Forex & Commo Market News

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

- A risk premium has returned to oil markets, boosting global prices as escalating fighting in Iraq threatens supplies while political tensions loom between the United States and Iran.  
- Gold prices were mostly steady, pressured by a firmer dollar but supported by worries over geopolitical tensions in the Middle East and on the Korean peninsula.
- London copper paused for breath near three-year highs as it faced headwinds from a stronger dollar, but renewed optimism over China's economic outlook has lent support to prices.  
- Chicago soybeans lost more ground as the market moved further away from its highest since late July reached last week with the focus on Brazilian planting delays and U.S. exports.

- Volatility in U.S. dollar corporate bonds remains at the bottom end of its historical range and North Korea-related jitters in August proved, the market seems "willing to look through" unforeseen events, like geopolitical risks, according to HSBC. Three-month realized volatility in dollar investment-grade and junk corporate bonds stands below the 25-75 percentile range and well below its median since 2006, based on HSBC data. Based on this and other market data, "the current market environment looks remarkably benign," the bank adds.
- The euro has fallen to the lowest levels in a week today. Societe Generale's Alvin Tan pegs reports that Fed chief candidate John Taylor made a good impression on Trump. The Stanford professor is seen by some in the market as more hawkish than Yellen. Meanwhile, news that Spain is preparing to replace Catalan security officials show signs that crisis is escalating, Tan added. The euro is down 0.3% versus the dollar and pound at $1.1765 and GBP0.8873, reaching a nearly 2-week low versus the latter.
- Hours before the 4th, and perhaps most contentious, round of Nafta renegotiations comes to a close, Trump and Trudeau talked trade tonight during a phone call, according to a summary of the conversation provided by the Canada PM's office. The summary didn't mention Nafta, but the Canadian version of events suggested the duo discussed the most-recent development in the Boeing-Bombardier trade row: A deal that sees Airbus taking a majority stake in the CSeries aircraft. That plane could face US tariffs of up to 300%. Also, the Canadian readout said Trump and Trudeau "expressed their hope" that a solution could be found to resolve another battle involving softwood lumber.
- There "remains an air of apprehension" among traders as they wait for news on who is in the best position to become the next Fed chair, says Stephen Innes, a senior trader at Oanda. Absent a clear indication of who the Fed chief will be, little action is expected in the dollar/yen market ahead of Japan's election on Sunday. Prime Minister Shinzo Abe has a large lead in the polls. "A substantial outcome for Abe should, in turn, mean a weaker JPY," he adds. The USD/JPY is little changed from late New York trade at 112.17.

- The Montana Health Co-op will be allowed to re-file its rates, seeking an extra increase for 2018 Affordable Care Act plans, permission that the nonprofit says will save it from the risk of receivership. Jerry Dworak, chief executive of the insurer, had said the nonprofit needed an extra rate increase in the wake of the Trump administration's decision to halt cost-sharing payments. The co-op's original 2018 rates had assumed those payments would continue. State regulators told the co-op Monday that they had gotten permission from federal officials to allow the insurer to re-file its rates, Dworak said. Dworak said the insurer will seek an extra 25% rate increase on middle-tier silver plans to account for the cost of losing the federal payments.
- US Coast Guard was busy around Louisiana this weekend handling two oil-industry-related incidents that raise concerns President Trump's deregulation drive to boost drilling is putting safety in the backseat. LLOG Exploration reported a large crude oil spill of up to 9,350 bbls from a fractured, offshore pipe 40 miles southeast of Venice, La. And then Sunday night, an energy platform exploded in Lake Pontchartrain near New Orleans, leaving seven people injured -- three critical -- and one worker missing and feared dead. Mark Salvo of DC-based Defenders of Wildlife tells WSJ Trump's efforts to increase drilling so US can be energy-dominant could make such incidents more common.
- With unplanned production outages hitting a five-year low in September, oil market participants have become somewhat complacent with regards to geopolitical risks, UBS says in a note. While no new production disruptions have emerged in the past several days, military clashes in Northern Iraq, tensions between the U.S. administration and Iran, and the regional elections in Venezuela increase the risk of production outages in the short run. The largest supply risks come from Iraq, where military confrontation between Iraqi soldiers and Kurdish forces were reported. Since the oil market is in deficit, any additional disruptions would likely cause prices to spike, it adds.
- With all eyes on the European Central Bank's upcoming Oct. 26 meeting, HSBC forecasts that the bank will extend its EUR60 billion-a-month QE program by six months, but at a reduced purchase rate of EUR40 billion. While a "lower for longer" approach would help reinforce forward guidance on policy rates and reassure markets that they won't rise for a long time, the strongest argument for "higher but shorter" tapering is that the ECB may want to retain some flexibility to respond to incoming economic data, says Simon Wells, chief European economist at HSBC.

Oct 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets jumped on concerns over potential renewed U.S. sanctions against Iran as well as conflict in Iraq, while an explosion at a U.S. oil rig and reduced exploration activity supported prices there.
- Gold slipped on a firmer dollar and stronger Asian equities, but stayed above the key psychological level of $1,300.
- London copper prices eased but stayed near three-year highs, underpinned by a rise in oil prices, after China's copper imports surged in September.
- Chicago soybean futures edged lower, pausing after climbing to their highest since late July, with lower U.S. yields and planting delays in Brazil limiting price declines.
- The euro was on the defensive early after Austria's election and on concerns over Catalonia's confrontation with Madrid, though the dollar also lacked momentum after soft U.S. inflation data.
- A senior counsel to Senate Banking Committee Chairman Mike Crapo (R, Idaho) said his team is hopeful that US lawmakers will agree on a package of financial regulatory reforms. "We are hopeful to get a package of something, I don't know what exactly," said Joe Carapiet at a banking conference. He said moving the $50B asset threshold for stricter bank rules, tweaking midsize bank stress tests, and help for community banks are under consideration as bipartisan ideas. "We're trying to see if we can get enough votes so we can get floor time in the Senate," he said.
- Health insurers stumble after the Trump administration threatened to pull back billions of dollars worth of subsidies paid under the Affordable Care Act. Anthem, the largest insurer by market cap slides 2.8% to $184.50 during late trading. Centene, Humana, Cardinal Health all logged declines between 1.7% and 3.4%.
- The head of the eurozone's bailout fund, Klaus Regling, says discussions on the creation a common backstop to the eurozone's Single Resolution Fund are "quite advanced" and the European Stability Mechanism will likely take on the task. Another mechanism aimed at pooling banking risks, a common deposit-insurance scheme, "will be useful and will happen," he says on a panel in Washington. Risk sharing remains an issue in the push to make the eurozone more resilient, Regling says, although he's not in favor of full fiscal or political union, nor does he think there should be additional transfers between countries to promote convergence.
- How much does it take to protect against defaults by the Turkish government after its latest diplomatic row with the U.S? Around as much as it did before the row. Investors need to pay $176,235 per year to insure $10 million of Turkish debt for five years. Last Friday, prior to news of Turkey and the U.S. stopping issuing nonimmigrant visas to each other's citizens, the cost stood at $175,905. On Monday, it cost $186,655. The country's 10-year dollar bonds also quickly reverse losses, a fact that some investors attribute to massive inflows into emerging market bond funds.
- Treasury Secretary Steven Mnuchin defends the decision by a council of regulators to end its enhanced oversight of insurer AIG. The company had been designated as a systemically important financial institution by the Financial Stability Oversight Council, a process created by the 2010 Dodd-Frank law. Mnuchin said the decision to remove AIG's designation showed companies can be released from the SIFI process "without going through complete liquidation." "I think this is a healthy process," he said.
- Oil prices surge higher as investors await an expected speech by President Trump on Iran. "If Iran's crude exports are curbed after POTUS looks to decertify Iran, there is the potential for Iranian's production to be taken out of the mix (about 2.3M bpd) and thus what some are saying maybe a $5-$10 premium," says Seaport Global. Iran is a top oil and gas producer, and sanctions imposed between 2011 and 2013 cut its exports, leaving a vacuum that added fuel to the US shale boom. The 2016 lifting of sanctions saw a return of Iran oil to global markets. The Nymex oil contract for November gains 1.9% to $51.57/bbl.
- The Social Security Administration today will announce whether roughly 66.7 million retirees and other Americans will receive a cost-of-living adjustment next year for their benefits. The calculation is based on inflation data released this morning by the Labor Department. Based on the figures in today's CPI report, beneficiaries are expected to see a roughly 2.0% increase for 2018 -- the largest bump since 2012. This year, Social Security recipients saw a more modest 0.3% increase, a reflection of low inflation the prior two years.
- ING expects GBP/USD to trade around 1.35-1.36 in the days before and during the Bank of England meeting on Nov. 2. This compares with a current GBP/USD rate of 1.3270. Once the EU leaders' summit next week is over, sterling sentiment should shift toward the BOE meeting, where Governor Mark Carney is expected to raise interest rates and may also hint this is the beginning of a rate increase cycle, says ING. Against the euro, sterling may not change much over the coming weeks, since "hawkish ECB and BOE policy steps are likely to counteract each other in the near-term," ING says, forecasting EUR/GBP to stay within a 0.88-0.90 range.

Oct 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose as both U.S. crude production and inventories declined, pointing towards a tightening market.
- Gold rose for a sixth day, buoyed by a weaker dollar, with investors waiting for key U.S. inflation data for clues on the outlook for potential hikes in U.S. interest rates.
- Nickel led across-the-board gains in Shanghai metals futures on bets China's Communist Party congress next week will result in stronger demand for imports.
- Chicago soybean futures edged higher, with the market poised for the biggest weekly gain in more than three months after the U.S. government unexpectedly cut its production forecast.
- The House Financial Services Committee approved about two dozen stand-alone deregulatory bills that could eventually advance through Congress as part of a larger package. One notable measure, which passed the committee by a vote of 47-to-12, would change the way the government designates banks as being "systemically important," a label that triggers tougher oversight. The bill, introduced by Rep Blaine Luetkemeyer (R, Mo), would scrap the current threshold--institutions with $50B or more in assets--and instead rely on a formula the Federal Reserve already uses to determine the amount of extra capital the biggest banks need to hold.
- California Governor Jerry Brown signs a new law forbidding employers from asking job candidates about their salaries at prior jobs. Similar laws exist in Massachusetts, Oregon and Delaware, as well as some cities. The rules are part of a movement to counter pay disparities between men and women, as research shows that lower pay for women in early jobs can follow them throughout their careers when new employers base compensation on previous salaries. California's law also requires employers to provide a salary range for open positions, when asked by job applicants. The bill, which takes effect January 1, had some bipartisan support in the California Assembly.
- Only 4% of Mexico's total exports could face "tariff peaks" in the US if Nafta is scrapped, says Economy Minister Ildefonso Guajardo. Close to 70% of Mexico's total exports go to North America. Under WTO rules, which would apply if Nafta is eliminated, most of Mexico's exports to the US would have zero tariffs. Close to 16% of Mexico's total exports--or about 20% of US-bound exports--would face average US import tariffs of 3%. Guajardo said in a radio interview early this week that the number of players affected by so-called tariff peaks is relatively small, including "the three companies that produce pickup trucks, and those that produce melons or asparagus."
- In the event Nafta is scrapped and Mexico-US trade reverted to WTO rules, the short-term impact on the Mexican economy would likely be limited -- "we would probably nudge down our GDP forecast for 2018 by something like 0.5-1.0 percentage point [from current 2.5%]" says Capital Economics. While longer-term effects are more uncertain, a weaker peso would help to cushion the impact, the firm adds. "There is of course no free lunch in a weaker currency, since it implies a loss of purchasing power globally. But it does at least limit the likelihood of a significant shift in production from Mexico back to the US."
- As major business groups warn that some of the Trump administration's proposals for Nafta could hurt their industries deeply, labor unions and House Democrats are cheering the very same ideas. In a hotel across the Potomac River in Virginia, the Trump administration has launched a fourth round of talks and began discussing provisions that business groups have branded as "poison pills," which they say are unlikely to lead to agreements or compromises with Canada and Mexico. But at the AFL-CIO headquarters overlooking the White House, several labor groups, joined by House Democrats, back those provisions: much tighter "rules of origin" for the auto industry, a "sunset provision" that could allow Nafta to expire and the gutting of an arbitration system known as investor-state dispute settlement.
- This month's WSJ survey of economists finds a broad consensus that the Republican tax plan, if implemented in its current form, would boost GDP growth in the next two years. But forecasters are nearly evenly split over whether it would lift the economy's long-term growth trajectory. Some 48% predicted a modest increase, while 38% said the US would remain on its current path. Just 4% said the tax plan would boost the GDP growth rate by more than 0.5 percentage point per year, while 10% said growth would be somewhat or significantly slower than if there had been no tax-code changes. Predictions could firm up as the tax plan is fleshed out by Congress in the coming weeks and months.
- If Treasury Secretary Steven Mnuchin pushes for Federal Reserve governor Jerome Powell to become the next Federal Reserve chair, as a report in Politico suggested, this would imply a weaker U.S. dollar outlook, Morgan Stanley says. "The article leaves the impression that the Trump administration is looking for a candidate willing to cooperate with the Treasury and that Powell may check this box too," Morgan Stanley adds. The dollar is already weak on "increasing worries within the Fed that the summer dip in core personal consumption expenditures was not due to temporary factors," says Morgan Stanley. The DXY index which tracks the dollar is flat at 93.05, having earlier fallen to a two-week low around 92.80.
- The Turkish lira stabilizes on Thursday after Monday's shock, when it fell to nearly a half-year low versus the U.S. dollar on tensions between Turkey and the U.S. The rebound in the lira comes on the back of Turkey's current account deficit narrowing in August, but Commerzbank says the deficit, which was announced on Wednesday, isn't likely to push the lira up forward. "We do not find much room for exuberance," says Commerzbank. "Ignoring month-to-month noise, Turkey's trade deficit and current-account deficit are both widening out as a percentage of GDP," Commerzbank says. This is mainly driven by the increase in oil demand and this isn't likely to change anytime soon, the bank says. USD/TRY last down 0.2% at 3.6419.
- Legg Mason investment director Amanda Stitt says there's still value in emerging-market debt, pointing to the high yields on offer after adjusting for inflation. But the bull case for EM -- better growth, strong exports, stable commodities -- is susceptible to moves in US Treasurys, she says. To that end, it's worth paying attention to the big themes that President Donald Trump keeps mentioning, like infrastructure spending and boosting US
manufacturing. Both are consistent with low rates and a stable dollar, she says. That suggests the EM party can continue.
- Canadian Prime Minister Justin Trudeau said he told President Donald Trump on Wednesday in the Oval Office how "vehemently" Canada disagrees with the Commerce Department's decision to slap preliminary duties of 300% on Bombardier Inc.'s CSeries aircraft--and the move could upend a planned Canadian purchase of Boeing Co. fighter jets. "We feel this is not something that is warranted and we look very negatively upon," Mr. Trudeau told reporters in Washington following his meeting with Mr. Trump. Duties were slapped after Boeing filed a trade complaint alleging Bombardier benefited from state subsidies to build the CSeries, which is meant to serve the 100- to 130-seat market. Trudeau said the trade complaint poses a "block" in terms of Canada's previously announced plan to purchase 18 Super Hornet fighter jets from Boeing.

Oct 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices eased as U.S. fuel inventories rose despite efforts by OPEC to cut production and tighten the market.
- Gold prices rose to their highest in two weeks amid a muted dollar, after minutes from the U.S. Federal Reserve's September policy meeting revealed low inflation concerns.
- London copper inched to its highest in more than a month, underpinned by steady demand and a weaker dollar.
- U.S. wheat edged up, rising for the first time in four sessions as investors looked for bargains, although ample world supplies and stiff competition from Black Sea producers limited gains.
- Investors didn't appear to focus on the future of Turkish President Recep Tayyip Erdogan when reemerging political jitters hurt Turkish assets earlier this week. "Markets have accepted that Erdogan has consolidated power and is here to stay, just like Putin in Russia," says Peter Kisler, portfolio manager at North Asset Management. Turkey and the U.S, a NATO ally, stopped issuing nonimmigrant visas to each other's citizens on Sunday. This followed the arrest of a U.S. consulate employee in Istanbul.
- Gold is up today, thanks mostly to a weak dollar, but geopolitical risk sentiment is also buoying the precious metal. "Market participants are also likely to be unsettled by the fact that two US long-range bombers flew near the Korean peninsula on a training exercise," Commerzbank says in a morning note. "This could prompt the North Korean ruler Kim Jong-un to conduct another missile test," the bank adds. On top of that, "confidence in U.S. President Donald Trump's ability to pass the [tax reform] bill is waning," and that is once more creeping into traders' considerations, according to John Meyer, an analyst at SP Angel.
- Political uncertainty continues to undermine the dollar, creating a sense of chaos that dampens prospects for tax reform, says Greg Gibbs, currency strategist at Amp GFX. With the global economic recovery continuing to support stock markets around the world, he notes investors are more willing to take emerging-market currency exposure to avoid elevated political risk in America. The WSJ Dollar Index fell 0.4% Tuesday, the most in 5 weeks and the 4th decline in 6 sessions.
- Though the Trump administration has made moves to restrict immigration, USDA Secretary Sonny Perdue says he's looking for ways for US agricultural companies and producers to expand legal hiring of immigrant workers. "I want to help get a legal guest worker program that many of our producers depend on," Perdue says at the WSJ Global Food Forum, citing immense efforts by immigrant laborers he recently observed at a sweet potato farm. Rep. Robert Goodlatte (R., Va.) has proposed a new Agriculture Guestworker Act that would allow for year-round employment of foreign workers, though Perdue didn't say whether he would throw his support behind the bill.

Oct 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up, rising for a third day, on signs that markets are gradually tightening after years of oversupply, although the outlook for 2018 remained less certain.
- Gold stood little changed after the dollar recouped early losses, with investors awaiting the release of the U.S. Federal Reserve's minutes from its September meeting for clues on further interest rate hikes this year.
- Speculation that President Donald Trump's tax overhaul plan would stall kept the dollar below a recent 10-week peak against major currencies, and the euro held near a 12-day high as political tensions over Catalonia receded slightly.
- London metals edged lower as the dollar rose from recent lows but prices found support from China buying on expectations of improving economic growth.
- Chicago corn futures slid for a third session, with plentiful supply and slow demand for U.S. shipments weighing on the market.
- FDA Commissioner Scott Gottlieb says at WSJ's Global Food Forum that despite delays in implementing what he calls public-health initiatives that came out during the Obama Administration, he's committed to advancing those. Providing information around calories at restaurants and a "better" nutrition facts panel on packaged food is complicated, but important, he says. "You don't get the chance to revisit these things very often," he says. "We need to provide guidance to the industry." The FDA will issue that guidance soon, he says. "We feel that we can address the challenges."
- US Chamber of Commerce president Thomas J Donohue said the chamber would "fight like hell" to protect the free trade agreement between the US, Canada and Mexico. He says the threat by President Donald Trump to pull out of NAFTA is an "existential threat" to the economy and national security of all three countries. Donohue warns of several "poison pill" provisions proposed by US negotiators that could doom the treaty. One is a sunset clause stipulating the agreement would end after five years, unless all parties agreed to continue it. Another is the emphasis placed by US negotiators on lowering the US trade deficit with other countries as a way of "winning" on trade. "It's the wrong focus and is impossible to achieve without crippling the economy," he said.
- Societe Generale advises going short of the Turkish lira versus the U.S. dollar on the back of Turkey's worsening diplomatic tensions with the U.S. and its falling real yields. It recommends doing this by buying a three-month USD/TRY option with a one-touch knock-in at 4.35. USD/TRY last trades down 0.6% at 3.6787, having jumped to its highest since early 2017 at 3.8352 on Monday after Turkey and the U.S. stopped issuing non-immigrant visas to each other following the arrest of U.S. consulate employee in Istanbul. SocGen also cites an increased risk of early elections in Turkey and adds that Turkish residents have resumed accumulating foreign currencies.
- Rabobank says it may be too early to dismiss the idea that the U.S. dollar "could end this year on a better footing." The DXY dollar index may fall below 92 this year before rebounding to at least 95.47, it says. "The leg lower could be driven by renewed market pessimism about tax reforms in the U.S." and "a stronger euro supported by expectations that the ECB will withdraw monetary policy stimulus," Rabobank says. But after that a move higher "should unfold driven by concrete fiscal policies being implemented by the Trump administration and Republicans accompanied by hawkish rhetoric from the Fed." The DXY index is last down 0.4% at 93.25, pulling away from a 2.5 month high of 94.27 reached Friday.
- U.S. dollar weakness comes from Asia on Tuesday. BK Asset Management says reports that North Korea has a missile which could reach U.S. territory is pressuring the U.S. currency. These tensions "continue to dog the dollar," says Boris Schlossberg at BK, and markets "remain on edge ahead of any possible North Korea missile launch this week." If rhetoric escalates then "jitteriness" will continue and could "overshadow" economic news, he says. "Any ominous tweets from President Trump could weaken the greenback further, with USD/JPY testing 112 support." USD/JPY last down 0.2% at 112.43. Analysts also cite the People's Bank of China fixing the Chinese yuan higher than expected as a factor pressuring the dollar.
- The euro rises in a sign of confidence that for now the risk of Catalonian independence is just a Spanish problem, says Thu Lan Nguyen at Commerzbank. Euro gains are small but still EUR/CHF reaches a two-week high 1.1526, according to Factset, and EUR/USD its highest in nearly a week at 1.1789. "We have seen so far that the euro has reacted very little to the political events in Spain," says Ms. Nguyen. However, it could be vulerable if risks of Catalonia separating become more imminent, with Catalan President Carles Puigdemont due to speak to the regional parliament later Tuesday. A weaker dollar also helps EUR/USD as investors remain skeptical of U.S. rates rising much beyond the expected December rise, Ms. Nguyen says.
- Japanese stocks are rallying into the close, even as the yen hasn't moved much. Yusuke Sakai, senior trader at T&D Asset Management, says despite the Nikkei's ascent to 2-year highs, some didn't aggressively buy ahead of the holiday weekend. Since the end of Friday's trading, US jobs data showed solid wage growth and North Korea remained quiet. "People feel comfortable buying stocks," he adds. Meanwhile, Sakai says many in the market suspect the upcoming election is unlikely to be a big disruption to Abe's coalition but could keep him focused on economics--not other things like constitutional amendments. The Nikkei is up 0.6%, hitting fresh 26-month highs.

Oct 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were steady as OPEC said there were clear signs the market was rebalancing and as U.S. production remained offline following Hurricane Nate.
- Gold prices inched up to their highest in more than a week, drawing support from geopolitical tensions and a softer dollar, but expectations of another U.S. Federal Reserve interest rate hike this year weighed on upside momentum.
- The dollar was little changed against the yen, with the market wary of potential North Korean provocations, while the euro extended gains following upbeat German data and hawkish-sounding comments from a European Central Bank official.
- London copper pushed higher after stagnating overnight, buoyed by a steady dollar and a modest uplift in Chinese futures.
- Chicago wheat was little changed, a day after suffering its biggest one-day loss in more than a month, with a lack of demand for U.S. shipments in an amply supplied world market dragging on prices.
- Canada takes another step that sets the stage to abandon its planned purchase of 18 F/A-18 Super Hornet fighter jets from Boeing. Canada says it submitted a formal offer to Australia to acquire second-hand CF-18 fighter aircraft. A decision could emerge by year end, Canada says. The news, unveiled on the Thanksgiving holiday in Canada, comes roughly 48 hours before PM Justin Trudeau meets President Trump in Washington, at a time of trade unease as Nafta renegotiations enter precarious stage. US authorities have slapped a preliminary 300% tariff on passenger jets from Canada's Bombardier, following complaint from Boeing about state subsidies. Talks between Canada and Boeing over Super Hornets have been suspended, and Trudeau vowed not to do business with Boeing so long as it's pursuing trade action against Bombardier.
- Shares in precious metal miners rise as investors seek safety in gold and silver on fresh jitters about North Korea. Randgold Resources and Fresnillo PLC are among the biggest risers in the FTSE 100, gaining 1% to 7505 pence and 0.4% to 1430 pence respectively. The gold price rises 0.7% to $1,284 an ounce after tensions with Pyongyang re-emerged as Donald Trump hinted at eventual military action by tweeting 'only one thing will work.' "The markets are concerned about news from Russia's RIA News Agency that North Korea is preparing to test a long-range missile which it believes can reach the US west coast," FxPro analysts say. "With renewed tensions between North Korea and the US, the markets have moved into safe havens."
- Sterling extends gains on Monday afternoon as U.K. Prime Minister Theresa May looks as though she stands a higher chance of keeping her job, but also due to a thinner liquidity in the market, given a U.S. holiday. "There is a little bit of relief she is still here," says Audrey Childe-Freeman at FX Knowledge, referring to Ms. May. "The market would probably prefer her to stay as the market desperately needs stability at this point," she adds. GBP/USD is up 0.6% at 1.3145, recovering from Friday's one-month low of 1.3027. Against the euro, the pound also gains ground, with EUR/GBP up 0.55% at 0.8929.
- Unicredit says more falls in the Turkish lira are likely after Turkey and the U.S. both suspended non-immigrant visa services following the arrest of a U.S. consulate employee. USD/TRY jumped to just above 3.80 in Asian trading, and has since settled to trade at 3.7161, still up nearly 3% on the day. "The extremely strained relations with the U.S. were not something that was considered a base case for market participants," Unicredit says, adding: "we would expect USD-TRY to make further gains from here." The move could reverse on signs of tensions "de-escalating" but Unicredit says weak economic fundamentals still leave TRY "the main underperformer in high-yield EMFX."

Oct 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up, after a 2 percent slide, on expectations that Saudi Arabia would continue to restrain its output in order to support prices, and as the amount of rigs drilling for new oil in the United States dipped.
- Gold prices climbed to their highest in more than a week as renewed concerns over North Korea's nuclear ambitions stoked safe-haven demand for the precious metal and weighed on the dollar.
- Shanghai zinc surged 4 percent to its highest in nearly a decade, lifted by supply concerns as well as expectations for improved liquidity in markets in China, the world's top metals consumer.  
- Chicago soybeans were largely unchanged after climbing to a two-week high, underpinned by concerns about dry weather bringing planting delays in the world's biggest exporter, Brazil.
- Current spat between U.S. and Turkey could develop into a crisis in relations between the West and Ankara and the lira might end up taking the strain, with the risk of a repeat of the early 2014 or late 2016/17 scenarios, says Timothy Ash, Senior EM strategist at Bluebay AM. "In terms of Turkish markets this has come at a difficult time, given the wide current account deficit, 4-5% of GDP, and marked deterioration of the financing of the deficit seen this year - with the share of hot money financing rising to 70%." Lira currently down 2.5% against the dollar.
- Concerns about Catalonia and the possibility of the "more hawkish" Kevin Warsh becoming new U.S. Federal Reserve chair make EUR/USD a sell on rallies, says Nordea. "While EUR/USD trades at our Q4 forecast of 1.17, we think a sell-on rally stance makes sense for now." Further escalations in Catalonia "cannot be ruled out" and would be "short-term EUR negative." Increasing bets on Mr. Warsh --who has criticized quantitative easing--would be dollar positive, although most pronounced via a higher USD/JPY, Nordea says. It adds the European Central Bank is likely to be "more vocal" about currency strength concerns if EUR/USD approaches 1.20. EUR/USD is last flat at 1.1739.
- Turkish corporate bond spreads slip early Monday, but losses are contained. Asset swap spreads on U.S. dollar bonds from the likes of Turk Telekom, industrial group Koc Holding, brewer Anadolu Efes and oil refiner Tupras widen by a few basis points Monday, but dealer quotes are scarce. Relations between Turkey and the U.S. deteriorate are both have suspended non-immigrant visa services after the arrest of a U.S. consulate employee. This has weighed particularly on the Turkish lira. UniCredit analysts say de-escalation may take a while as the stand-off is linked to Turkey's long-held demand for the extradition of cleric Fethullah Galen.
- Buoyant risk sentiment and signs that U.S. wage inflation is picking up - potentially prompting a rate rise by the Federal Reserve - should weigh on German government bonds and push yields back toward 0.5%. But Catalonia-related risks remain. Therefore, 10-year bund yield should eventually settle in a range below 0.5%, even though they could, at some point, rise above 0.5% thanks to buoyant risk sentiment, Commerzbank rates strategist Rainer Guntermann says. German 10-year yields stand at 0.465% early Monday, based on Tradeweb data. Yields move inversely to bond prices.

Oct 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets were cautious as traders monitored a tropical storm heading for the Gulf of Mexico and as China remained closed for a week-long public holiday.
- Gold was steady ahead of key U.S. jobs data later in the day, with prices curbed as the dollar stood firm near a seven-week high.
- London copper held overnight gains amid holiday-thinned trading in Asia, but prices were curbed by a strong U.S. dollar.
- Chicago wheat futures edged higher but the market is on track for its second week of decline with pressure from abundant global supplies.
- Mexican peso weakens 1.1% against the US dollar, reaching levels not seen since early June, on worries that the renegotiation of Nafta among the US, Mexico and Canada could derail in the coming months. The peso, which had recovered some ground in the summer, closed in Mexico City at 18.4750 to the dollar, up from 18.2720 Wednesday. The benchmark IPC index closed down 0.2% at 50,480 points. America Movil ended flat, while cement-maker Cemex closed down 0.3%.
- US wheat farmers are growing frustrated with the Trump administration's focus so far on renegotiating existing trade deals, like Nafta and the US-Korea Free Trade Agreement, rather than striking new ones that would broaden the global market for American-grown grain. "It is time to get past plowing the same fields and start opening ground in new markets," says Chandler Goule, CEO of the National Association of Wheat Growers, in a letter co-signed by the US Wheat Associates. US wheat has struggled to find international buyers as other countries, like Russia, peddle cheaper grain, and the groups call on President Trump to make good on repeated campaign-trail promises of new bilateral trade deals.
- The Heritage Foundation's Stephen Moore calls the US energy revolution vital for America's economy, and says the revolution has a friend in President Trump. "Donald Trump is pro-American energy," Moore tells an audience at the Moneyshow conference in Dallas. Trump's leadership, he says, means "we're going to produce more oil, we're going to produce more gas, we're going to produce more nuclear power, and we're going to produce more coal." Moore says the ongoing development of the shale industry, and the jobs it created, hasn't received due recognition. "If it weren't for states like Texas and North Dakota and Oklahoma, we wouldn't have gotten out of recession."
- Whirlpool won a key vote Thursday by a US government panel in its long-running trade dispute over imported washing machines made by its South Korean rivals Samsung and LG. The US International Trade Commission voted unanimously in favor of Whirlpool, which is seeking broad trade protections under the so-called "safeguard" law. The 4-0 vote precedes recommendations on potential remedies for the "serious injury" Whirlpool has complained about. The decision on whether to impose tariffs or put up other trade barriers will ultimately go to President Trump. Whirlpool shares up 1% to $187.87.
- Federal Reserve Bank of Philadelphia President Patrick Harker spoke glowingly about Chairwoman Janet Yellen when asked about her future as leader of the Fed. "I really enjoy and respect working with Janet Yellen," he said in an interview with The Wall Street Journal. "I think she's been a great leader for the Fed." President Donald Trump recently met with two possible replacements for Yellen, Fed governor Jerome Powell and former Fed governor Kevin Warsh. Yellen's term as chairwoman ends next year. The White House said she is a candidate to remain in the role. Harker declined to weigh in on potential successors. "The decision about who is the next chair, or if Janet Yellen continues, is above my pay grade," he said.
- Boeing's move into the brave new world of flying taxis via the planned purchase of Aurora Flight Sciences may be a welcome distraction from the political flak facing the aerospace giant. The US commerce department is due to rule later Thursday on the second part of Boeing's complaint against Bombardier over alleged state subsidies and unfair pricing for the Canadian company's CSeries jetliner. Canada and the UK -- which hosts a factory making CSeries wings -- have both howled in protest at the trade case, with the US threatening to slap punitive tariffs on imports of the plane to domestic customers.
- Randal Quarles is poised to win confirmation to a top post on the Federal Reserve, after the Senate on Wednesday met a 60-vote procedural hurdle to limit debate and move to a confirmation vote. Wednesday's vote, to invoke "cloture," was 62 to 33 and confirmation vote is expected Thursday morning. Quarles is the Trump administration's pick to become the Fed's vice chairman of supervision, easily the most powerful position in financial regulation. Thursday's expected vote will confirm him only as a Fed governor; the Senate may have to vote subsequently to formally make him the central bank's point man on regulation, though he can likely serve informally in that role until the Senate acts again.

Oct 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were stable on expectations that Saudi Arabia and Russia would extend production cuts, although record U.S. exports and the return of supply from a Libyan oilfield dragged on the market.
- Gold was mostly unchanged as the dollar held firm on strong U.S. services sector growth, with markets awaiting the key U.S. non-farm payrolls report on Friday.
- Profit-taking drove base metals lower after supply concerns in China lifted recent sessions, traders said, with zinc retreating from 10-year highs.
- Chicago soybean futures rose for a second session as rains delayed the harvest in parts of the Midwest United States and dry weather slowed the pace of planting in Brazil, underpinning prices.
- Americans are worried or deeply ambivalent about the impact automation will have on their jobs and lives, according to a new report from Pew Research Center. Nearly three-quarters of US adults are very or somewhat worried about the effect that automation could have on jobs. A similar share believe that automation will worsen economic inequality in the US and will not lead to the creation of enough new, high-paying jobs for humans to offset technology-related job losses. Americans feel more positive about the prospects for driverless cars and the development of robots that can care for the elderly, but even in those cases Americans are deeply split. Pew surveyed more than 4,000 adults in May.
- SEC Chairman Jay Clayton "is confident" that his regulators will propose rules for how stockbrokers navigate financial conflicts of interest that may affect advice they provide to clients. The SEC is drafting a proposal that could alter the current standard for how brokers advise clients, Clayton tells the House Financial Services Committee. Under current rules, brokers are only obligated to provide "suitable" advice, a weaker standard than one that applies to money managers who often have discretion to pick clients' investments. Wall Street wants the SEC to write a new rule because it opposes an even stricter regulation implemented by the US Labor Department, whose measure required brokers to act in the best interest of retirement savers.
- Newly sworn-in CFTC Commissioner Brian Quintenz blasts an Obama-era proposed rule to collect source code from algorithmic traders, calling the proposal "massively over-reaching and highly concerning." The data collection scheme was part of the proposed Regulation Automated Trading, which the CFTC failed to complete before the change in presidential administrations. Quintenz, who will now run the CFTC's Technological Advisory Committee, told a financial technology conference that the proposed rule would have to be totally reconsidered to better reflect the market realities of algorithmic trading. CFTC Chairman J. Christopher Giancarlo has also strongly criticized source code collection, and given the Republican majority on the CFTC, these concerns are likely to be reflected in any final rulemaking.
- Shares in the insurers of Puerto Rico's bonds fall in premarket trade after President Trump suggested the struggling island commonwealth's debt load would have to be wiped out. "You can say goodbye to that," Trump said in a Fox News interview late Tuesday. MBIA fell 6% ahead of the opening bell, while Ambac Financial is down 3.3%, and Assured Guaranty dropped 4.9%. Prices of Puerto Rico bonds also tumbled. Insurers are on the hook for about $12Bof the par value of the island's $70B plus debt load, according to corporate filings. Their stock prices have often risen and fallen alongside the outlook for the island's restructuring. "Trump's comments will likely pressure Puerto Rico credits or monoline insurers," said Ed Groshans, a managing director at Washington, DC-based brokerage Height Securities.

Oct 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices eased, with U.S. crude dipping below $50 per barrel, pulled down by caution that a rally that lasted for most of the third quarter would not extend through the last three months of the year.
- Gold prices rose after hitting a 7-week low in the previous session, buoyed as the dollar pulled back from a 1-1/2-month high against a basket of currencies.
- Nickel and zinc led most base metals higher, building on overnight gains amid mounting supply concerns in China.
- U.S. corn fell to a one-week low as North America's harvest began to fill the market with supply.
- Sherrod Brown of Ohio, the top-ranking Democrat on the Senate Banking Committee, blasted Wells Fargo's chief executive Timothy Sloan, saying changes at the bank don't go far enough in light of a series of scandals at the company. "The changes Mr. Sloan and his team have made are not sufficient to reform a corporate culture that is willing to abuse its customers and employees in an effort to pad its numbers and increase executive compensation," Brown says at the start of a hearing featuring Wells chief executive Sloan.
- The top US derivatives regulator says that the effects of new European financial rules known as Mifid II make the Dodd-Frank Act look like "a walk in the park." Some of the rules "are quite experimental....it's going to be quite interesting," said Commodity Futures Trading Commission Chairman J Christopher Giancarlo at a panel discussion with Fed Governor Jerome Powell. Giancarlo says that the US's approach to market regulation was "equally valid in the spirit of financial market reform."
- Federal Reserve governor Jerome Powell got a question Tuesday morning at a George Washington University event about his meeting last week with President Donald Trump regarding the job of Fed chairman. He sarcastically thanked the moderator for the question and said "I've got nothing on that for you today."
- The risk-free rate component of euro corporate bond yields increased in 3Q 2017 but that wasn't a major issue for investors, as it was offset by credit spread tightening, according to UniCredit. And its sector-by-sector analysis shows that credit returns can explain most of the total return performance year-to-date, says strategist Philip Gisdakis. European government bond yields jumped in September as investors reassessed expectations of central bank policy, especially at the Bank of England, and U.S. tax plans revived the so-called reflation trade.

Oct 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell, declining for a second day and sapping more strength from a third-quarter rally, amid signs that a global glut in crude may not be clearing as quickly as some had hoped.
- Gold edged down to a 7-week low, as equities and the dollar were buoyed in Asian trade by upbeat economic data and strong U.S. treasury yields.
- The dollar struck a 1-1/2-month high as Treasury yields rose after a strong reading for U.S. manufacturing activity hardened expectations for U.S. interest rates to rise by the year-end.
- London copper and zinc prices eased after starting the week firmer, with investors taking profits in holiday-thinned trading in Asia.
- Chicago soybean futures dropped for a second session, falling to their lowest in almost three weeks as the harvest of a bumper U.S. crop gathers pace amid reported higher yields.
- Societe Generale expects EUR/USD to fall further, after it dropped to its lowest since in more than a month in the wake of Sunday's Catalan independence referendum. It forecasts the dollar will gain further in advance of an expected interest rate rise by the U.S. Federal Reserve in December. "We are still anticipating a deeper correction in EUR/USD, amid a bigger dollar bounce. The market implied probability of a December Fed hike is still too low," Societe Generale says. EUR/USD trades slightly higher at 1.1741, off a low of 1.1696 as investors take some profit on the falls following the Catalan vote.
- Senate GOP leaders took a key procedural step Monday to advance the nomination of Randal Quarles, President Donald Trump's pick to become the Federal Reserve's vice chair of supervision, arguably the most influential financial regulatory post. Senate Majority Leader Mitch McConnell (R., Ky.) invoked "cloture" on Mr. Quarles's nomination to join the Fed's governing board, a move that sets up a likely confirmation vote later this month after up to 30 hours of floor debate, according to a Capitol Hill aide. The move gets the ball rolling only on whether to confirm Mr. Quarles as a Fed governor; the Senate would have to later vote on whether to approve his nomination as the central bank's vice chairman of supervision, according to the aide. It's unclear when that vote would occur.
- Australia will equip a new fleet of naval frigates with combat-control systems made by Lockheed Martin and Sweden's SAAB to counter the threat of missiles fired by rogue nations like North Korea. The decision means a A$35B fleet of naval frigates to be selected next year from three contenders--including the Type 26 global combat ship proposed by BAE Systems, the Carlo Bergamini class offered by Italy's Fincantieri and a version of Spanish shipbuilder Navantia's F-100 design--will be equipped with Lockheed Martin's Aegis combat system and able to counter long-range missiles. The ships are part of a A$200B, decade-long modernization of Australia's military.
- As expected, FCC Chairman Ajit Pai is reconfirmed by the Senate for a second term on the panel. The move opens the door for the commission to move forward with some high-profile and controversial changes, notably rolling back Obama-era net-neutrality rules that were strongly supported by the tech industry. Those rules required internet service providers such as cable and wireless firms to treat all internet traffic equally. But Pai's statement after the vote made no mention of lightning-rod issues, and instead focused on other priorities, such as bridging the digital divide, promoting innovation and protecting consumers and public safety.
- Genworth and China Oceanwide aren't alone in refiling for transaction approval with the Committee on Foreign Investment in the United States, analysts say. But the refiling disclosed by the firms today counts as the third since the deal's announcement almost one year ago exactly, according to Wells Fargo Securities. CreditSights says "it is highly unusual for a deal to eventually close that requires multiple re-filings at CFIUS." Analysts say concern about the deal apparently stems from policyholder privacy protection. "But we are concerned that Genworth is also caught in a geopolitical net in which it has no control," CreditSights adds.
- Oracle co-CEO Mark Hurd bluntly says he doesn't like anti-immigration policies that restrict the ability of foreign workers to hold jobs in the US. In a question-and-answer session with journalists at the company's OpenWorld conference for its developers, partners and customers in San Francisco, Hurd cites immigration as an opportunity to grow the US economy. "I don't understand how we let somebody into this country go to our schools and earn degrees, and then not allow them to practice the trade that they trained and learned in this country," Hurd says. Like many large tech companies, Oracle is a large sponsor of foreign workers who apply for H-1B visas for technical jobs.
- Former Utah Gov. Jon Huntsman Jr. has resigned from the boards of Caterpillar, Ford and Hilton Worldwide in recent days after the US Senate confirmed his nomination to serve as ambassador to Russia. Huntsman has served on the boards of Caterpillar and Ford since 2012 and Hilton's board since  2015. Huntsman served as US ambassador to Singapore under President George H.W. Bush and to China under President Barack Obama.
- The US has filed a second complaint with the World Trade Organization against Canada over how the province of British Columbia treats US wine. One of the final acts of the Obama administration's chief trade envoy in January was to allege British Columbia's rules regarding the sale of alcohol "effectively deny" American wine prominent shelf space. The US filed a complaint with the Geneva trade body in January. Now, the US Trade Representative's office has filed another complaint, the WTO says, targeting five regulations, saying British Columbia's rules "appear to discriminate on their face against imported wine," and are "inconsistent" with Canada's global trade obligations. In its list of Nafta negotiation objectives, the US listed market-access issues related to wine in Canada as an issue it wanted addressed.
- Firearms-related stocks slip a bit from earlier highs in heavy volume after White House address on the Las Vegas shootings, with Smith & Wesson maker American Outdoor Brands and Sturm, Ruger hitting their usual daily volume in the first 90 minutes of trading, recently up more than 5% and 4% respectively. Winchester ammo maker Olin also up almost 6%, with Vista Outdoor gaining more than 2.5%. The Vegas shooting is the second catalyst for the sector after moves revealed last month to streamline the export of US-made guns and ammo.
- A grim coincidence of the Las Vegas shooting is that the city hosts the industry's largest trade event, with some 50K attendees each year at the annual Shot Show. Semi-automatic weapons, aka modern sporting rifles, have been one of the best-selling products in recent years, and gun control advocates are likely to focus again on efforts to prevent sales of conversion kits that make them almost automatic, as well as high-capacity magazines. Calls for more controls are routine after such tragedies, but the occurrence of the latest at a country music festival -- a constituency often supportive of gun rights -- could strengthen the control lobby, notes John Raines at IHS Markit. American Outdoor Brands and Sturm, Ruger both open 4% higher with ammo makers Olin and Vista Outdoor 2% ahead.
- Genworth Financial (GNW) and China Oceanwide Holdings plan to continue to seek US government approval of their deal, saying that they have withdrawn their application to regulators "with an intent to refile the transaction with additional mitigation approaches." The two companies didn't detail the new proposal but said they seek active talks with the Committee on Foreign Investment in the United States. While the companies remain committed to the deal--China Oceanwide buying Genworth for $2.7B--Genworth said it is evaluating its upcoming debt maturities. Imperial Capital said in a research report that if the deal falls apart, Genworth "muddles through," thanks to its liquidity position and ability to sell assets.
- Canadian Foreign Minister Chrystia Freeland says Trump administration introduced a "really disappointing" proposal in the recent round of Nafta talks in Ottawa access to government procurement contracts. "We are proposing, 'let's move ahead,'" Freeland said over the weekend in interview with Canada's Global TV. "Their starting proposal is to move backwards." She added based on Canada's analysis of US offer, Canada would be on par with the Middle East state of Bahrain in terms of access to the US government procurement market. She said Canadian firms require increased access, adding US firms enjoy freedom to bid on government tenders. Freeland's comments represent rare instance in which Canada explicitly outlined unease with a US proposal as part of Nafta renegotiation. Next round of talks are scheduled for next week in the DC area.

Oct 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell, pausing for breath after posting gains of as much as 20 percent in the third quarter, after a survey pointed to a slight increase in OPEC production in September.
- Gold slipped to its lowest in nearly seven weeks as the U.S. dollar rose and equities gained, while growing expectations for a Federal Reserve interest rate hike in December also added to pressure.
- London copper futures rose nearly 1 percent in slow trading, with market participants in top metals consumer China away this week for the National Day break.
- The dollar started the month on a high note, underpinned by higher U.S. yields, while the euro came under pressure as investors monitored the aftermath of an independence vote in Spain's Catalonia.
- Chicago wheat slid for a third consecutive session, hitting a one-week low under pressure from a forecast for higher production in the United States.
- Big food manufacturers will have until January 2020 to add more detailed nutrition labels on their products, a nearly year and a half extension from the original July 2018 deadline. Small food companies will have until January 2021. Food companies pressed the Trump administration for an extension, arguing they needed more time to change their packaging. Industry groups welcomed the extension.
- There is a long way to go until U.S. President Donald Trump's tax plan goes through the legislative process--potentially changing along the way--but at least the bond market has moved away from pricing that there is no chance of it passing, Deutsche Bank strategists say. Mr. Trump's plan has reignited the reflation trade, boosting yields of U.S. Treasurys--and by extension European bonds--this week. Deutsche expects 10-year Treasury yields to end 2017 at 2.75%, with German bunds at 0.65%. They currently trade at 2.31% and 0.46%, respectively.
- There appears to be concern that US Republicans' tax reform plan will get stuck in Congress and not get passed, like the healthcare bill, says Greg Gibbs, currency strategist at Amp GFX. Indeed, tax reform is complex and it will take time to draft a bill and debate the details. However, tax reform is likely to be far less contentious than healthcare reform, he adds. Republicans hold a majority in both houses, and they are likely to show more unity on tax reform. Democrats are less likely, as a bloc, to oppose tax reform, he says. Trump and the administration are approaching tax reform in a more proactive manner and appear to be working harder with Congress to pass legislation rather than grandstanding. Republicans need a win on tax reform; they can't afford to go into the midterms next year without making this happen, he says.
- USD gave back some of its recent gains overnight. USD will continue to trade defensively until markets have more details on the proposed tax reform's effect on US fiscal policy and foreign capital flows to the US, CBA says. Also, the legislative process to get tax reform passed by Congress will most likely take some time. The US core PCE deflator is the next USD focus, with an expected reading near 1.4% on-year, CBA says.
- The GOP's latest tax plan, if implemented, could provide an inflationary boost to an economy that doesn't need one, says Luca Paolini, chief strategist at Pictet Asset Management. "It looks like it's going to be unfunded, which is by nature reflationary," he says. In the short term, this will likely boost growth, but the risk is it could also boost inflation, forcing to the Fed to hike rates fast just when the market is at all time highs and earnings are at their peak, triggering the deflationary shock they're trying to avoid, he says.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 0.1% higher and the pan-Nordic OMXN40 index up 0.3%. Risk sentiment was mostly positive Thursday after Wednesday's U.S. tax reform details were unveiled, but a sell-off in heavyweight H&M Hennes & Mauritz AB's shares weighed on the Stockholm stock exchange. The Swedish fashion retailer saw third-quarter profit sink amid a heavy bout of price-cutting and fewer visitors to its stores. Crude oil traded higher on concerns that the Kurdistan Regional Government vote for independence may hit supply from the oil-rich region, Saxo Bank said in a note. Oslo's oil-heavy OBX index rose by 0.5%.

Sep 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices were mixed, but both Brent and U.S. crude were set to chalk up another weekly gain as investors bet that efforts to cut a global glut are working and that the demand outlook is improving.
- Gold fell, inching towards the previous session's six-week low as the dollar strengthened, with prices set for their biggest monthly fall this year.
- London copper rose for a third session and was set to notch up its fifth consecutive quarterly gain, buoyed by expectations of strong demand in top industrial metals consumer China.
- Chicago wheat slid with the market facing its biggest quarterly decline in two years as record world supplies dragged down prices, although concerns over higher quality wheat production are likely to prevent further losses.
- The GOP's latest tax plan, if implemented, could provide an inflationary boost to an economy that doesn't need one, says Luca Paolini, chief strategist at Pictet Asset Management. "It looks like it's going to be unfunded, which is by nature reflationary," he says. In the short term, this will likely boost growth, but the risk is it could also boost inflation, forcing to the Fed to hike rates fast just when the market is at all time highs and earnings are at their peak, triggering the deflationary shock they're trying to avoid, he says.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 0.1% higher and the pan-Nordic OMXN40 index up 0.3%. Risk sentiment was mostly positive Thursday after Wednesday's U.S. tax reform details were unveiled, but a sell-off in heavyweight H&M Hennes & Mauritz AB's shares weighed on the Stockholm stock exchange. The Swedish fashion retailer saw third-quarter profit sink amid a heavy bout of price-cutting and fewer visitors to its stores. Crude oil traded higher on concerns that the Kurdistan Regional Government vote for independence may hit supply from the oil-rich region, Saxo Bank said in a note. Oslo's oil-heavy OBX index rose by 0.5%.
- Trump administration is implementing greenhouse gas performance measure after lawsuit challenging delay, California Attorney General Xavier Becerra says. California and other states sued administration earlier this month over delay. Measure requires all states to measure and track on-road greenhouse gas emissions, set locally-appropriate performance targets and ensure consistency in data collection, Becerra says. California litigation marks latest effort by state to resist efforts by Trump administration to alter climate-change policy.
- The GOP tax plan unveiled yesterday takes aim at two policies that have spurred furious corporate borrowing in recent years, potentially crimping a lucrative business for Wall Street, which makes money underwriting and trading loans and bonds. Ending the deductibility of interest payments and exempting some foreign income from US taxes would both make borrowing a less attractive (relative to selling stock) way for companies to finance their operations. But Morgan Stanley (MS) analysts caution against overreacting: "Confidence is often a bigger driver of corporate behavior than math." CEOs on their front foot tend to expand, invest and do deals, and debt is a key component in both.
- An outperformance of U.S. dollar corporate bonds due to the proposed tax overhaul in the U.S. could expand to the euro-denominated issues of American corporates, according to Commerzbank. So-called reverse Yankees are one of the largest segments of the euro corporate bond market after heavy supply this year. Bank of America Merrill Lynch recently said in a note that lower corporate tax rates would mean higher after-tax debt costs for issuers, prompting them to reduce debt.
- At least partially to blame for the dollar's 2017 weakness has been the Administration's inability to get its agenda going. The dollar's rebound of the past several weeks got a further lift Wednesday as details of Trump's tax proposal were released. Standard Bank, which had been saying "the market might be a bit too downbeat on the prospects for tax cuts," now says "that if the dollar does recover on this tax issue, it will be more of a temporary expectations-led recovery than a longer-term structural move towards dollar strength. Our core view remains that the dollar is in the early throes of a structural, multiyear downtrend that will endure whether taxes are cut or not." Partly why is the greenback historically weakening during GOP administrations.
- Tax reform, one element behind the so-called Trump reflation trade, may look tough to implement, but as market expectations are low, any hopes can help the trade, according to Deutsche Bank strategists. The bond market seems to confirm this view, as yields on 10-year U.S. Treasurys have shot up in recent days, dragging other developed market yields higher. Yields rise as bond prices drop.
- Expectations the Federal Reserve will continue to raise interest rates and the prospect of U.S. tax reform has boosted the dollar across the board, but it has still potential for further gains, Societe Generale says. The DXY index, which tracks the U.S. dollar's value against a basket of other currencies, hasn't recovered enough compared with 10-year U.S. treasury yields, after falling by 12.3% from early January to early September, so there's still scope for a further rise, according to SocGen. And the index has more room to rise if investors decide to substitute their net short position for a more neutral one, says SocGen. However, even though "the pain trade facing USD short and UST long positions caught fire this week...it is too soon to tell if this has enough momentum to run in the coming weeks." The DXY earlier reached its highest in more than a month around 93.67, according to Factset.
- Trading in Bombardier's 6.125% 2021 euro bond has been subdued, with average daily volume rarely crossing the $10 million-equivalent mark this year. Until this week. Investors reacted to the U.S. government's decision to impose a tariff on Bombardier's CSeries jets by selling the bond on the secondary market and boosting European trading volume to more than EUR50 million Wednesday, according to data by MarketAxess subsidiary, Trax. Trading volume on Tuesday, when the news emerged, rose to $20 million.
- There is a risk of EUR/USD falling as low as 1.15 if investors continue to worry about German politics and optimism about the U.S. increases, says Societe Generale. "For EUR/USD, a return to 1.15 could be a matter of when, not if." EUR/USD trades at 1.1752, having dropped to its lowest in nearly 6 weeks after U.S. tax reform plans were announced Wednesday. After Sunday's German elections, worries have resurfaced about the rising populism in the eurozone, and about whether German Chancellor Angela Merkel and French President Emmanuel Macron will be able to strike a deal on deeper eurozone financial integration. This is negative for the euro, while the dollar also benefits from expectations that the U.S. Federal Reserve will raise interest rates in December.
- Australia Treasurer Scott Morrison has used planned tax cuts unveiled by Trump to increase pressure on rival lawmakers to drop opposition to business-tax cuts Down Under. "Unless we can convince the Labor Party and the Parliament to pass the tax cuts we currently have, then Australian businesses will be stranded on a tax island--uncompetitive with the US, the UK, with Singapore," Morrison argues. "Having a lower tax environment is good for jobs. It is good for investment." Trump's proposal would lower corporate-income-tax rates to 20%, reduce levies for small businesses and lower the top income-tax rate for individuals. Australia's conservative government wants to cut the tax rate of all companies to 25% over the course of a decade, but Labor instead wants to target tax breaks on housing investment and trusts.
- In the space of two days, markets have had confirmation Janet Yellen is going to keep hiking rates and President Trump's "Gang of 6" have delivered a tax plan that might get through Congress, says Greg McKenna, chief strategist at AxiTrader. That makes the U.S. the focal point again and changes the narrative for markets, he adds. U.S. 10-year Treasury rates have risen 7 points to 2.31% and that has also pressured bond rates across the globe higher. "There is every chance U.S. bond rates keep rising in the current environment," he added.

Sep 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell, with U.S. crude giving up some of the previous session's gains that were driven by a surprise fall in inventories, while Brent moved further away from recent 26-month highs.
- Gold held steady after hitting a more than one-month low, pressured by the increasing likelihood of a U.S. interest rate hike in December and as a new tax plan boosted the dollar on the back of stronger economic data.  
- London copper fell slightly after rising in the previous session. Prices are underpinned by solid industrial profits in China that allayed concerns about slowing growth and demand for metal but direction was limited ahead of the end of the third quarter and before China, the world's biggest user of industrial metals, shuts for holidays next week.
- Chicago wheat futures edged lower as the market took a breather after climbing to its highest in more than seven weeks in the previous session on short-covering and expectations of lower U.S. production.
- Stratas Advisors says that for energy markets, continuing news regarding a Kurdish referendum earlier this week in northern Iraq "bears watching," as the Kurds seek independence and acknowledgement of their efforts confronting Islamic State. The vote delivered a comfortable "yes" for independence. "The non-binding vote is not likely to incite an immediate conflict, but it could drive price volatility this week," Stratas says, noting the region has about 600k bpd of crude oil production. "The referendum is only the first step in what will likely be a protracted political negotiation between Erbil, the Kurdish capital, and Baghdad as the semi-autonomous region continues to push for more freedom."
- The Russell 2000 Index of small cap stocks is flirting with its biggest advance of 2017 as investors mull the implications of tax overhaul that could lower effective tax rates for domestically focused companies. The Russell 2000 added 1.91% in recent trading and, should it advance more than 1.94%, Wednesday would mark the benchmark's biggest one-day rise of the year. The Russell 2000 has also bested the S&P 500 for six days in a row, a streak last matched in the nine sessions ended Sept. 1, 2016, according to WSJ Market Data Group.
- U.S. President Trump's fiscal policies will partly determine the USD's strength in the long-term, as Central and Eastern European, Middle Eastern and African currencies are pressured by a strengthening greenback, Rabobank says. The pace of the Fed's tightening is another contributer, it adds. The USD/ZAR, USD/TRY, and USD/HUF are the hardest-hit, standing around 11-week highs. The USD/ZAR is up 1.5% at 13.58 on Wednesday, and if it closes above 13.60, if could breach the April high of 13.97 in the coming weeks, Rabobank says.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 0.8% up, the pan-Nordic OMXN40 index higher by 0.6% while Oslo's oil-heavy OBX index rose 0.7%. "European equity indices traded in positive territory on Wednesday as merger news [and] U.S. tax-cut plans added to risk-on sentiment," Saxo Bank said in a note. Siemens AG and Alstom SA signed an agreement to merge their train-making units which, if approved by regulators, will become the region's biggest deal in the transportation sector, Saxo added. Investors also took heart from the Trump administration's unveiling of a tax plan that includes large individual tax cuts and a drop in the corporate tax rate. The dollar strengthened after comments from Federal Reserve Chairwoman Janet Yellen boosted bets on higher U.S. interest rates.
- A U.S. decision to impose a 220% tariff on Bombardier Inc. jets partially built in the U.K. could be a sign of things to come for Britain if it leaves the EU, an international courier firm says. Washington plans to impose the charges on Bombardier's C-Series jet, the wings for which are made in Northern Ireland, due to what it sees as unfair state subsidies. Once Britain quits the EU, it's likely to fall outside long-standing trade deals with the rest of the world and will not have the EU's huge clout to fight new tariffs, says Fastlane International. "We've seen from this ruling that we can't rely on the U.S. to drop tariffs," says Fastlane's Head of Consumer Research, David Jinks. "It could be the tip of a tariff iceberg facing British-made products if they threaten the domestic markets of many overseas manufacturers."
- The United States is the second most competitive economy in the world in 2017, trailing only Switzerland, according to a closely watched index from the World Economic Forum. The US climbed one spot since last year's rankings, reaching its highest place in eight years, possibly reflecting executives' early optimism that a new administration would enact business-friendly policies like deregulation and tax reform. The index assesses 137 countries on 12 factors that attract business investment and help determine productivity, including nations' institutions, infrastructure, education systems and innovation. Rounding out the top five were Singapore, the Netherlands and Germany.
- US government bond prices fell ahead of the release of a closely watched Republican tax plan. The yield on the benchmark 10-year US Treasury note was recently at 2.287%, according to Tradeweb, compared with 2.229% Tuesday. President Donald Trump is expected to unveil a plan that could call for a corporate tax rate as low as 20%, down from the current 35%. Hopes for tax cuts lifted stocks and Treasury yields after Election Day, although some analysts say the moves this time around could be limited, especially as economists continue to debate the viability of the plan.
- An announcement on tax reform later Wednesday by President Donald Trump could give an additional boost to an already buoyant dollar, but investor skepticism is likely to mean any gains will be limited. Investors are anticipating that Mr. Trump will announce a wide range of rate cuts for businesses and individuals. ING says the announcement could push the DXY dollar index up to 93.60, from around 93.45 currently, but it notes: "Markets have learnt their lesson from earlier this year of buying into tax reform promises too early." Rabobank similarly says it would be "a huge leap of faith to expect substantial tax reform to be written into US law by the end of this year."
- Asset swap spreads on Bombardier's 6.125% 2021 euro bond surge to their highest level since late 2016 after the U.S's decision to impose a big tariff on the Canadian firm's CSeries jets. Spreads previously stood near their tightest year-to-date level -- the news practically wiped out this year's gains. Bid asset swap spreads trade at 574 bps, up from Tuesday lows of around 350 bps, according to Tradeweb.
- The U.S. dollar rises across the board, reaching a five-week high against the euro and a 10-week high against the yen, after a speech Tuesday by Federal Reserve Chair Janet Yellen increased the prospect of a December rate rise. Expectations that President Donald Trump could announce a tax reform later on Wednesday are further boosting the dollar. EUR/USD falls 0.4% to 1.1741, USD/JPY rises 0.5% 112.82, while the dollar also gains against sterling, commodity-linked and emerging market currencies. Commerzbank strategist Thu Lan Nguyen doubts how far the dollar can rise, however, because inflation remains disappointing, and expects a muted reaction to any tax announcement unless Mr.Trump provides concrete details. Mr. Trump is due to give a speech at 2100 GMT.
- USD has risen against most major currencies. Expectations the Trump administration and senior Republican lawmakers in Congress will unveil a stimulative tax reform plan over the next 24 hours is supporting a firmer USD, CBA says. President Trump said overnight the planned tax reform measures will cut taxes "tremendously" for the middle class, lower the corporate tax rate and bring back trillions of dollars invested overseas. Markets will have a better indication of whether tax reform will be possible to implement by year end when the details of the tax plan are released, CBA adds.

Sep 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Brent oil prices rose, hovering around a 26-month high hit in the previous session, after U.S. data showed an unexpected drop in crude stocks as refineries boosted output and amid threats from Turkey to cut crude exports from Iraq.
- Gold was largely unchanged after falling over one percent in the previous session on hawkish comments from U.S. Federal Reserve Chair Janet Yellen, while lingering North Korea worries supported prices.
- London copper hovered near its lowest since mid-August, subdued by a stronger dollar and ongoing concerns over flagging economic growth in China.
- Chicago corn futures slid for a second session with the market weighed down by the harvest of a bumper U.S. crop amid abundant world supplies.
- White House Budget Director Mick Mulvaney reiterates the Trump Administration's preference to see the corporate tax rate brought down to 15% from 35% although he indicates the White House would be willing to compromise. "The president wants 15%," he says. "End of the day we want the very best tax package that can pass. We don't want to win the argument and lose the vote." Capitol Hill Republicans say it may be more realistic to lower the corporate tax to around 20% instead
- A deal to tax carbon emissions is a realistic possibility, Sen Lindsey Graham says at National Clean Energy Week. Graham has announced his push for a carbon tax in recent weeks, adding Tuesday that he has been talking with Democratic Sen Sheldon Whitehouse and power companies in his efforts. A deal is becoming more likely because lawmakers need to find a way to fund highway spending now that fuel-efficient cars are crippling gasoline-tax revenue and to help nuclear power plants that are closing due to competition from natural-gas fired plans, Graham says. "I believe the greenhouse-gas effect is real and I want to deal with it now," he adds. "Future generations will look upon us with a smile if we pull this off. If we don't, then god help us all."
- White House Budget Director Mick Mulvaney says he's pleased the Federal Reserve has announced the beginning of the process to unwind some of the assets in its $4.5T portfolio. The Fed announced last week it would begin letting some its maturing Treasury and mortgage-backed securities roll off its balance sheet beginning in October. As a member of the House of Representatives, Mulvaney had criticized the Fed's asset purchase programs. "I'm very happy to see that we are finally going to address this extraordinary circumstance of the growth of the size of the balance sheet at the Federal Reserve and I was encouraged they're taking it as seriously as they are," he says.
- White House Budget Director Mick Mulvaney says the Trump administration would send Congress a funding request to help Puerto Rico repair from Hurricane Maria "shortly with an eye on passing something in mid-October." Mulvaney says the money Congress appropriated last month to deal with earlier hurricane damage would provide enough money to last until the middle of October. "We had originally expected that money to last us until the middle of October," he says. "We still think we can get to the middle of October."
- Chief executive Jack Dorsey pledged in a tweet Monday that his company will increase transparency, in response to questions about why Twitter hasn't removed a tweet from President Donald Trump about North Korea. Some say President Trump's tweet, which said "Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won't be around much longer!" could be interpreted as a threat of violence, something that is against Twitter's rules. Twitter however cites its policy of considering the "newsworthiness" of tweets when determining whether to remove them.
- Top Democrats demand Richard Smith, who is resigning as Equifax's CEO, appear before the Senate Banking Committee as scheduled next week, and press for further actions from company executives. "It's not real accountability if the CEO resigns without giving back a nickel in pay and without publicly answering questions," Sen. Elizabeth Warren (D., Mass.) says, hinting she would seek the clawback of pay from executives. She demands Smith, along with the new chairman and the new interim CEO of Equifax, testify before the Banking Committee scheduled for Oct. 4. Warren, a leading critic of the financial industry, had led lawmakers' successful push to get Wells Fargo to claw back top executives' compensation following its phony account scandal. Sen. Sherrod Brown (D., Ohio), the committee's top Democrat, echoes Warren's sentiment. "Equifax executives cannot be allowed to wash their hands of this while millions of Americans are left to deal with the consequences," he says. Meanwhile, in the House, California Rep. Maxine Waters, the top Democrat on the House Financial Services Committee, calls for Congress to enact comprehensive reforms of the
credit-reporting industry. "There will be consequences," she says.
- London shares close in the red amid continued concern about the standoff between the US and North Korea, though oil stocks make progress on tension caused by Iraqi Kurdistan's vote for independence. The FTSE 100 Index falls 0.2%, or 15.55 points, to 7285.7 as traders keep an eye on any developments from Washington and Pyongyang. "There is a feeling we should be on watch for more comments and provocations, as the situation remains extremely febrile," IG says. Royal Dutch Shell is among the biggest risers, up nearly 1% as Turkey threatens sanctions against Erbil after Iraqi Kurds reportedly voted by 90% or more to split from Iraq. Marketing group WPP is off 1.7% after a broker reportedly cut it to hold.
- Nordic markets close mixed with Sweden's OMXS30 index ending the day up 0.4%, the pan-Nordic OMXN40 index lower by 0.4% while Oslo's oil-heavy OBX index also fell 0.4%. After a lower close on Wall Street Monday, European markets had a muted open as U.S.-North Korea tensions escalated. The North Korean foreign minister described President Trump's recent comments as a "declaration of war" and warned that his country would shoot down U.S. war-planes. The price of oil rose to levels not seen since July 2015 amid tension caused by Iraqi Kurdistan's vote for independence, with Brent crude trading just off the $60/bbl mark.
- Germany's DAX closes slightly higher, up 0.1%, at 12605.20, just off the opening level of 12557.44. Tensions between the U.S. and North Korea weighed on sentiment, as the euro continued to weaken after Germany's election on Sunday. Linde AG topped the blue chips, ending 2.9% higher, ahead of a vote by Praxair Inc. shareholders on its plan to merge with the German industrial gas maker. Deutsche Lufthansa AG ends down 0.4% after the flag carrier says it will invest EUR1 billion to expand its Eurowings unit. Adidas AG sheds 2.4% after the arrest of its global sports marketing director James Gatto. On Wednesday, investors are set to watch for German inflation data, the EU business and economic sentiment survey and several U.S. indicators.
- SEC Chairman Jay Clayton declines to endorse a delay to a huge new trading database that was designed to help regulators prevent a repeat of the May 2010 flash crash but has raised concerns about cybersecurity. No time-out is needed for the rollout of the database, called the Consolidated Audit Trail or CAT, Clayton says in response to questioning at a hearing of the Senate Banking Committee today. Exchanges are set to begin reporting data to the CAT in November, following a multiyear push by the SEC to get the database off the ground.
- SEC Chairman Jay Clayton defended his handling of a hack on the commission's corporate filing system, telling Senate lawmakers he disclosed the matter as promptly as possible. Though he learned of the hack in August, the commission didn't disclose it immediately because the commission worked to learn more about the hack, hire outside consultants to independently test the commission's computer networks and ensure that once the matter was disclosed, the systems were secure. One of the worries "is that when you make a disclosure, other people try to test and probe," he says. "We are under constant attack from nefarious actors."
- The U.S. dollar is at a one-month high versus the euro, but Bank of Tokyo-Mitsubishi doesn't expect the dollar's uptrend will continue unless President Donald Trump's tax reform "proves more effective than expected" at boosting the U.S. economy. "Without such a positive shock for the U.S. economy, we remain unconvinced that the U.S. dollar can stage a more sustained rebound," the bank says. Short term, however, the dollar may rise as investors reverse the short dollar positions they have built up in recent weeks. "The latest International Monetary Market report clearly highlights that speculators have built up short U.S. dollar positions in recent months, which could be lightened in the near-term." EUR/USD falls 0.7% on Tuesday to a one-month low 1.1764.

Sep 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices extended gains, with Brent crude hitting a 26-month high, supported by Turkey's threat to cut crude flows from Iraq's Kurdistan region to the outside world.
- Gold held steady after rising over one percent in the previous session, supported by safe-haven demand amid rising tensions surrounding North Korea and as the dollar eased from near three-week highs.
- London metals rose amid a broader updraft for commodities after production cuts fuelled an oil price recovery, while demand prospects also brightened after the Asian Development Bank raised its forecast for China's growth.
- Chicago soybean futures ticked higher as the market took a breather following last session's biggest one-day decline in six weeks, although expectations of a rapid U.S. harvest limited gains.
- The yen stood tall after tensions on the Korean peninsula flared-up anew amid an escalating war of words between North Korea and the United States, while the euro struggled near a four-week low versus the dollar.
- Commodity Futures Trading Commission Commissioner Sharon Bowen urges the regulator to finish several outstanding rules in a farewell address at Georgetown University. Bowen, a Democrat, will step down from the agency this week after serving since 2014. She encouraged the CFTC to finalize its governance standards for clearinghouses and trading platforms, along with improving its data collection. She also issued a final plea for more funding for the agency, which has had flat appropriations for the past three years. Bowen's departure will leave the CFTC with three commissioners--two Republicans, including Chairman J. Christopher Giancarlo, and one Democrat.
- Germany's DAX closes flat at 12594.81. The market was unable to keep earlier gains after German elections weakened the hold on power of Chancellor Angela Merkel's CDU party and tensions between the U.S. and North Korea re-surfaced. Merck KGaA leads the blue chips to close up 2%. Bayer ends 1.6% higher, after BNP Paribas raises the stock to out-perform on Monsanto acquisition savings. Deutsche Lufthansa AG ends up 0.5%, after Air Berlin's board agrees to exclusive air transport unit sales negotiations with the national flag carrier and EasyJet PLC. Utility RWE AG tails the DAX, 5.3% lower, after gains by the Greens raise the prospect of a ban on coal-fired power generation in Germany. On Tuesday, investors will eye U.S. data such as the consumer confidence index as well as remarks by Federal Reserve board officials.
- RBC recommends a long USD/MXN position, targeting 18.14 with a stop at 17.61, as it sees the Mexican peso as "vulnerable" as the third round of NAFTA negotiations unfold early this week. It established the trade at 17.7885, compared with a current rate of 17.901. "At least some of the most controversial topics on the agenda such as the trade deficit between Mexico and the U.S...are expected to be touched upon in this round and we expect a higher NAFTA-related risk premium incorporating into the prices," says RBC. For now, a U.S. withdrawal is "a low probability event but underpriced nonetheless at current MXN levels," it says. It also sees a chance of he central bank adopting "a more cautious stance on growth."
- Gold prices jump after media reports that the North Korean foreign minister said President Trump's weekend comments were a declaration of war. Futures go from down 0.1% to up 0.4%. Although investors have shaken off recent comments between the two countries, analysts have said the tensions will likely keep a floor on gold prices moving forward. "You're going to continue to see limited selling interest in the gold market because of this North Korean situation," says Jim Wyckoff, senior analyst at Kitco Metals. Many investors favor gold and other haven assets during times of geopolitical turbulence. Stocks extend losses and Treasurys rise after the comments.
- Geopolitical tensions involving North Korea and Iran could move oil prices, according to Tamas Varga, an analyst at brokerage PVM Oil Associates. If the stand-off between the U.S. and Pyongyang escalates, stock markets will be the first ones to suffer from uncertainty but oil markets could follow, Mr. Varga wrote in a note Monday. Conversely, President Donald Trump's outspoken rhetoric against the international deal to curb Iran's nuclear program could potentially have a more bullish impact on oil prices, he argued. "At the moment, there is nothing that would suggest the isolation of the Persian Gulf country, but it is worth remembering that during the international sanctions, Iran's oil production was more than 1 million barrels per day below the current level."
- Merkel's win is far from a sign that electorates have calmed following 2016 votes for Brexit and Trump, says Nick Clay, equities fund manager at BNY Mellon. He highlighting the far-right AfD getting 13% of the vote, 3rd-best among Germany's parties, in Sunday's election. "The people are still voting for change and something different as the status quo is not working for them," notes Clay. As such, "The positive reading of this taken by markets could...be premature." Since Macron's win in France, investors "decided that this was the turning point of the populist uprisings and that the political landscape is returning to normal...We think this could well be a misplaced belief." He points to next year's Italy election and the potential succession vote in Spain's Catalonia.
- The euro is down modestly against other major currencies, falling no more than 0.2% in early Asian trading, following a German election which saw a far-right party garner much-more support than recent polls suggested. Merkel remains handily in the driver's seat, though the makeup of the next ruling coalition remains to be seen. The euro has been strong this year, rebounding allowing with the continent's economy. The election results, which will change little regarding Germany's political path, is a good a time as any for some bull to take a bit off the table. The euro is down 0.2% at $1.1925 and GBP0.8825.

Sep 25 - Euro Slides, Dollar Rises After Elections in Germany, New Zealand (Dow Jones)
- The euro slid while the U.S. dollar rose Monday after elections in Germany and New Zealand set the stage for periods of political uncertainty in both countries.
- Chancellor Angela Merkel's conservative alliance won Sunday's German election, essentially guaranteeing her a fourth term as chancellor, though a strong showing for the nationalist Alternative for Germany party suggests Europe's largest economy could face political turbulence. The AfD party is anti-immigrant and wants to weaken European integration. "The waning support for Merkel's coalition partner...combined with the rise in popularity of the far-right Alternative for Germany means that the process of building a coalition could take months and that the resulting agreement will be a much weaker government in the eurozone's largest economy," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. The euro fell 0.6% to $1.1878, though it remains up about 13% for the year.
- New Zealand's general election Sunday failed to deliver a clear result. Party leaders now have to forge alliances to achieve a ruling coalition, which could result in a either another term for the current center-right government, or a win for the center-left Labour Party. The New Zealand dollar dropped 1% against the U.S. dollar. "There is a sense that we are entering a period of political uncertainty and that is never a good thing, at least for the currencies of the countries involved," said Ray Attrill, head of foreign-exchange strategy at National Australia Bank. Others noted, however, that market moves sparked by recent political and other surprises have been short-lived. "Given the relatively muted reaction to the many big recent shocks, we don't expect much in the way of volatility as a result of this," Paul Hatfield, global chief investment officer at Alcentra, which is part of BNY Mellon Investment Management, wrote in a note.
- The WSJ Dollar Index, which measures the dollar against 16 other currencies, rose 0.3% to 85.81 ! The dollar has strengthened in recent days as investors grow more optimistic on the prospect for U.S. interest-rate increases. Last week, the Federal Reserve signaled it still expects to raise rates against this year and three times next year despite weakness in inflation. Investors are now pricing in a 73% chance that the Fed raises rates again this year, up from 58% a week ago. Expectations that U.S. rates will rise help support the dollar by making U.S. assets more attractive to yield-seeking investors.
- In other Monday trading, the British pound rose 0.2% against the dollar. Moody's Investors Service cut the U.K.'s rating on Friday, citing the likelihood of a Brexit-linked economic slowdown. Separately, British Prime Minister Theresa May said Friday the U.K. would try to keep its current trade terms with the European Union for two years after its planned 2019 exit.
- The dollar slipped 0.1% against the Korean won, though it has gained 0.6% so far in September. Tensions between the U.S. and North Korea escalated further over the weekend as North Korea's foreign minister warned that a rocket attack on the U.S. mainland was inevitable. Also, U.S. warplanes flew off the east coast of North Korea.

Sep 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices came under pressure from a strong dollar, but kept most of their gains from the previous session as major producers meeting in Vienna said the market was well on its way towards rebalancing.
- Gold prices dropped, and hovered around one-month lows hit last week, weighed down by a firm U.S. dollar and as concerns over the Korean peninsula eased over the weekend.
- London zinc and nickel bounced back as markets stabilised after investors slashed risk late last week on concerns about China's credit and escalating tensions over North Korea.
- U.S. wheat slid 1 percent, falling for a second consecutive session as ample supplies continued to weigh on prices.
- The euro slipped in early Asian trading after Germany's election showed surging support for a far-right party that left Chancellor Angela Merkel scrambling to form a governing coalition.
- A US paper producer accusing Canadian rivals of dumping and unfair subsidies won a small victory as the US International Trade Commission agreed on a preliminary basis that the American industry is suffering from Canadian trade. The case pits North Pacific Paper Company against the Canadian forest-products industry, which some US firms say benefits from below-market access to logs harvested from government land. But the US newspaper industry and sympathetic members of Congress say they're already suffering from revenue declines and can't afford having tariffs imposed on Canadian uncoated groundwood paper. One Rock Capital Partners, which owns Norpac, didn't immediately reply to a request for comment.
- GBP/USD is down 0.5% at 1.3513. Sterling is falling versus the U.S. dollar below 1.35 to as low as 1.3489 because British Prime Minister Theresa May isn't giving much detail on how she sees the relationship between the U.K. and the EU after Brexit. Speaking in Florence, she says that she doesn't see a deal similar to the one Canada has with the EU, or one similar to an European Economic Area membership. Mrs. May says she would want the U.K. to form its own type of deal with the EU. "Let us be creative," she says. This level of unpredictability is negative for the pound. However, sterling rebounded slightly once Mrs. May says there will be an implementation period of about two years, which gives more time for the U.K. and its currency to adjust to the new landscape.
- The pound trades marginally lower versus the U.S. dollar at 1.3575 before U.K. Prime Minister Theresa May's speech in Florence at 1315 GMT and Derek Halpenny from Bank of Tokyo-Mitsubishi says he finds "it hard to envision what Mrs. May could say to excite the market at this moment in time." What's important is the settlement deal for the U.K. to exit the EU and the market will be looking at any communication regarding that. Mr. Halpenny says it's possible a fine detailed plan about the deal could be offered today, but it's more likely that Mrs. May won't provide much clarity on that. "Today we'll get the tone," he says.
- South Korean stocks fell for the 4th-straight sessions Friday amid the latest geopolitical tension. The Kospi dropped 0.74% to 2388.71 after North Korea said it could detonate a hydrogen bomb over the Pacific Ocean in response to President Donald Trump's UN speech. Pharmaceutical and nonmetallic mineral sectors suffered the most, falling 3.7% and 3.1%. Financials slightly offset the weakness as the insurance sector rose 1.5% and banks jumped about the same. Samsung Electronics also helped with a 0.38% gain. Steelmaker Posco slipped 3.2%. Overall, institutions sold a net KRW 114 billion of stocks, while foreigners and individuals bought a net KRW 26.7 billion and KRW 43.3 billion, respectively.
- Content marketer Outbrain finds fashion posts online from the Primetime Emmy Awards were more successful at getting clicks than political- or TV-related posts. Of all Emmy-related content from the event on Sunday, Outbrain said content from the red carpet garnered the most clicks, trailed by Sean Spicer and Donald Trump. The Handmaid's Tale, a Hulu production and Outstanding Drama award winner, received the most engagement among shows, but still got only half as many clicks as Trump-related content.

Sep 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were mixed in early Asian trade as the market waited to see whether major oil producers would extend supply cuts beyond March at a meeting in Vienna later in the day.
- Gold rebounded from a four-week low as the latest twist in tensions between the United States and North Korea prompted investors to  seek out the safe-haven asset.
- Metals in Shanghai and London fell as investors slashed risk given escalating tensions on the Korean peninsula and ongoing jitters about China debt after a ratings downgrade.
- Chicago soybean futures were on track for a fifth consecutive week of gains, with prices underpinned by strong demand and dry weather threatening planting in Brazil.
- The dollar buckled as tensions simmered on the Korean peninsula, though the sharp divergence between U.S. and Japanese monetary policy kept the greenback on track for a winning week against the yen.
- Content marketer Outbrain finds fashion posts online from the Primetime Emmy Awards were more successful at getting clicks than political- or TV-related posts. Of all Emmy-related content from the event on Sunday, Outbrain said content from the red carpet garnered the most clicks, trailed by Sean Spicer and Donald Trump. The Handmaid's Tale, a Hulu production and Outstanding Drama award winner, received the most engagement among shows, but still got only half as many clicks as Trump-related content.
- Many of President Trump's protectionist trade proposals threaten to drive down global oil prices, according to Sabine Schels, head of fundamental commodities research at BofA Merrill Lynch. "Energy demand in emerging markets is based on trade--its trade on steroids," she said during a conference on European refining in Brussels Thursday. But Ms. Schels also noted that the U.S. oil and gas production stands to gain from Mr. Trump's proposed policies--including corporate tax reform, which should boost investment in the sector--more than under the previous administration.

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

- Oil markets dipped, weighed down by rising crude inventories and production in the United States as well as a stronger dollar, which potentially hampers fuel consumption in countries that use other currencies at home.
- Gold dropped to its lowest level in over three weeks as a stronger dollar and increasing prospects of a December rate hike by the Federal Reserve curbed appetite for the metal.
- London metals came under pressure after the Federal Reserved raised expectations of one more rate hike this year, lifting the dollar and raising prospects of higher costs for industrial metals.
- Chicago wheat futures rose for a second session, with prices underpinned by short-covering and positioning ahead of winter crop planting in the United States and Europe.
- Bank of New York Mellon has not received the $185M interest payment on Venezuela's 2027 sovereign bond that was due last week, a source close to the fiscal agent says. The country has a 30-day grace period and has used this leeway in the past. Last week, Finance Minister Ramon Lobo repeatedly stressed the country's search for new payment mechanisms to avoid the US financial system, presumably precisely to lower the risk of bounced payments. What is unclear is whether Venezuela has not paid because of temporary liquidity issues or because they are looking for alternative ways of payment. The Treasury today released a new set of guidelines for financial institutions for dealing with Venezuelan government.
- The main lobbying group for health insurers comes out strongly against Republicans' latest bill aimed at repealing the Affordable Care Act. In a letter to Senate leaders, America's Health Insurance Plans says the Graham-Cassidy legislation "would have real consequences on consumers and patients by further destabilizing the individual market; cutting Medicaid; pulling back on protections for pre-existing conditions; not ending taxes on health insurance premiums and benefits; and potentially allowing government-controlled, single payer health care to grow." The group joins the association representing Blue Cross Blue Shield insurers, which earlier criticized the bill. AHIP has generally not taken a full-throated stance on previous Republican health bills, though it has expressed support or opposition to some particular provisions.
- Venezuela missed a $185M bond interest payment due last week. That in itself is not particularly dramatic: the country has a 30-day grace period and they have used this leeway in the past. Bondholders are more worried that Venezuela could've made the payment, but the fiscal agent (in this case Bank of New York Mellon) is delaying the processing because of Treasury's sanctions or litigation against the country by miner Crystallex. The Treasury today released a new set of guidelines for financial institutions for dealing with Venezuelan government. Last week, Finance Minister Ramon Lobo repeatedly stressed the country's search for new payment mechanisms to avoid the US financial system, presumably precisely to lower the risk of bounced payments.
- The Blue Cross Blue Shield Association says its members share the significant concerns of many health care organizations about the proposed Graham-Cassidy bill. The group points to "provisions that would allow states to waive key consumer protections, as well as undermine safeguards for those with pre-existing medical conditions," and they warn that the bill will reduce federal health funding for many states. The legislation would "increase uncertainty in the marketplace, making coverage more expensive and jeopardizing Americans' choice of health plans," the Blue Cross Blue Shield insurers say in a statement. In general, insurers tend to be supportive of states getting greater authority over health-insurance regulation, which the bill would do, but the group says concerns about the legislation outweigh that feature.
- HSBC's North American head of government affairs, Kevin Fromer, has been appointed president and chief executive of the Financial Services Forum trade group, the group says. There had been speculation that the trade group would disappear after it lost its last permanent leader in 2015, but it appears it will be sticking around as a Washington voice of the CEOs of large financial firms.
- CBS's Simon & Schuster publishing arm says Hillary Clinton's political tell-all "What Happened" sold 167,000 hardcover copies in its first week, the largest first week sales for any hardcover nonfiction title since 2012. (The results include pre-orders placed prior to the September 12th publication date.) S&S has already gone back to press three times, raising the total number of copies in print to an impressive 800,000. Digital audio book sales also set an S&S record, and the e-book edition had the best week of e-book sales for any S&S title since Walter Isaacson's "Steve Jobs" biography, published in 2011. CBS shares rise 24 cents to $59.09.
- Traders in Asia look set to follow the muted overnight reaction to Trump's UN speech, in which he threatened to "totally destroy" the Pyongyang regime and called North Korean leader Kim Jong Un "Rocket Man." That as some market participants may sideline themselves ahead of the FOMC statement later Wednesday. For Japan, some profit-taking potential exists after the Nikkei popped to 2-year highs yesterday. Futures opened up 15 points at 20125 on SGX.
- The NZD/JPY holds above 81.00 early in Asia on Wednesday, after traders took the view that some tough talking from U.S. President Trump didn't represent an escalation of Korean tensions. In an address to the United Nations General Assembly, Trump warned the U.S. could "destroy" North Korea if it was forced to take action to defend itself or its allies. The NZD/JPY is up 3.6% at 81.64 this month so far, with Australia & New Zealand Banking Group seeing resistance looming at 82.50.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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