traders took profits and reduced their positions ahead of the release of U.S. Federal Reserve minutes that could push the dollar higher.
- U.S. soybeans edged up for the first time in four sessions to move away from a three-week low, though ample global supply capped gains.
Feb 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- German government bonds, a safe-haven asset as European political risks rise, now seem to be at the mercy of potentially hawkish comments by Philadelphia Fed President Patrick Harker, says Commerzbank. Analysts at the German bank recommend tactical short positions in Bunds Tuesday, as Harker could add to his recent hawkish comments in a speech this afternoon. A hawkish view should weigh on Treasurys and impact Bunds accordingly.
- HSBC notes that as the bank has recently boosted its economic-growth forecasts, the move is "largely the partial reversal of downgrades made last year, when uncertainty was elevated" in the wake of political events including Brexit and Trump's win. The lender, in its just-issued 2016 report, adds its latest growth views remain "slightly lower than [the] long-term trend, with risks largely to the downside." HSBC adds while there's many political uncertainties for 2017, especially with European elections looming and potential protectionism out of the US,
"countering these factors are signs of a cyclical upturn."
- There's been plenty to unsettle nervous travelers over the past few months, particularly Brexit and a change in the White House. But there were reassuring noises from Tourism Holdings, a New Zealand-based provider of rental vehicles to tourists, when unveiling its 1H result on Tuesday. "To date we have seen no discernible change in short or long term bookings due to Brexit in any of our businesses," Tourism Holdings says. That's significant because tourists from the U.K. and Europe are traditionally most sensitive to FX changes. While U.S. inbound travel from Europe, U.K. has been more volatile week-to-week recently, it's not been materially so, management adds. "New Zealand continues to experience high tourism demand and Australia is showing higher demand growth in recent months," Tourism Holdings says. "Our forward plans currently conservatively understate this experience." THL last traded at NZ$3.88.
- U.S. crude futures rose for a second day, with data showing hedge funds are betting big across oil markets following OPEC production cuts agreed last year.
- Gold prices fell as the dollar gained, with investors waiting for clues on the timing of any increase in U.S. interest rates from minutes of a Federal Reserve meeting and in a series of speeches by Fed officials this week.
- London copper held its ground, trading near its highest levels in a week amid ongoing supply concerns from industrial action in Chile and an Indonesian export permit dispute.
- Chicago soybean futures gained almost 1 percent as the market recovered from its lowest in more than two weeks with rains in Argentina raising concerns over potential decline in yields.
Feb 20 - Oil prices rose but the gains were limited as investors gauged whether an increase in U.S. drilling rigs and record stockpiles would undermine efforts by producers to cut output and bring the market into balance.
- Gold prices held steady, with investors looking ahead to a clutch of speeches from U.S. Federal Reserve officials later in the week for clues on the timing of possible interest rate hikes.
- A slide in U.S. bond yields pressured the dollar against the yen, while the euro struggled for traction after suffering significant losses at the end of last week on renewed concerns about the upcoming French elections.
- London copper climbed above the key level of $6,000 per tonne, buoyed by supply worries after the world's second-biggest copper mine in Indonesia said it could not deliver promised shipments due to export permit issues.
- U.S. wheat and corn futures fell on Friday for a second straight session as traders liquidated long positions ahead of a U.S. holiday weekend, and following a fund-driven rally seen as lacking fundamental drivers, analysts said.
Feb 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- US shale gas exports begin to enter the Japanese market at a politically convenient time for Tokyo, which has been nervously watching President Donald Trump's trade policy following his criticism of nations running trade surpluses with America. Japan buys 211,000 tons of liquid natural gas from the US in January, worth 15.9 billion. About two-thirds of them is Japan's first imports ever of US shale gas, says the Ministry of Finance. The amount may be small, but it is among the reasons behind a 26.6% narrowing in Japan's trade surplus with the US in that month to Y399.3 billion.
- Japanese stocks may be weighed down by uncertainty over the French presidential election and U.S. President Donald Trump's promised tax cuts and infrastructure projects. Safe-haven demand amid economic uncertainty has pushed up U.S. Treasurys and the yen, factors that will likely weigh on Japanese financial and exporter stocks. The USD/JPY is at 112.87, down from 113.38 at Friday's Tokyo stock market close. Nikkei futures ended Friday's Chicago trading at 19130, compared with the earlier close in Osaka at 19200. Nikkei ended down 0.6% on Friday at 19234.62.
- The month ahead could see NZD/USD (Now 0.7192) extending beyond 0.7500 if the US dollar continues to register disappointment in the Trump Administration's policies, says Westpac. Further ahead, though, the Fed's tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD lower to 0.7000. Granted, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar's trend, Westpac adds.
Feb 17 - Oil prices edged up, lifted by a report that producer club OPEC could extend an output cut aimed at reining in a global fuel supply overhang.
- Gold prices held firm as the dollar hovered near one-week lows, keeping the metal on track for a third week of gains amid political uncertainties in the United States and Europe.
- Copper prices climbed following overnight losses, supported above the key $6,000-mark by major supply restrictions at the world's two biggest mines in Chile and Indonesia.
- Chicago wheat slid 1.1 percent, falling for a second day and set for its first weekly loss in three as abundant global supplies weighed on the market.
Feb 16 - Oil held steady, supported by ongoing supply cuts led by producer group OPEC, while rising fuel inventories and crude production in the United States dragged on prices.
- Gold prices rose as the dollar drifted down from one-month highs hit in the previous session on upbeat U.S. economic data that boosted the prospects of an interest rate hike by the Federal Reserve next month.
- London copper held gains as the prospect of lengthy supply disruptions in Chile and Indonesia underpinned prices, but ample stockpiles in Asia contained consumer buying.
- Chicago wheat futures edged lower, as the market took a breather after a rally in the previous session that was triggered by fund-buying and strong demand.
Feb 15 - Oil prices dipped over concerns that OPEC producers would not be able to maintain their high compliance so far with output cuts aimed at reining in a global fuel supply overhang.
- Gold prices edged lower after U.S. Federal Reserve Chair Janet Yellen hinted at a hike in interest rates in an upcoming meeting of the central bank.
- London copper prices steadied as support from supply disruptions at the world's two biggest mines held prices above the $6,000-mark.
- Chicago soybeans edged higher with the market recovering after two days of falls but the harvest of an all-time high crop in Brazil capped gains in the market.
- The dollar held gains near a 3-1/2-week high after Federal Reserve Chair Janet Yellen signalled a faster pace of U.S. interest rate hikes.
Feb 14 - Oil prices were stable, supported by an OPEC-led effort to cut output while rising production elsewhere kept crude futures within the narrow range that has contained them so far this year.
- Gold prices edged up as the dollar crept lower, with investors turning their attention to testimony from U.S. Federal Reserve Chair Janet Yellen later in the day for hints on the central bank's interest rate strategy.
- Copper held on to hefty overnight gains amid supply concerns from two of the world's biggest sources of the metal.
- Chicago soybean futures slid for a second session with the rapidly advancing harvest of a record crop in Brazil and much-needed rains in Argentina weighing on the market.
Feb 13 - Oil prices dipped on signs that global fuel markets remained bloated despite OPEC-led crude production cuts that have been more successful than most initially expected.
- Gold slipped as the dollar strengthened against the yen, with the greenback buoyed by a smooth meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe that saw no mention of currency policy.
- London copper extended gains to hit its highest in 20 months in heavy trade, driven up by supply worries after shipments were shut off from the world's two biggest copper mines.
- Chicago wheat lost ground, snapping four sessions of gains and falling from its highest in seven months as ample world supplies weighed on the market.
Feb 10 - Oil prices were stable, supported by strong Chinese crude imports and OPEC-led production cuts, although ample U.S. fuel inventories weighed on the market.
- Gold fell on a firmer dollar after U.S. President Donald Trump promised a major tax announcement and as economic data boosted expectations of a U.S. rate hike.
- London copper edged up and was set for a weekly gain, buoyed by simmering supply concerns and Chinese trade data that underscored stronger demand prospects for the metal.
- Chicago wheat futures were poised to post a second week of gains with the grain trading at its highest in seven months on a U.S. forecast for lower global supplies.
Feb 09 - Oil prices rose, boosted by an unexpected draw in U.S. gasoline inventories, although bloated crude supplies meant that fuel markets remain under pressure.
- Gold held near 3-month highs as political risks from elections in Europe and worries over U.S. President Donald Trump's policies buoyed safe haven demand for the bullion.
- London copper hovered near its highest since late November as niggling supply risks threatened to corrode what is expected to be a modest surplus this year.
- Chicago soybean futures lost ground, snapping three sessions of gains and falling from a two-week high as the market took a breather ahead of a key U.S. global supply and demand report.
- The dollar managed to stabilise after the previous session's slide, although lingering risk aversion pinned Treasury yields near multi-week lows and restrained the greenback's bounce.
Feb 08 - Oil prices dropped to extend falls from the previous day, as a massive increase in U.S. fuel inventories and a slump in Chinese demand implied that global crude markets remain oversupplied despite OPEC-led efforts to cut output.
- Gold held near three-month highs hit the session before, buoyed as political and economic uncertainty in the United States and Europe stoked safe-haven demand.
- London copper climbed, boosted by supply concerns after miner BHP Billiton said it would halt output at the world's biggest copper mine during a strike set to begin this week.
- U.S. soybean prices rose for a third session to hit their highest in 12 days, supported by strong demand for U.S. supplies.
- The euro nursed losses in Asian trading, pressured by political woes in Europe ahead of elections that checked its recent ascent against the dollar.
Feb 07 - Oil firmed after falls the previous session, with markets torn between mixed price indicators that have kept crude range-bound for much of the year.
- Gold held slightly below a near three-month high hit in the previous session and the yellow metal was supported by safe-haven demand on the back of rising global political uncertainty.
- London copper drifted as the dollar edged higher after a Federal Reserve official offered support for a March rate rise, while supply concerns underpinned prices.
- Chicago soybeans gained more ground with prices underpinned by strong demand for U.S. shipments although gains were curbed as record Brazilian crop hits the market.
- The yen held large gains against a number of peers as investors sought refuge in the safe-haven Japanese currency amid a latest rise in European political concerns.
Feb 06 - Oil prices rose, with traders shifting money into crude futures as the dollar weakened, and on concerns that new U.S. sanctions against Iran could be extended to affect crude supplies.
- Gold prices edged up, gaining for a third day, on technical buying and a weaker dollar after mixed U.S. jobs data late last week muted expectations for near-term interest rate hikes.
- London copper edged up on supply concerns, steadying after its biggest daily fall so far this year in the previous session in the wake of surprise economic tightening in top consumer China.
- Chicago soybeans bounced back, rising 1.1 percent as a a weaker dollar supported prices, although the rapidly advancing harvest of a record Brazilian crop kept a lid on the market.
- The dollar started the week on the back foot, after U.S. data showed a smaller-than-expected rise in wages in January that reinforced expectations the Federal Reserve will refrain from raising interest rates next month.
Feb 02 - Oil prices edged up on news that U.S. President Donald Trump could be set to impose new sanctions on multiple Iranian entities, firing geopolitical tensions between the two nations.
- Gold prices slipped on a firmer dollar and as investors booked profits after the metal hit 11-week highs in the previous session, with attention shifting to key U.S. jobs data later in the day.
- London nickel prices slipped, but were still on track for a 7 percent weekly gain on prospects of tighter supply after the Philippines said it would permanently close half its nickel production.
- Chicago wheat was poised for a weekly gain as short-covering drove prices higher, although plentiful global supplies kept a lid on the market.
Feb 01 - Oil prices fell after official data showed U.S. crude and gasoline stockpiles rose sharply, although signs that OPEC and other producers are holding the line on output cuts are helping support prices.
- Gold edged up, as the dollar weakened after the U.S. Federal Reserve kept interest rates unchanged at its first meeting since President Donald Trump's inauguration.
- London copper hovered below three-month highs hit the session before on prospects of supply disruptions after workers at the world's biggest copper mine voted to strike.
- Chicago wheat futures eased as the market took a breather following its biggest one-day rally in a month, driven by short-covering and technical buying.
Jan 31 - Oil dipped, weighed down by ongoing high supplies despite an OPEC-led production cut, but prices remained within a narrow trading band that has been in place since late January.
- Gold held steady after hitting a one-week high in the previous session, as traders waited to see if the U.S. Federal Reserve will keep its interest rates unchanged amid uncertainty over the policies of President Donald Trump.
- London copper eased in light trade on profit taking following hefty overnight gains, with losses held in check by concerns about a potential strike at the world's biggest copper mine.
- Chicago soybean futures edged lower, giving up the previous session's gains as record Brazilian production and improving weather in Argentina boosted world supply prospects.
- The dollar sagged against its major peers after U.S. President Donald Trump and his top economics adviser took aim at the currency policies of key U.S. trade partners, further raising concern that Washington was poised to actively weaken the greenback.
Jan 30 - Oil prices fell as rising U.S. drilling activity offset efforts by OPEC and other producers to cut output in a move to prop up the market.
- Gold rose on increased safe haven demand as U.S. President Donald Trump's tough stance on immigration rattled global markets, with prices finding further support from a weaker dollar.
- London copper climbed as the dollar weakened, with trading light due to the Lunar New Year break in top metals consumer China.
- Chicago soybean futures lost more ground, trading near last session's weakest in more than two weeks with an improving crop outlook in Brazil and Argentina weighing on the market.
Jan 28 - Oil prices extended declines, dragged down by signs of growing output in the United States that could partly offset output cuts by OPEC and other producers.
- Gold prices edged up on a weaker dollar and as uncertainty over U.S. policy under President Donald Trump stoked safe-haven demand, although gains were curbed with many in Asia on holiday for the Lunar New Year.
- London copper traded little changed below recent eight-week peaks as China's week-long Lunar New Year holiday drained the markets of liquidity and direction.
- U.S. wheat fell to an 18-day low as ample global supplies pushed two-day losses to more than 2 percent.
Jan 27 - Straight Talk About Inflation, Markets (WSJ)
Inflation is on the up, and shareholders are delighted. The postelection reflation rally was predicated on the new president's promise to reflate the U.S. economy with big fiscal spending, putting a booster under expectations for inflation that were already moving skyward. So far the "Trumpflation" trade has run exactly as would be expected: Shares have risen, bond prices have tumbled (as yields have increased) and the values of the longest-dated bonds have been eviscerated. Investors have waved goodbye to deflation fears and embraced higher inflation.
For the moment, that looks like a rational response to the assumption that President Donald Trump's policies herald higher inflation. But shareholders should be keeping a watchful eye on consumer prices, as they often rise much faster than anticipated. Like alcoholic drinks (prices of which are up just 1.4% in the U.S. in the year to December,) too much of a good thing can have nasty aftereffects.
The basic effects of inflation are well-established: Higher inflation means weaker real, or inflation-adjusted, returns from shares. Put another way, as inflation accelerates, share price gains don't keep pace. The ideal for investors is steady, reasonably low inflation; just enough to keep deflation worries away, but not so rapidly that the central banks will have to jack up interest rates quickly.
Richard Turnill, chief investment strategist at BlackRock Investment Institute, says higher inflation is supportive of corporate earnings despite higher wages, because those wages are spent. But he says it can push down the valuation of those earnings, and since share prices are the result of the earnings times the valuation multiple, that can offset the higher profits. "This tips from good reflation to bad reflation when the central banks really have to tighten and you start to worry about how far away the next recession is," he said.
Every cycle is different, but in the past there often has been a break in markets when inflation hits 4%. "If inflation gets to 4% the Fed's really behind the curve," says Jason Trennert, chief investment strategist at Strategas Research Partners. "The good news is that we probably have some time before we get to 4%."
It would be misleading to say 4% inflation is guaranteed to be the point where the market going gets rough. Yet, that level has often been a decent warning signal. In 1987, for example, inflation hit 4% in August and the market crashed in October. In 2000, the dot-com bubble burst with inflation at 3.75%, while stocks hit their precrisis peak in October 2007, the month before inflation broke through 4%.
It is easy to forget inflation can be that high. Consumer-price inflation in the U.S. is just above 2% at the moment and hasn't been above 4% since 2008, while the Federal Reserve's preferred personal consumption expenditure (PCE) measure is a little below its 2% target. Friday will bring figures for the fourth-quarter PCE which aren't expected to rise much, and investors are now pricing in U.S. inflation being broadly on target in the long run.
The inflation rate implied by Treasury bonds for the five years starting in five years' time -- a gauge designed to strip out near-term fluctuations -- is up from a postrecession low of 1.4% in July to 2.2%. That would equate to PCE inflation almost exactly on target, suggesting few concerns about an overshoot.
Yet, in the past, inflation has rarely paused at 2%. Since Paul Volcker's Fed tamed the monster inflation of the 1970s, it has risen back through 2% a dozen times, including in December. A year after each of the previous 11 instances it had jumped to 4% twice, and above 3% four times. Maybe this year will be like October 2002, the only time inflation was still at 2% a year later (although it did briefly jump to 3% in between.) But there has to be at least a decent chance that inflation overshoots.
If inflation does carry on up, history suggests that the price/earnings ratio will suffer, as the sweet spot for valuations has been with inflation in the range of 1% to 3%, and they have on average fallen sharply with inflation above 4%. Given that the market starts out already very highly valued compared with the past, the danger is that a sharp drop in valuation will more than offset the rise in earnings from a stronger economy.
This time might be different, if Mr. Trump's plans for corporate tax cuts and a bonfire of red tape boost earnings enough to mean that any drop in valuation doesn't matter. After a seven-year bull market and with valuations high, many fear the end can't be far away, but the rosy scenario is that Mr. Trump can take us back to 2005. A year after the Fed started raising rates, inflation broke 4% and the valuation of the S&P 500 began to drop. But earnings rose quickly enough to allow shares to carry on up for months before a brief pullback in 2006 -- and then, as inflation dropped, to have a final run that took them up another 25% before the credit crunch hit in 2007. Just hope that we have learned enough to avoid a repeat of what followed.
Jan 26 - Oil prices were stable, with rising crude output from the United States offsetting efforts by OPEC and other producers to prop up the market by cutting supplies.
- Gold held near two-week lows hit in the previous session as the dollar regained ground, with selling ahead of the Lunar New Year holidays adding pressure and leaving the metal on track to record its first weekly loss since late December.
- London copper futures edged down, pulling back from a two-month high as the dollar strengthened, with trading volumes lean as the week-long Lunar New Year holiday kicks off in top metals consumer China.
- U.S. soybeans fell to a two-week low as prospects for higher supply of the crop improved in South America, leaving the oilseed poised to record a weekly loss of 2 percent.
Jan 25 - Oil prices rose, driven up by a weakening dollar, but gains were capped by plentiful supplies and inventories despite an effort by OPEC and other producers to cut output and prop up the market.
- Gold prices steadied near 1-1/2-week lows, as a U.S. equities rally offset support from uncertainty over U.S. government policies and a weaker dollar.
- London copper futures steadied near a two-month high amid worries over potentially tighter supply while the dollar wilted on concerns over U.S. President Donald Trump's protectionist policies.
- Chicago corn futures lost ground, giving up some of the last session's gains on concerns over changes in trade policies under new U.S. President Donald Trump
Jan 24 - Oil edged lower as expectations of an increase in U.S. inventories weighed on the market, offsetting bullish momentum from output cuts announced by OPEC and other producers.
- Gold slipped in a technical correction following an 8 percent rally since mid-December that was stoked by fear about U.S. President Donald Trump's protectionist trade policies.
- London aluminium futures held close to 20-month highs in Asia, buoyed by reports of possible capacity cuts in China, while copper steadied near its highest in almost two months.
- Chicago corn futures slid for a third session to touch a one-week low, dragged down by ample world stocks and concerns over U.S. trade policy under President Donald Trump.
- The dollar drifted lower against the yen and euro, as lingering concerns about U.S. President Donald Trump's protectionist stance undermined the greenback's earlier rebound.
Jan 23 - Oil climbed as a weaker U.S. dollar and production cuts announced by OPEC and other producers buoyed the market, but an increase in drilling activity in the United States is likely to keep a lid on prices.
- Gold prices were steady as the dollar remained under pressure on signs that United States President Donald Trump would adopt a protectionist stance on trade.
- Copper led most base metals higher as the dollar struggled amid concerns of U.S. protectionism under the newly-formed administration of U.S. President Donald Trump.
- Chicago soybean prices rose for the first time in four sessions as the dollar weakened, but forecasts of much-needed dry weather in Argentina's flooded crop-belt trimmed gains.
Jan 20 - Oil ticked lower, falling for the first time in three sessions as prospects of rising U.S. production weighed on the market.
- Gold prices rose to the highest in two months as investors sought safer assets amid uncertainty around the economic policies of new U.S. President Donald Trump and as the dollar declined against other major currencies.
- London copper climbed to a six-day high, buoyed by a weaker dollar and as U.S President Donald Trump reiterated plans to spend big on infrastructure.
- Chicago soybeans slid for a third session, with forecasts of dry weather in Argentina's flooded crop areas easing concerns over yield losses.
- The pound rose to its highest against the dollar in a month, as the greenback sold off broadly.
Jan 19 - Oil climbed for a second day underpinned by expectations of tighter supply and on reports of record Chinese demand, but prices remained under pressure from rising U.S. crude and gasoline inventories.
- Gold prices held steady and were on track for their fourth weekly gain in a row, buoyed by a weaker dollar ahead of the inauguration of U.S. President-elect Donald Trump later in the day.
- London copper futures edged higher after China's economy grew slightly faster than expected in the last quarter of 2016, but caution among investors ahead of U.S. President-elect Donald Trump's inauguration capped gains.
- Chicago soybeans slid for a second session with a strong dollar weighing on prices, although crop-damaging floods in Argentina kept a floor under the market.
Jan 18 - U.S. oil moved away from one-week lows touched the session before, with investors turning their attention to upcoming government data on U.S. inventories.
- Gold prices were down on a strong dollar after Federal Reserve Chair Janet Yellen advocated lifting U.S. interest rates gradually.
- London copper reversed early losses to follow Shanghai futures higher as expectations of steady growth in China helped the red metal along with positive U.S. economic signals.
- Chicago soybeans eased from a six-month high with the market snapping four sessions of gains on a stronger dollar although losses were limited by concerns that floods could crimp output in Argentina, the world's third-biggest producer.
Jan 17 - Oil markets were mixed, supported by growth in U.S. crude production and Saudi Arabia saying it would strictly adhere to a commitment to cut output, but held back by scepticism in financial markets that oversupply would be curbed.
- Gold prices rose to hover near seven-week highs hit the day before, with safe-haven demand boosted ahead of a speech in which British Prime Minister Theresa May is expected to discuss plans for a "hard Brexit".
- LME copper slid for a second session, as a firmer U.S. dollar pressured the market, but expectations of strong demand in top consumer China put a floor under prices.
- Chicago soybean futures rose for a third consecutive session on Tuesday, climbing to a seven-week top as heavy rains across Argentina's central crop belt raised concerns over yield losses.
- The British pound flirted with a three-month low, hit by fears that Prime Minister Theresa May's speech later in the day is likely to set Britain on a course that would end its access to the lucrative European Union single market.
Jan 16 - Oil prices inched up, supported by a weaker dollar and expectations that OPEC and other producers will cut output as part of a deal to curb global oversupply.
- Gold rose, buoyed by safe-haven demand due to uncertainty over U.S. policy ahead of President-elect Donald Trump's inauguration and amid concerns over Britain's exit from the European Union.
- Copper prices rose, extending hefty gains from last week on the back of strong economic data from the United States and China.
- U.S. soybean futures rose on Friday on follow-through buying on the U.S. Agriculture Department's surprise cut to its domestic production estimate and ending stocks on Thursday, traders said.
- Sterling wallowed at three-month lows in Asian trade after media reports that the British government is prepared to make a "hard" exit from the European Union rekindled investors' fears about the impact of the impending move.
Jan 13 - Oil prices edged up, supported by reports on details of OPEC output cuts, although lingering doubts over producer compliance with supply reduction targets weighed on the market.
- Gold fell after hitting a seven-week high in the previous session as the dollar edged up and a technical correction set in, but the yellow metal was still on track to end higher for a third straight week.
- London copper edged up, putting it on track for a weekly gain of about 5 percent, its biggest weekly advance since late November after data showed China imported more copper last year and a weaker dollar boosted industrial metals.
- Chicago soybean futures were on track for their biggest weekly gain since late November, with prices underpinned by the U.S. government reducing its estimate for yields and stockpiles.
Jan 12 - Oil prices dipped on the back of rising U.S. crude inventories and plentiful supplies, despite emerging output cuts from OPEC and other producers.
- Gold rose to a 7-week high on a weaker dollar after U.S. President-elect Donald Trump provided little clarity on future fiscal policies at a press briefing.
- Shanghai copper traded little changed in low volumes, while most other Shanghai contracts fell after U.S. President-elect Donald Trump failed to offer concrete stimulus plans.
- Chicago wheat futures slid for a third session, trading near one-week lows as the market faced pressure from forecasts of favourable weather in the U.S. Plains and the Black Sea region.