Forex & Commo Market News

Dec 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices moved up, lifted by the Forties pipeline outage in the North Sea and ongoing OPEC-led production cuts, although rising output from the United States kept a lid on markets.
- Gold prices edged higher in Asian trade, heading for their first weekly gain in four, as the dollar sagged on concerns about the progress of U.S. tax reform.
- Copper and aluminium led gainers in Shanghai base metals futures, helped by overnight increases in the London market on the back of upbeat China manufacturing data.
- U.S. soybeans ticked higher, but were still on course for the biggest weekly loss in almost two months on expectations of rains in Argentina, the world's third biggest supplier.
- A proposed rule allowing small drones to routinely fly over people, and a separate proposal aimed at reducing space debris stemming from spent rockets, are the top 2018 regulatory priorities for the Federal Aviation Administration. The White House's latest unified regulatory agenda indicates the agency seeks to allow commercial drone operations over people "without a waiver or exemption." Another front-burner FAA issue will be releasing an advanced notice of proposals to establish broad security and law-enforcement safeguards for various types of drone applications. In addition, FAA officials are expected to propose a rule tightening oversight of disposal of upper-stages of spent rockets in space.
- The Commodity Futures Trading Commission clarifies that it hasn't dropped its effort to tighten supervision of high-frequency trading firms, but that it had moved its next action deadline for the rulemaking to December 2018. The Office of Management and Budget and Government Accountability Office, which compiles the federal government's unified regulatory agenda, categorizes that deadline as "long term action," leading it to be excluded from its semi-annual report on Thursday. Still, no movement on the regulation is expected in the near term, given the concerns of Republican CFTC members.
- The future of the Affordable Care Act marketplaces remains uncertain as this year's open enrollment period draws to a close Friday, with Republicans in Congress close to repealing the law's individual insurance mandate as part of a broader tax package. But the marketplaces may be filling a niche for the ranks of self-employed people who get work through companies such as Uber. Stride, a startup that focuses on health coverage for self-employed people, says a growing number of companies tied to such independent workers are promoting its services, most recently a half-dozen new ones including Fiverr, HoneyBook and Samaschool. Uber, Etsy, Instacart, DoorDash and others were already working with Stride, the company says.
- Bank of Nova Scotia economist Derek Holt is surprised Bank of Canada governor Stephen Poloz played down the risks to the economy posed by the unraveling of Nafta in a Toronto speech. That speech was billed as offering a list of issues keeping Poloz preoccupied. Holt says Nafta only got a passing reference in the speech. "Really? Barely even worth mentioning all of a sudden? I must have missed the memo on how well the negotiations are going all of a sudden," he tells clients. Holt says negotiations among US, Canadian and Mexican officials are bogged down in key disagreements with no agreement in sight. "A protracted period of uncertainty is likely to overhang boardrooms and return as a confidence dampener," he says.
- In a press conference on Thursday following the announcement of Disney's megadeal to buy assets from Fox, President Trump's press secretary said the President called the slated merger a "great thing" for jobs. If history is any indication, the opposite will be true. One of the major motivators for any type of corporate deal making is the ability to cut costs. And, one of the first ways that companies cut costs following a merger is by eliminating jobs to the tune of hundreds, if not thousands, in functions such as human resources, accounting, sales force, middle management, etc. In deal parlance, this is part of what companies refer to as synergies. Disney shares are up 3.4%; 21st Century Fox shares are up 5.7%.
- Google says it'll "promote strong, enforceable protections" for net-neutrality policies in the wake of the FCC's repeal of the law that required internet-service providers to treat all traffic equally. Google, which owns the world's largest video site, YouTube, is among the companies with the most to lose under the new rules. Internet providers charging more for internet fast lanes could decrease usage of YouTube and other Google properties, where the company sells ads. Google also points to a statement from its trade group, the Internet Association, which says it's weighing its legal options and urges Congress to enshrine "strong, enforceable net neutrality protections into law." Google parent Alphabet has a small hedge against the rules: it provides internet service itself in parts of roughly 20 metro areas.
- Negotiators are unlikely to reach consensus on a revised North American Free Trade Agreement by next spring as Mexican and Canadian teams continue pushing back against US demands, Scotiabank says. Delaying past the first quarter will entangle Nafta with July's presidential vote in Mexico and US midterms, likely pushing the talks into 2019. "Nevertheless, we do not believe this is the end of Nafta," the report says. "Keep calm and trade on as the zombie Nafta era dawns."
- Delta, which is leading the trade dispute brought by itself, American Airlines and United Continental, is optimistic that the Trump Administration will heed US complaints that three big Persian Gulf airlines are flouting air treaty rules because they enjoy billions in state subsidies. Delta CEO Ed Bastian said Thursday that he was heartened by a meeting the State Department held this week and the government's plans to meet with representatives of Qatar and the UAE to press for more financial transparency and recognition that subsidies can hurt fair competition. The three Gulf airlines deny they are subsidized or tilting the playing field.

Dec 14 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets rose, lifted by a fourth straight weekly fall in U.S. crude inventories, though climbing output capped prices well below the 2015 highs reached earlier this week.
- Gold prices hit their highest in a week, as the dollar was on the defensive after tumbling in the previous session following the U.S. Federal Reserve's widely expected decision to raise interest rates.
- London metals turned mixed late in Asia as a China rate rise took the shine off cheerier manufacturing reports from the country and Japan, with markets winding down ahead of the Christmas break.  
- Chicago wheat futures rose for a second session with short-covering by investors while concerns over cold weather hurting the U.S. winter wheat crop underpinned the market.
- Fed Chairwoman Janet Yellen says she is concerned about what a Republican tax bill could do to the country's debt picture. While Yellen said Fed officials generally expect the bill to help boost economic growth, she also noted the bill is projected to add to the national debt. To the extent the bill takes a "significant problem" and makes it worse, Yellen says "it is a concern to me." But she took a pass when asked whether the bill was ill-timed, adding that it's up to Congress and the White House to set fiscal policy.
- Federal Reserve officials took the prospect of tax policy changes into account when projecting higher growth rates in next few years, Chairwoman Janet Yellen says. Official projections released following the Fed's meeting showed central bankers now see the economy growth 2.5% next year, up from 2.1% in September's projection. "My colleagues and I are in line with the general expectation among most economists that the type of tax changes that are likely to be enacted tend to provide some modest lift to GDP growth in the coming years," she says.
- Fed officials send a reassuring signal to Republicans hoping to ramp up economic growth next year through a major tax cut. Officials' median estimate for annual gross domestic product growth jumps to a rate of 2.5% in 2018 from 2.1% when they last met in September. Their growth estimate for 2017 also rises to 2.5% from 2.4%. Such a significant change to next year's forecast could mean officials now see fiscal stimulus boosting growth. At the same time, they expect inflation to hold steady, and they maintain their expectation of two interest-rate increases in 2018. That suggests that, at least for now, the Fed isn't anticipating such growth to drive up prices or require them to raise rates in response--welcome signs for GOP leaders who don't want to see the central bank cut off growth.
- Honeywell had a slow year for deals but expects $14B in usable cash for 2018 and "M&A remains a top priority." On Wednesday, Honeywell detailed its recent investment in Flux, a Chinese supply chain software company for e-commerce and sees opportunities for similar deals. CFO Tom Szlosek said the "the pipeline across all of the businesses is quite active." While tax changes could encourage US deals, he noted that Honeywell hasn't had any issues with access to capital. In terms of big moves--like merging with United Technologies--Szlosek described the exploration of such a deal last year as "once in a lifetime" and "not something that we are trying to reinvigorate." Honeywell would be "sticking to our
- Investors concerned that Democrat Doug Jones winning the Alabama Senate election could pose a threat to GOP tax reform proposals should be reminded there's a good chance the legislation could be passed by the end of the year, before Jones takes his seat. Senate and House lawmakers may have done enough to reconcile their tax reform bills to enable them to unveil a joint plan by Friday, says Rabobank. But the fact that Jones is the first Democrat to win a Senate seat in the state in 25 years, and "given that next November's mid-term elections are looming, 2018 could be an interesting year for U.S. politics," and of course, for the dollar.
- Democrat Doug Jones' victory in Alabama could make it more difficult for Republicans to push through tax reform, analysts at B. Riley say. Once sworn in, Jones will reduce the GOP's Senate majority from 52-48 to 51-49, narrowing the margin of votes Republican lawmakers can afford to lose to push through a tax bill. "Our base case is that GOP leadership will do what it takes to get a deal done in any form before Jones is officially sworn in," say the analysts, adding that they believe there is still a 75% probability of the tax bill becoming law. A corporate tax cut could lift S&P 500 earnings and lend additional fuel to a long stock rally, while failure to push through legislation could send stocks and bond yields lower, investors and analysts say.
- While the GOP losing the Alabama seat will halve its Senate majority, "this will not stop the passage of tax-reform legislation," predicts RBC. With needs to certify the election results and other steps, it could be until January before Doug Jones is sworn in. Republicans have been hoping to get a bill passed through both sides of Congress before Christmas.
- As the dollar hit session lows following Doug Jones' Senate win in Alabama, supporting the currency short-term is Wednesday's widely anticipated interest-rate hike, says Kyosuke Suzuki at Societe Generale in Tokyo. But he adds the greenback could be vulnerable to fresh selling afterward. The WSJ Dollar Index, up the past 7 days, has rebounded some to currently stand 0.1% lower in midday Asian trading.
- The dollar fell to session lows as Democrat Doug Jones took a late lead in Alabama's Senate special election, followed by the AP declaring him the winner. That narrows the GOP's majority in the chamber to 51-49 and perhaps toughens the prospects for Republican legislative efforts--most notably tax reform. The WSJ Dollar Index, which has risen for 7-straight days, is down 0.2%.

Dec 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as industry data showed a larger-than-expected drawdown in U.S. crude stockpiles, while expectations for an extended shutdown of a major North Sea crude pipeline also continued to bolster markets.
- Gold traded within a range after hitting the lowest in nearly five months in the previous session, with investors in a holding pattern ahead of the outcome of a two-day meeting of the U.S. Federal Reserve.
- London copper trading was little changed, as volumes thinned throughout the complex in the lead-up to holidays and ahead of a U.S. monetary policy meeting which may spell out higher interest rates.
- Chicago wheat futures ticked up, with the market steadying after dropping for the past seven sessions during which it touched its lowest since January due to pressure from record global inventories.
- The dollar slipped from a four-week high against a basket of currencies after a Democrat won a bitter fight for a U.S. Senate seat in deeply conservative Alabama, reducing Republicans' already narrow Senate majority further.
 
- The dollar fell to session lows as Democrat Doug Jones took a late lead in Alabama's Senate special election, followed by the AP declaring him the winner. That narrows the GOP's majority in the chamber to 51-49 and perhaps toughens the prospects for Republican legislative efforts--most notably tax reform. The WSJ Dollar Index, which has risen for 7-straight days, is down 0.2%.
- If Democrat Doug Jones does win the Alabama Senate seat, some traders say it would be a handy excuse to take profits on the greenback, which per the WSJ Dollar Index is riding its longest winning streak in a year. It's currently down slightly in Asian trading as voting number start to roll in. A Jones win would narrow the GOP's Senate majority to just 51-49.
- Nearly one in five employers are steeling themselves for a possible increase in sexual harassment claims. And more than 20% are revamping staff training to prevent harassment. The findings come from a survey completed Monday by the Institute for Corporate Productivity. It polled 335 companies, nonprofit groups and government agencies. A surprising 47% aren't mulling new actions in response to heightened awareness about sexual harassment. That may reflect dissatisfaction with internal training, which 71% of employers require. Only 48% of those canvassed say harassment prevention training is effective to a high or very high degree. And while an HR official typically handles workers' harassment allegations, the designated person rarely reports to the CEO, the study shows.
- Central banks top the list of risk events with the FOMC, BOE, ECB, SNB and Norges Bank all meeting. Key data includes an Australian employment report on Thursday. US politics are never far from the main stage. The Alabama Senate election race could see the Republicans' Senate advantage fall to just one seat, which could affect their ability to get policy through, especially ahead of key midterm elections next year.
- Bank of Canada governor Stephen Poloz will deliver a speech Thursday in Toronto in which he's scheduled to discuss the issues that keep him up at night. In a note to clients, Laurentian Bank Securities chief economist Sebastien Lavoie takes a stab at what Poloz will single out. First, Lavoie says, underlying inflation in Canada remains well below the 2% target despite a synchronized, and accelerating, global recovery, with Canada leading G7 economies. Second, some labor indicators, such as hours worked and long-term joblessness, remain weak. Third, elevated levels of household debt. And finally, the uncertainty over Nafta. All told, Lavoie said this is a "challenging time to making monetary-policy decisions" in Canada.
- Scott Garrett's quest to head the Export-Import Bank could come to an end next Tuesday, when the Senate Banking Committee is expected to vote on the former House lawmaker's nomination to an agency he previously pushed to shutter. Garrett isn't likely to advance: all of the panel's Democrats and two of its Republican lawmakers are expected to vote against the New Jersey Republican's nomination, depriving him of a majority needed to advance to the full Senate. That would effectively end his candidacy for the Ex-Im Bank post, according to lobbyists and Senate aides.
- The Department of Energy says it will put $18.5 million in funding toward an offshore wind research and development consortium aimed at reducing the cost of the energy-generating technology. The announcement comes as Rhode Island's Block Island Wind Farm, which is the only offshore wind installation in the US, celebrates a year in operation. In making the announcement, Energy Secretary Rick Perry touts Texas and his past support for wind. Texas has more installed wind-energy generating capacity than any other state by far, and that buildout largely occurred when Perry was governor.
- 3M CFO Nick Gangestad says the Minnesota-based manufacturer is pleased with changes to the US tax code spelled out in House and Senate bills being reconciled in Congress. But Gangestad declined to say what precisely 3M liked in the bills--or their expected effects on the company's finances--until the legislation advances further. "The direction that we've been advocating for years--both the House and the Senate version make a lot of progress towards that," Gangestad says at an analyst meeting. "We are pleased with those versions. We think they're beneficial to 3M."
- American, Delta and United for the past three years have been lobbying the US government to take steps to discipline two Middle Eastern nations whose fast-growing carriers have allegedly fueled their expansions with billions of dollars of state subsidies, an assertion the three Gulf carriers vehemently deny. At a meeting of US airlines and airport and travel trade groups at the State Department, government officials said they plan to engage in technical discussions with the governments of Qatar and UAE to acknowledge subsidies may hurt fair and equal opportunities to compete and to ensure that the Gulf carriers' financial results offer more transparency, that they use commercial financing and that transactions between state-owned entities are executed on commercial terms. The lobbying group representing the three US carriers on this issue says it applauds the Trump administration for taking action to level the playing field, after receiving little action under the prior administration. But the US government, for now, isn't revoking its liberal air treaties with the two Gulf nations.
- Aerospace metals specialist Allegheny Technologies eyeing titanium contracts with Airbus as the plane maker looks to reduce its exposure to Russia's VSMPO, with supply contracts with Arconic also expiring in 2020 and put out to bid next year. "We think it is likely that ATI secures a position on the next round of Airbus Ti contracts given escalating geopolitical tension with Russia may encourage Airbus to diversify its supply sources," said analysts at Cowen. They also expect ATI to seek work on the GTF engine made by the Pratt unit of United Technologies, as well as submarines produced by General Dynamics and Huntington Ingalls.
- The Canadian dollar trades higher versus the U.S. dollar on Tuesday, with USD/CAD down 0.2% at 1.2831, but RBC says it is watching "very closely" whether the pair will reach 1.2917. If USD/CAD closes above this level, it would unlock a rise to 1.30, RBC says. NAFTA negotiations, as well as Canadian economic data, could serve as reasons for that. Formal NAFTA talks start again on Jan. 23, but inter-sessional negotiations continues from Tuesday until Saturday. Chart support levels for USD/CAD are at 1.2823 and 1.2786, says RBC.
- If the Trump administration does not move to unravel the 2015 international agreement to curb Iran's nuclear program, the Islamic Republic has the potential to seal 10 new oil contracts with world oil majors like Shell by the end of 2018, according to Ramin Forouzandeh, senior strategist at Dana Energy. Mr. Forouzandeh says that Iran, which currently has the capacity to produce 4 million barrels of oil a day, aims to invest $200 billion in in its oil industry and increase its capacity to 4.7 million barrels a day. But that best case scenario is contingent on the nuclear agreement remaining in place -- without the re-imposition of economic sanctions -- and Iran gaining access to global financial institutions.

Dec 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent oil prices jumped 1.5 percent to their highest since mid-2015, after the shutdown of the Forties North Sea pipeline knocked out significant supply from a market already tightening due to OPEC-led production cuts.
- Gold was slightly higher, just up from its lowest in nearly five months in the previous session, and ahead of the start of a two-day U.S. Federal Reserve meeting.
- Shanghai base metals futures were mostly higher amid signs that supply cuts linked to an environmental crackdown by Beijing will lead to greater import demand.
- Chicago wheat futures slid for a seventh consecutive session, trading near their weakest since early January on pressure from abundant global supplies.
- The dollar held firm near two-week highs versus a basket of major currencies, with traders awaiting the U.S. Federal Reserve's policy meeting this week for fresh catalysts.
- Exxon says it reconsidered its opposition to an investor demand for more transparency on climate change, saying the board decided to provide further disclosures on the issue "in the near future," according to a corporate filing. Shareholders including the New York State Common Retirement Fund have pushed Exxon to provide specific details about how its assets would be affected in the event of greater regulation to reduce emissions. Vanguard and BlackRock, Exxon's two largest investors, supported the measure in May, and it won the support of 62% of shareholders who cast ballots on the issue.
- President Trump's formal decision directing NASA to send astronauts to the Moon and eventually to the Mars surface fails to acknowledge huge safety hurdles, including health hazards for crews that would be subjected to extensive radiation exposure. Declaring that sending humans to the Red Planet will "reclaim America's proud destiny in space," the President said such missions demonstrate "we dare to dream big." NASA's outside experts have said Mars voyages would "expose the crew to roughly two to three times the radiation dose received," on missions involving the international space station. As currently envisioned, these experts project a three-year, round-trip voyage to Mars would result in an "increase in lifetime cancer risk of approximately 10%," for crew members.
- Richard Berner, the departing director of the Office of Financial Research, will join New York University's Stern School of Business effective January 1, the school says. Berner announced in November he was leaving his post before the end of a six-year term. He is set to be replaced on an acting basis by Treasury Department Chief Risk Officer Ken Phelan. Berner will be the first to hold the title of executive-in-residence of the school's Center for Global Economy and Business, and will serve as an adjunct professor in the economics department, NYU says.
- Commerzbank expects that EUR/USD is likely to fall next year because of the U.S. tax reform bill, which should push U.S. inflation up by fueling consumption and supporting investment. "Tax cuts therefore have the potential to open up scope for Fed rate hikes," the brokerage adds. European Central Bank policy is expected to remain expansionary, keeping the euro subdued. Commerzbank expects EUR/USD at 1.16 by March 2018, then at 1.14 by June, before falling to 1.12 by September and staying at that level until the end of the year. Still, Commerzbank says it remains a "moderate U.S. optimist." EUR/USD is up 0.1% at 1.1786.

Dec 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as last week's rise in the U.S. rig count pointed to a further increase in American production that could undermine OPEC-led efforts to tighten markets.
- Gold prices steadied above a four-month low, but lacked upward momentum as expectations of higher interest rates in the United States supported the dollar.
- London metal prices edged higher, following robust trade data from China, while zinc rallied as a crackdown on pollution in China dampened growth in mine supply.
- U.S. soybean futures fell for a fourth consecutive session as forecasts for rain across South America pushed prices to a 10-day low on expectations of increased output amid already ample global supplies.
- Some banks, including UniCredit and Bank of America Merrill Lynch, prefer trading Brexit news through EUR/GBP rather than GBP/USD, since the U.S. tax reform is influencing the dollar. GBP/JPY is another preferred trade. "Tactically we would position for a rally on GBP/JPY and a drop in EUR/GBP," says UniCredit. GBP/JPY is down 0.4% at 151.82, but earlier it rose to 153.42, its highest since the immediate aftermath of the 2016 EU referendum vote. On June 23, 2016, the day of the vote, GBP/JPY closed at 159.52.
- Responding to an article about a regulator reviewing whether there should be fines against Wells Fargo for mortgage problems, Trump came on strongly in favor of punishing the bank, which has been in the news since its sales practices scandal erupted last September and more recent problems in its mortgage business as well as other divisions. "Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased," Trump tweets. "I will cut Regs but make penalties severe when caught cheating!" Reuters reported earlier Friday that the new head of the Office of the Comptroller of the Currency is reviewing whether Wells Fargo should pay tens of millions of dollars over alleged mortgage abuse. The WSJ reported last week that the OCC sent the bank's board a letter that it is weighing a formal enforcement action.
- More than a third of junk bond investors see proposed U.S. tax changes are a risk to corporate profits in Europe, according to a Bank of America Merrill Lynch survey. The reason is that tax reform could make the U.S. more competitive. The reform is currently going through the legislative process. Investment-grade fund managers are not as concerned, focusing more on pressure on corporates to increase their balance sheet leverage and weakening Chinese demand.
- The University of Michigan says this morning that its closely watched index of US consumer sentiment fell in December for the second straight month. It was 96.8 in early December, down from 98.5 in November and 100.7 in October, and missing economists' expectations for a preliminary December reading of 99.9. "Most of the recent decline was concentrated in the long-term prospects for the economy, while consumers thought current economic conditions have continued to improve," says Richard Curtin, the survey's chief economist. "Importantly, the largest decline in long-term economic prospects was recorded among Democrats, which reflected their concerns about the impact of the proposed changes in taxes."
- While wages improved last month, gains remained muted, suggesting inflation isn't likely to pick up anytime soon, said David Lefkowitz, a senior equity strategist with UBS Group. That could help keep the Federal Reserve from moving more aggressively on interest-rate hikes and keep concerns around stock valuations at bay. "It's a confirmation that the Goldilocks environment we've been in this whole year is continuing," Lefkowitz said. "There's solid growth and limited inflationary pressures." Persistently low inflation has been a key concern of the Fed, but it has also helped support ideal conditions for stocks. Wall Street analysts widely expect inflation to pick up next year, and add that the GOP's tax overhaul could impact that pace. The tax bill "could be a big swing factor with what happens to inflation," Lefkowitz added.
- The fact that European Commission President Jean-Claude Juncker said that sufficient progress has been made to move on to trade negotiations between the U.K. and the EU "means that [Theresa] May government will live to see another week," says Jane Foley, senior currency strategist at Rabobank. But "what we heard this morning doesn't fully answer the question of the Irish border," Ms. Foley says. "The economic integrity of the U.K. is still in question." After arriving in Brussels on Friday, Mrs. May said there would be no hard border between the Northern Ireland and Southern Ireland after Brexit, and that the Good Friday Agreement would be upheld.
- Two Seoul-based North Korea watchers say the North may conduct another provocation before the 2018 Pyeongchang Winter Olympics to gain more leverage before initiating talks with the US to be accepted as a de-facto nuclear power. But the provocation will be "limited" due to fear of provoking a US military response and a stronger provocation only increasing global support for UN sanctions, they add. Kim Yong-hyun, who served as an advisor to the Moon Jae-in transition committee, said a test launch of a submarine-launched ballistic missile would be "the strongest possible provocation." Kim doubted the North would carry out its 7th nuclear-weapons test or another ICBM launch before the Games. Park Sun-song, professor of North Korea studies at Dongguk University in Seoul, added a cyberattack would be another possibility.
- Proposed changes to the interest deductibility regime in the U.S. could deepen potential business cycle downturns, Moody's chief economist John Lonski says. The proposed law stipulates that a drop in corporate earnings will necessarily reduce the amount of interest expenses that is tax deductible. But it's exactly when earnings drop that businesses need to conserve cash. Therefore, the loss of full deductibility of interest expenses could make things worse for companies needing liquidity amid a downturn.
- Australian US ambassador Joe Hockey says Canberra's efforts to contain Chinese influence and meddling in domestic political affairs are being closely followed in America. Australia unveiled new laws this week to counter espionage and foreign interference.

Dec 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable, held back by a strengthening U.S. dollar but supported by China's relentless thirst for crude amid the OPEC-led supply cuts that have already tightened the market this year.
- Gold edged up in early trade as investors resorted to bargain hunting after the yellow metal dropped below its recent trading range to hit the lowest in more than four months overnight.
- Shanghai copper futures were on track to end the week in negative territory after opening softer, ignoring signs of supply-side support.
- Chicago wheat futures ticked higher as the market took a breather after falling for the last four sessions with prices on track for the biggest weekly decline in four months on pressure from ample supplies.
- Sterling rose while the euro edged down, as traders waited to see if British Prime Minister Theresa May has finally clinched an elusive deal with Irish and EU officials on how they would run their post-Brexit Irish land border.
- Australian US ambassador Joe Hockey says Canberra's efforts to contain Chinese influence and meddling in domestic political affairs are being closely followed in America. Australia unveiled new laws this week to counter espionage and foreign interference.
- Why are banks still so unpopular? That was the question posed by Wells Fargo banking analyst Mike Mayo to JPM Chief James Dimon during an investor conference. Dimon says that question has popped up with politicians, too. During a meeting with around 25 congressmen at the House of Representatives earlier Thursday, Dimon says one mentioned "how low we are in the polls." Dimon says: "We're doing a little bit better than you are. We're like 40%, they're 20%; cockroaches are 21%." Dimon says he doesn't expect to change the negative public sentiment because there's a "huge misunderstanding about banks" especially after the financial crisis and a sense that all banks were bailed out. "It just wasn't true ... and I can't overcome that," he says.
- As the US agricultural industry frets over the possibility that Trump pulls the US out of Nafta--throwing into question nearly $40B in US farm exports--Cargill aims to marshal some of its 155,000 employees to spread the benefits of global trade. The Minnesota agribusiness has set up a website with explainers on trade's support of the US farm sector, with a section for employees and others to submit personal stories on how trade has benefited them personally, which Cargill aims to share in its effort to defend US trade deals. Many people "don't see or understand the daily benefits of trade," the company says. "So trade can get a bad rap."
- Canadian government bonds edge higher on investor expectations that the Bank of Canada will take a cautious approach to raising interest rates in the future, moving slower than the US Federal. The BoC held rates steady Wednesday and said that while growth has accelerated faster than forecast, it could moderate in coming months. Central bankers noted that while oil prices have improved, the outlook for global growth remains "subject to considerable uncertainty." Some investors have expressed concern that negotiations between the US, Canada and Mexico to revise aspects of the North American Free Trade Agreement may not reach a positive resolution, which could affect trade between the US and Canada. The Canadian 10-year government bond yield fell to a recent 1.853% from 1.855% Wednesday.
- In response to public comments and in the spirit of the Trump Administration's executive order reducing government regulation, the Transportation Department last week withdrew a proposed rulemaking from July 2011 that could have required airlines to collect data on 19 separate charges they assess for optional passenger services, including priority check in, internet access, alcoholic drinks, seating assignments and unaccompanied-minor fees. Consumer groups supported the increased transparency the data dump would have generated, as did Southwest Airlines, according to the DOT. But other airlines said the reporting would create an economic burden on the industry, could reveal proprietary information and suggested that this could lead to a tax on ancillary revenues. Even Southwest suggested the number of items be cut in half. A similar plan to considering providing airline passengers with more specific information on bag fees also was withdrawn.
- Bank of America Merrill Lynch says the US dollar is likely to rise next year, but only in 1Q, taking advantage of December's interest rate increase and the passing of the tax bill, which is expected to happen by the end of this year. As next year unravels, however, other major central banks--such as European Central Bank and Bank of Japan--could take advantage of the US dollar strength and start tightening their monetary policy, which would refocus investors' for their currencies.
- Dell Technologies is concerned certain aspects of proposed US tax legislation could create headwinds for the company. For example, the proposed capping of interest-expense deductions could be an issue because Dell has more than $43 billion in long-term debt, which it used to acquire EMC last September. "We're talking to our representatives about how they should think through some of the impacts given that it's effectively an anti-growth strategy as you think about how debt has funded job growth and company growth in the US," CFO Tom Sweet says on an earnings call. Overall, the company is a supporter of tax reform and elements such as territorial tax reform that would reduce taxes on overseas profits.
- Investors expect Brazil to fix its insolvent pension system and could punish Brazilian assets if lawmakers fail to approve reform, Planning Minister Dyogo de Oliveira said to reporters today. "There is a 'reform premium,'" he said, arguing that currency would be much weaker and stocks would be much lower by now if the reform wasn't on the table. He expressed confidence the Lower House would approve the overhaul next week, despite reports that a meeting with party leaders last night didn't supply enough support for the bill. Oliveira took part in the meeting and said it was actually good. "A leader told me support in his party has moved from terrible to acceptable," he said.
- Ashtead would clearly benefit from U.S. tax reform and any other economic stimulus as a result of lower U.S. corporate taxes over the medium-term, Numis says. While the timeline and magnitude of the cuts are unclear, they will have a positive impact on the equipment rental company because it makes about 90% of its group Ebitda in U.S. dollars and because its 34% underlying tax rate could be reduced significantly, the brokerage says. Numis adds that Ashtead could also get a boost from hurricane clear-up activity. Numis raises the stock's rating to buy from add, and the target price to 2,500 pence from 2,000 pence.
- Protests are planned across the country today in response to the Trump Administration's plan to repeal net neutrality rules for the web. Protestors plan to show up outside 700 Verizon stores across the US, as well as at the Washington DC Hilton Hotel where a dinner honoring the FCC Chairman is being held tonight. Verizon has said it doesn't plan to block, throttle or otherwise restrict internet traffic. But the wireless giant is partly responsible for the current state of play. It successfully sued the government to overturn a 2010 version of the rules that had widespread support among businesses and consumers. As a result, the FCC passed even tougher rules in 2015, which then FCC commissioner, and now chairman, Ajit Pai has opposed.
- US government bond traders seem to take Labor Department data on jobless claims in stride. Jobless claims showed a decline to 236,000 from 238,000 the week before. With 10-year yields having been stuck in a range between about 2.2% and 2.5% for several months, they are looking for signs of an evolution into a new trading environment. In this context, the Friday nonfarm payrolls report is taking on less importance than usual, investors said. They are looking for the Federal Reserve to put out a road map for rate hikes next year, and are taking for granted that Congress and the President will get together and pass temporary approval for the government to continue spending. The benchmark 10-year Treasury note yield was recently 2.330%, unchanged from Wednesday.
- The U.S. dollar has been rising on hopes the tax reform may become law by the end of the year, but there are no economic reasons why the reform should be good for the dollar, ING says. "Without genuine supply-side reforms, the [Donald] Trump tax bill is adding to the fiscal deficit without changing the long-run trend growth in the U.S." The bank doesn't expect the dollar to rise strongly in 2018, especially given the fact that growth in the rest of the world is catching up with the U.S., while the "U.S. economy that is far later in its cycle." EUR/USD falls to a 2-week low of 1.1776.

Dec 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable as a fall in U.S. crude inventories was countered by soaring output and a rise in fuel stocks.
- Gold prices were mostly steady amid a firm dollar, trading within sight of a two-month low hit earlier this week.
- London copper edged up but was still not far from two-month lows amid signs that growth in China's property and power sectors, both major copper consumers, is tapering into the year-end.
- Chicago wheat futures slid for a fourth consecutive session, hitting the lowest in more than two weeks as abundant supplies weighed on the market, with the latest data from Canada showing higher than expected production.
- Optimism that a U.S. tax reform bill will be signed into law lifts the dollar, with Danske Bank saying this has helped push EUR/USD below 1.18. EUR/USD is only just below 1.18, however, last slightly weaker at 1.1793, while the euro firms against most other currencies. Data at 1000 GMT is expected to confirm the eurozone economy grew by a quarterly 0.6% in 3Q. USD/JPY is up 0.35% at 112.67, and the DXY dollar index is up around 0.1%. "Despite the many differences between lawmakers, it is highly expected that a final bill may see light before year-end, which may keep the dollar well-supported," says Hussein Sayed, chief market strategist at FXTM.
- Citigroup CFO John Gerspach, speaking at an investor event on Wednesday, said trading revenue is expected to fall a "high-teens percentage" in 4Q from a year earlier. He cited low volatility and the difficult comparison to the year earlier, when the trading business benefited from activity around the presidential election. He also noted that the weakness was largely in fixed income, currencies and commodities, which makes up a large share of Citigroup's business. Other bank executives made similar remarks yesterday: Bank of America and JPMorgan projected trading revenue to fall about 15% in the quarter. One bright spot Gerspach noted was investment banking.
- The Aussie dollar is ground back down to 0.7560 in New York as the risk-off tone to markets saw USD appreciate. ANZ says AUD is likely to trade on global risk factors in the session ahead. The US government continues to debate tax reform, the Brexit debate is getting heated and German coalition talks are ongoing. The US president's stance on Jerusalem also raises political risk, ANZ adds.
- Food retailers expect to distribute any savings reaped from a tax bill moving through Congress across investors, consumers and employees, says Amin Maredia, chief executive of Sprouts Farmers Market, a fast-growing natural grocery chain. "The intent of the tax reform is to lift all boats," Maredia tells investors at a Barclays Capital conference. "I think Sprouts would recommend something similar to our board." Maredia says he's had many conversations with CEOs lately about what they intend to do with cash freed up by the tax bill if passed, and others agree it should be spread out. "CEO's are leading and talking to their boards about being more balanced," he says.
- Whether the Trump administration should impose tariffs on imported solar panels and cells, as the International Trade Commission is recommending, is a hot topic in the solar world. The Office of the US Trade Representative received nearly 4,000 comments ahead of a Wednesday hearing on the issue. Juergen Stein, CEO of SolarWorld Americas, one of the embattled solar manufacturers requesting protections, lobbied for tariffs saying "the President has the power to help bring the US solar manufacturing industry back from the brink." The Solar Energy Industries Association disagrees, saying tariffs "would put tens of thousands of American workers out of jobs." A decision from Trump is due in January.
- Bank of Nova Scotia economist Derek Holt tells clients the uncertainty over Nafta is weighing heavily on Bank of Canada policymakers, and perhaps moreso than Wednesday's rate-policy decision is letting on. BoC remains on hold when it comes to rates, Holt says, and is more mindful of the tenuous state of Nafta talks relative to economic data. Holt says BoC is likely more focused on the risk of raising rates based on economic data, only to find out later Trump makes good on his threat to begin the Nafta withdrawal process. "There is obviously a limit to the point to which monetary policy can be put on hold by never ending uncertainties, but I simply don't buy that the data is screaming out that this limit is being breached now," Holt tells clients.
- Steel companies are trading higher after the Commerce Department issued a preliminary ruling that steel from China has been circumventing US anti-dumping tariffs by being processed and shipped from Vietnam. The department says galvanized steel and cold-rolled steel from Vietnam that uses Chinese steel as a substrate should be subject to same US duties as steel imported from China. Imports from Vietnam have surged recently, attracting complaints from US steel companies that much of the steel shipped from there originated in countries subject to stiff US steel tariffs. "This decision should put other countries and companies on notice that their cheating will no longer be tolerated," United States Steel Corp says. US Steel up 6.5%; AK Steel up 4.1% and Steel Dynamics ahead 2.1%.
- Potentially lower tax deductibility in the U.S. will make debt a more expensive source of capital for U.S. corporates and could encourage debt issuance in more favorable jurisdictions, says Andrey Kuznetsov, portfolio manager at Hermes Investment Management. This could boost the volume of so-called reverse Yankees, bonds issued by U.S. companies in currencies other than dollars. Proposed U.S. tax changes are currently going through the legislative process.
- The planned changes to the U.S. corporate tax system would have a limited negative impact on Wacker Chemie, says Warburg, as they would mostly erase tax credits which are used to foster investment in renewables. Under the worst-case scenario, the demise of the U.S. solar cell market would shrink the global market by 3% or 4% in 2018, the bank notes, lowering demand and prices for polysilicon, a material produced by the German chemicals company. Yet Warburg has not made any changes to the company's estimates, as the final changes to the U.S. tax code may differ from the Senate bill. Warburg raises its target price to EUR147.30 from EUR144.60 and keeps a hold rating.
- Danske Bank recommends buying 30-year callable mortgage bonds against Danish government bonds as part of their fixed income top trades for 2018. Foreign investors should be a dominant buyer of mortgage bonds, supporting option-adjusted spreads at currently low levels. Meanwhile, Danish investors look poised to hold on to their callable bonds. But a jump in volatility and credit premiums or an end to foreign investors' callable bond buying could jeopardize this trade.

Dec 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped, as refined product inventories in the United States rose in what the market interpreted as a sign of lacklustre demand.
- Gold was mostly unchanged in Asian trade after sliding to a two-month low in the previous session, despite a slightly weaker dollar.
- Shanghai copper fell more than 3 percent, tracking a steep drop on the LME as investors wound in profits on concerns China could see a weaker first half of next year.
- Chicago soybean futures rose for a fourth consecutive session, with the market trading near its highest since late July on concerns over dry weather reducing yields in Argentina, the world's third-largest supplier.
- Solar power suddenly--but not unexpectedly--isn't getting cheaper. As many in the US solar industry predicted might happen, the cost of solar installations has jumped in recent months on worries that the Trump administration will impose trade protections on imported solar panels and cells, making solar installations less affordable. That's spurred a rush to procure panels that are currently tariff-free. An analysis by GTM Research shows prices for utility-scale fixed-tilt systems increased from 98 cents a watt in the first half of 2017 to $1.03 a watt in the second half. Prices also rose in the residential and commercial solar markets.
- AT&T finance chief John Stephens says he expects tax reform to pass this quarter as House and Senate bill enter the conference phase. His upbeat political outlook suggests the telecom company is ready to reap the benefits of a lower corporate income tax rate. Stephens tells investors at UBS's annual media and comms conference in New York the company still plans to lift capital spending by some $1B next year should the corporate rate fall, with much of that cash going toward hooking up homes with fiber-optic broadband service. More broadly, Stephens predicts lower taxes will "generate demand for our services, and we're most excited about that."
- Kroger says the tax bill being reconciled in Congress would benefit it across the board, but a provision that could limit the deductibility of corporate debt would hurt competitors that are highly-levered. "Some people will run into an issue with that," CFO Mike Schlotman says at a Barclays investor conference. "I don't think everybody in our industry is going to wind up in the same situation." Schlotman says Kroger, the US's largest grocer, will take until the end of January to evaluate the implications of the tax plan before deciding how to use the additional cash if it passes.
- Morgan Stanley says "a U.S. tax plan that adds to growth in the future needs to boost inflation rates today for USD to rise." That's because inflation is what drives the course of the dollar these days, or more precisely, the lack of it, the bank says. "The current level of the DXY suggests that markets expect the U.S. personal consumption expenditure to have moderated in November." The U.S. Dollar Index rises 0.2% to 93.3480. EUR/USD falls 0.2% to 1.1840, as investors get optimistic the tax reform will soon become law, and disregard the fact that November ISM non-manufacturing came in below expectations at 57.4.
- S&P futures and Dow futures are higher as enthusiasm over the GOP tax package continues to buoy sentiment on Wall Street. On Monday, the Dow Industrials rose 58.46 points, or 0.2%, to 24290.05, its 64th record close this year, but the S&P 500 and Nasdaq both slipped after a selloff in tech shares. In premarket trading, Autozone climbs 5.7% on better-than-expected earnings and apparel maker G-III surges 12% after an earnings beat and guidance lift. On the economic front, the US trade deficit widened 8.6% in October to a seasonally adjusted $48.73B. Exports were little changed from September while imports rose 1.6%.
- The impact of U.S. foreign company repatriation on the dollar should be small, if at all, says Deutsche Bank. Of the $3.5 trillion of U.S. earnings offshore, around $1.5 trillion are in cash or equivalents, and only around 10% of those, i.e. $150 billion, sit in non-dollar holdings, says the German bank. Which means their repatriation won't increase U.S. dollar volumes by much. And most of the money already sit in U.S. banks. Also, current U.S. tax proposals don't oblige companies to repatriate cash.
- Sterling has dropped to session lows as European trading picks up following May's failure Monday to bring home word that trade negotiations with the EU can begin. It's down some 0.5% against the dollar and euro after holding little changed during Asian trading Tuesday. She pulled back from Brussels after the Democratic Unionist Party said it wouldn't accept Northern Ireland being treated differently from the rest of the UK after Brexit. But ING says, "Despite a Brexit divorce deal falling at the last hurdle yesterday, we remain constructive on GBP." ING targets $1.40 on the assumption that a transition deal will be agreed by 1Q. The pound is at $1.34.
- Australia has unveiled bills banning foreign political donations and overseas interference in the country's domestic affairs, reacting to mounting worries about Chinese meddling in politics, universities and media. "Foreign powers are making sophisticated attempts to influence the political process," says PM Turnbull while calling the proposed reforms the most sweeping in decades. The proposals aren't aimed solely at China as they would also outlaw donations from progressive US foundations to left-leaning political-activist groups which have been prominent in supporting anti-coal, tax and labor-movement campaigns.

Dec 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched lower ahead of U.S. crude inventories data, as the market weighed the impact of rising U.S. crude output versus last week's deal between OPEC and other crude producers to extend output curbs.
- Gold prices held within a tight range in Asian trade, supported by a slightly weaker dollar as investors awaited the next steps over U.S. tax reform legislation for clues.
- Chinese metals futures were mixed in early trading, with nickel leading gainers on the back of stronger steel prices.
- Chicago soybean futures rose for a third straight session with the market trading near its highest in more than four months, buoyed by dry weather in Argentina and strong U.S. demand.
- Canada is working on contingency plans in the event of Nafta's demise that aim to limit any negative fallout by as much as possible, the country's chief Nafta negotiator tells Canadian lawmakers. "We have a number of ideas in that regard," Steve Verheul tells the parliamentary trade committee, without elaborating. Verheul adds Canada is also contemplating what to do in the event the Trump administration commences the formal 6-month process under which the US can withdraw from Nafta. He says Canada expects a fairly robust reaction from US industry, and it's likely Canada would work "very closely" with US stakeholders to try to persuade Trump from following through on the threat to withdraw at the end of the 6-month process.
- Canada's chief Nafta negotiator, Steve Verheul, says his team is struggling to come up with proposals or ideas that can address complaints from the Trump administration over the trade pact. "We can bring some creativity to the table to developing outcomes that could be categorized as a US win," he tells members of parliamentary trade committee, citing areas such as autos, the sunset clause and dispute settlement. The issue, he says, is the US's overarching objective is to reduce the benefits enjoyed by Canada and Mexico under Nafta, and ensure they are enjoyed solely by the US. "The only way the negotiations can succeed is if it's win-win-win and all three parties benefit," he says. What the US is looking to do is a "recipe for making North America less competitive."
- Canada's chief negotiator at Nafta, Steve Verheul, told Canadian lawmakers the Trump administration's proposal on auto-sector content is "wholly unworkable," and warned Canada wouldn't sign on to a continental trade pact that "fundamentally weaken the benefits of Nafta for Canada." Verheul, in a rare public appearance before a parliamentary trade committee, said US proposals dealing with autos, the dispute-settlement process, government procurement, and a sunset clause are "extreme," echoing language used by senior Canadian officials such as Foreign Minister Chrystia Freeland. He added the US is also proposing the elimination of Canadian tariffs on dairy, poultry and eggs with no assurances the US will do likewise for Canadian agrifood products. His hardline comments come as Nafta talks are at a standstill. The next full round of talks is scheduled for Montreal in late January.
- Farmers and ranchers will benefit from President Trump's move to slash the size of national monuments in Utah, according to the American Farm Bureau Federation. The group says the decision helps unwind the Obama administration's abusive "quarantine" of millions of acres of grazing land, according to AFBF President Zippy Duvall, who says rural Americans suffered under a "remote bureaucracy." Duvall sees Trump's move in keeping with the original spirit of the 1906 Antiquities Act and follows similar reductions by past presidents like Taft and Kennedy.
- Nike will close its current New York City flagship store this coming spring, as it prepares to open a new multi-story retail location on 5th Avenue in 2019. The current New York flagship, the Niketown at 57th Street and 5th Avenue, is adjacent to Trump Tower. The world's largest sportswear maker says the new retail location will feature 69,000 square feet with a members-only floor for customers participating in Nike's rewards program and "a sneaker bar for style advice." The new flagship will be six blocks from rival Adidas AG's New York digs on 5th Avenue, and will be Nike's second major retail opening in New York in as many years after opening a five-story 55,000 square foot shopping mecca in SoHo last November.
- The broad rally that's taken the Dow Jones Industrial Average up nearly 300 points Monday has left behind one sector: technology. Shares of technology companies in the S&P 500 were recently down 0.8%, the only group of the broad index's 11 sectors trading in negative territory. The losses weighed on the Nasdaq Composite, which edged down 0.1% as the Dow industrials jumped 1.2%. While the Republican plan to cut corporate tax rates should lift earnings growth broadly, helping US stocks, some analysts have said it could also spur a rotation out of outperforming names into relative underperformers. Those analysts believe tech stocks in the S&P 500, which have nearly doubled the broad index's gains this year, are vulnerable to a pullback.
- Fresenius Medical Care could be one of the biggest European beneficiaries of the U.S. tax reform, says a trader. "Earnings per share are likely to increase by at least 10%," he says, noting that the biggest part of FMC's dialysis business is in the U.S. The company's shares trade up 4.7% at EUR86.51. Shares of parent company Fresenius also gain, trading up 3.2% at EUR62.52.
- Boeing and other aerospace stocks make strong early gains, lifted by proposed U.S. tax reform as well as IATA's report of a 7.2% bump in passenger traffic during October. Boeing rises around 2%, with commercial aero shares outperforming defense stocks, the latter weighed slightly by the prospect of another short-term Pentagon budget when the current one runs out Friday. Tax experts said the impact on aerospace will hinge on reconciling language on a proposed foreign excise tax.
- Shares of banks are rallying shortly after the opening bell, lifted by the latest signs of progress on a US tax overhaul. The KBW Nasdaq Bank Index of large US lenders was recently up 2.3%, on course for its fifth consecutive session of gains. JPMorgan rose 3%, Morgan Stanley added 2.1% and Goldman Sachs rose 1.4%. Corporate tax cuts could boost earnings growth and lend additional fuel to the US stock rally, analysts say. Shares of banks, which some analysts say pay among the highest effective tax rates of any major industry, have rallied in recent sessions as Republicans have drawn closer to pushing a tax bill to the White House.
- If the U.S. Senate's "yes" on the tax cuts bill helps U.S. bond issuers outperform, as some analysts expect, then investors in euro corporate bonds have good reason to take notice. After all, heavy issuance of so-called reverse Yankees -- bonds by U.S. companies in euros -- has makes the U.S. the largest segment in the iShares fund tracking the Bloomberg Barclays Euro Corporate ex-Financials Bond Index, surpassing France.
- U.S. issuers and dollar-denominated corporate bonds could outperform after the U.S. Senate passed the tax cuts bill, Commerzbank says in a note. This boost will come more from the "drastically increased prospects" of the reform -- which includes corporate tax rates dropping to 20% -- rather than the actual changes, which will largely take effect in 2019, credit strategist Macro Stoeckle says.
- The euro is being dragged down against the U.S. dollar on Monday by dollar strength, but ING says "the European recovery story should keep the EUR relatively well-insulated from the stronger dollar." EUR/USD is still likely to come under some pressure from a stronger dollar this week, meaning support at 1.1810 should be tested, with outside risk of a further fall to 1.1730/50, it says. However, it sees the euro rising against the yen, "breaking to the topside of its 131.50 to 134.50 trading range as EUR out-performs." EUR/USD is down 0.38% at 1.1848, but EUR/JPY rises 0.24% to 133.76.

Dec 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil fell after U.S. shale drillers added more rigs last week, but prices still held close to their highest since mid-2015, supported by an extension of output cuts agreed last week by OPEC and other producers.
- Gold prices fell in Asian trade, as the dollar gained on expectations that the United States' economy will expand further after the Senate passed a bill to overhaul the country's tax system.
- London copper held its ground, defying a stronger dollar to find support from resilient manufacturing demand in top consumer China, although analysts said downward pressure may mount towards year-end.
- Chicago corn climbed to its highest since early September with concerns that dry weather will hurt crop yields in Argentina underpinning the market.  
- Any falls in EUR/USD towards 1.18 "is a buy," says UniCredit, since there are too many political uncertainties in the U.S., and there is little to suggest the U.S. tax reform will give U.S. growth "a fundamental sustainable boost." EUR/USD falls 0.25% to 1.1864 as the dollar gains after the Senate passed the tax reform. The allegations on Friday surrounding national security adviser Michael Flynn about possible contact with Russian officials during Donald Trump's presidential campaign--albeit later denied--don't seem "a good recipe for the dollar," Unicredit says.
- Sterling is likely to rise on Monday as "strong signals could emerge later today as to whether EU negotiators are recommending to EU leaders that Brexit negotiations should move to phase two," ING says. U.K. Prime Minister Theresa May is due to meet with EU Commission President Jean-Claude Juncker in Brussels to discuss progress regarding Brexit negotiations. Broad U.S. dollar strength pushes GBP/USD down 0.25% at 1.3443, while EUR/GBP is flat at 0.8831 and GBP/JPY is up 0.3% at 151.67. ING says EUR/GBP could fall to 0.8730 while GBP/JPY is likely to rise to 160. The purchasing managers' index on U.K. construction activity is due at 0930 GMT.
- EUR/USD falls 0.4% to 1.1851, extending the U.S. dollar rise during Asian trading, after the U.S. Senate passed the tax reform bill. Worries about the possibility of the bill being delayed kept the dollar weak last week, together with concerns about political uncertainty, and so the news brings a relief rally for the dollar on Monday. Commerzbank says after the controversy over reports of possible Russian interference in Donald Trump's election campaign still has the potential to upset the dollar. "Politics remain an important factor influencing USD exchange rates," it says, but adds: "for the time being EUR/USD is likely to be comfortable around the current levels."
- German 10-year government bonds, or bunds, look poised to lose traction Monday after the U.S. Senate passed the tax cuts bill, Commerzbank rates strategist Rainer Guntermann says. The cuts' effect should only be felt next year but they do support expectations of a GDP boost and a more hawkish Federal Reserve. U.S. tax reform "will be the key driver for global risk sentiment for now," Mr. Guntermann adds. Bund yields are quoted at 0.34% early Monday, according to Tradeweb.
- An inquiry by Australia's competition regulator into the impact digital giants such as Facebook and Google are having on media and advertising will reveal whether the market is being distorted and dominated, Australia's NXT party says. The review, launched Monday, was a condition for NXT agreeing to the government's recent media reforms. NXT lawmaker Stirling Griff says it'll "expose the tactics search engines and social media platforms have employed to hoard advertising dollars'" and the part they have played in eroding media profits. Since the review was announced, Google has stopped requiring publishers to give away 3 free articles a day via Google search before users hit a paywall.

Dec 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil futures rose after OPEC and other major producers agreed to extend their production curbs in a widely expected move aimed at ending a persistent glut in global supplies.  
- Gold steadied near a 3-1/2 week low touched in the previous session, as investors opted for riskier assets amid a surge in U.S. equities and expectations of an interest rate hike by the Federal Reserve later this month.  
- Shanghai metals futures were mixed, with copper starting the month in negative territory after China, the world's biggest consumer of the metal, reporting that factory growth slowed in November.  
- Chicago corn futures rose for a third consecutive session on short-covering, although concerns over weak U.S. exports limited gains.
- The dollar steadied against the yen, losing steam after rising to a 10-day high, as the market endured the wait for a vote on a U.S. tax reform bill.
- The euro rises 0.18% to 1.1927 versus the U.S. dollar, extending Thursday's gains, when it benefited from month-end re-balancing flows, according to ING. Marginal U.S. dollar weakness on fears that U.S. tax reforms may not go through a Senate vote on Friday contributes to the rise. ING says EUR/USD is likely to stay around the 1.19 level on Friday. The Eurozone manufacturing purchasing managers' index for November is due at 0900 GMT and according to a WSJ poll, it should come in at 60, which would be higher than October's manufacturing PMI of 58.5. EUR/GBP is up as well, by 0.25% at 0.8822.
- Nordic markets are set to open slightly lower Friday with IG calling the OMXS30 down 0.3% at around 1605. "U.S. equity markets ended yesterday's trading higher, with Dow Jones climbing past the 24,000-mark for the first time ever," says SEB. "The upturn was triggered by optimism on the prospects of the tax bill, but the debate and subsequent vote halted yesterday and is expected to continue today. Asian stocks are mixed as Chinese stocks edged lower following weaker than-expected November PMI data." Manufacturing PMIs are in focus today, with data from Sweden, Denmark, Norway, the eurozone and the U.S. all due. OMXS30 closed at 1610.11, OMXN40 at 1567.90 and OBX at 729.52.
- Large US public companies disclosed spending $300M on political efforts in 2016, though none on independent support of candidates, according to new data from the Center for Political Accountability. That's up from $220M in 2015, though more disclosures reflected ballot-measure spending and less reflected trade-association contributions. The group advocates for better disclosure of corporate political spending and compiled voluntary disclosures from S&P 500 companies. About 60% disclose at least some political spending figures; the rest disclose nothing. More companies are revealing how much of their trade-association spending goes to political activity, the group says. Top trade-group recipients in 2015 and 2016: PhRMA ($40M), US Chamber of Commerce ($27M) and Nuclear Energy Institute ($10.5M).
- Roughly a month before the end of his tenure as Federal Aviation Administration chief, Michael Huerta is highlighting cooperation he promoted between regulators and industry officials. The approach "has consistently yielded better results than if the FAA had tried to go it alone," he maintains. One inevitable result will be autonomous flying cars, he has said. "We can debate when drone taxis will emerge and how many people they will carry. But there's no debate they're on the horizon." The agency head also expects that "the emerging commercial space industry could easily evolve into a system" of rocket planes taking passengers "to Asia, Europe or the Middle East in a matter of minutes." But he stops short of predicting any timelines for such sweeping changes.
- A surge in US stocks has lifted major indexes to fresh highs and put them on course for their best day in months. The Dow was recently up 352 points, or 1.5%, at 25292--narrowly on course for its biggest one-day percentage gain since Dec. 7. The S&P 500 was up 1.1%, good for its best session since March 1. Signs that the Senate is drawing closer to pushing through a tax bill helped lift financial stocks, which many analysts expect to be among the biggest beneficiaries of a corporate tax cut. But gains are broad: all 11 sectors of the S&P were trading higher after midday.
- Provisions in the House and Senate tax-overhaul bills could wreak havoc for offshore reinsurers, warns Height Securities analyst Stefanie Miller. The House bill would impose a 20% excise tax on payments to foreign-owned parent companies by US subsidiaries, payments that are currently deductible to the US firm. The Senate targets similar transfers, subject to some company-size thresholds, Miller writes. In addition, both bills would impose a new bright-line test designed to prevent hedge funds from making use of an insurance exception to avoid higher taxes on income from a "passive foreign investment company." Miller says the provisions' similarity makes it likely to appear in any final legislation.
- The U.S. dollar falls on reports President Donald Trump is looking to fire Rex Tillerson as State Secretary and replace him with CIA chief Mike Pompeo. This sparks concerns about political uncertainty, pulling the DXY dollar index down around 0.3%. "It's hard to see policy having any straight direction when the people making it are changing," says Adam Cole, chief currency strategist at RBC, adding: "The policy is becoming shambolic in the U.S." EUR/USD last trades up 0.5% at 1.1909, having reached a high of 1.1932. GBP/USD also gains close to 1% to reach a fresh 2-month high of 1.3549, before trimming gains to last trade at 1.3506.
- Major indexes rise to session highs, with the Dow Jones Industrial Average recently up 195 points, or 0.8%, to 24135, after Senator John McCain says he will support the Senate tax bill. Proponents of the Republican tax overhaul say the measure, which calls for reducing the corporate tax rate, will boost earnings growth and potentially help the long US stock rally keep climbing. Yet skeptics have warned that the measure will inflate the federal deficit and potentially fall short of the stimulus the bill's backers are hoping for. Shares of financial and telecom companies, which UBS analyst  say could be the biggest beneficiaries of a corporate tax cut, jump more than 1% apiece in the S&P 500, among the best performers for the day of the index's 11 sectors.
- Banks are emerging as clear winners from the Republican tax reform plan. Analysts at Bernstein Research estimate that taking into account all of the plan's planks, S&P 500 banks could see a jump of 15% to their expected 2019 earnings-per-share. That's almost twice the 8% improvement that Bernstein is estimating for all S&P 500 companies. Among the big banks Bernstein forecasts Wells Fargo as the biggest winner, with a more than 16% uplift to 2019 earnings-per-share, and Citigroup as the smallest, at 10%. That reflects the tilt toward US earnings for Wells Fargo, and non-US for Citi.
- The dollar firms on improved prospects for the U.S. tax reform proposals, with the DXY dollar index at 0.14% and USD/JPY up 0.3% at 112.28, having hit a one-week high of 112.48. BK Asset Management says the dollar has gained on "news that the GOP tax reform bill cleared yet another hurdle before going to full debate and floor vote." U.S. personal consumption expenditure data--a measure of inflation--due at 1330 GMT is the next focus and a solid reading may see USD/JPY rise toward 113.00. "The market is looking for Real Personal Consumption to decline to 0.2% from 0.6% the month prior, so any upward surprise could send USD/JPY through the 112.50 level and towards 113.00 figure as dollar recovery continues."

Nov 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell on doubts OPEC and Russia will agree on extending a crude production cut that the market has already priced in, and after a report of an unexpected rise in U.S. crude oil inventories.  
- Gold prices edged higher amid a slightly weaker dollar, while North Korea's latest missile test had little impact on the safe-haven metal.  
- London copper edged up, pulling away from its lowest in more than a week hit in the previous session, buoyed by signs of progress on U.S. tax cuts, but analysts said any reprieve may prove short-lived given weaker oil prices.
- Chicago December corn futures hit a contract low, weighed down by plentiful world supplies and lacklustre demand.  
- The dollar steadied against the yen, supported by strong U.S. economic data while North Korea's latest missile launch had little immediate impact on currency markets though investors are focused on how the U.S. responds to the test.
- Nordic markets open slightly higher Wednesday. The OMXS30 gains 0.5% to around 1628.5. "The S&P 500 closed 1% higher yesterday as the Senate budget committee advanced the Republican tax bill and the greenback gained in process," says SEB. "But the latest move from North Korea offsets the optimism and Asian stocks are mixed this morning." After firing an inter-continental ballistic missile that put the entire U.S. in range, North Korean leader Kim Jong-Un reportedly said his regime has completed its nuclear program, SEB adds. Fed chairman nominee Jerome Powell said before Congress that the case for a December rate hike "is coming together". Swedish confidence and GDP, eurozone confidence and the second estimate of U.S. GDP are due today. OMXS30 closed at 1620.81, OMXN40 at 1575.87 and OBX at 727.18.
- During UnitedHealth Group's annual investor day, the company says it sees little chance it will delve back into the Affordable Care Act marketplaces, from which it has almost completely exited. The ACA market "just didn't work for us as a company," with issues of stability and risk mix, CEO David Wichmann says. He says "there's really been no change in the overall complexion of that market segment" and "we wouldn't see ourselves re-entering" at this point. However, UnitedHealth sees the chance for growth in the Trump administration's move to allow longer durations for short-term medical coverage. The company says it is also engaged in lobbying on the other aspects of the president's executive order.
- Apart from Jerome Powell testifying at his confirmation hearing at 1645 GMT, there's also a vote on the U.S. tax bill by the Senate Budget Committee on Tuesday. Senators Ron Johnson, Bob Corker are on the committee and among those who have expressed concerns about the tax reform, which could mean further delays to the bill. "If there is a risk of the reform failing things can get uncomfortable for US dollar," Commerzbank says, adding that U.S. tax reform hopes are a "decisive straw" for dollar bulls. ING says "any Republican hold-outs" could hurt risk assets "after a great run." EUR/USD trades flat at 1.1891, but USD/JPY 0.15% higher at 111.28.
- Jerome Powell is due to appear in front of the Senate Banking Committee for his confirmation hearing for Federal Reserve Chair on Tuesday. Mr. Powell seems to be a supporter of the Fed's current stance. "Fed chair designate Powell's Senate hearing could go some way toward ensuring a frictionless transition from outgoing chair [Janet] Yellen next February," says Societe Generale. The dollar trades mixed, with EUR/USD up 0.1% at 1.1906, while USD/JPY rises 0.16% at 111.29. "Powell will probably not rock the monetary policy boat today, but there is scope for...market take-aways that may test the flattening in two-year/10-year interest rate swaps and cut the dollar some slack," says SocGen.

Nov 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slipped in Asian trade amid uncertainty over a possible extension of output cuts by major crude producers and expectations of higher supply as the Keystone pipeline restarts.
- Gold prices edged lower but held not far off a six-week high hit in the previous session, as investors awaited a confirmation hearing for U.S. Federal Reserve chair nominee Jerome Powell and a possible Senate vote on U.S. tax reforms.
- Shanghai nickel futures tumbled more than 4 percent to their lowest since mid-October as reforms in China threaten steel-intensive infrastructure projects.
- Chicago wheat futures rose, with investors looking for bargains after prices slid almost 3 percent over the last two sessions on plentiful world supplies.
- The dollar held steady versus the yen and held above a two-month low, with the near-term focus on a possible Senate vote on a U.S. tax plan later in the week.
- J.P. Morgan expects a negative return of around 2.5% on developed markets' bonds in 2018, with rising yields across the G4 economies. JPM forecasts that U.S. yields will rise relative to Europe and Japan. For the eurozone, JPM looks for higher yields on the back of an upbeat economic backdrop, only modest political uncertainty, and the slowing pace and eventual end of the European Central Bank's asset purchases. JPM expects the spreads of eurozone periphery states to be range-bound, with Spain outperforming and Italy underperforming.
- North Korea will likely conduct a "fully operational" intercontinental ballistic missile test before the Winter Olympics in South Korea in February, and then push for talks to recognize it as a de facto nuclear state, according to Evan Medeiros, a former senior director for Asian affairs in Barack Obama's National Security Council. Medeiros, now managing director at Eurasia Group in Washington, says there is still only a 20% chance of military conflict, in his opinion. North Korea has conducted no missile or nuclear tests in the past 2 months despite a US move to redesignate it as a state terror sponsor and the presence of 3 US aircraft carriers in the region during Donald Trump's visit.
- Joseph Otting is sworn in as the 31st US Comptroller of the Currency, placing the former banker at Bank of America, Union Bank, US Bancorp, and CIT Group in charge of hundreds of supervisors stationed at federally-chartered banks across the US. Otting says he understands both "the importance of effective supervision" and "the challenges bankers face as they work to meet customer needs while coping with unnecessary regulatory burden."
- If President Donald Trump approves tariffs as high as 50% on imported washing machines, retail prices on those appliances made by LG Electronics and Samsung Electronics may go up as high as 32% as the manufacturers pass the higher costs onto the consumers, Longbow Research analyst David MacGregor predicts. Trump has until early next year to decide on whether to follow the recommendations of the US International Trade Commission, which made its recommendations last week. But MacGregor said if Trump imposes the ITC's recommended tariffs, domestic washer makers Whirlpool and GE Appliances are likely to follow suit and raise their prices. MacGregor says new barriers could "significantly alter the competitive landscape in the U.S. appliance industry."
- Virginia Sen. Mark Warner asks Uber Technologies to open up about the year-old data-breach incident it disclosed for the first time last week. Warner, ranking member of the Senate Banking Subcommittee on Securities, Insurance and Investment, discloses an open letter to Uber's CEO asking questions about the coverup of the breach, which include a $100,000 payment to the hackers. Among the questions are how many people knew, how was Uber assured the data was deleted and why Uber disclosed the breach to an investor before it did so to customers, per a WSJ story. It all adds to pressure on the CEO, who is being questioned by authorities worldwide about the breach.
- US drivers are already paying at least $5 more than last November each time they fill up their gasoline tanks, and pump prices are renewing their upward trend today after oil prices hit a 29-month high over the holiday weekend. But the Trump White House is so far saying next to nothing. "What was once a hated industry is now a darling of the [Trump] administration, and protected from political peril that may arise with [gasoline] price spikes," Consumer Watchdog President Jamie Court tells WSJ. The US average is $2.51/gallon today vs $2.12 a year ago. Still, Court acknowledges that Trump or no Trump, the gas price situation would still be difficult for drivers given higher crude prices, tax hikes in states like California and high refinery margins.
- Venezuela President Maduro's says his decision to move an active military person, National Guard Maj. Gen. Manuel Quevedo, into the dual post of energy minister and head of state oil company PDVSA is aimed at stomping out oil-sector corruption. But Teneo Intelligence says the move, which continues a purge of management within PDVSA and Houston-based refining and distribution subsidiary Citgo, is mostly about loyalty. "This is as much of a political rebalancing as it is an anti-corruption drive," it says. Giving the military more direct control of the oil sector and its purse strings "incentivizes the military to remain loyal."
- The euro's rise against the safe-haven Swiss franc to levels not seen since early 2015 is evidence of increasing investor confidence in the euro as concerns about political uncertainty in the U.S. grow, says Esther Maria Reichelt, currency analyst at Commerzbank. "EUR/CHF is confirming that the euro is considered more stable in the longer term." EUR/CHF on Monday matched a near three-year peak reached on Nov. 17, just as EUR/USD rose to a two-month high. "We could be seeing the end of the eurozone [debt] crisis as far as market sentiment is concerned," she says, adding that investors are aware of "bigger risks to the U.S., especially from the political side."
- Home sales in the U.S. rose much more than expected, but the U.S. dollar benefits only marginally. Strong data is unlikely to change Federal Reserve's near-term monetary policy stance, due to the change in leadership. There's also no further progress with the U.S. tax reform, which is the dollar's main catalyst for now. EUR/USD trades flat at 1.1930, only slightly down from 1.1939 before the announcement. Home sales rose 6.2% to 685,000 in October, their highest level in 10 years. The consensus in a WSJ poll was for a fall to 624,000. More economic data will released this week in the U.S., including personal consumption expenditures on Thursday.
- Terminating NAFTA would hurt the Canadian and US economies, but it would be manageable, according to a new analysis by Bank of Montreal Capital Markets. Canada's economy could be 1% smaller over five years post-Nafta, while the US would take a 0.2% hit. A weaker dollar and government intervention could help mitigate some of the damage in Canada, says Douglas Porter, chief economist at BMO. But he says that none of the negative effects would happen if Nafta stays as is. "It's what the Brits would call an 'own goal,'" he says. David Jacobson, former US Ambassador to Canada warns that more than the economies could be hurt; the failure of talks could hurt political and security ties between the two countries.
- U.S. president Donald Trump's Nafta withdrawal threat is likely only to be a negotiation tactic, says UBS analyst Colin Langan. But if the U.S. does leave, its departure would severely impact domestic and foreign auto makers, he adds. Together with the "Detroit Three"--GM, Ford and Fiat Chrysler--Volkswagen would be one of the most adversely impacted by the breakup, he says, noting that the German car makers is the biggest net importer to the U.S among its European peers. If the U.S. remains in the free-trade agreement, a proposed increase in the share of car product required to be produced in the Nafta area would still pose high risks for Volkswagen, while Daimler and BMW would have less exposure, according to the analyst.
- EUR/USD could rise to 1.2000 or 1.2020 as investors' worries regarding eurozone political uncertainty fade and with incoming economic data expected to be healthy again, ING says. EUR/USD is at 1.1957 after reaching a two-month high of 1.1957. The first estimate of the eurozone consumer price index, due Thursday, is set to come in strong and ING says that eurozone markets are relatively underpricing inflation. Meanwhile, the political deadlock in the eurozone's key economy is likely to be settled after Germany's Social Democrat party agreed to discuss forming a "grand coalition" with Chancellor Angela Merkel and her Christian Democratic party.

Nov 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices dipped, easing from two-year highs on the prospect of increased U.S. output, although global markets were slightly better supported by expectations an OPEC-led supply cut would be extended.
- Gold prices crept up as the dollar held close to a two-month low hit in the previous session, with investors noting the U.S. Federal Reserve's cautious view of inflation.
- London nickel led metals lower, as investors cut their exposure to risky assets as Beijing steps up a crackdown on shadow banking and other riskier forms of financing.
- Chicago wheat lost more ground, falling for a second session as abundant global supplies make it hard for U.S. exporters to win business.
- The euro hit a two-month high versus the dollar and held firm against other major currencies thanks to strong German business confidence and reduced anxiety about political instability in Europe's biggest economy.

- EUR/USD benefits Monday not only from political clouds dispersing across Europe, but also from U.S. dollar weakness. According to UniCredit, the dollar experienced its third consecutive weekly decline last week, which is nearly a fall of 1% on a trade-weighted basis. EUR/USD is likely to rise to 1.20, or above, as we head towards year-end, says UniCredit. EUR/USD rises to a two-month high of 1.1957. A weak U.S. dollar could benefit the Australian dollar and the Canadian dollar, since "both have lagged other major FX considerably," UniCredit says.

Nov 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- U.S. crude oil hit fresh two-year highs, as the shutdown of a major crude pipeline from Canada to the United States tightened North American markets.
- Gold prices inched up as the  dollar remained under pressure after minutes of the U.S. Federal Reserve's meeting revealed that some policymakers were concerned about lower inflation.
- Copper traded in a tight range, stymied by the U.S. Thanksgiving Day holiday and a stagnant greenback.

- Base metals remain range-bound has US and Japan holidays have hit activity. Then there's yesterday's slump in Chinese equities as regional equity investors often tend to use metals as a proxy for some of their trading positions. Helping copper is a strike at a Chilean mine as well as other mine-supply snags; LME 3-month prices are up 0.1%. Zinc is down 0.4% and aluminum is essentially flat.
- China iron ore and steel rebar remain around yesterday's near-2-month highs. Strong margins have induced higher steel-factory utilization, dragging up iron-ore prices as well despite oversupplies. Coking coal, used in steelmaking, also being around 2-month highs is providing additional support to iron ore, though analysts remain bearish on 2018 Chinese demand. Dalian iron ore is up 0.5% and Shanghai steel rebar edges 0.1% higher.
- Asian palm oil price are like to remain supported by broad strength in commodities, including rising oil prices. Markets will be keen to see whether the next round of Malaysia palm-oil-export estimates will show a pickup from the slight decline seen for Nov. 1-20.
- London spot-gold prices edges higher in thin holiday-impacted trading after markets were closed Thursday in the US and Japan. Amid slight movement the past day-plus, spot gold is up 0.1% at $1,292.30/troy ounce.
- Tokyo rubber prices have bounced after yesterday's holiday and despite fresh gains in the yen. That's because of broad strength in commodities in Asia, including a lift yesterday in Shanghai rubber futures. The Tocom benchmark 6-month contract is 2.4% higher at Y195.8/kilogram.
- Shares of Australia's two biggest miners look set to push higher still as the uptrend of the past 2 years remains firmly intact, technical analysis by Morgans Financial suggests. For BHP, a recent pullback has it in neutral territory, hinting at a likely bounce soon and a potential upside target of A$29.50 that likely positions it to test the A$31 zone longer term. Morgans adds Rio is likely to see a similar bounce, with a target of A$75, where initial resistance may be found as the stock closes in on overbought levels. Both are down slightly today, at A$27.83 and A$71.89.
- Nymex oil futures have started higher this morning in Asia thanks to the gains seen in Brent futures overnight. The global benchmark settled up 0.4% Thursday; there wasn't one for WTI because of Thanksgiving. Front-month futures' Wednesday finish notched a 2 1/2-year high, and the January contract is up another 0.6% at $58.37/barrel. Brent, meanwhile is off 0.2% at $63.42, further narrowing the spread between the two.
- There's material upside to the base case for South32 thanks to strength in spot-market prices for alumina, manganese, coking and thermal coal, Macquarie says. At spot prices, the investment bank calculates the miner is trading on FY18 and 19 multiples of 8 and 5 times, respectively, and a free cashflow yield of 15% and 20%. The company's recent annual meeting yielded no surprises, yet Macquarie expects early-December's investor briefings to provide a detailed outlook on production from Australian operations.
- The latest round of supply disruptions highlight supply risks in 2018 that could push copper prices higher than markets are expecting, says Commonwealth Bank of Australia. On Thursday, the main union at BHP's Escondida copper mine in Chile went on strike after the company said 120 workers would lose their jobs. A labor strike at Escondida, the world's largest copper mine, from Feb. 9 to March 25 unsettled markets by raising concerns around supply shortages. The mine accounts for 4.6% of global copper supply. Also, strikes continued for a third day at Southern Copper's assets in Peru that account for 1.7% of global copper supply.
- A tour next week of BHP Billiton's Olympic Dam mine in South Australia and an accompanying investor update should provide some clarity as to how the company aims to turn around cash generation at the project, Macquarie suggests. The investment bank anticipates a fairly bullish outlook from BHP on copper but no material change on production and costs for the rest of its Minerals Australia unit. Turning around Olympic Dam could be a major catalyst for the stock, though BHP needs to convince investors pumping more capital into an underperforming asset is worthwhile, Macquarie says.
- Mineral Resources surprised Macquarie with its bullish outlook for shipments of lithium direct shipping ore, or DSO, from its Wodgina operation in Western Australia. MinRes lifted its DSO shipment target for FY18 to 4.50-4.75 million tons, from 4.25 million tons. It also issued guidance of 5.50-5.75 million tons for FY19. Macquarie raises its FY19 and FY20 earnings forecasts by 33% and 28%, respectively, while its FY21 estimate moves up 13%, largely on the higher DSO shipment guidance. "Importantly, the DSO sales effectively provide MinRes with a trial processing run of Wodgina ore, and we have shortened the assumed production ramp up for the spodumene plant at Wodgina," Macquarie says.
- Investors are expected to continue to be hungry for infant-formula producer Bellamy's Australia, Morgans technical analysis says. Bellamy's shares tripled in value since January, although it recently pared some gains and edged closer to its previous support of A$10.40. Morgans notes the relative strength index indicator has approached oversold territory, suggesting the rally will restart. It looks for Bellamy's stock to test A$13.80 soon, having ended trading on Thursday at A$11.84.

Nov 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices eased, with U.S. crude dipping away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a drawdown in fuel inventories continued to bolster markets despite worries over rising output.  
- Gold prices nudged lower, with investors taking profits after gains of nearly 1 percent in the previous session on weaker U.S. economic data and concerns among some Federal Reserve policymakers over lower inflation.
- Shanghai aluminium prices rose as much as 1 percent, on track to end a four-day losing run despite some lingering bearish sentiment.
- Chicago soybean futures approached a two-week high near $10 a bushel Wednesday on technical buying ahead of the U.S. Thanksgiving holiday, analysts said.
- The dollar touched a two-month low against the yen, having tumbled after the minutes of the Federal Reserve's latest meeting showed some policymakers were concerned about persistently low inflation in a blow to rate hawks.

- Until there's considerable progress on U.S. tax reform, the dollar is likely to stay pressured by a stronger euro and rising Asian currencies. Unless there are repeated general elections in Germany, which would bring uncertainty and weaken the euro, according to Societe Generale, a scenario which is looking less likely. "We expect to see the dollar snap back if and when the tax bill does happen thanks to the offshore cash repatriation bill," says SocGen. Other strategists are more skeptical on what the repatriation of U.S. earnings overseas could do for the dollar, however. EUR/USD is up 0.2% at 1.1846.
- Why are US stocks hitting new records? Growing confidence among investors about the prospects for tax-overhaul legislation may be a factor, according to Fed staffers cited in minutes released Wednesday from the FOMC's Oct. 31-Nov. 1 meeting. "Broad equity price indexes rose notably, reportedly reflecting in part investors' perceptions that tax reform was becoming more likely," the minutes said.
- EUR/USD rises, gaining 0.4% at 1.1789 as strong eurozone consumer confidence figures contrast with weak U.S. durable goods, which unexpectedly fell 1.2% in October. In November, consumer confidence in the eurozone surged to its highest level since early 2001--a sign that stronger economic growth may continue next year. CIBC currency strategist Jeremy Stretch says the confidence reading was "quite stunning," underlining "the scale of resilience" in the eurozone economy, which could have implications for European Central Bank policy. Meanwhile, concerns about German politics are easing, on hopes that Chancellor Angela Merkel's CDU party may reach a deal with the Social Democratic Party after three-way talks with the Greens and the liberal FDP broke down.

Nov 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as ongoing cuts of piped Canadian crude to the United States added to falling U.S. crude inventories, while expectations of a prolonged OPEC-led production cut also offered support.
- Gold prices remained in a narrow range as investors remained cautious ahead of the release of minutes from the U.S. Federal Reserve's last meeting, which could offer hints on the outlook for the central bank's monetary policy.
- Zinc rallied more than 1 percent in London, tracking strength in Chinese steel prices on expectations that mills will restock following the country's forced production cuts over winter.
- Chicago wheat prices climbed for a second session , with short-covering by investors and a decline in the U.S. winter crop condition underpinning the market.
- The dollar treaded water against its peers, capped as U.S. Treasury yields failed to rise despite increasing investor risk appetite in broader financial markets.

- Farming exports are one area where the US has a trade surplus with South Korea. The US trade surplus in agricultural products reached $6.5 billion last year, according to a report presented by the Korea Rural Economic Institute to government trade negotiators. The farming surplus is still dwarfed by an overall US trade deficit with Korea of $23 billion that President Donald Trump has blamed on a US-South Korea trade deal that he wants to change. US exports of beef, pork, oranges, cherries and almonds to South Korea have surged since the pact took effect in 2012, the report shows.
- The chairman of a federal bank regulator says his and other agencies "have not rescinded" a controversial guidance document governing banks' standards for leveraged loans. The comment from Federal Deposit Insurance Corp Chairman Martin Gruenberg, an Obama appointee, may add to confusion about the legal status of the guidance, which has been called into question by a government auditor's report. The Trump-appointed acting Comptroller of the Currency earlier this month criticized regulators' enforcement of the guidance. Regulators are in the process of reviewing a guidance document governing banks' standards for leveraged loans, according to Gruenberg.
- A record backlog for Jacobs Engineering has executives optimistic even though President Donald Trump's $1 trillion infrastructure plan hasn't panned out and Congress is debating an overhaul of US taxes. "The North America market has remained extremely strong, even though there's still a lot of uncertainty on the whole federal government infrastructure support bill, tax bill, etc," an executive told analysts. "The demand is there. The economy is strong. ... Robust activity across all sectors of infrastructure." Jacobs reported its fiscal Q4 EPS of 98 cents, beating Wall Street estimates of 82 cents, and a record backlog of $19.8B. Jacobs shares rise 9.5% to $64.99.
- Nordic markets close higher with Sweden's OMXS30 index ending the day 0.8% up, the pan-Nordic OMXN40 index higher by 0.8% while Oslo's oil-heavy OBX index rose 1%. After a muted start to trade, European stocks gathered steam, finding support from a decent Asian session in which stock indexes rise sharply. Markets shrugged off political concerns in Germany after coalition talks in the country broke down. Investors also digested news that Fed Chair Janet Yellen will resign her seat on the Fed's Board of Governors once new chairman Jerome Powell is sworn in. "Yet another vacancy means that President Trump can, on the margin, gain further influence," SEB said in a note.
- Consultants FX Knowledge expect EUR/USD to rise to 1/20 by the end of the year and to 1.23 in 1Q, despite political uncertainty in Germany, as European Central Bank policy normalization "is looming." EUR/USD last trades at 1.1739. FX Knowledge's base case scenario is German Chancellor Angela Merkel ruling with a minority government. "Germany has shown in the past that it can be run relatively efficiently under a coalition government," it says. German politics "could contain the EUR potential upside" into December and early next year, but this is more likely to be "short-term noise" than a change in trend.
- Germany's September election may ultimately proved to have been the country's Brexit or Trump moment and be the cause of future declines in the euro, says Standard Bank. The results showed a drift to the right--like other recent European elections--but while the market has shown a measure of resilience since Macron's win in France, Merkel's  inability to form a government "might prove a bit harder to brush off," says Steven Barrow, head of G10 strategy at the bank. "We have been calling for a slide to $1.10-1.15...and our confidence in this has increased a notch following the failed coalition talks." The euro remains around $1.1750.

Nov 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were little changed as the impact from expectations of an extended OPEC-led production cut was cancelled out by rising output in the United States.
- Gold prices crept up ahead of the release the next day of minutes of the last U.S. Federal Reserve meeting, which could offer clues on the pace of potential interest rate hikes by the central bank.
- China aluminium futures fell sharply to their lowest in more than three months, dragged down by signs of robust global production.  
- Chicago wheat futures lost ground for a second session, with abundant global supply pressuring prices.
- The dollar gave back some of its gains in Asian trading but stuck close to a one-week high against a basket of currencies as a German political deadlock continued to pressure the euro.
- Currency market players in Asia will likely remain cautious over the dollar-yen pair amid expectations that North Korea will respond to President Donald Trump's decision to re-designate North Korea as a state sponsor of terror, says Brown Brothers Harriman's Masashi Murata. "Japanese traders are hesitant to buy positions," he says, despite a dollar rebound overnight. The pair edges down 0.1% to 112.55 yen Tuesday morning. Given no likely change in the global growth and US tax reform narrative ahead of Thanksgiving, risk-on trade will likely abate in the next few days, he says. Murata sees USD/JPY sticking in a 112-113 range today, unless North Korea makes renewed threats.
- Heartland Institute President Tim Huelskamp praises Trump and EPA chief Scott Pruitt after Nebraska regulators approve Keystone XL pipeline, saying because of them "no longer do fake environmental concerns hold up projects such as these." The Illinois-based group also says a recent spill along the Keystone pipeline--a sister project to Keystone XL--actually "proves how safe pipelines have become." The section of pipeline that ruptured, causing the 5,000-barrel spill, pumps 410 barrels of oil per minute, which "means the leak was detected and the line was shut down in approximately 12 minutes, which is less time than it takes the police to respond to 911 calls in many parts of the country," says Heartland research fellow Isaac Orr.
- Fed Chairwoman Janet Yellen says she'll leave the Federal Reserve's board of governors altogether once her successor as chairman, Jerome Powell, is sworn in. Her announcement shuts down speculation that she might have stayed on as a governor on the central bank's powerful board after her term as chairwoman expires early next year, since her term on the board extended until January 2024. In keeping with recent Fed custom, she announced Monday that she would leave the Fed altogether once her successor is sworn in. Only once has a chairman opted to stay on the board after his term leading the Fed was up. Marriner Eccles served as a governor for three years after his term as chairman expired in 1948.
- Democratic Senators Elizabeth Warren and Chris Van Hollen write to the Office of the Comptroller of the Currency pressing for more information about its decision to allow a subsidiary of Mitsubishi UFJ Financial to convert to a federal license in the middle of the New York state investigation. WSJ reported on the controversial license conversion last week, publishing an angry letter from the New York State regulator. The Democrats say they are deeply troubled by the decision.
- Mallinckrodt Pharmaceuticals, a producer of specialty biopharmaceuticals, hopes Britain will remain open to high-skilled foreign workers after its exit from the European Union, said Executive Vice President Gary Phillips. Around half of the company's 60 employees in the UK are not British, Phillips said. "We want to have proper access to talent -- that's why we are based in the UK," he added. The Brexit-induced departure of the European Medicines Agency -- the EU's drug regulator -- is not a concern for Mallinckrodt, Phillips said. "Most of our business is based in the US," he said. European officials are voting today on where to move the EMA and the EU's banking regulator, the European Banking Authority. Mallinckrodt has its global corporate headquarters and its European headquarters in Surrey close to
London.
- Kansas' Department of Agriculture acknowledges Tyson Foods' move to build a chicken processing plant in Tennessee after the meat company shelved plans to construct such a plant in Kansas' Leavenworth County, and officials congratulate both Tyson and Tennessee "for the agricultural growth you're welcoming in your state." Kansas agriculture officials found some of their own citizens less welcoming after Tyson's initial proposal in late summer to build in Tonganoxie, Kan., spurred protest campaigns among residents of the 5,000-person town, but in a statement the Kansas Department of Agriculture says it hopes to keep working with Tyson on any future expansions that could include Kansas.
- Lawyers who put two failed California housing redevelopments into bankruptcy last year have asked a judge to set a December 13 auction date for them. The properties were being developed by Jeffrey Yohai, who recently divorced the daughter of President Donald Trump's one-time campaign chairman Paul Manafort. The properties filed for chapter 11 protection as lender Genesis Capital had moved to foreclose, according to documents filed in US Bankruptcy Court in Santa Ana, Calif. Judge Catherine Bauer has yet to approve the auction date.
- After a planned chicken plant ran into stiff opposition from residents of Leavenworth County, Kan., late last summer, Tyson Foods says it will turn to Gibson County, Tenn., to host a major poultry facility. Tyson says it has "accepted the invitation of city, county and state leaders" to build the $300M complex, which the company says will create about 1,500 jobs and process 1.25M chickens weekly for sale in grocery stores. Marvin Sikes, mayor of Humboldt, Tenn., says the plant "will have a positive impact on our community that will last for many years." Some Kansas residents feared a Tyson plant would risk pollution and strain on local infrastructure.
- The U.S. dollar takes a break from the U.S. tax reform bill until Nov. 28 with Thanksgiving on Thursday. Weekend news that Maine Senator Susan Collins has some concerns regarding the Republican tax bill passed by the Senate Finance Committee last Thursday hasn't had much influence on the dollar, even though Senate Republicans cannot lose more than two members to get the bill passed. Wisconsin Senator Ron Johnson has already said he can't back the bill as written. The DXY dollar index trades down 0.07% at 98.5960.

Nov 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets were tepid as traders were reluctant to take on big new positions ahead of an OPEC meeting at the end of the month, when the producer club is expected to decide whether to continue output cuts aimed at propping up prices.
- Gold prices dipped early on a stronger U.S. dollar, but remained close to a one-month high hit in the previous session on uncertainty over progress on a potential overhaul of the U.S. tax code.
- London copper was little changed after a report showed China's property sector, a major metals consumer, remained resilient in October but a stronger dollar capped gains.
- Chicago wheat futures slid after two sessions of gains with prices weighed down by ample world supplies and stiff competition for U.S. exporters.
- The euro hit a two-month low against the yen, as German Chancellor Angela Merkel's efforts to form a three-way coalition government failed, stoking political uncertainty in the euro zone's largest economy.
- The U.S. dollar takes a break from the U.S. tax reform bill until Nov. 28 with Thanksgiving on Thursday. Weekend news that Maine Senator Susan Collins has some concerns regarding the Republican tax bill passed by the Senate Finance Committee last Thursday hasn't had much influence on the dollar, even though Senate Republicans cannot lose more than two members to get the bill passed. Wisconsin Senator Ron Johnson has already said he can't back the bill as written. The DXY dollar index trades down 0.07% at 98.5960.
- With the German coalition talks failing, it is "completely" open how the formation of a government could proceed, says LBBW. Fellow bank Nordea adds a weak German government is seen making European-wide reforms more difficult to achieve and risks slower decisions occurring in a time of crisis. The euro's selloff after the talk headlines first hit have persisted; the common currency is down 0.3% at around $1.1750.
- European shares drop as the dollar declines against the euro following more potentially damaging political news for U.S. President Donald Trump. The Stoxx Europe 600 falls 0.14%, or 4.3 points, to 3137.25 after The Wall Street Journal reported that Special Counsel Robert Mueller's team in mid-October issued a subpoena to Trump's campaign requesting Russia-related documents from more than a dozen top officials, according to a source. Shares in French caterer Elior Group SA fall 15% after it warns on annual profit. Shares in French industrial conglomerate Bollore SA rise 3.6% after it posted higher 3Q revenue Thursday following full consolidation of its stake in Vivendi SA.
- EUR/USD looks well-supported at current levels because the EU economy and the bloc's politics look healthier compared to the U.S. or the U.K., says Commerzbank. "The eurozone quite simply seems attractive because the political situation in other countries has deteriorated." EUR/USD is up 0.2% at 1.1801 on Friday. Stronger-than-expected GDP data and the possibility of coalition government formation in Germany support the euro. Meanwhile in the U.S., reports regarding President Donald Trump's election campaign getting subpoenaed and weaker optimism regarding tax reform weigh on the dollar. "The reform is likely to be watered down to such an extent that it is unlikely to result in a significantly positive effect on the dollar," Commerzbank says.
- London shares fall as the euro and sterling climb against the dollar on news of a subpoena requesting information from the Trump administration linked to the Russia investigation. The index drops 22.03 points to 7364.91 after the single currency gains 0.2% to $1.1802 and the pound rises 0.4% to $1.3241. The Wall Street Journal reported that Special counsel Robert Mueller's team in mid-October issued a subpoena to Trump's campaign requesting Russia-related documents from more than a dozen top officials, according to a source. Meanwhile, shares in FTSE 250-listed Carillion PLC sink 38.5% after the civil engineering and support service group issues another profit warning. United Utilities PLC falls 4.4% after an HSBC downgrade. Retailer Kingfisher PLC gains 1.4% from an RBC upgrade.
- The U.S. Dollar Index is likely to close this week below 93.50 on "shaky global risk sentiment," says ING. On Friday, DXY is down 0.18% at 93.75. The U.S. dollar is falling on reports surrounding President Donald Trump and his election campaign and disregards news about the House Republicans passing their version on the tax cuts. Still, the true test for the tax bill comes in the Senate. "It's difficult to see anything but the U.S. dollar losing out in an environment where policy and political uncertainty remains elevated," says ING, adding that it sees "limited positive catalysts for the dollar in the week ahead."

Nov 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were mixed after recent declines, but were were on track for the first weekly fall in six weeks, under pressure from surging U.S. supplies and doubts over Russian support for continuing a cut in crude output.
- Gold prices rose as the dollar weakened after a report that investigators looking into possible Russian interference in the 2016 U.S. presidential election had subpoenaed President Donald Trump's election campaign for documents.
- Shanghai nickel prices fell on worries about growth in Chinese steel markets, with the sector heading into a low consumption period over winter.
- U.S. corn futures steadied near one-year lows and were set to post their biggest weekly fall in a month after U.S. export sales came in below market expectations and forecasts pointed to plentiful supply.
- The sentix policy barometer may improve slightly in November, says sentix, publisher of surveys on investor behavior. Sentix attributes the likely improvement to the fact that geopolitics and U.S. President Donald Trump are assessed more favorably, according to its latest survey. On the other hand, Brexit is gaining negative momentum, and even Germany's difficulty in forming a government weighs on the policy barometer. Sentix conducts its policy barometer monthly among private and institutional investors, and it shows which policy issues are decisive for investors watching capital market developments.
- The U.S. dollar loses traction Friday, having been down throughout Asian trading, after reports that Trump officials have been subpoenaed by special attorney Robert Mueller as part of the investigation into Russian involvement in the Trump Presidential campaign. EUR/USD is up 0.2% at 1.1793 and USD/JPY is down 0.4% at 112.58. These reports overshadowed comments from Federal Reserve member John Williams, who said three interest rate increases next year are perfectly reasonable, says RBC. News of House Republicans passing the tax-overhaul bill were also ignored.
- US stock indexes rise to session highs after the House of Representatives passes a Republican-backed bill to overhaul the US tax code--bringing some investors' hopes for a tax cut one step closer to reality. The S&P 500 is up 1% and the Dow Jones Industrial Average rises 0.9%, both on course for their biggest one-day percentage gain since September. The House bill would lower the corporate tax rate to its lowest point since 1939, which some analysts hope will boost corporate profits. Still, proposed changes to deductions for state and local taxes and property taxes, as well as a decision to pair the bill with a repeal of the mandate for individuals to have health insurance, have divided lawmakers and constituents, which analysts say means passage in the Senate is far from guaranteed.
- Barclays has little faith in U.S. dollar strength. "We continue to see the USD moving lower over the medium-term, given existing USD overvaluation...as global growth becomes more synchronized." The U.S. tax reform should give the dollar a bounce in 4Q and 1Q, but tax cuts are likely to be modest, so the dollar won't challenge the highs it reached at the beginning of the year, when optimism about what President Donald Trump could do for the dollar was at its height. Barclays sees EUR/USD at 1.17 at year-end and 1Q, then 1.19 in 2Q, and 1.22 in 3Q. EUR/USD last at 1.1782.
- The U.S. dollar should see a big move soon in either direction, depending on developments with U.S. tax reform, says BK Asset Management. The Senate is expected to finish marking up their bill this week and an initial vote is expected on Friday. "If the Senate vote ends up being pushed past Friday, the delay could drive the dollar sharply lower, whereas a passing of the House bill and a yes vote from the Senate Finance Committee...would trigger a strong end of week rally." EUR/USD is down 0.1% at 1.1780, largely due to the euro reversing some of this week's gains.

Nov 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets were stable as rising U.S. crude production and inventories were countered by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month.
- Gold prices were little changed after upbeat U.S. economic data bolstered the prospects of interest rate increases next month and beyond by the Federal Reserve.
- London copper was steady, holding above a five-week low plumbed the previous session as markets calmed after a spate of China data showed its economy cooled in October.
- Chicago soybean futures rose for a second session, with prices underpinned by strong demand from U.S. processors and expectations of higher imports by top buyer China.
- The dollar was on the defensive as doubts on the prospects of U.S. tax reforms offset an uptick in underlying U.S. inflation while the Australian dollar hovered near four-month lows ahead of key local jobs data.
- While investors are betting any reduction in the corporate tax rate will benefit corporate earnings, that could be more than offset in the stock market by the tax bill's impact on the economy and interest rates, says Jim Paulsen, chief strategist at the Leuthold Group. "I'm all for making the U.S. tax code more competitive with the globe, but it's ridiculous to bring a massive fiscal stimulus when we're already at full employment," he notes. "The thing people aren't focusing on that might matter more isn't whether tax rate of small caps is more or less but whether it creates more inflation and rate pressure," he says.
- The euro is likely to withstand the general drop in risk appetite since it looks to be the best performing currency amongst G10, especially the U.S. dollar, the pound, the Australian dollar and the Norwegian krone, according to Rabobank. This increases the chance that the euro "will demonstrate safe haven behaviour," Rabobank says. The euro rises to nearly a four-week high of 1.1861 against the U.S. dollar as it extends Tuesday's gains on the back of better-than-expected German GDP data. Concerns there could be a delay in the introduction of a lower corporation tax in the U.S. have "put the USD on the defensive," which has also helped boost EUR/USD.
- New Trump Administration policy changes partly restricting US tourism in Cuba led to the latest discontinuation of airline flights. Alaska Air says it'll drop a daily flight linking Los Angeles and Havana on Jan. 22. Alaska said 80% of its fliers visited under a US allowance for individual "people-to-people" educational travel, which is no longer allowed. Low-fare Sun Country Airlines recently relinquished its rights to serve Santa Clara and Matanzas, Cuba, from Minneapolis. Spirit Airlines and Silver Airways already abandoned Cuba flights and American Airlines earlier trimmed its daily flights to the island nation to 10 from 13 and will drop a flight to Cienfuegos from Miami in January. More schedule changes could occur as airlines absorb the new rules, which also put 80 Cuban hotels off limits to Americans.
- The Canadian dollar was flat against its US counterpart in afternoon trading, as investors weighed a drop in oil prices against diminishing expectations that US lawmakers will be able to push through a tax reform proposal in coming weeks. The US dollar was recently unchanged against the loonie at 1.2733. Prices for US oil fell 1.9% to $55.70 a barrel.
- Commerce Secretary Wilbur Ross says President Trump would wait to see what kind of new agreement negotiators can produce before deciding whether to pull the US out of Nafta. "Some sort of draft will land on his desk," Ross tells The WSJ CEO Council Tuesday. At that point, Trump will have a "binary" decision on whether he wants to accept it. Ross did not rule out the possibility of US termination, saying Trump's "general point of view is no deal is better than a terrible deal."
- Commerce Secretary Wilbur Ross suggests the US will keep pushing for big changes to Nafta, calculating that Mexico and Canada have far more to lose than the US from the pact's collapse. "It would be devastating to the Mexican economy," Ross tells The WSJ CEO Council Tuesday. "It's also a big-time problem for Canada," he says. Ross adds that, for those reasons, the Trump administration is betting "they'll come to their senses and make a sensible deal."
- An uptick in US coal production this year is largely attributable to rising demand from China and solid domestic consumption, rather than any legislation pushed by the Trump administration to revive the beleaguered industry, argues Thomas Pugh, a commodities economist at Capital Economics. "The surge in US coal output this year has largely been driven by higher exports, which have more than doubled since September 2016," Pugh says. However, he expects demand to weaken because higher coal prices are making gas more affordable for many US utilities--which are also shutting down old and inefficient coal plants--and as a result of a slowdown in Asian demand for US coal.
- T. Rowe Price Group's broad view on US stocks is cautious, and investors should expect lower returns going forward, though not necessarily negative returns, says Ann Holcomb, a portfolio manager for the firm at a briefing Tuesday. Valuations are stretched against a backdrop of modest economic growth and uncertainty surrounding pro-growth policies from Washington, DC, she says. But valuations differ among market sectors, Holcomb says. Going forward, US growth stocks should continue to deliver strong earnings growth, she adds. Among the sectors that are discounted relative to historic levels are technology, health care and telecom stocks, while energy stocks remain elevated.

Nov 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell more than 1 percent, continuing Tuesday's slide after the International Energy Agency cast doubts over the past few months' narrative of tightening fuel markets.
- Gold prices firmed as investors awaited the October consumer inflation data from the United States for potential hints on the Federal Reserve's monetary tightening policy.
- Shanghai nickel and zinc tumbled alongside steel, extending losses from the previous session, in the wake of slowing industrial production growth in China.
- Chicago corn slid for a third consecutive session, hitting a one-year low as harvest of the second-largest U.S. crop on record boosts global supplies.
- A reduction in risk appetites lifted the yen and pressured the Australian dollar, as investors awaited U.S. consumer inflation data later in the global session.
- Commerce Secretary Wilbur Ross says President Trump would wait to see what kind of new agreement negotiators can produce before deciding whether to pull the US out of Nafta. "Some sort of draft will land on his desk," Ross tells The WSJ CEO Council Tuesday. At that point, Trump will have a "binary" decision on whether he wants to accept it. Ross did not rule out the possibility of US termination, saying Trump's "general point of view is no deal is better than a terrible deal."
- Commerce Secretary Wilbur Ross suggests the US will keep pushing for big changes to Nafta, calculating that Mexico and Canada have far more to lose than the US from the pact's collapse. "It would be devastating to the Mexican economy," Ross tells The WSJ CEO Council Tuesday. "It's also a big-time problem for Canada," he says. Ross adds that, for those reasons, the Trump administration is betting "they'll come to their senses and make a sensible deal."
- An uptick in US coal production this year is largely attributable to rising demand from China and solid domestic consumption, rather than any legislation pushed by the Trump administration to revive the beleaguered industry, argues Thomas Pugh, a commodities economist at Capital Economics. "The surge in US coal output this year has largely been driven by higher exports, which have more than doubled since September 2016," Pugh says. However, he expects demand to weaken because higher coal prices are making gas more affordable for many US utilities--which are also shutting down old and inefficient coal plants--and as a result of a slowdown in Asian demand for US coal.
- T. Rowe Price Group's broad view on US stocks is cautious, and investors should expect lower returns going forward, though not necessarily negative returns, says Ann Holcomb, a portfolio manager for the firm at a briefing Tuesday. Valuations are stretched against a backdrop of modest economic growth and uncertainty surrounding pro-growth policies from Washington, DC, she says. But valuations differ among market sectors, Holcomb says. Going forward, US growth stocks should continue to deliver strong earnings growth, she adds. Among the sectors that are discounted relative to historic levels are technology, health care and telecom stocks, while energy stocks remain elevated.
- Labor Secretary Alexander Acosta raised concerns about student debt and graduation rates with state universities in a speech to the Association of Public and Land-Grant Universities. He suggested that schools, often referred to as four-year colleges, could be called six-year schools because students are taking longer to graduate. "For too many students, college does not open doors," Acosta said. "Rising student-loan debt limits their options upon graduation or weighs them down for those who don't earn a degree." He said schools do well at teaching theory but aren't delivering job skills. Acosta pushed the schools to offer apprenticeships as part of a degree. The Trump administration is seeking to expand of apprenticeships, training largely used in fields where college degrees aren't required.
- EUR/USD is likely to rise to 1.20 in six months on improving eurozone data and slowing U.S. tax reform pace, according to Rabobank. Before that, EUR/USD is likely to consolidate at current levels, the bank says. On Tuesday, EUR/USD hit a two-and-a-half week high of 1.1747, boosted by better-than-expected German 3Q GDP and other good eurozone economic data, reversing post-ECB falls. However, if the Federal Reserve gives hints that it may tighten its monetary policy in a less aggressive manner than the market expects, EUR/USD could go even higher than 1.20, says Rabobank senior currency strategist Jane Foley.

Nov 14 - End of Aussie Resource Boom Flattening Phillips Curve for Now (Dow Jones)
The end of Australia's record-breaking resources boom is an additional factor that helps explain why the Phillips Curve looks broken Down Under, according to HSBC. As in other countries, the usual relationship between unemployment and inflation appears to have diminished. With the resources boom over, the strengthening of the labor market represents growth in lower-paid employment outside the resource sector. HSBC modeling suggests the resource cycle effect acts with a lag and predicts that wages growth will pick up in 2018, says Paul Bloxham, chief economist at HSBC.

Nov 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)

- Oil prices fell as the prospect of further rises in U.S. output undermined ongoing OPEC-led production cuts aimed at tightening the market.
- Gold prices inched down, with the dollar holding steady on higher U.S. Treasury yields amid uncertainty over the outlook for tax reforms in the United States.
- Chinese nickel futures led gainers, building on hefty overnight gains in the London market as consumers built positions as a hedge against further price rises.
- Chicago soybeans edged higher with prices underpinned by bargain-buying after the market dropped to a two-week low in the previous session, although gains were limited by rains in key Brazilian growing areas.

- Trump, Xi Visions Contrast (WSJ)
  DA NANG, Vietnam -- President Donald Trump delivered his vision for a new American economic relationship with Asia here Friday, one that eschews big trade deals the U.S. has long favored for country-to-country bargaining. Moments later, Chinese President Xi Jinping took the same stage at a Pacific Rim summit and praised the kind of multicountry treaties that have underpinned American influence in the region for decades. The dueling remarks laid out the battle plans of the world's two largest economies as Mr. Trump seeks to remake trade policies that have made Asia the globe's fastest-growing region and flooded U.S. consumers with less expensive goods.
     The speeches also highlighted a contrast between rhetoric and reality, as Mr. Trump has yet to find willing partners for new bilateral deals, much of China's market remains under government control, and the openings that emerged from a Trump-Xi summit in Beijing could prove smaller than they appear.
     In his speech to business leaders at the Asia-Pacific Economic Cooperation forum, Mr. Trump, a Republican, repudiated the policy of predecessors from both parties, where Washington took the lead in shaping market-opening rules for the region. But he said the U.S. had no intention of retreating from Asia, seeking to allay the fears of allies in the region. "I will make bilateral trade agreements with any Indo-Pacific nation that wants to be our partner and will abide by the principles of fair and reciprocal trade," Mr. Trump said.
     He also disputed the notion that the U.S. itself had benefited from Asia's growth and liberalization, saying "we are not going to let the United States be taken advantage of any more." Mr. Trump rejected the principle of stitching together the sprawling region through a common set of rules and agreements among multiple countries, a defining goal of the 21-member APEC, which was founded with U.S. guidance in 1989. "What we will no longer do is enter into large agreements that will tie our hands, surrender our sovereignty and
make meaningful enforcement practically impossible
," Mr. Trump said.
     The administration of former President Barack Obama, a Democrat, had sought to bind the region's economies with the U.S.'s through the Trans-Pacific Partnership, a 12-nation pact that excluded China. Mr. Trump withdrew Washington from the TPP after he took office. The remaining 11 nations are meeting on the sidelines of the APEC meeting in Vietnam -- without U.S. participation -- to try to keep the bloc alive.
     Moments after Mr. Trump's address, Mr. Xi echoed the rhetoric of Mr. Trump's predecessors. "We are seeing profound changes in economic globalization," the Chinese leader said, in his first address to a major multinational forum since consolidating executive power last month. "We should uphold multilateralism, pursue shared growth through consultations and forge closer partnerships."
     Since Mr. Trump's election a year ago on an "America First" platform, Mr. Xi has repeatedly sought to portray China as the new guardian of free trade. Mr. Xi's campaign has drawn skepticism, especially in Asia. At the same time that he has embraced the rhetoric of free trade, he and his government have solidified their control of the Chinese economy and espoused a "Made In China 2025" industrial policy that seeks Chinese leadership in a wide range of sectors, from robotics to self-driving cars. China continues to face a long list of allegations of unfairly priced and illegally subsidized exports, and complaints by foreign firms about restrictions on access to its market.
     One big question hanging over the Asian economy left unanswered by Mr. Trump's week in the region is just how he plans to deal with China, which has, by far, the biggest goods trade surplus with the U.S., valued at $347 billion last year. In the American president's two-day China visit, which preceded his trip to Vietnam, Mr. Trump hailed progress in opening China's market to U.S. companies, marking the signing of business deals that officials said would be worth billions of dollars -- though many in the $250 billion pool of deals aren't full contracts. And shortly after Mr. Trump left China, the government said Friday that it was taking a major step in opening its financial sector, saying it would relax restrictions on foreign ownership in the securities and banking sectors.
     It was a change long sought by previous U.S. administrations and by Wall Street, and it potentially paves the way for Wall Street investment banks to increase their presence in China's domestic market -- though profits may be harder to find in China's finance sector these days. Messrs. Trump and Xi didn't find common ground on a long list of trade disagreements between the two countries. Mr. Trump's aides have said they are preparing possible trade penalties to impose on China in the coming months. Chinese officials have threatened to retaliate. An open trade war between the two would have great implications for Asia.
     TPP has been appealing to many Asian nations as a vehicle to contain China economically, amid a fear of Chinese dominance that has spurred Japan, Vietnam, and other TPP supporters to try to salvage the pact. Negotiators had been aiming to announce a deal at APEC this week, but early Saturday said that while they had reached consensus on "core elements," disagreements remained about issues including dispute settlement and state-owned enterprises, according to a draft statement seen by the Journal.

     "What we have achieved is progress but we also identified what work needs to be done," Canadian Trade Minister François-Philippe Champagne told reporters Saturday morning. He said more work needed to be done on cultural  exemptions and the automotive sector. TPP supporters seek a regional commercial system built around U.S.-style rules -- and hope to keep the pact structured in a way that would allow Washington to join in the future, said people familiar with the talks. But just as officials in many Asian countries said they are suspicious about China, they also said they are nervous about the implications of Mr. Trump's rejection of the U.S.'s role in leading a regional bloc and his broader questioning of the value of free-trade agreements.
     Mr. Trump "was speaking to an audience comprised of many of our former TPP partners that are deeply suspicious of China and hungry for a reassuring, affirmative message of U.S. regional commitment and leadership," said Daniel Price, a trade aide to President George W. Bush, now managing director at Rock Creek Global Advisors. "That is not what they heard." Asian partners have been concerned by Mr. Trump's bid to renegotiate -- and threats to kill -- a five-year-old bilateral free-trade pact with South Korea and the 23-year-old North American Free Trade Agreement with Mexico and Canada.
     "While he did say something today about seeking mutually beneficial agreements, until they can convince partners and illustrate and demonstrate there is a win-win, there won't be a long line of countries lining up for bilaterals," said James W. Fatheree, the vice president for Asia at the U.S. Chamber of Commerce, which has feuded openly with Mr. Trump's administration on trade policy. No countries have so far engaged in negotiations in response to Mr. Trump's repeated calls for more bilateral trade pacts, though administration officials have said they want to launch agreements with TPP countries, notably Japan and Vietnam. Mr. Trump's schedule included a meeting with the other APEC heads of government in a closed-door retreat in Da Nang on Saturday, before flying to Hanoi for a meeting with President Tran Dai Quang of Vietnam. He then was set to travel to the Philippines for a meeting with President Rodrigo Duterte and a summit with Southeast Asian leaders over the weekend.

Nov 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)
- Oil trading was cautious amid ongoing tensions in the Middle East and after a rising rig count in the United States suggested producers there are preparing to increase output.
- Gold prices were little changed, but held near the previous session's low, pressured by a firmer dollar and expectations of a series of interest rate hikes by the U.S. Federal Reserve this year and in 2018.
- London copper inched away from one-month lows hit last week, buoyed by steady demand and as the dollar hovered below recent peaks.
- Chicago wheat futures lost ground, falling after two days of gains as abundant global supplies and a stronger dollar weighed on the market.
- The full Senate is poised to vote next week on the nomination of Joseph Otting to become the Comptroller of the Currency, according to Senate aides. Otting, a former regional banker who is expected to win confirmation largely along party lines, is fourth on a list of Trump nominees Senate Majority Leader Mitch McConnell (R., Ky.) plans to advance in the coming week, these people say. Otting would succeed Joseph Noreika, who has served as the acting comptroller--a top role overseeing national banks--since May.
- Even small tariff increases enacted in the event Nafta is disbanded could have ramifications for Canadian output, Royal Bank of Canada says. The bank says roughly 4% across-the-board rise in tariffs between Canada and the US could lead to lost production of roughly $20B (nominal, in today's dollars) of annual output. The firm warns tariffs are a tax on trade flows, as opposed to production, "so even incremental increases could have a disproportionate impact on industries that trade a lot across the border." RBC says job losses from the dismantling of Nafta is difficult to estimate. Still, it envisages only a minority of the half-million Canadians employed in highly trade-sensitive sectors would be affected.
- Economics, monetary policies and politics imply many scenarios for a EUR/USD direction, but technicals point to a small corrective rebound in the near term, according to Commerzbank technical analysts. EUR/USD has scope for a rebound towards 1.18 in the next few days, says Karen Jones, technical analyst at Commerzbank, even though this "shouldn't impact on the overall view of it going down." EUR/USD last trades up 0.1% at 1.1651. The short-term rebound is likely to terminate just ahead of 1.18, and therefore, EUR/USD will likely resume its way towards 1.1232.
- New Federal Reserve members and hints of further U.S. rate rises could boost the U.S. dollar in the coming weeks, breaking EUR/USD out of its recent tight range and sending it lower, says Commerzbank. EUR/USD has been stuck in a range between 1.1574 and 1.1662 over the past two weeks. But if John Taylor is named Deputy Fed Chair, this "might send out a USD positive signal after all." And the dollar would get a further boost if the Fed reiterates its previous forecast of three more interest rate rises in 2018, alongside an expected rate increase in December, says Commerzbank analyst Antje Praefcke. EUR/USD last steady at 1.1643.
- ING says EUR/USD could rise in the near-term as the recent rally in the U.S. dollar "runs out of steam." Senate Republicans have presented a tax bill quite different to the one President Donald Trump wants to implement. That means Trump's tax reform could be delayed until next year. "With the Congress week-long Thanksgiving recess starting next Friday, the odds of a GOP tax plan landing on President Trump's desk this side of Xmas remain slim-to-none," says ING. If EUR/USD rises above 1.1680 or 1.1690, it will extend gains further, ING expects. On Friday, EUR/USD trades up 0.1% at 1.1655.
- Australian Prime Minister Malcolm Turnbull is hopeful an agreement will be reached on reviving an ambitious Pacific trade deal abandoned by the US as talks continue among leaders of the remaining 11 nations Friday. "We've made a lot of progress," Turnbull says. Australia and Japan are confident of securing support for the Trans-Pacific Partnership trade deal when the leaders meet in Vietnam, though Turnbull says an in-principle agreement has still yet to be reached. The US is unlikely to change its view on the TPP anytime soon, butWashington could still join under future leadership, he adds.
- The National Association of State Treasurers is a fan of an amendment to the House tax bill which would allow people to transfer funds from 529 college savings plans to 529 ABLE accounts. ABLE accounts are a savings vehicle for disabled people that offer the same tax-free growth available in 529 college-savings plans. The biggest benefit of these accounts is that disabled individuals can have as much as $100,000 in one and still qualify for benefits including Medicaid and Supplemental Security Income. "We are pleased that this new amendment would allow Americans to seamlessly transfer funds from 529 plans to ABLE accounts, and we look forward to working with the House and Senate to ensure the final bill includes this beneficial measure," NAST says. If the bill goes through, it could increase the number of ABLE accounts, which industry watchers say are low due in part to ABLE's recent launch and some families' lingering fears that they will lose their benefits if they open one.
- New York-listed Navigator Holdings, partly owned by an investment company run by Commerce Secretary Wilbur Ross, defends ties with Russian petrochemicals producer Sibur, following media attention arising from the Paradise Papers. "Our contact with Sibur goes back to 2009," President David Butters says in an earnings call. "Sibur was not a sanctioned company when we began operations with them, nor are they today." Navigator, a major gas tanker operator, has four vessels chartered to Sibur. The company lost $1.1M in the third quarter from a $6.5M profit last year. Shipping executives say Ross and other investors own 31.5% of Navigator worth around $175M, but they have started selling their shares.
- Climate change is a main topic at the Heartland Institute's America First Energy Conference in Houston, where many panelists including former NASA scientist Hal Doiron roundly criticize what they call "climate alarmists." Doiron tells an audience the US government--and the military specifically--is relying far too much on unvalidated data that's unsupported by physical data to justify big, costly decisions related to climate. "All this climate alarm is really, mostly propaganda with very little evidence," he says, adding that it's causing political bottlenecks. "It prevents rational decisions by our government regarding development of our US energy resources."
- A senior energy adviser at the US State Department says rising US oil production, which is at near-record levels of around 9.5M bpd, is having a huge effect on global oil markets by reducing the power of other energy powerhouses. "OPEC has become less relevant," says Richard Westerdale during a Q&A session at the Heartland Institute's America First Energy Conference in Houston. "Put simply, the US shale revolution and the oil that we're producing has changed the balance of power." The former Exxon staffer says these sweeping changes forged by the US are being reflected in reform efforts by the Crown Prince in Saudi Arabia, who has announced an economic plan called "Vision 2030." Westerdale calls those efforts by the Saudis "good things."

Nov 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)
- Oil markets were little changed, supported by ongoing supply cuts and strong demand which have resulted in a tightening market, although the prospect of rising U.S. output capped prices.
- Gold prices held near a three-week high touched in the previous session, underpinned by uncertainty over U.S. tax reforms and on track for the first weekly rise in four weeks.
- London Metal Exchange copper held above one-month lows as a weaker dollar broadly lifted base metals, although it remained on track for a weekly loss.
- Chicago corn futures were set for a second week of decline, with prices trading near a one-year low as a U.S. government forecast of record yields weighed on the market.
- Climate change is a main topic at the Heartland Institute's America First Energy Conference in Houston, where many panelists including former NASA scientist Hal Doiron roundly criticize what they call "climate alarmists." Doiron tells an audience the US government--and the military specifically--is relying far too much on unvalidated data that's unsupported by physical data to justify big, costly decisions related to climate. "All this climate alarm is really, mostly propaganda with very little evidence," he says, adding that it's causing political bottlenecks. "It prevents rational decisions by our government regarding development of our US energy resources."
- A senior energy adviser at the US State Department says rising US oil production, which is at near-record levels of around 9.5M bpd, is having a huge effect on global oil markets by reducing the power of other energy powerhouses. "OPEC has become less relevant," says Richard Westerdale during a Q&A session at the Heartland Institute's America First Energy Conference in Houston. "Put simply, the US shale revolution and the oil that we're producing has changed the balance of power." The former Exxon staffer says these sweeping changes forged by the US are being reflected in reform efforts by the Crown Prince in Saudi Arabia, who has announced an economic plan called "Vision 2030." Westerdale calls those efforts by the Saudis "good things."
- US stocks tumble, bringing major indexes to session lows. Some traders attribute the latest market moves to reports that Senate Republicans' tax bill, which is expected to be unveiled later Thursday, will propose delaying a corporate tax cut until 2019--diverging from the House Republicans' bill. "That headline specifically took the financials and the overall market lower. Big picture I think it speaks to the fact that all sides are still far apart on tax reform," says R.J. Grant, director of equity trading at KBW, who says he noticed shares of financial companies take a hit around the time the reports were released. The Dow falls 215 points, or 0.9%, while the S&P 500 loses 0.9% and the Nasdaq Composite sheds 1.3%.
- The House tax plan would be a net positive for the auto business, UBS says. GM, Ford and other auto makers, & dealer groups like AutoNation, would see their tax rates fall by 10%+, the bank says. Suppliers' rates would fall less, 0-6%. There are a few negatives--the proposed elimination of the $7,500 tax credit for electric cars would hurt Tesla most, UBS says. And the proposed cuts to deductions for state taxes poses a small risk for luxury players, because high-tax states have concentrations of high-net-worth buyers.
- Almost 50% of donors say a greater tax benefit or the ability to take a larger tax deduction would influence them to give, according to a study by donor-advised fund Fidelity Charitable. Given the GOP's tax plan, that could be bad news for charities. While the plan keeps the charitable deduction, it doubles the standard deduction, making it less attractive for taxpayers to itemize (and hence take the charitable deduction). If the plan goes through, charities are worried that giving will sharply decrease because of this change.
- The administration's recent move to curtail individual travel to Cuba could send Americans curious about the island to cruise lines. The new restrictions will make most forms of travel harder for Americans because interactions with many hotels are now banned. But, the changes are unlikely to affect cruise travel because the companies already adhere to restrictive regulations says Instinet. Norwegian Cruise Line has the most exposure to the island at around 4%, followed by Royal Caribbean at 2% and Carnival at 1%-2%, the firm says.
- The odds of a US withdrawal from the North American Free Trade Agreement: 26%. That's according to the latest WSJ survey of private-sector economic forecasters. The overwhelming majority of the forecasters said, if President Trump followed through on his threats to pull out of Nafta, it would leave the economy worse off. Some 82% said GDP would grow at a weaker rate over the subsequent two years, and an additional 7% said the economy would weaken so much that it would enter a recession. In the long run, 85% said economic growth would be weaker after withdrawal than if the nation had stayed in the trilateral trade agreement. No economist surveyed said growth would be stronger if the US left Nafta, either in the short or long run.
- Heartland Institute President Tim Huelskamp kicks off its America First Energy Conference in Houston by slamming the mainstream media, saying it has "either yawned or attacked," President Trump's policy of promoting energy dominance. Critics label Heartland as a group of climate skeptics, but Huelskamp says the Trump administration won't be deterred as it rolls back years of Obama-era regulations, and does away with Obama-led "propaganda masquerading as sound science." The one-day conference includes several Trump administration officials.
- China had orders for just 293 jets on Boeing's books at the end of Sept, including just 18 twin-aisles, so little surprise that a majority of the 1,110 planes listed without customers in its backlog are expected by analysts to end up in that market. The announced 300-plane commitment during the Trump state visit is expected to draw heavily from that booked backlog, as well as still-to-be-completed deals, and Boeing's stock unmoved in pre-open trade.
- Currencies like the Australian and the New Zealand dollars "could come back in line as winners" if it becomes clear that investors are over-optimistic regarding U.S. tax reform and what it could do to the U.S. dollar, says ING foreign exchange strategist Viraj Patel. AUD/USD and NZD/USD both trade slightly higher, at 0.7687 and 0.6970, respectively. When it comes to U.S. dollar, "the key is what will happen with the tax reform." Other currencies, like the euro and the pound, have also been pushed down by U.S. dollar optimism, and they could regain some strength too, Mr. Patel says.
- The U.S. dollar falls on Thursday, retracing some gains made in the previous day, due to uncertainty regarding the fate of the U.S. tax bill. "The fact that the tax reform in the U.S. is unlikely to happen before the spring is putting slight pressure on the dollar," says Commerzbank. EUR/USD is up 0.2% at 1.1613, while USD/JPY is down 0.29% at 113.54. GBP/USD also rises, last up 0.23% at 1.3145.
- Spot gold prices are little changed in Asian trade following modest overnight gains. All eyes remain focused on US President Donald Trump's Asia visit as his comments about North Korea could again stoke geopolitical tensions in the region. Gold is also finding support from slow progress in the US tax reform bill. Spot gold is trading 12 cents higher at $1,281.32/troy ounce.

Nov 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices held steady after falling late in the previous session, supported by ongoing supply cuts led by OPEC and Russia.
- Gold prices edged higher, after marking a near three-week high in the previous session, as the dollar eased while palladium remained close to a more than 16-year peak touched on Wednesday.
- London nickel fell by more than two percent to its weakest since October as hype over potential electric vehicle demand that drove last week's rally died down.
- Chicago corn futures lost ground, falling for four out of five sessions with pressure on the market ahead of a key U.S. government report that is expected to boost production estimate.
- In light of the GOP's tax plan, clients may want to accelerate any charitable giving they were planning to do in early 2018 into the end of this year instead. To get the most out of existing tax breaks (which may be reduced if the plan goes through), donate appreciated equities to charities and donor-advised funds by Dec. 31, says JSF Financial's Jeff Fishman. Folks may also want to defer income into next year if they think tax rates will then drop, he says.
- Seed and pesticide maker Monsanto continues to face an uphill fight in Arkansas, where state agricultural officials vote in favor of prohibiting the spraying of the herbicide dicamba for much of the state's growing season. That could cut into sales of the weed spray, manufactured by Monsanto and BASF, as well as seeds that are genetically engineered to resist it. The proposed regulation now goes to a subcommittee of state lawmakers for final approval. Scott Partridge, Monsanto's head of strategy, says it's another example of Arkansas' "arbitrary" approach to regulating dicamba, and that the company will keep up opposition as Arkansas lawmakers weigh approving the new restrictions.
- Corporate America is coming late to the fight to preserve the North American Free Trade Agreement, and has only itself to blame, according to a former US trade official. "It was a strategic decision" not speak out publicly against the Trump administration's move to renegotiate Nafta, said Kellie Meiman, managing partner at DC-based consulting firm McLarty Associates and former US Trade Representative official during the Clinton Administration. Speaking at a seminar in Detroit, Meiman said business groups worked quietly behind the scenes to persuade the White House to maintain the status quo, but that failed and now talks with Canada and Mexico have faltered. "The cat's out of the bag. The negotiations are in bad shape," she said.
- Companies nervous about negotiations with Canada and Mexico are mulling options to prevent the Trump administration from pulling out Nafta, according to a former US trade official. "A number of companies have started to look down that path for a Plan B," said Kellie Meiman, managing partner at DC-based consulting firm McLarty Associates and a former US Trade Representative official during the Clinton Administration. Speaking at a seminar in Detroit on Wednesday, Meiman said options include lobbying for legislation requiring Congressional consultation or an International Trade Commission impact study, she said. Another possibility is a constitutional challenge to Section 151 of the Trade Act of 1974, which grants presidential termination and withdrawal authority, she said.
- Keith Noreika, acting Comptroller of the Currency, said regulators may be able to exempt small banks from the Volcker rule trading ban without action from Congress. Speaking at a banking conference, he said regulators could solicit public comment on changes to the Volcker rule as early as the spring, and regulators should propose changes recommended by the Treasury Department while looking for banks to provide evidence that exempting them from the rule wouldn't cause undue risks. "There is a question of will there ever be the data to support using the exemptions" Noreika said, referring to exemptions Congress outlined when it told regulators to write the Volcker rule in the 2010 Dodd-Frank financial overhaul law. "I am of the view we should actually ask the question to people."
- Northrop Grumman CFO Ken Bedingfield says there "largely" been no movement from export customers away from US-made military products since the advent of the Trump administration. "Largely, our allies want to have products that are interoperable with the US," he says at an investor event, noting that if anything, demand for American-made equipment has increased.
- U.S. tax reform optimism, together with improving 4Q economic performance, has helped boost the U.S. dollar in recent days. But Morgan Stanley highlights that "the U.S. seems to be heading towards re-leveraging, allowing its economy to grow above income," which is due to the Federal Reserve raising interest rates at a slow pace. A highly leveraged country brings dark clouds over its currency. According to Morgan Stanley, consumer credit in the U.S. rose to $20.83 billion in September, the highest since November last year. EUR/USD trades up 0.1% at 1.1599.
- Ohio voters overwhelmingly reject a ballot proposal to cap prescription drug prices in the state, 79% to 21%. The measure would have barred state government programs from paying more for prescription drugs than the discounted prices paid by the US Veterans Affairs administration for veterans. Drug industry trade group PhRMA, whose members include Johnson & Johnson and Pfizer, spent heavily to defeat the measure. It's the second loss for the measure's sponsor, the AIDS Healthcare Foundation, after a similar proposal failed in California last year.
- One year after U.S. President Donald Trump won the U.S. presidential election, the U.S. dollar has lost 3.3% based on the DXY index which measures the dollar against a trade-weighted basket of currencies. The dollar has fallen by 5.2% against the euro and by 6.2% against the pound over this period. However, it has risen 9.3% against the safe-haven Japanese yen. Most consider that Trump would prefer a weaker dollar. The stock market rose massively during the year meanwhile, frequently reaching all-time highs. The S&P 500 index has increased by 21% since Nov. 8 last year, thanks to the combination of a weaker dollar and low interest rates.
- European shares fall as the euro gains against the dollar on political jitters. The Stoxx Europe 600 drops 0.24%, or 0.93 points, to 393.72 as the single currency rises 0.04% to $1.1591 on concerns about rhetoric from U.S. President Donald Trump regarding North Korea and slower-than-expected progress on his tax reforms. Gold and silver prices gain as investors seek safe havens. Danish drug group H. Lundbeck falls 7% on lower-than-expected 3Q sales of some drugs. Video game publisher Ubisoft Entertainment SA shares gain on strong 1H numbers.
- The U.S. dollar trades slightly lower on Wednesday after reports that Senate Republicans could postpone the $845 million corporate tax cut until 2019. They were also reportedly discussing eliminating the state and local tax deductions. "With the prospect of delays, USD will lose much of its appeal and could give back its recent gains," FXPro says. Dollar falls are not big, however. EUR/USD is up 0.16% at 1.1609 and USD/JPY is down 0.2% at 113.76. ING says the dollar "retains support against G10 low yielders, while making non-negligible gains against EM high yielders."
- China's strong domestic demand has given Beijing more bargaining chips over Washington, says Shen Jianguang, an economist at Mizuho. "China doesn't have to rely on the US market, but US companies do need the Chinese market," he says, referring to a group of company executives who accompanied US President Donald Trump to China. Chinese President Xi Jinping, who has emerged from the recent Communist Party Congress as a strong leader, won't likely make many compromises during his meeting with his US counterpart, he says.

Nov 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices fell as Chinese crude imports slipped to their lowest level in a year, although traders said the overall market remains well supported on the back of OPEC-led supply cuts.
- Gold prices nudged higher, as the dollar slipped following a media report that suggested a delay in the implementation of a major corporate tax cut under a crucial U.S. tax reforms plan.
- Nickel and copper led an across-the-board-decline in Chinese base metals triggered by a sharp selloff overnight in London metals markets.
- Chicago soybean futures rose for a third consecutive session with support from expectations that the United States government will lower its production estimates for the crop which is being harvested.
- Companies that have pledged to speed women's progress up the corporate ladder appear to have made the biggest strides in the boardroom, according to data from Catalyst, a nonprofit group dedicated to advancing women in the workplace. This year, more than 50 major companies--including UPS, Target, Lockheed Martin, Wal-Mart and PepsiCo--signed a pledge to step up their gender-equality efforts. Their 2017 data, which Catalyst will use as a baseline to measure their collective progress, shows they already outperform other S&P 500 companies in boosting the ranks of women managers, and particularly women board members. Some 29% of board seats at the 50-plus companies are occupied by women, compared with 21.2% at all S&P 500 firms. The gap narrows when it comes to managers: About 28% of senior-executive positions are filled by women at the 50-plus companies, compared with 26.5% at the S&P 500 as a whole.
- The process for the US and South Korea to amend their 5-year-old free trade deal will likely pick up speed after the leaders of both countries agreed to expedite it. After a summit with visiting US President Donald Trump in Seoul Tuesday, South Korean leader Moon Jae-in said the work should proceed more quickly. Trump thanked Moon for "instructing his trade negotiators to work closely with us to quickly pursue a much better deal" during a joint news conference. Seoul's trade ministry says it will hold a public hearing Friday to discuss how to change the pact that Trump has blamed for a growing US trade deficit. Afterwards, the ministry will report its detailed negotiation plan to parliament before starting actual amendment talks with the US.
- Rexnord CEO Todd Adams says the diversified industrial company is ahead of plan in its effort to cut $500M in costs, with the biggest contributor being the effort to trim 20% from its building footprint. That includes the transfer of work to low-cost countries, including the shift to Mexico that drew Trump's wrath. Adams says at an investor event that only area below target is its MRO business after restocking by distributors failed to materialize.
- A Toronto law firm says Canadian businesses could be vulnerable to countervailing US trade duties if their major investors include Canadian pension funds. Osler Hoskin & Harcourt says in a report the US Commerce Department's preliminary decision to slap a 300% duty on Montreal-based Bombardier was based in part on a finding that one of its big investors, a Quebec pension fund, was a "mandatory of the state." A final decision is expected next year. Canada has a concentrated pool of giant pension funds that mostly manage the retirement savings of public sector workers. Although these funds invest mostly outside Canada, Osler says the Commerce ruling "plainly illustrates" that their business investments could be "considered a subsidy to which a countervailing duty may apply."
- Half of Americans say jobs are plentiful in their local community, according to new data from Pew Research Center. That is the most positive response since Pew began asking about local job availability in 2001. However, half of Americans also say their incomes are not keeping pace with the cost of living. The data contains more than a whiff of partisanship. Since December, the share of Republicans and right-leaning independents that say economic conditions are good or excellent rose from 14% to 57%, while similar views among Democrats dropped from 46% to 30%. Overall, 41% of Americans rate economic conditions as good or excellent.
- An index tracking news coverage of the global economy rises in October for the fourth straight month to reach a seven-year high. Absolute Strategy Research, which compiles the ASR/WSJ index, says its measure climbed to 62.5 compared with a 60 in September. ASR says many of the index components reached multi-year peaks, though still remain below pre-financial crisis highs, which suggests the outperformance of stocks over bonds "may have further to go." But ASR cautions that since the index is a measures of sentiment, and a number of components are at decade-long peaks, "we might want to be careful assuming the CNI will remain elevated."
- Days before the House Science Committee is expected to reiterate support for NASA's program to eventually explore Mars, the agency's inspector general has blasted those initiatives. The report, among other things, criticizes the lack of a "detailed operating plan" including dates of orbital missions to the Red Planet or development of landers to take astronauts to its surface. The inspector general emphasizes that significant work must be done in the 2020s--and the priorities aren't yet established--in order to reach the goal of sending humans to Mars by the late 2030s or early 2040s. The report also questions whether any credible plan is financially possible if NASA continues to spend more than $3B annually to maintain and operate the international space station.
- Strong Democratic opposition and a pair of ailing GOP Senators could mean a significant delay--and potentially even threaten--Rep. James Bridenstine's bid to become NASA administrator. With Republican Senators Rand Paul of Kentucky and Thad Cochran of Mississippi ailing and unable to participate in pending floor action, GOP leadership is still counting votes and hasn't decided when to bring up the nomination. Democratic lawmakers are pushing for a party line battle, and they see as many as three Republican Senators leaning against confirmation. One of the opposition's arguments is that the agency can't afford a drawn-out partisan fight at a time major decisions are pending to firm up plans for manned missions into orbit, to the moon and deeper into the solar system.
- In a relatively quiet week for economic reports, many investors and analysts say they'll be watching for signs of progress on Republicans' tax bill. Among the biggest questions they're grappling with: how much the stock market's gains have been based on the assumption that Congress will push through tax cuts. "No one is really confident what kind of tax package we're going to get," said Joe Tanious, senior investment strategist at Bessemer Trust. Treasury Secretary Steven Mnuchin said in October that the stock market could reverse "a significant amount" of its gains if the tax overhaul fails. Tanious isn't as sure. "It hasn't been baked into forecasts because we know the proposal we have before us will change several times before it becomes law," he said.
- Corporate-tax reform under consideration in Congress has negatives for the insurance industry. US insurers employing offshore reinsurance entities in low-tax locales may be subject to a 20% excise tax for payments to these foreign entities. "Though the full implications are unclear, we understand that [the tax law] would limit the use of internal reinsurance," Credit Suisse says. That isn't all. A "bigger negative impact" may be increased competition, as insurers benefit from a lower tax rate, Credit Suisse says. Many executives have anticipated that the third quarter's
costly hurricanes and earthquakes would usher in higher premium rates after years of price competition that has damped industry profits. The tax bill throws in a monkey wrench.
- President Donald Trump is negatively influencing the world economy, according to a survey of 929 experts in 120 countries conducted by the Munich-based Ifo Institute. Of those asked, 73.9% shared this opinion, with more than half of them also seeing negative impacts for the U.S. economy. "The poor stand to lose out the most from the policy measures that have been announced and those already implemented to date," the experts believe, according to Ifo. "Trump's administration also scores poorly in international trade, cooperation in multilateral organisations, as well as in peace and security."
- The U.S. dollar is the big picture story this week, trading slightly stronger on Tuesday in a reversal from overnight moves, says ING's foreign exchange strategist Viraj Patel. Continued optimism over the prospect of U.S. tax reform helps, while low eurozone bond yields weigh on the euro against the dollar. Some are optimistic tax reform will boost the U.S. economy and the dollar, although others question this, Mr. Patel says. However: "Your best bet as an investor is to not be selling the dollar." EUR/USD is down 0.16% at 1.1593, USD/JPY trades up 0.37% at 114.37. The DXY dollar index is up 0.17% at 94.9220.

Nov 07 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices largely held on to gains after posting the biggest rise in six weeks a day earlier, buoyed by moves by Saudi Arabia's crown prince to tighten his grip on power and rising tensions between the kingdom and Iran.
- Gold inched down after investors sold bullion to lock in profits following the nearly 1 percent gain in the previous session on safe-haven buying on concerns over corruption arrests that targeted royal family members and ministers in Saudi Arabia.
- Nickel helped lead most Chinese metals futures higher, building on hefty gains in the London market overnight.
- Chicago soybean futures rose for a second session with prices underpinned by expectations the U.S. Department of Agriculture will forecast lower yields in a monthly report later this week.
- The dollar sagged, knocked away from an eight-month highs versus the yen down as Treasury yields slipped on uncertainty over whether the Republicans can pass their tax bill in a timely manner.
- Politics is the main risk factor in the European corporate bond market while bond spreads and credit default swap spreads keep tightening, according to Danske Bank. Things may have "cooled" in Spain, but the Danish bank fears they may be further bouts of volatility ahead. Regional elections in Catalonia are scheduled in 2017. Danske also cites stories on U.S. President Trump's campaign ties with Russia, which could boost political uncertainty. Option-adjusted spreads in euro corporate bonds trade at their tightest levels since the 2008 financial crisis, based on ICE BofAML indexes. Meanwhile, European CDS indexes from iTraxx trade at their tightest levels since rolling into Series 28 in late September.
- While shares is most of Asia rose Tuesday, South Korea's market pulled back a bit further as Trump arrived. Slight early gains faded by midday and the Kospi spent the afternoon lower before finishing down 0.2% at 2545.44. Trump said trade issues will be on the agenda as he meets with President Moon Jae-in. Samsung retreated 0.5% and fellow chipmaker SK Hynix declined 1.3%. Meanwhile, Hyundai Motors eased 2.2%. But steelmaker Posco jumped 1.6% amid rising commodities prices. The medical-precision sector, meanwhile, rose 1.9%.
- House Republicans are preparing to bring to the floor as early as this week legislation to reauthorize the federal flood insurance program for five years. The move comes after the bill's author, House Financial Services Committee Chairman Jeb Hensarling (R., Texas), eased aspects of the bill that would have imposed steep penalties on individuals whose homes have repeatedly flooded. The concessions, which make it harder for repeat flood victims to lose their insurance coverage, was part of a deal reached between Hensarling and House Whip Steve Scalise (R., La.), who had previously opposed the legislation in question. The bill is expected to clear the House on Wednesday or Thursday, largely along party lines, though it faces an uncertain future in the Senate, where efforts to reauthorize the program have languished.
- For some wealthy people who are considering selling their home, it may make sense to do so before year's end in light of the GOP's tax proposal, Northern Trust's John Voltaggio says. Individual taxpayers can currently exclude up to $250,000 of capital gains on the sale of their primary residence, with no phase out based on income levels. But the latest proposal would phase out that exclusion for individuals whose incomes exceed $250,000. Another reason to expedite a sale: there may be fewer buyers in 2018 as the bill could make home ownership more expensive. Namely, the proposal cuts in half the size of loans that qualify for deductions of mortgage interest to $500,000 from $1M. The plan also doubles the standard deduction which would cut the number of homeowners who would itemize their taxes to capture the mortgage interest deduction.
- Sysco executives aren't banking on Washington passing sweeping changes to the tax code, but the world's largest food distributor sees benefit in the corporate reductions included in the plan under debate. "It certainly seemed like a positive opportunity for us," says chief financial officer Joel Grade during an earnings call. Grade wouldn't say if any corporate tax reductions would be passed on to customers in the form of lower prices if the tax plan passed.
- Although some strategists question how much the US tax plan can do for USD, Rabobank says the dollar should get stronger on the back of it. "While it is not a done deal just yet, approving tax reforms would...provide the US dollar with a boost." Emerging-market currencies, and especially TRY and ZAR, are likely to lose from this, according to Rabobank. USD/TRY is down 1.2% at 3.8414. Rabobank forecasts USD/TRY rising to 4.10, 4.2686, and then to 4.54, also due to renewed political risks and Turkey's tense relationship with the U.S. USD/ZAR is likely to rise to a one-year high of 14.6507, and then to 14.7526, Rabobank says. USD/ZAR trades flat at 14.2219.
- Charities and nonprofits aren't happy with the GOP tax proposal. They're afraid that if the standard deduction is doubled, many taxpayers who currently itemize will instead take the standard deduction. If that happens, charities may lose up to $13.1B a year in contributions, according to the Charitable Giving Coalition, which represents charities and foundations. The CGC is instead proposing a "universal charitable deduction" which taxpayers would get in addition to the standard deduction, so their contributions to charities wouldn't be taxed by the federal government and taxpayers who currently take the deduction for their gifts will "continue to be incentivized." Some charities are also afraid that the elimination of the estate tax will discourage wealthy families to give as they may be more likely to transfer that money to their heirs instead.
- The beaten-down US dollar is poised for a comeback, BlackRock says. The WSJ Dollar Index, which measures the currency against a basket of 16 others, has fallen roughly 5% in 2017, weighed down by a spurt of shaky 1H economic data and uncertainty around tax and fiscal policy. Yet with the Federal Reserve indicating it will continue raising interest rates even as the European Central Bank and Bank of Japan maintain relatively easy monetary policies, BlackRock said it favors the USD to the euro and the yen. WSJ Dollar Index recently down 0.1%.
- Supply of euro investment-grade corporate bonds looks poised to amount to around EUR20 billion in November from EUR17.5 billion the previous month, according to ING. The rather subdued issuance last month may have been due to political uncertainty in Catalonia limiting opportunities to hit the market, ING adds. But now the Dutch bank expects favorable conditions in terms of execution and low spread levels to support supply. Monday features a series of new investment-grade bond issues from the likes of Whirlpool, APRR, United Technologies and Akzo Nobel.
- J.P. Morgan stays long of U.S. dollars, citing "the constructive environment for U.S. growth," says J.P. Morgan. The American bank continues to hold USD longs versus CHF and JPY. This is despite the fact that the new Federal Reserve chair is unlikely to bring higher interest rates than those already priced in, and even though wage growth cooled to a nearly two-year low. On top of that, it's unknown yet what kind of political compromises will have to be made regarding tax cuts the reform is supposed to bring in. "But we're not too worried about the broad dollar rolling over," J.P. Morgan says. USD/CHF last trades at 1.0007, USD/JPY at 114.13, both little changed on the day.
- Republicans' tax plan, if passed, will likely boost corporate earnings--just not as much as one might think, Goldman Sachs says. Currently, the GOP tax bill proposes reducing the federal statutory corporate tax rate to 20% from 35%--below the median effective tax rate for S&P 500 firms of 27%. But GS says other proposed changes could "significantly offset the potential boost to earnings," including a tax on payments to foreign affiliates and a shift toward a territorial tax system. "The Republican tax plan would boost corporate earnings but has a long way to go before becoming legislation," Goldman wrote.
- Oil prices remain likely to fall despite rises driven by lower U.S. rig-count data and political tension in Saudi Arabia. The price of a barrel of Brent crude rises 0.7% to $62.5 after data showed U.S. oil and gas producers cut eight rigs last week, reportedly the biggest weekly drop since May 2016. Prices also hit a two-year high following arrests of ministers in Saudi Arabia. "We stick to our cautious view and see prices falling back towards $50 per barrel," says Norbert Ruecker at Swiss private bank Julius Baer. "The seasonal soft patch should challenge the market tightening narrative while the market mood can only deteriorate from today's overly bullish levels."

Nov 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices hit their highest levels since July 2015 as markets tightened, while Saudi Arabia's crown prince cemented his power over the weekend through an anti-corruption crackdown that included high profile arrests.
- Gold held steady, but hovered near a one-week low hit in the previous session, as largely upbeat U.S. economic data reinforced the prospects of another rate hike by the Federal Reserve next month.
- London nickel and copper extended gains, supported by upbeat sentiment over potential demand from electric vehicles in the wake of last week's cheery London industry week.
- The dollar touched its highest level in nearly eight months versus the yen, supported by expectations for continued monetary policy divergence between the Federal Reserve and the Bank of Japan.
- America Movil's chief competitors say the regulator's decision to allow the dominant carrier to charge for interconnection--after three years of zero tariffs--could be bad for consumers. "The zero-tariff policy worked precisely as foreseen. It brought greater investment, more and better mobile services and dramatically lower prices," says AT&T. Spain's Telefonica says the zero tariff --which the Supreme Court overturned on an America Movil appeal--had allowed rivals to compete with offers such as unlimited calls, and that the announced 2018 rates put at risk progress made under the telecom reform. America Movil still has 65% of the voice market and 70% of mobile data, making Mexico one of the most concentrated in the world, Telefonica adds.
- Harley-Davidson is throwing its support behind the House Republicans' tax plan unveiled this week, saying a US tax overhaul will help the company and US manufacturing overall. "The proposed lower corporate tax rate and shift to a territorial tax system will make us more competitive globally," the motorcycle maker said. "We encourage Congress to work together to address tax reform in a thoughtful and meaningful way to help US companies compete in today's global marketplace." Shares slip 1.2% to $47.72.
- Early details of tax-plan proposals unveiled by Republicans appear positive for US oil and gas companies, according to Tudor Pickering Holt. Like most large American companies, oil companies like Exxon and Chevron would benefit from a reduction in the corporate tax rate from 35% to 20%. Beneficial tax policies, such as intangible drilling costs and others which allow accelerated depreciation, a "holy grail" for exploration and production companies, haven't been cut, Tudor Pickering says.
- ING says Jerome Powell's nomination as new Federal Reserve chair hasn't changed the trajectory of the U.S. interest rates and the dollar therefore has limited scope to gain. The Fed is expected to raise interest rates in December and then twice more next year. "Given that market already priced 63 bps of hikes by end-2018, this suggests limited upside potential to USD from the monetary policy channel," ING says. Mr. Powell "represents continuity, which will likely foster the current gradualism in Fed's policy tightening." The U.S. dollar rises slightly, with DXY index up 0.1% at 94.7910 and EUR/USD down 0.1% at 1.1645. U.S. jobs data at 1230 GMT is unlikely to derail the rate path, ING says.
- The upcoming Xi-Trump meeting could yield some trade deals regardless of whether the two leaders can agree on regional political cooperation, says ANZ economist Betty Wang. "We expect [Trump's] visit to China to warm Sino-US trade relations after the setback from the impasse of the US-China Comprehensive Economic Dialogue" in July. That gathering is held annually. She adds more-complicated issues may need more time to be resolved. China's trade surplus with the US hit a record high in September.

Nov 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets rose, supported by OPEC-led supply cuts which are tightening the market as well as by strong demand, but analysts cautioned that the cuts would need to be extended to counter rising U.S. output.
- Gold firmed but stuck to a narrow range below the previous session's highs as the dollar steadied amid caution ahead of U.S. jobs data later in the day.
- London nickel prices renewed their advance, putting the metal on course for a gain of nearly 10 percent this week and 27 percent year-to-date on expectations of bullish demand from the electric vehicle (EV) battery sector.
- Chicago corn futures were on track for a second week of gains with strong demand underpinning the market, although abundant global supplies kept a lid on prices.
- The upcoming Xi-Trump meeting could yield some trade deals regardless of whether the two leaders can agree on regional political cooperation, says ANZ economist Betty Wang. "We expect [Trump's] visit to China to warm Sino-US trade relations after the setback from the impasse of the US-China Comprehensive Economic Dialogue" in July. That gathering is held annually. She adds more-complicated issues may need more time to be resolved. China's trade surplus with the US hit a record high in September.
- Fake and duplicate accounts are more rampant on Facebook Inc.'s platform than the company previously acknowledged. In its quarterly filing Thursday, FB said it found a new method for finding these accounts among its 2.07 billion monthly users. It now says 10% of monthly users are duplicates, or additional profiles created by preexisting FB users, up from its previous estimate of 6%. Between 2% and 3% of monthly accounts are "misclassified" or "undesirable," up from its earlier estimate of 1%. This second basket of accounts includes everything from the profiles people set up for their pets to the pages created by Russian propagandists before the 2016 U.S. election.
- Apple's finance chief Luca Maestri says it's difficult to determine the direct effect of initial tax legislation for the company because it's so early in the process, but he says corporate tax reform is "badly needed in the US" and would be a "positive for the US economy." Maestri adds tax reform would help ease global tension over taxes. Apple is battling an effort by the EU to recoup $14.5B in tax breaks granted by Ireland over a decade. "There are people in Europe that believe taxes should be paid in a different way," Maestri says. "If the US tax system gets simplified and becomes more modern, in a way, we think this tug of war can be resolved."
- One feature of the GOP tax plan may have implications for the abortion-rights debate. The plan allows "unborn children" to become account beneficiaries of 529 plans. In the past, families weren't able to open a 529 in a child's name or make them a beneficiary of such an account until that child had a Social Security number. The ability to open a 529 plan in the name of an unborn child may have political or religious motivations, since it in effect allows unborn children to have property, some watchers are saying. That may open an abortion-rights fight. "The GOP's relentless obsession with advancing its dangerous anti-choice ideology knows no boundaries and no common sense," Naral Pro-Choice America's Kaylie Hanson Long says. "Inserting 'personhood' language into their tax bill is just the latest example of how they're trying to turn back the clock on this country."
- The proposed tax reform may not be kind to Athene Holding, which closed down 7%. Evercore ISI cites "Section 4303, Excise Tax on Certain Payments from Domestic Corporations to Related Foreign Corporations." This is about insurers that lay off risk to related entities in lower-tax places, as ATH does with a Bermuda entity. "We believe the majority of its earnings could be impacted at a higher tax rate," Evercore says of Athene. Today's selloff and relatively weak performance over the past few weeks suggests the market "seems to already be pricing in a high probability of the scenario where ATH's tax rate moves up to a 15% plus level." Athene currently has a tax rate of around 5%, Evercore says.
- Financial adviser Jeff Levine of BluePrint Wealth Alliance doesn't support the elimination of the alimony deduction proposed in the GOP tax plan. The reason: once the couple is divorced, their combined expenses will likely be much higher than if they remained together--they may have two mortgages, for example. Eliminating the alimony deduction means that more income will (usually) be taxed at the higher earner's tax rates. Ultimately, this means more to Uncle Sam and less to the family at a time when they could probably use every dollar, he says.
- Martin Marietta Materials executives expressed disappointment at lower-than-expected spending on public works projects this year. CEO C. Howard Nye pointed to President Trump's stalled agenda, though he didn't name the president, in a call with analysts: "We believe the lack of progress over key elements of federal policies--specifically healthcare, tax reform, and infrastructure funding--continues to exert downward pressure on both public and private construction activity," Nye said. "As we have seen historically, uncertainty around the federal government fosters inaction on the parts of states and contractors to advance construction projects or undertake significant capital investment."
- Home improvement retailer stocks including Home Depot and Lowe's fell on news that the Republican tax plan could include mortgage interest deduction revisions that would cap deductions on homes worth over $500,000. That could affect wealthy homeowner's ability to deduct the cost of home renovations, a piece of both Home Depot and Lowe's businesses. Wealthier homeowners "tend to use their home equity as the source for remodel funds which historically were given the same tax deduction as a primary mortgage on the home," said Bernstein. Still, Bernstein estimates the switch would remove around $4.3B or about 1.4% of remodel spending from Home Depot and Lowe's revenue. "It is big, but is it scary huge? Probably not, so we are a little surprised by the reaction," said Brandon Fletcher, retail analyst at Bernstein in an interview. Home Depot fell 1.6% to 162.71, while Lowe's slid 4.1% to $76.65.
- It's not a unanimous love fest for Jerome Powell as Fed chairman. The Center for Economic Policy and Research, which leans left, called the decision "unfortunate." The group notes "it is worth noting that Yellen, the first woman to serve as Fed chair, is effectively being fired, in spite of doing an outstanding job during her tenure."
- Morgan Stanley expects benefits from a reduced income tax "will potentially be uneven" across life insurers. "The reduction in the corporate tax rate from 35% to 20% clearly provides a benefit for the higher tax payers in the industry on their legacy operations, although the benefit is likely to be quickly reflected in pricing on new sales," Morgan Stanley says. Companies with the higher effective tax rates include Torchmark and Unum, it says. Torchmark ends up 0.9%, while Unum gains 1.7%.
- Shares of lenders and insurers rally late in the US trading session, with the S&P 500 financial sector gaining 0.85% near a session high, while the broader S&P 500 is up less than 0.1%. Some traders attribute the gains to details from the newly-released GOP tax bill, which calls for lowering the corporate tax rate to 20% from its current 35%. "A lot of financial companies pay quite close to the full [tax] rate, so we'd expect that positive sentiment to keep lifting that space," said RJ Grant, director of equity trading at KBW, who added that "it's been a very busy day" of trading. Morgan Stanley adds 1.5%, Bank of America climbs 1.2% and Goldman Sachs rises 1%.
- President Trump's nomination of Jerome Powell as the next Federal Reserve chairman is shining a spot light on the bare cupboard of central bank governors. Michael Feroli of JPMorgan suspects Janet Yellen, who can remain a governor until 2024, might stay on for a bit due to the fact that right now there are three open slots. "A Board with only three Governors is woefully understaffed and public mindedness may compel Yellen to remain on Board until the Board is better staffed," Feroli writes. He adds that John Taylor and Kevin Warsh, having been considered for chair, are unlikely to settle for being vice-chairman.

Nov 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices held steady as U.S. crude inventories fell despite a rise in production, while outside the United States an OPEC-led supply cut continued to tighten the market.
- Gold rose to a one-week high amid a weaker dollar, on increased demand from Chinese retail investors and as the market waited for the announcement of a new chair of the U.S. Federal Reserve, expected later in the day.
- Shanghai nickel soared by another 5.5 percent to its highest in almost a year, tracking an earlier rise in London nickel on expectations of new demand from electric vehicles (EVs).
- Chicago soybeans rose for a third consecutive session with the market hitting its highest in more than two weeks as expectations of lower U.S. yields supported the market.
- The White House has notified Federal Reserve governor Jerome Powell that President Donald Trump intends to nominate him as the next chairman of the central bank, according to a person familiar with the matter, a move likely to combine continuity on interest-rate policy with perhaps a lighter touch on financial regulation. If confirmed by the Senate, Mr. Powell would succeed Fed Chairwoman Janet Yellen, the central bank's first female leader, whose four-year term as Fed chief expires in early February. In his five years at the Fed, Mr. Powell has been a reliable ally of Ms. Yellen and would likely continue the Fed's current cautious approach to reversing the central bank's crisis-era stimulus policies as the economy expands. That would mean gradually raising short-term interest rates in quarter-percentage-point steps through 2020 while slowly shrinking the Fed's $4.2 trillion portfolio of Treasury and mortgage-backed securities it purchased to lower long-term rates.
- AUD/USD remains in a tight range between 0.7650--0.7670. Still, AUD has outperformed on most crosses supported by a rising iron ore price, says CBA strategist Joe Capurso. Merchandise trade data at 0030 GMT will be the focus with economists expecting a healthy surplus of 1.2B Australian dollars. Still US developments remain the main driver of the AUD with President Trump set to announce the new Fed Chair and US payrolls data due before the weekend.
- Despite little indication the Trump Administration is closer to levying across-the-board tariffs on imported steel, United States Steel CEO David Burritt on Tuesday joined other steel CEOs in predicting tariffs will be deployed. "We're confident that we'll see something happen and when it does, that'll be a good thing for the steel companies in America," Burritt told analysts. The Commerce Department is studying the ramifications of the duties and has until January to make a recommendation. The administration has come under  pressure from steel users, like the auto industry, and other countries, including US allies, to refrain from duties. Even with higher prices recently on imports, steel executives remain adamant the tariffs are needed to block deeply discounted foreign steel from undermining domestic steel. US Steel up 6.7%.
- The pharmaceutical industry is fighting hard to defeat a Nov 7 ballot measure in Ohio that would cap prices state government agencies pay for prescription drugs. A campaign to defeat the proposal--funded by trade group PhRMA, whose members include Johnson & Johnson and Pfizer--has spent about $49M on TV ads that say the measure could actually raise drug costs for many Ohioans. A support campaign funded by the AIDS Healthcare Foundation has spent about $14M, running ads that criticize Mylan's sharp price increase for EpiPen. The industry has spent tens of millions of dollars trying to squelch state legislation and ballot proposals around the US targeting high drug prices in recent years.
- For the second time this week, Facebook widens the potential reach of Russian-created content on its platforms to 146M. Facebook says some 20M people saw at least one post by Russian-created accounts over Instagram, its photo-sharing app, between mid-2015 and mid-2017. Of those 20M, about 16M saw the content starting in October 2016, Facebook's general counsel says during a Senate intelligence hearing. That's on top of the 126M that saw posts on FB--a figure that only seeped out Monday.
- USD/RUB is "very poorly priced" given Special Counsel Robert Mueller's investigation into the involvement of Russia in U.S. President Donald Trump's election campaign, says Saxo Bank. "I see very strong risks of harsh new financial sanctions against Russia on this news," says John Hardy, head of FX strategy at Saxo Bank, in a note. USD/RUB is last down 0.2% at 58.1785. Mr. Hardy says "USD/RUB could trade to 62 or 64 in the coming weeks or months on a reassessment of the situation."
- Twitter saw activity on its platform by the pro-Kremlin firm Internet Research Agency stretching back to 2015, Twitter's acting general counsel Sean Edgett says in testimony with the Senate Intelligence Committee. Much of the probing from lawmakers on Tuesday and Wednesday has been focused on why Twitter, in addition to Facebook and Google, have been reactive rather than proactive in addressing the threat of foreign actors attempting to sow divisive content on their platforms. The disclosure that Twitter started noticing this kind of behavior two years ago does little to bolster these companies' claims that they are doing everything they can to stop the spread of targeted misinformation and content intended to divide communities.
- During today's Senate Intelligence hearing, congressional investigators are trying to conduct an autopsy of Russia's social-media manipulation during the 2016 presidential campaign. Repeatedly the companies have been asked who knew what and when. Facebook says it started to see this activity as early as 2015 and flagged federal law enforcement. Twitter says it started taking down accounts by the Internet Research Agency in 2015 as well. Alphabet's Google says it spotted the activity much later.
- Since the election, foreign actors on Twitter have been trying to fuel divisive content on the social media platform related to protests of the national anthem in the NFL, Twitter's acting general counsel Sean Edgett says on Wednesday in response to a question from Sen. James Lankford of Oklahoma. Much of the focus of concerns about foreign actors using Twitter, Facebook and Google has been centered around the 2016 US Presidential Election, but this revelation confirms that such activity did not end when these platforms removed the actors they identified in recent months.
- Twitter needs to find a way to prevent its users from posting content that illegally suppresses voters, such as the tweets that falsely claimed people could "vote by text" in the 2016 US Presidential Election, says Senator Dianne Feinstein of California. Twitter's acting general counsel Sean Edgett says Twitter has focused on taking down content like this faster, but Feinstein says this is not enough. "You've created these platforms, and now they are being misused," Feinstein says, referring to Twitter, in addition to Facebook and Google. "You have to be the ones to do something about it. Or we will."
- Russian efforts to manipulate the election on Facebook weren't about electing Donald Trump but sowing chaos, Sen. Richard Burr (R., N.C.) tells Americans at the outset of a hearing of the Senate Intelligence Committee. "This isn't about relitigating the 2016 presidential election," Burr says. "This is about national security and this is about corporate responsibility." Russian-backed actors bought five times as many ads in Maryland than in the swing state of Wisconsin, Burr says, adding that it was likely that social media platforms including Twitter and Alphabet's Google were still being manipulated today.
- The Senate Banking Committee advanced two nominees to posts at the Securities and Exchange Commission, somewhat easing a logjam that has hampered the short-handed markets regulator. Senate panel approves Robert Jackson, a Democrat, and Hester Peirce, a Republican, unanimously by voice vote. The SEC is currently operating with just three members -- two fewer than its full complement -- including Kara Stein, a Democrat; Michael Piwowar, a Republicans; and Jay Clayton, the independent chairman. Wednesday's vote paves the way for the full Senate to confirm the pair later this year.
- Twitter appears to be "vastly underestimating" the number of fake accounts and bots pushing misinformation on its social-media platform, US Senate Intelligence Committee vice chairman Mark Warner says at a public hearing Wednesday. Twitter has estimated that false or spam accounts represent less than 5% of its 300M monthly users. Many academics put the number of fake or automated accounts on Twitter at closer to 15% of its monthly users. Despite evidence from outside research, "Twitter has to date only uncovered a small piece of that activity," Warner says.

Nov 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Brent crude oil prices were near two-year highs as OPEC has significantly improved compliance with its pledged supply cuts and Russia is also seen keeping to the deal.
- Gold edged lower as the dollar firmed with investors awaiting hints on the U.S. Federal Reserve's monetary policy stance following the central bank's two-day meeting.
- Chinese nickel futures rocketed to their daily limit in early trade, tracking overnight gains in London as the sector turned positive on the prospect of new demand from electric vehicle battery manufacturers.
- Chicago wheat edged higher, but the market traded near last session's six month low with pressure from abundant world supplies.
- Facebook and Twitter were built to encourage free expression, but the companies are taking a harder line when it comes to ads. Executives said on Capitol Hill today they would work to prevent divisive ads from appearing on their platforms. "We want our ad tools to be used for political discourse, certainty, but we do not want our ad tools to be used to inflame or divide," said Facebook General Counsel Colin Stretch during the hearing about Russia's use of social media during the election. Sean Edgett, Twitter's acting general counsel, seconded that: "Those ads have no place on Twitter." One unanswered question, however, was how the companies will actually determine what kind of ads are divisive and where they would draw a line between free and hate speech.
- Facebook has been forced to confront its role in developing markets, where the company's services are often synonymous with the internet. During today's congressional hearing about its role in last year's election, Sen. Patrick Leahy (D., Vt.) hit General Counsel Colin Stretch with questions about how the company handles hate speech in Myanmar, where comments about the Rohingya ethnic group has spread across the platform and perhaps fueled violence. The questions touch on a broader tension within Facebook about how to police misinformation while also protecting freedom of expression.  "You have a great responsibility," Leahy said. "Not only can elections be swayed by people who are not favorable to the United States, but people can die."
- When Twitter detected tweets spreading misinformation in 2016 that claimed users could "vote-by-text," the impressions of tweets calling out these tweets as false were eight times as large, Twitter's acting general counsel Sean Edgett said in testimony on Tuesday. Twitter removed the tweets spreading the "vote-by-text" misinformation, because the company deemed it illegal voter suppression. Twitter's reason for removing these tweets, and Edgett's description of the magnitude of users calling out the misinformation as false, highlight an important part of Twitter's philosophy: the company doesn't remove content for being false in general, and the company prefers to highlight the role of its users in determining what information is credible.
- The BoE, FOMC, Fed chairman announcements, US tax reform details, perhaps more Mueller-inquiry related headlines, together with some key US data such as ISM data and payrolls are all on the calendar for the next few days. ANZ says it is hardly surprising, then, that markets were have been relatively quiet as they draw a collective breath and prepare for what could be a volatile few days.
- The benchmark IPC index falls 0.5% to 48,626 points, posting a 3.5% loss for October. The peso firms against the US dollar and was quoted in Mexico City at 19.16 compared with 19.2520 Monday, but is down almost 5% on the month. Volatility associated with concerns over the future of Nafta eased as the central bank increased its dollar hedging program to $5B from $1B, although jitters could return in November as round 5 of Nafta negotiations is set to start in Mexico and participants speculate about Fed rate increases, Banco Base says.
- Belgium shares close up 0.4% at 4096.38 on Tuesday in line with other regional markets and ahead of President Trump's announcement of a Federal Reserve chairman, expected this week. The strongest performer was Anheuser-Busch InBev which closed up 1.4% at EUR105.05 and Solvay ended 1.2% higher at EUR127.55. The session's worst performers were KBC Groupe, down 0.8% at EUR71.31 and Colruyt was 0.4% lower at EUR43.91.
- Canada is preparing for a scenario in which there's no resolution to the current trade row over softwood lumber, under which some Canadian lumber imports face a 30% duty from the Commerce Department. The Canadian government issued a call for bids, in search for an analysis on the repercussions from trade barriers to Canada's lumber exports. In its request for bids, it's asking bidder to present scenarios to measure the impact of a 30% duty on US-bound lumber exports through to 2030. Canada has also asked for scenarios in which lumber is sold in a free-trade scenario, or under conditions set out in a 2006 US-Canada deal. That pact allowed Canadian forest producers to either accept either a quota on US-bound exports, or pay a tax on goods shipped to the US.
- Leaders in the aerospace and defense sector still oppose the nomination of former Rep. Scott Garrett to head the US Export-Import Bank, even after testimony released Tuesday included a pledge from him to support its future operations. The Aerospace Industries Association has campaigned against the nomination of Garrett, who's twice voted to shut down the bank, a big backer of overseas sales for companies ranging from Boeing and General Electric to SpaceX. "Nothing has changed regarding our attitude towards him," a spokesman for the aerospace industry's main trade group says.
- While Special Counsel Robert Mueller's investigation into Russian meddling in the election moved into a higher gear this week, investors mostly shrugged off the developments. Investors say their trades over the last two days have been largely based on companies' 3Q profit reports, with some weak results crimping markets on Monday and a stronger batch sending indexes higher Tuesday. "Whether it's charges filled by Mueller or the next tweet sent out [by President Trump], I don't think it's going to affect markets," says Jon Mackay, investment strategist of Schroders. Paul Karrlsson-Willis, head of global equity sales and trading at Cabrera Capital, adds that investors who reacted to headlines have been burned before, as they watched stocks like Amazon subsequently rise higher. "People are nervous about where the market is today, but they can't get out because they'll worry about underperforming," Karrlsson-Willis says. Some money managers say the big political news this week for markets is the naming of the next Fed chairman.
- In response to President Trump's executive order on health care, Aetna is "looking at re-energizing a program we had prior to the," Affordable Care Act, the sale of short-term insurance that can last as long as a year, says CEO Mark Bertolini. He says Aetna is "already all over that," and, once regulations emerge that flesh out the executive order, "we will be prepared when we have the opportunity to act." But he says Aetna is looking at the short-term or transitional plans rather than "skinny" benefit coverage, which falls short of the protections of full health insurance and can create "moral harm," he says. In mentioning skinny plans, he was likely referring to products such as indemnity plans, which pay a set amount toward certain medical services such as hospital stays.
- Easing tensions in Catalonia leave EUR/USD poised to rally, says Morgan Stanley, adding that a rise above 1.170 would provide a buy signal. Declining spreads between Spanish and German bond yields and sharp gains in Spanish equities "tell us that the Catalan risk should now be priced out of the EUR, which is in line with our call seeing EUR/USD rallying from here," says Morgan Stanley. EUR/USD was last at 1.1637, down 0.1% on the day but well above Friday's multimonth low 1.1574. The IBEX 35 index rises 0.7%, while the Spanish-German government bond spread drops to 111 bps, its tightest since Sept. 25.
- London's blue-chip index is tipped to open slightly lower after a mixed session in Asia, U.S political intrigue and ahead of eurozone economic data. The FTSE 100 is expected to fall seven points to 7480 as softer-than-expected Chinese manufacturing and non-manufacturing PMI weighed on sentiment, though the Shanghai and Hong Kong exchanges both traded higher. The US dollar came off three-month highs on increased political risks caused by investigations on Trump-Russia ties. The euro falls against the dollar ahead of eurozone inflation and GDP data. BP PLC posted a 9.2% fall in replacement cost profit in 3Q, though it forecast a 4Q output increase and said it was starting a share buyback.

Oct 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)   
- Oil prices eased as traders took profits following days of gains and as the prospect of increasing U.S. exports dampened overall bullish sentiment that has driven Brent above $60 per barrel.
- Gold prices were largely unchanged after the Bank of Japan kept its monetary policy steady, with investors shifting their attention to other central bank meetings and economic events due this week.
- London copper returned overnight gains in Asian trading on the back of a stronger U.S. dollar.
- U.S. wheat futures edged higher, recovering from a two-month low touched in the previous session, as the U.S. Department of Agriculture (USDA) said the condition of crop was below market expectations.
- The Senate Banking Committee is set Wednesday to advance two Securities and Exchange Commission nominees to the Senate floor, setting up a confirmation vote later this year. The banking panel announces it will meet Wednesday to vote on the nominations of Hester Peirce, a Republican, and Robert Jackson, a Democrat, to fill vacancies at the five-member commission. The panel is expected to approve them, but it's unclear when the full Senate will vote on the pair. The SEC is currently operating with only three members--Kara Stein, a Democrat, Michael Piwowar, a Republican, and Jay Clayton, the independent chairman.
- A stronger USD is likely this week because of favorable US tax-reform developments, CBA says. Kevin Brady, the Republican chairman of the tax-writing House Ways and Means committee, is expected to unveil a comprehensive tax reform plan Wednesday New York time. This will be the first step in the tax legislative process, CBA says.
- The benchmark IPC stock index closes down 0.7% at 48,855 points, with retailer Wal-Mart de Mexico shares down 1.8% and Televisa shares slipping 0.3%, adding to the previous session's losses. The peso loses ground against the US dollar, quoted in Mexico City at 19.2520 compared with 19.1555 Friday. "We remain defensive on the peso, buying dollars on dips," says Banorte, which sees events such as progress on US tax reform and the possible nomination of a Fed chief keeping the peso-dollar exchange rate between 18.75 and 19.50 this week.
- Experts have speculated for months whether President Trump would fire Richard Cordray, Director of the Consumer Financial Protection Bureau. The president may not have known or cared about Cordray enough to take such a major step. In a surprise revelation, the Obama appointee, says the two "have never met or spoken." The statement was part of a letter Cordray sent to Trump Monday, urging him to veto a bill approved by GOP lawmakers last week to overturn his agency's "arbitration" rule designed to make it easy for consumers to sue banks in groups. Cordray acknowledged that many thought writing the missive was a waste of time because Trump had already expressed support for the bill. But he tried to give the president a push anyway by appealing to his litigious nature.
- Canadian medicinal marijuana producer Canopy Growth hit a new year-to-date high following The Wall Street Journal's report that US Corona distributor Constellation Brands took a 9.9% stake in the Canadian firm. The stake, worth about C$245M, will provide Canopy with some marketing and branding heft ahead of the Canadian government's plans to legalize marijuana next July. The announcement also helped to push much of Canada's listed cannabis-companies higher for the day, while the Horizons Marijuana Life Sciences Index ETF was up about 5%.
- US government bonds gain after President Trump's former campaign manager, Paul Manafort, was charged in an indictment relating to Special Counsel Robert Mueller's investigation into Russian meddling in the 2016 election. The move was mitigated by the uncertainty surrounding the extent to which the charges will eventually be tied back to Trump, and by the expectations for data and announcements that could affect the direction of Federal Reserve policy. Trump is expected to announce his pick to lead the Fed, while the Labor Department is scheduled to release employment data on Friday. The benchmark 10-year Treasury yield was a recent 2.388% versus 2.426% Friday.

Oct 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil markets were firm, with Brent remaining above $60 per barrel on expectations that an OPEC-led production cut due to expire next March would be extended, although rising exports from Iraq kept a lid on prices.
- Gold inched lower as investors remained cautious ahead of policy meetings of three major central banks and the naming of the next U.S. Federal Reserve chair.
- London copper steadied, not far from a two-week low hit in the previous session on persistent headwinds from a stronger dollar.
- U.S. soybeans rose 0.5 percent as dry weather across South America pushed prices to a five-day high.
- President Donald Trump is likely to announce Federal Reserve governor Jerome Powell as his nominee to be the next chairman of the U.S. central bank next week, according to a person familiar with the matter. The president hasn't made a formal decision and could still change his mind, several people familiar with the matter said. Mr. Trump said in a video released Friday he had "somebody very specific in mind" for the post, and would announce his decision "sometime next week." "It will be a person who hopefully will do a fantastic job," Mr. Trump said in a video posted to Instagram, adding, "I think everybody will be very impressed." The day of the announcement is still unclear, and next week is a busy one for Fed officials and the president. A Fed spokeswoman declined to comment.
- Facebook is adopting TV-style rules toward political advertising. Now the trick is figuring out what is a political ad in the first place. Facebook says it will start highlighting political ads in users' news feeds and share details on who paid for them. Television and radio already comply with this standard. Anyone running election-related ads on Facebook must verify their identity and location, and Rob Goldman, a Facebook ad executive, said it was "incumbent upon the advertiser to certify themselves." Facebook is also developing systems to understand what a political ad looks like. The feature will roll in the US next summer in time for the midterm elections.
- Facebook is shedding some light on its lucrative ad business following rampant criticism of its lack of transparency. Next month, Facebook will start testing a feature so users can see any ad that a Facebook page is currently running on the platform. Facebook users are typically served individualized ads that aren't shown to everybody else, so this will shed more light on how its ad business works. This change comes two months after Facebook said Russian actors bought divisive ads on Facebook around the election. Friday's announcement wouldn't have prevented that, but executives say it would have helped Facebook catch the issue sooner. "They would have still been able to do certain things, but this process--the combination of authenticity and proper enforcement would have caught it sooner," Facebook ad exec Rob Goldman says. Facebook says all pages, from political candidates to local bakeries, will be subject to the standard. Facebook will test the feature in Canada next month and introduce it in the US next summer.
- Among the Trump administration's self-inflicted wounds early after inauguration was its slowness in hiring staff for federal regulatory and other agencies, says Susan Ginsberg, VP of oil and natural gas regulatory affairs at the Washington-based Independent Petroleum Association of America. "I don't know if it was distrust of the federal bureaucracy, or being an outsider in politics and thus simply not putting the pieces in place, but they hit the ground not running," she tells an energy conference audience in Dallas during a Q&A session. She says part of the staffing delays problem was due to an early reluctance by many in DC to be part of the Trump administration, compared with the typically spirited desire to join new presidential administrations. Some, she says, were worried being stamped as "Trump loyalists" could hurt them down the road.
- Despite better-than-expected trade data for Hong Kong in September, one obstacle on the horizon is US President Donald Trump, says ING. Both import and export figures came in above consensus, but the bank is concerned that if North Korea's talks with China don't pan out well during Trump's trip to Asia next month, Trump could "escalate trade tension after returning home," says Iris Pang, an ING economist. "As 55% of Hong Kong's exports go to the mainland, that would be negative for Hong Kong trade."
- The benchmark IPC index closes up 0.2% at 48,987 points, while the Mexican peso weakened against the US dollar, as the US House of Representatives cleared the way for tax cuts. America Movil falls 0.9%, while bread-maker Bimbo closes down 0.1%. The peso, which has been pressured in recent weeks by renewed concerns over the future of Nafta, closes in Mexico City at 19.2130 to the dollar, up from 19.0550 Wednesday.
- FAA Administrator Michael Huerta didn't do any media briefings and was barely mentioned in press releases when the Trump administration rolled out its long-awaited model program promoting expanded drone operations. Industry officials said that partly reflected nagging friction between the FAA chief and more-senior Trump appointees. The President months ago publicly embarrassed Huerta, a nonpilot, by saying an aviator should have his job. Huerta, whose congressionally-set term expires in a few months, gave a speech during the summer describing Trump's Charlottesville controversy as "profoundly troubling," saying it revealed that "we were wrong" to "believe that racism and intolerance are events in the distant past."

Oct 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)   
- Oil prices inched higher, with Brent crude approaching $60 a barrel amid tightening market expectations, buoyed by comments from Saudi Arabia's Crown Prince backing the extension of OPEC-led output cuts.
- Gold prices drifted in a narrow range after hitting a near three-week low in early trade as the  dollar gained against the euro after the European Central Bank extended its bond buying programme.
- Chinese nickel futures dropped in step with steel prices, reversing earlier gains and on track to end the weak sharply lower.
- Chicago wheat futures lost more ground, declining for a third consecutive session, with the market facing pressure from ample supplies and profit-taking following a rally earlier in the week.
- The benchmark IPC index closes up 0.2% at 48,987 points, while the Mexican peso weakened against the US dollar, as the US House of Representatives cleared the way for tax cuts. America Movil falls 0.9%, while bread-maker Bimbo closes down 0.1%. The peso, which has been pressured in recent weeks by renewed concerns over the future of Nafta, closes in Mexico City at 19.2130 to the dollar, up from 19.0550 Wednesday.
- FAA Administrator Michael Huerta didn't do any media briefings and was barely mentioned in press releases when the Trump administration rolled out its long-awaited model program promoting expanded drone operations. Industry officials said that partly reflected nagging friction between the FAA chief and more-senior Trump appointees. The President months ago publicly embarrassed Huerta, a nonpilot, by saying an aviator should have his job. Huerta, whose congressionally-set term expires in a few months, gave a speech during the summer describing Trump's Charlottesville controversy as "profoundly troubling," saying it revealed that "we were wrong" to "believe that racism and intolerance are events in the distant past."
- The Kiwi remains friendless and the technical picture is threatening to look "even more bearish," ANZ says, even if the pace of the move lower suggests a short period of consolidation, perhaps even a bounce. A break of 0.6820--the May low--would open up the possibility of a further considerable move south, the bank says. But rather than domestic developments, ANZ suspects the power is now with USD. Progress on US tax reform appears to have been made, but there are still plenty of hurdles to clear, they say. The NZD/USD was at 0.6838 early in Asia.
- The US's derivatives regulator formally delayed rules that would require more firms to register as swaps dealers, a move that buys more time without stricter oversight for energy and agricultural companies that use the products to hedge risks. The delay was previously announced by Commodity Futures Trading Commission Chairman J. Christopher Giancarlo in his testimony before a congressional committee earlier this month. The lower threshold was meant to go into effect next year, after already being delayed once during the Obama administration. This delay will be the last one, Giancarlo has said, adding he expects the CFTC to make a final rule on the matter during 1H.
- Fed chairman contender John Taylor's appearance at an event in Madison, Wis., tonight will be greeted by protesters from the Fed Up campaign. The group has turned from critics of the Fed's plan to raise rates to staunch Yellen defenders. Fed Up will be joining with other groups to show "the widespread resistance that would emerge if Trump were to nominate Taylor as Fed Chair," the group says.

Oct 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices inched lower, pressured by an unexpected increase in U.S. crude inventories and as oil output and exports from the United States rose last week.
- Gold prices inched up, after hitting a two-and-a-half-week low in the previous session, as the dollar eased ahead of a key European Central Bank meeting later in the day.
- London aluminium surged to its highest in more than five years on expectations of dwindling supply of both aluminium and its raw materials, as China imposes restrictions on industrial output over winter.  
- Chicago wheat futures ticked higher, rising for three of four sessions although abundant global supplies of the grain kept a lid on the market.
- The euro inched higher as investors awaited details of the European Central Bank's plans for scaling back its bond- buying programme, while the dollar took a breather after its recent rally.
  Trump Says He Is Thinking About Keeping Yellen as Fed Leader
- President Donald Trump said Wednesday he still is considering offering Janet Yellen another term as Federal Reserve chairwoman when her term expires in early February. "You like to make your own mark, which is maybe one of the things she's got a little bit against her," Mr. Trump said in an interview with Lou Dobbs on Fox Business Network, a portion of which was released Wednesday afternoon. But the president, who interviewed Ms. Yellen about the job in the Oval Office last Thursday, said he thinks the central bank chief is "terrific" and that the two "had a great talk." "And we're obviously doing very well together; you look at the markets," he said. Speaking to reporters at the White House on Wednesday, Mr. Trump suggested he was close to making a nomination.
- Commodity Futures Trading Commission Chairman J Christopher Giancarlo says the Dodd-Frank Act did not anticipate some of the biggest current sources of systemic risk, such as cybersecurity and new market technologies. Speaking at an event in Washington, Giancarlo notes some of the successes of the Dodd-Frank Act like mandated central clearing for swaps trades, but also warns that regulators need to address the next generation of threats. He noted that his agency receives some 10,000 attempted hacks each month, and eventually "one of those is going to be successful." His goal, he says, was to protect vital systems and the personally identifiable information that his agency holds.
- Uncertainty around the Trump administration's trade policy continues to pose a risk and "substantial uncertainty" to Canadian economic forecast, Bank of Canada says in quarterly forecast. It noted Commerce Department's decision to slap a preliminary 300% tariff on Bombardier's CSeries, and the recent negative turn in talks regarding Nafta. "Although the bank's projection for exports is cautious, there is a risk that exports will fall short of expectations, given the growing protectionist pressures and continuing competitiveness challenges," BoC says. One way around US risk could be decision by Canadian firms to expand production capacity abroad instead of in Canada, to avoid possible protectionist measures. As it happens, part of the Airbus-Bombardier pact reached last week includes production of CSeries at an Airbus factory in Alabama.
- Bund bulls, take note: there are several factors in place that support a further sell-off in 10-year German government bonds, according to RBC Capital Markets. Economic data is strong; the U.S. seemingly gets closer to a tax reform deal; fiscal loosening might take place in Germany, albeit not too meaningful in size; the next Fed Chair could tilt the rates path slightly higher; and the European Central Bank's tapering could boost term premiums. Bund yields are down 1 basis point to 0.465% early Wednesday, having jumped 10 bps over the past week. Yields rise when bond prices drop.
- Absent from Canada's economic and fiscal update is hardly any mention of Nafta, or the growing risk the continental trade deal collapses given that negotiations among the parties has taken a negative turn. There is just a line, in a chapter dealing with risks, in which the government says that, "uncertainty over U.S. economic policies could affect Canadian business confidence." In contrast, market watchers expect Bank of Canada on Wednesday, in its latest rate decision and updated economic outlook, to highlight the risk posed by Nafta's unraveling, and how it might affect rate policy in the coming months.

Oct 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices were largely steady, hovering near a four-week high hit a day earlier after top exporter Saudi Arabia said it was determined to end a supply glut.  
- Gold prices edged lower, pressured by stronger equities and a firmer dollar amid speculation over who will be the next U.S. Federal Reserve chief.  
- London copper was steady, after hitting its highest in a week in the previous session, on encouraging prospects for economic growth in China, the world's top consumer of metals.  
- Chicago soybean futures edged higher on bargain buying after dropping to their lowest in almost two weeks, but gains were limited by the rapidly advancing U.S. harvest giving a boost to world supplies.
- The dollar held near a three-month high versus the yen, underpinned by reports of Republican senators' favouring John Taylor to become the next head of the Federal Reserve, while the Aussie dollar weakened after soft inflation data.
- Of the 52 S&P 500 companies that had conducted 3Q earnings conference calls through Oct. 18, 13 cited "tax reform" during their calls, more than those that had mentioned it in 1Q and 2Q--11 and five, consecutively, says FactSet. Ten of those companies expressed some positive sentiment about the potential passage or potential effect of tax reform, but six also discussed some uncertainty around the time or specific details of the reform and five stated that they or their clients wouldn't change their outlook or strategic planning decisions due to Washington's renewed focus on tax reform, FactSet says. FedEx, for example, said in its Sept. 19 call, "And, secondarily, I'm still waiting to see on tax reform, what that might do, and that could have an impact on our spending as well."
- Caterpillar has been supportive of the Trump administration's call to update Nafta. But CFO Brad Halverson says the manufacturer wouldn't support a so-called sunset provision. "Things that are not permanent tend to just not create as much stability and confidence," Halverson says in an interview. Caterpillar says Nafta helps support US jobs and has benefited the heavy machinery maker's dealers and customers. Halverson was optimistic Nafta wouldn't collapse, saying: "They've got good business people working on it so I think the process will work out."
- As widely expected, the Canadian government says it will take in more revenue than originally budgeted. Deficits over the next three fiscal years, to 2020, will total nearly C$56 billion, or narrower than the C$80 billion forecast in the 2017 budget plan. Debt-to-GDP ratio is forecast to drop below 30% in FY19-20, or around the same time the Liberal government faces re-election. The bulk of the improvement is due to a major upward revision in growth. The 2017 budget plan anticipated 1.9% expansion this year, whereas the new estimate has GDP advancing 3.1%. Economists, such as Warren Lovely of National Bank Financial, had anticipated the government's bottom line was up to C$7 billion a year better based on economic prospects.
- Auto makers, suppliers and dealers forge group to lobby against withdrawal from North American Free Trade Agreement, arguing pact has created jobs and Trump administration shouldn't "change the game in the middle of a comeback." Groups representing likes of GM, Ford, Toyota, Volkswagen and Hyundai join dealers and suppliers in coalition dubbed "Driving American Jobs." Effort comes amid NAFTA negotiations between U.S., Mexico and Canada, and president's criticism of auto makers for building outside American borders. President Donald Trump has threatened to quit the deal. Trump administration had proposed changing NAFTA's rules of origin so 85% of content in cars be North American parts, and 50% hail from US, the latter a first. Auto makers have pushed back on that proposal.
- Despite President Maduro's low popularity and Venezuela's crippling economic crisis, it's the leader's detractors who appear to be more fractured than ever as they reel from their loss in recent state governor elections. The opposition's most prominent leader, Henrique Capriles, says he will no longer be a part of the opposition coalition until the Democratic Action Party, one of the alliance's biggest members, pulls out. Democratic Action is under fire and faces accusations of kowtowing to the authoritarian government after four of their governors on Monday agreed to take oath of office by submitting their authority to the pro-Maduro legislative superbody. Democratic Action chief Henry Ramos says his party has betrayed no one, but Capriles is adamant that there is no way forward together. "What happened yesterday has no justification," Capriles says.
- Santiago's Chamber of Commerce sees Chile's economic growth strengthening to about 3% next year from 1.6% in 2017, as most sectors improve. The important mining sector is expected to rise 6%, as copper production hits 5.9M tons, copper prices average about $3 a pound and mining exports bring in $42B, the business group says. It also sees 2.7% growth for the agriculture sector, an increase in manufacturing and steady retail activity.
- Chile's leading presidential candidate Sebastian Pinera's plans to cut taxes will face political and fiscal constraints if he is elected later this year, Eurasia Group says. Pinera, a conservative ex-president, wants to roll back several of President Michelle Bachelet's reforms that have been criticized by the private sector for hampering growth. His tax plan calls for simplifying the tax code and reducing corporate rates to about 24-25% from around 27%. However, Pinera's party is unlikely to win a majority in congressional elections, meaning he will have to work with parties on the left. He will also inherit high levels of social spending from Bachelet, making it difficult to reduce government tax intake, Eurasia says. The election is scheduled for Nov. 19.
- President Donald Trump's two nominees for vacancies at the SEC -- Hester Peirce, a Republican, and Robert Jackson, a Democrat -- won praise from Senate Banking Committee Chairman Mike Crapo (R, Idaho) on Tuesday.  Crapo praised both nominees as "strong candidates" and said he expected the Senate would confirm them soon. Both nominees said the SEC should work to complete a series of unfinished executive compensation rules mandated by the 2010 Dodd-Frank law, though Peirce -- a vocal opponent of the law -- said she couldn't say in what order the commission should finish such rules. The SEC is currently operating with just three members: Jay Clayton, its independent chairman; Kara Stein, a Democrat; and Michael Piwowar, a Republican.
- Both consumer and commercial loans fell at Fifth Third Bancorp in 3Q and Fifth Third execs tell analysts on a conference call the environment remains a challenge for commercial lending on uncertainty on tax policy, health-care reform and more. However, Fifth Third CFO Tayfun Tuzun tells analysts it plans to add to its commercial sales force and is studying whether it should geographic expansion of middle-market lending. Excluding commercial-loan exits, Fifth Third says the commercial portfolio rose 3%. Shares rise 0.4% as the company delivered a beat on earnings when excluding a $1B gain from the sale of Vantiv shares.
- JPMorgan rises above $100 per share in intraday trading, the first time the bank has crossed that mark, according to FactSet. Shares have been steadily rising over the past several weeks. Though bank stocks have been fairly flat in the months following the post-election surge, they came roaring back toward the end of 3Q, partly on investor optimism around a tax-code overhaul. But interest rates are likely to be the dominant force for bank shares through the end of the year.
- The Department of the Interior proposes "the largest oil and gas lease sale ever held in the US" to be held in March, covering nearly 77M offshore acres in federal waters of the Gulf of Mexico from Texas to Florida. Interior Secretary Zinke says more access is important in today's "low-price energy environment," and calls the proposal "a pillar of President Trump's plan to make the US energy dominant." The sale would be the second offshore sale under the 2017-2022 National Outer Continental Shelf Oil and Gas Leasing Program, which has been criticized by environmentalists, who say with a current surplus of oil and natural gas it makes no sense to drill even more.
- Given that investors are still buying U.S. dollars in the hope of higher interest rates and tax cuts, EUR/USD may fall to 1.1670 or 1.1610, Morgan Stanley says. This would provide a "strategic buying opportunity," it says, recommending a stop if EUR/USD drops to 1.1570. EUR/USD last trades at 1.1776.

Oct 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices inched up, getting support from a decline in oil exports from OPEC's second-biggest producer Iraq and a projected extended fall in U.S. commercial oil stocks.
- Gold inched up on the back of a slightly weaker dollar, but traded in a tight range amid possibilities of an early announcement on the next U.S. Federal Reserve chair.
- A wave of fresh investment drove Chinese copper futures more than 2 percent higher.  
- U.S. corn prices edged up to hit their highest in eight days as the U.S. Department of Agriculture said the harvest was lagging market expectations.
- The dollar edged down as attention turned to who would be the next head of the U.S. central bank.

- President Donald Trump pledged Monday to protect a popular retirement-savings program, promising to leave it untouched in the forthcoming GOP plan to overhaul taxes.Mr. Trump, in a tweet, shot down an idea that had been circulating in Washington policy circles and worrying the retirement-savings industry: limiting pretax contributions to retirement accounts."There will be NO change to your 401(k)," the president wrote on Twitter. "This has always been a great and popular middle class tax break that works, and it stays!"

Oct 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose over supply concerns in the Middle East and as the U.S. market showed further signs of tightening while demand in Asia keeps rising.  
- Gold hit its lowest in over two weeks early, as the dollar climbed to a more than three-month high versus the yen after Japan's ruling bloc scored a big win in Sunday's election, leaving the door open to ultra-loose monetary policy for longer.
- London copper climbed alongside other metals, after Chinese authorities reaffirmed that the country's economy was on track to achieve the official growth target even as its housing market slows.
- Chicago soybeans were little changed after dropping to their lowest in more than a week earlier in the session as advancing U.S. harvest and forecasts of more rains in Brazil weighed on prices.
- President Donald Trump signaled Friday that Federal Reserve Chairwoman Janet Yellen remains a strong candidate to be renominated for the job after the two met this week, saying he liked her "a lot," while also highlighting two other candidates as front-runners.  In an interview with Fox Business, Mr. Trump mentioned by name three candidates who are among the finalists: Ms. Yellen, Stanford University economist John Taylor and Fed governor Jerome Powell. Mr. Trump indicated he hadn't made a decision yet. Asked who he wanted to run the Fed, Mr. Trump responded: "Most people are saying it's down to two: Mr. Taylor, Mr. Powell. I also met with Janet Yellen, who I like a lot. I really like her a lot. So, I have three people that I'm looking at, and there are a couple of others."
- The negative tone at the conclusion of Nafta talks in Virginia this week pose significant risks to the outlook for both Canada and Mexico, as well as global trade in general, BMO Capital Markets' chief economist Doug Porter writes. He said even if the strident talk from USTR Robert Lighthizer is about extracting concessions later on, "there is no doubting the seriousness of the administration's protectionist leanings and the dark outlook for NAFTA." He added Mexico and Canada, combined, account for barely 10% of the US trade deficit with the rest of the world. After Nafta talks conclude, with or without a revamped deal, it is likely the Trump administration "is coming for those responsible for the other 90% of the gap next," Porter said.
- The US dollar has seen better days, says Paul Mortimer-Lee, the chief market economist for BNP Paribas. The greenback has edged down in recent months because of weaker-than-expected US inflation numbers and a reduced risk of a Federal Reserve interest rate hike, says Mortimer-Lee in a recent report. Official numbers put the US inflation rate at 2.2% so far for 2017. Meanwhile, WSJ Dollar Index, which tracks the dollar against a basket of other currencies shows the greenback has edged down 6.37% since January. "Political travails in the U.S. have also weakened the dollar," adds Mortimer-Lee."The U.S. no longer stands out as the beacon of advanced economic growth, and so the dollar's pole position has also suffered."
- FAA officials, who helped drive international efforts to crack down on air-cargo shipments of lithium batteries, may be relegated to the back seat by the Trump Administration. The Pipeline and Hazardous Materials Safety Administration is about to be designated as the lead US agency on the topic, according to a senior Democratic congressman, just as the FAA is publicizing its recent tests demonstrating fire hazards posed by a single overheating laptop inside a suitcase loaded into the belly of a jetliner. In extreme cases, according to the latest FAA laboratory demonstrations, contact with everyday items such as aerosol cans or nail polish can result in a blaze or explosion serious enough to disable fire-suppression systems in cargo holds.
- As the Nikkei extended its winning streak in the week ended October 18, Japan Equity Funds posted their biggest outflows on record, EPFR says. Investors were expressing their caution ahead of this weekend's elections, which Japanese Prime Minister Shinzo Abe is expected to win, amid questions about the direction Abe will take, EPFR says. Also in the week, redemptions from Korea Equity Funds hit their highest level since early in the second quarter of 2016 as investors expressed concerns about the possibility that Abe's administration might take a stronger military line with North Korea, the fund tracker says. Overall, equity funds took in $8.8B in the week, with US equity funds pulling in the biggest share of that, EPFR says. Bond and money-market funds took in nearly $6B and $10B, respectively, in the week, it says.
- USD/JPY hasn't rallied enough on good company earnings in the U.S., according to some strategists. That is because the equity market in Japan has also performed well, and the local economy has improved slightly, says FX Knowledge. On Friday, USD/JPY is up 0.8% at 113.40, after rising to a two-week high of 113.52, driven by expectations that the U.S. tax reform is one step closer to being implemented. If the Bank of Japan changes its tone even by a fraction after the elections on Sunday, there is a very large "potential surprise or bullish outcome for the currency," says FX Knowledge, which targets USD/JPY below 110.
- Bad news for refiners still recovering from Hurricane Harvey: prices are surging for ethanol renewable identification numbers--RINs--after President Donald Trump reportedly poured cold water on hoped-for relief from pseudo-penalties against refiners who don't blend enough corn-based ethanol into their gasoline. "RIN prices reacted to the news by trading back up to 99c/gal for D4s and 83c/gal for D6s yesterday, and shares of refiners particularly leveraged to purchase RINs generally underperformed in group trading," says Tudor Pickering. The issue is sort of a battle between pro-oil folks from Texas and Oklahoma picked to lead the Environmental Protection Agency, Department of State and Department of Energy, and Midwest farmers who feel left out even after helping get Trump elected.
- Short-term sterling recovery takes EUR/GBP down by 0.6% to 0.8953 and the pound is to blame for two fifths of the fall, says Vasileios Gkionakis, co-head of strategy research at UniCredit. Sterling has some catching up to do as it has underperformed a lot for the past few days. The other three-fifths is due to the euro. The common currency is unaffected by the Catalan crisis, according to most strategists, but falls versus the dollar due to the latter's strength. But Mr. Gkionakis says EUR/GBP is likely to rise after the European Central Bank's meeting on Oct. 26. By then, it should be clear that the ECB is tapering its QE program and the focus will be on the divergent political fortunes of the U.K. and the EU.
- The U.S. dollar rises Friday on expectations that President Donald Trump's tax reform is one step closer to becoming law after Senate approved the budget resolution by strict party vote, avoiding intervention from the Democrats. EUR/USD is down by 0.5% at 1.1788. But Vasileios Gkionakis, co-head of strategy research at UniCredit, says what will be passed will be a version of the tax reform envisaged right now, not necessarily entirely what's being promised. "The market is right to not get overly excited about this," Mr. Gkionakis says. Most likely, there will be some tax reductions, he adds.
- Shares of banks are climbing along with the US dollar and government bond yields ahead of the opening of the US stock market. Bank of America rises 1.8%, JP Morgan Chase is up 1.4% premarket and Goldman Sachs adds 1%. Some analysts attribute the moves to the US Senate passing a budget blueprint late Thursday, which they say will help unlock a procedure that Republicans plan to use to rewrite the tax code with only GOP votes. Hopes for tax cuts helped bank stocks, bond yields and the dollar rise after Election Day, although some of those moves unwound early 2017 as investors walked back hopes for swift policy changes.
- Treasurys pulled back overnight after the Senate approved a budget resolution that would make it easier to pass a tax cut of up to $1.5 trillion. A tax cut of that size would likely boost the supply of Treasury debt, weighing on the prices of existing bonds. It could also potentially boost economic growth and inflation, delivering a further blow to Treasurys. Before the Senate's action, Treasurys had edged higher on a report that Fed governor Jerome Powell is the leading candidate to replace Fed chairwoman Janet Yellen -- ahead of other candidates who are thought to favor a faster move to tighter monetary policy. The 10-year yield was recently 2.370% vs. 2.323% Thursday.
- European shares gain as markets react to rising prospects of a U.S. corporate tax cut after the Republicans passed a budget resolution. The Stoxx Europe 600 rises 0.36%, or 1.39 points, to 390.5 after the GOP voted by 51 to 49 for the measure, which analysts say heightens chances of Trump finally passing one of his major election promises. "The chance of a U.S. tax cut has benefited both U.S. dollar and U.S. stock futures alike overnight," says Joshua Mahony at spread-betting firm IG. Husqvarna AB shares fall 3.4% as the Swedish outdoor power product supplier reported lower 3Q sales in its consumer brands division. Shares in Volvo AB top the Stoxx 600 Europe index after the automotive group's 3Q earnings beat expectations, driven by construction equipment.
- The U.S. dollar rises on expectations the tax reform may be implemented by the end of this year, and on speculation that rule-based economist John Taylor may become the next Federal Reserve chair. EUR/USD is down 0.5% at 1.1796. "The Taylor-based rule would translate into a Fed funds rate of around 3.50%, 225 bps higher than today," according to Societe Generale. However, current Fed Board of Governors member Jerome Powell also stands a chance to grab the job, says MUFG, which could modestly weaken the dollar. "The diverging potential outcomes are one reason why
the U.S. dollar is struggling for direction in the near-term," says MUFG.

Oct 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices edged up, supported by signs of tightening supply and demand fundamentals, although a warning about excessive China economic optimism still weighed somewhat on markets.

- Gold prices turned lower as the dollar regained ground after the U.S. Senate approved a budget blueprint for the 2018 fiscal year that will pave the way for Republicans to pursue a tax-cut package without Democratic support.

- London copper nudged higher as some investors beefed up positions following overnight losses, and remained on track to post its fourth weekly rise even after retreating from three-year highs.

- Chicago wheat edged higher, drawing support from strong demand, but was poised for its biggest weekly drop in almost two months as ample global supplies weigh on the market.
- After losing the fight over whether their imported washing machines hurt domestic appliance makers like Whirlpool, LG Electronics and Samsung Electronics told trade regulators Thursday that tariffs and quotas would hurt their planned U.S. factories. LG executive John Riddle said in an interview 50% tariffs would limit how many washers it could provide retailers, limiting its ability to win prized floorspace. "It would kill us, from a washer standpoint," Mr. Riddle said in an interview.
- Chile's central bank keeps its benchmark interest rate unchanged at 2.5%, but says lower-than-expected inflation could require adjustments in the future. In September, the annual inflation rate was 1.5%, well below its target range of 2-4%. The central bank says this could affect its two-year forecast for inflation to converge to the midpoint of its target range. As a result, the monetary policy could require adjustments. "The board will evaluate with special attention this risk," it says.
- Nucor CEO John Ferriola says he remains confident the Trump administration will impose additional tariffs on imported steel, but admits he's "getting a little concerned about the length of time it's taking." Opposition from steel users and other countries caused the administration to pause its aggressive schedule for imposing the across-the-board duties sought by US steel company executives. Ferriola says importers have used the lull to accelerate their steel shipments to the US to "get their products in before something goes into effect." Ferriola says imports now account for a bigger share of the steel consumed in the US than a year ago and are holding down the pricing power of domestic producers. He suggested any duties be applied retroactively to spring, when the import surge started.
- People in Latin America are among the most dissatisfied with how democracy is working in their countries, according to Pew. The percentage who say they are satisfied ranges from 6% in Mexico to 46% in Argentina. Some 42% of Mexicans say military rule might not be a bad thing. And just 2% of Mexicans and Brazilians say they have a lot of trust in their government. That's bad news for traditional politicians given both countries have elections next year.
- Canadian stocks rise as financials and mining companies outperform, while oil-and-gas producers slide amid tumbling crude prices. The S&P/TSX Composite Index was up 35.84 points, or 0.2%, to 15,818 despite decliners leading advancers 838 to 727. Trading volume was 287.5M shares. The blue-chip S&P/TSX 60 Index was up 3 points, or 0.3%, to 994.93.
- Canadian bonds rise, with reignited demand for safe-haven assets spurred by moves south of the border and in Spain. The yield for Canada's two-year bonds was recently at 1.479% from 1.521%, according to FactSet. The 10-year bond yield was at 2.014% from 2.037%. There was a lack of domestic drivers Thursday, leaving moves in Canada's bond market to be influenced by US Treasury gains in the wake of rising tensions in Spain and the Catalonian independence movement. Retail sales and inflation reports will likely drive bonds early Friday with a small move higher in Canadian rates expected following the data, TD says.
- Whirlpool is asking federal regulators to back 50% tariffs on imported large residential washing machines and parts over three years. The Michigan-based appliance giant is also asking the US International Trade Commission to recommend quotas on parts to prevent rivals Samsung Electronics and LG Electronics, from building mere "kitting operations" in the US. Samsung and LG say Whirlpool wants to stifle competition as its products have lagged in innovation. The ITC votes in November, but the decision on trade barriers ultimately goes to President Donald Trump's desk.
- The gender wage gap that persists across corporate America appears to be worse for freelancers in creative industries such as photography, graphic design and event planning. An analysis by HoneyBook, a platform for self-employed creative professionals to find work and manage their businesses, finds that on average women earn 32% less than their male counterparts for the same work. The data, collected from invoices from more than 200,000 freelancers, found the disparity especially big among disc jockeys and musicians: Women DJs and musicians earned 45.53c for every dollar their male peers earned. HoneyBook's survey of more than 3,100 creative freelancers, though, found 63% of women respondents and 72% of men believed the two sexes are paid equally.
- Venezuela's falling oil exports to the US give other Latin American producers a chance to shine, BMI Research says. "Financial and supply-related uncertainties will reduce Venezuelan crude exports to the US over 4Q17," it says. "Neighboring heavy crude exporters Mexico, Ecuador and Colombia are likely to fill the void." It notes September OPEC data showing Venezuela oil production fell under 1.9M bpd for the first time in 25 years, and says deeper Washington sanctions against Venezuela are another problem. BMI says Canada will still service most US heavy crude demand, but says Castilla blends from Colombia, Oriente from Ecuador and Mexican crude could all see more US sales.
- The U.K. is undertaking a renewed review of its defense spending plan. The sharp fall in the British currency after the Brexit vote has blown a hole in the country's defense budget. On the chopping block: choppers. Britain's Parliamentary Under Secretary Tobias Ellwood to the defense minister said there are "too many" helicopter platform types, with high costs for software and training. "That does need to be simplified," he told parliament. Leonardo, Airbus, Boeing will be watching what happens.
- Early losses in European and U.S. markets have eased, after fears surrounding the future of Catalonia were largely discarded. Investors see the Spanish government's decision to invoke Article 155 as a positive for economic and political stability, says IG analyst Joshua Mahony. "While the potential for further Catalan protest means a degree of uncertainty remains, today's actions have allayed much of the market fears," says the analyst.
- EUR/USD rises 0.4% to a nearly one-week high of 1.1841, and Lee Hardman, currency analyst at MUFG, says nervousness surrounding the U.S. dollar due to uncertainty over politics and economics is behind the move. He cites U.S. Treasury Secretary Steven Mnuchin comments on Wednesday that stocks could take a significant tumble if tax cuts aren't implemented soon. The S&P500 rose Wednesday to an all-time high. USD/JPY also falls 0.4% to 112.47. European leaders are meeting on Thursday and Friday, but the market doesn't have high expectations from the summit, Mr. Hardman says. And Spain looking set to move to suspend Catalonia's autonomy doesn't seem to be impacting the euro either, he adds.

Oct 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices were stable, supported by ongoing OPEC-led supply cuts, tensions in the Middle East and lower U.S. production due to hurricane-enforced closures.
- Gold prices touched the lowest in more than one week, as the dollar stood firm on rising U.S. Treasury yields, with investors focusing on who would replace Janet Yellen as the next chair of the Federal Reserve.
- London copper held steady after in-line economic readings out of China signalled some moderation in growth.
- Chicago wheat ticked higher as bargain buying after three sessions of decline underpinned prices, although gains were checked by stiff competition in the global export market.
- Presidents Donald Trump and Mauricio Macri talked shop on Wednesday, discussing their commitment to expand trade and investment between Argentina and the U.S. According to a readout from the White House, Trump "praised" Mr. Macri's economic reforms. "They also discussed the ongoing crisis in Venezuela and agreed to continue to work together to help the people of Venezuela restore democracy in their country," the readout says. Trump and Macri have known each other for decades, having done business together in New York long before either entered politics.
- US Government Accountability Office releases a report that calls on Congress to establish an independent commission to "comprehensively examine the US retirement system and make recommendations" on ways to improve retirement security. Report notes that it has been 40 years since the last such commission, appointed by President Carter, evaluated the nation's retirement system. Among the challenges on the horizon, the report notes, are the underfunding of Social Security, which is projected to be unable to pay full retirement benefits starting in 2035, and the shift from a defined benefit pension system to 401(k)-style plans, which puts the risks and responsibilities of funding retirement onto the individual. AO report recommends appointing representatives from government agencies, employers, the financial services industry, unions and academia.
- Morgan Stanley recommends selling GBP/USD since sterling is under pressure from political and economic risks and the dollar has potential to benefit from the U.S. tax reform. President Donald Trump's tax reform could send U.S. real rates and yields higher. And since the dollar is the preferred global funding currency, this may reduce funding flows, and therefore boost the dollar, Morgan Stanley says. The U.K. has high debt levels, and so higher yields in the U.S. would drag the pound down. If GBP/USD falls below 1.2990 on a daily closing price basis, it likely then to fall to 1.25, the bank projects. On Wednesday, GBP/USD is last down 0.1% at 1.3177.
- U.S. Bank executives are asked on the earnings call this morning if they expect to benefit from the Trump administration's proposed tax overhaul. Too early to tell, they say. "What's going to ultimately be in the tax reform bill is still moving around a lot even though that there is some framework associated with it," says CFO Terry Dolan. "We're kind of in a wait-and-see mode, in all honesty."
- The newest member of the Commodity Futures Trading Commission, Democrat Russ Behnam, will lead the agency's Market Risk Advisory Committee, he announces at a derivatives industry conference in Chicago. Behnam, the CFTC's lone Democrat, takes over the committee from former Commissioner Sharon Bowen, who left the agency last month. The committee is composed of industry representatives who advise the agency on market structure and risk. Brian Quintenz, his fellow new commissioner, recently took over the Technology Advisory Committee.
- Gold prices continue to pull back, with the dollar building on recent gains amid growing expectations of another interest rate hike by the Federal Reserve before the end of the year. It's down 0.37% at $1,280.78 a troy ounce. The WSJ Dollar Index is up 0.22% at 86.80. President Donald Trump Tuesday said he was closer to deciding the next Federal Reserve chairperson and his short-list of five candidates includes several with hawkish views. That Fed-driven dollar strength is generating selling pressure across commodity markets, Commerzbank says. CME Group data shows 98.2% of traders are betting the Fed will raise rates in December.

Oct 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ Dow Jones)
- Oil prices rose, lifted by a fall in U.S. crude inventories and concerns that tensions in the Middle East could disrupt supplies.
- Gold prices inched up from a one-week low with the dollar holding steady, but speculation that President Donald Trump might pick a policy hawk to lead the U.S. Federal Reserve weighed on the metal.
- London copper climbed, supported by healthy demand growth expectations and relief from a stronger dollar, while markets looked ahead to policy announcements from China's Communist Party conference.
- U.S. soybeans edged lower as forecasts for crop-friendly weather pushed the oilseed towards its third consecutive daily loss.
- Harley-Davidson CEO Matt Levatich isn't worried overseas sales will be hurt by backlash against President Donald Trump's foreign policy. Levatich says the company has reviewed external research suggesting there hasn't been any "residual tarnishing" of American brands by unpopular US government actions. "Customers around the world can separate the policy of the US government from the purity of the intention of companies and their products and their brand positioning," Levatich says in an interview.
- Citibanamex revised down its outlook for the Mexican peso, citing the "conflictive climate" surrounding talks to change Nafta and next year's presidential elections in Mexico. The bank now expects the peso to end 2017 at 18.60 to the US dollar, compared with its previous 17.90. For 2018, it moved its year-end estimate to 18.10 from 17.60. Global expectations of Fed interest-rate increases could also play a part, Citibanamex adds. The peso is trading around 19 to the US dollar for the first time since May.
- USDA won't move ahead with rules that aimed to help livestock and poultry producers contest how much they're paid by meatpackers, the latest move in a nearly seven-year battle over government regulation of big meat companies' relationship with the farmers who raise their animals. It's a win for meat companies like Tyson Foods and JBS, following meat industry criticism that the rules were unnecessary and onerous, but a setback for farmers who have argued they needed help from the USDA to ensure meat companies are treating them fairly. The USDA, in a notice, says the rules raised "serious legal and policy concerns" and that they may not hold up in court.
- UnitedHealth flags the Trump administration's health-care moves last week. CEO David Wichmann says that UnitedHealth has "a great deal of experience in the areas covered," in the President's executive order, which were short-term health policies, association plans and health reimbursement arrangements. UnitedHealth says it has around 300,000 people currently enrolled in association plans and the "performance is strong." The insurer also says it was seeing an "incredible increase in the growth," of short-term plans before the Obama administration capped their duration at 3 months, and the company would be "excited" to see the Trump administration expand the length again. UnitedHealth also suggests it expects "any impact to be extremely small," related to the Trump administration's move to end the Affordable Care Act cost-sharing reduction payments to insurers.
- UnitedHealth Group gives a projection of the impact of an Affordable Care Act tax on health plans that is slated to return next year after being suspended. If the tax isn't reinstated, the company says its earnings next year will grow in the 13% to 16% range. If the tax does return, the impact on earnings-per-share growth would be roughly 75 cents, the company says, with about two-thirds of that representing a hit to 2018 results and around a third representing the loss of an extra boost it saw in 2017 related to the tax. CFO John Rex says more than half of the impact on 2018 results is tied to Medicare Advantage and the non-deductibility of the tax, and the rest is tied to commercial risk products.
- Copper prices slip 0.95%, as profit-taking and a stronger dollar erodes Monday's gains. The WSJ Dollar Index is up 0.17% to 86.61. A stronger dollar makes metals denominated in the American currency more expensive for holders of other currencies. Profit-taking shaves some of copper's gains, though the slip comes in the wake of recent volatility, Commerzbank says. Copper on Monday reached highs not seen since August 2014 after better-than-expected Chinese inflation data allayed fears of ebbing economic growth in the world's biggest metals market. That was particularly welcome news for traders fearing a growth-rate target cut by the Chinese government when the National Congress of the Communist Party begins Wednesday.
- Airbus sees the deal for Bombardier's CSeries as doing more for the European plane maker than just opening the door to airliner sales. It could also bolster its position as a defense supplier to Canada. The European plane maker now champions Canada as one of its new home markets. It comes as Canada backs away from plans to buy Boeing F/A-18 Super Hornets because the U.S. has threatened to impose tariffs on CSeries sales to Delta Air. Airbus makes the Typhoon combat jet and for years has tried to get Canada to buy the plane.
- German businesses are concerned about economic relations with the U.S. Almost one-fourth (23%) of the roughly 350 engineering officials attending an industry event in Berlin say the U.S. is currently a "poor" economic partner, with President Trump's "America First" mantra hurting the relationship. About 55% of survey participants say they are currently "very cautions," as they are finding it hard to foresee Trump's next steps; 24% rate the partnership "good."
- 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.

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.