Forex & Commo Market News

Apr 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)  

- Oil prices rose, supported by an expectation that the United States will re-impose sanctions against  Iran, a decline in output in Venezuela and ongoing strong demand. 
- Gold prices were little changed after falling to their lowest in five weeks in the previous session,  pressured by a stronger dollar, which held near more than three-month highs, and a rise in U.S. Treasury yields.
- London aluminium slipped again, after snapping a four-day losing streak in the previous session, as  the deadline extension to comply with U.S. sanctions on Rusal, one of the world's biggest aluminium producers, pulled down prices.
- Chicago wheat futures rose for a third consecutive session to hit a seven-week high, with prices  underpinned by short-covering and adverse weather that is curbing U.S. winter crop yields.
- Tim Cook is on President Trump's official agenda today. After attending last night's state dinner, Cook is returning to the White House to meet personally with Trump at 1:45 p.m., according to the White House schedule. The meeting comes amid escalating US-China trade tensions. China is one of Apple's biggest markets and the tensions could disrupt its business there. The meeting is the latest detente in an evolving relationship. Trump has criticized Apple for manufacturing overseas and Cook has criticized the Trump administration over the plan to end DACA. They recently found common ground over US tax reform with Apple announcing a plan to spend $300B in the US.
- James Comey's memoir "A Higher Loyalty," which went on sale April 17th, sold an impressive 360,000 hardcover copies in the US between its publication date and April 22, according to NPD BookScan. The service tracks an estimated 85% of retail book sales but doesn't report e-book or audiobook sales. Macmillan's Flatiron Books on Tuesday said the book sold more than 600,000 copies in its first week on sale in all formats. There are now more than 1 million copies in print.
- You didn't see this one coming. General Dynamics CEO Phebe Novakovic says speculation that proposed Chinese tariffs could impact its Gulfstream business jets is unfounded. Novakovic says on 1Q call that the chatter didn't affect customer discussions at a recent airshow in Asia, and may even have kindled additional interest in the high-end jets. Gulfstreams would have been captured in the proposed tariffs, which don't as yet capture many Boeing planes.
- German Economics Minister Peter Altmaier indicates Europe's largest economy is willing to offer concessions to Washington in the trade dispute with the European Union over steel and aluminum tariffs. "We still don't think that punitive tariffs are right and justified, but we also know that we are responsible for preventing an uncontrolled race to tariffs and trade barriers," says Mr. Altmaier. "I remain convinced that it would be reckless to stumble into a trade conflict. And I therefore believe that an amicable solution should be given precedence over a confrontational one." The U.S. gave the EU an exemption to looming steel tariffs until the end of April. The EU is expected to present next week its proposals in the negotiations with Washington to be granted a permanently exemption.
- EUR/USD is still holding support at 1.2150, as "the market is probably waiting to hear from the ECB tomorrow before making its next move," says ING. But EUR/USD could fall to 1.2050 this week if the European Central Bank "disappoints" on Thursday or U.S. gross domestic product data comes in on the firm side on Friday, it says. The Dutch bank says the euro is expected to rise against the dollar this year, but that "our bullish EUR/USD story requires feeding, either by Trump protectionism or by confirmation the ECB is on the path to ending QE towards the end of the year." EUR/USD is last down 0.2% at 1.2207.
- The dollar "short squeeze could have a little further to run," says ING, as EUR/USD falls 0.1% to 1.2215 and USD/JPY rises 0.3% to 109.12. The Dutch bank says "by moving back to 109, USD/JPY has arguably removed the protectionist risk premium which was built into it from early February." But it's unlikely USD/JPY will go above 109.50/110, ING says. The dollar DXY index is up by 0.2% at 90.9760, and according to ING, "DXY looks biased to 91.70 over the short term, with 90.30/50 now proving support." But then again, everything "could turn to dust in just a few tweets" from President Trump.
- US defense stocks were up around 15% versus a flat broader market before Tuesday's sell-off. Optimism hinged on rising spending after the bump in the Pentagon's 2018 budget and 2019 request. Many sell-side analysts seized on this as sustainable, even in the face of broader federal budget pressures emerging in the early 2020s. Now deputy defense secretary Pat Shanahan--a former Boeing executive--weighs in, reportedly telling media earlier Tuesday: "The picture is not 3%-5% growth year over year, it's flat lined." That spooked investors, with Lockheed's post-1Q slide of more than 6% along with falls of more than 4% at Northrop Grumman and Raytheon ahead of their own reports this week.
- Jeffrey Gerrish, a deputy US trade representative, will oversee day-to-day operations of the Export-Import Bank on an acting basis, the White House announced Tuesday. The move to tap Gerrish as the export-finance agency's acting director ensures someone is in charge of the bank, which has operated  without any board members for over a month. Still, the Trump administration has yet to nominate anyone to head the bank on a permanent basis since the Senate blocked former House Republican Scott Garrett for the post late last year. And a handful of additional bank nominees are still pending in the chamber. Gerrish was confirmed by the Senate in March as a deputy to US trade representative Robert Lighthizer, with a focus on Europe, Africa and other areas of trade.
- When Arizona Sen. Jeff Flake initially voted to block confirmation of the White House's choice for NASA administrator, GOP Senate leaders pulled out all the stops to get him to switch that vote. Texas Sen. John Cornyn, the majority whip, threatened to embarrass the Arizona lawmaker in novel fashion, according to one person briefed on the strategy. If Vice President Mike Pence had to jet back to the capital to counteract the no vote, this person said, the Trump administration was prepared to leak the cost of the last-minute military transport to the media. Sen. Flake ended up voting yes, and his press spokeswoman says the lawmaker was "never made aware of those intentions."
- Senate Finance Committee Chairman Orrin Hatch (R., Utah) asked the Internal Revenue Service to use its congressionally-granted power to make tax-exempt federal credit unions file Form 990s that would give the public more information about their operations. The move would provide "greater transparency," including details about compensation of credit union executives, he suggests in an April 24 letter. Expect bankers to cheer the change. Your move, credit unions.
- Wells Fargo CEO Timothy Sloan debates with a shareholder representing the American Federation of Teachers asking about the bank's relationship with the NRA and the firearms industry. The AFT recently ended its relationship with Wells Fargo's home loan program for teachers. The shareholder, Jordan Ash of St Paul Federation of Teachers, said Wells should terminate its relationship with the NRA. He also asked the bank to disclose how much money it makes from the NRA and assault rifle manufacturing industry. Sloan says Well's policy on firearms is an "issue best decided by the American people." He added: "We don't think it's a good idea for banks to decide what products and services Americans can buy. It should be up to me, to us, to decide that."
- Despite President Trump's tweet at the end of last week criticizing OPEC's efforts to hold back production and blaming the cartel for "artificially high" oil prices, he is unlikely to do much to try to lower prices, argues Thomas Pugh, commodities economist at Capital Economics. "Instead, Trump is more likely to push prices higher if he re-imposes sanctions on Iran," Mr. Pugh writes in a note. Growing speculation that Mr. Trump will pull the U.S. out of the Iran nuclear deal, triggering a reimposition of economic sanctions that would weigh on the country's oil output, pushed Brent crude prices above $75 Tuesday. "We doubt Trump will take any action to reduce oil prices...we expect prices to eventually fall back from current levels as higher oil prices encourage significant additional non-OPEC production, especially in the U.S.."

Apr 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable, but were below the more than three-year highs reached the previous session as rising U.S. fuel inventories and production weighed on an otherwise bullish market. 
- Gold prices fell as the dollar advanced towards more than three-month highs and on easing concerns over North Korea and a Sino-U.S. trade war, but found some support from sliding stock markets.
- London aluminium dropped as much as 1.4 percent, retreating for a fifth straight session, as the softening of the U.S. sanctions Rusal continued to weigh on prices.
- Chicago wheat futures rose for a second session as investors looked for bargains, although plentiful world supplies capped gains.
- When Arizona Sen. Jeff Flake initially voted to block confirmation of the White House's choice for NASA administrator, GOP Senate leaders pulled out all the stops to get him to switch that vote. Texas Sen. John Cornyn, the majority whip, threatened to embarrass the Arizona lawmaker in novel fashion, according to one person briefed on the strategy. If Vice President Mike Pence had to jet back to the capital to counteract the no vote, this person said, the Trump administration was prepared to leak the cost of the last-minute military transport to the media. Sen. Flake ended up voting yes, and his press spokeswoman says the lawmaker was "never made aware of those intentions."
- Senate Finance Committee Chairman Orrin Hatch (R., Utah) asked the Internal Revenue Service to use its congressionally-granted power to make tax-exempt federal credit unions file Form 990s that would give the public more information about their operations. The move would provide "greater transparency," including details about compensation of credit union executives, he suggests in an April 24 letter. Expect bankers to cheer the change. Your move, credit unions.
- Wells Fargo CEO Timothy Sloan debates with a shareholder representing the American Federation of Teachers asking about the bank's relationship with the NRA and the firearms industry. The AFT recently ended its relationship with Wells Fargo's home loan program for teachers. The shareholder, Jordan Ash of St Paul Federation of Teachers, said Wells should terminate its relationship with the NRA. He also asked the bank to disclose how much money it makes from the NRA and assault rifle manufacturing industry. Sloan says Well's policy on firearms is an "issue best decided by the American people." He added: "We don't think it's a good idea for banks to decide what products and services Americans can buy. It should be up to me, to us, to decide that."
- Despite President Trump's tweet at the end of last week criticizing OPEC's efforts to hold back production and blaming the cartel for "artificially high" oil prices, he is unlikely to do much to try to lower prices, argues Thomas Pugh, commodities economist at Capital Economics. "Instead, Trump is more likely to push prices higher if he re-imposes sanctions on Iran," Mr. Pugh writes in a note. Growing speculation that Mr. Trump will pull the U.S. out of the Iran nuclear deal, triggering a reimposition of economic sanctions that would weigh on the country's oil output, pushed Brent crude prices above $75 Tuesday. "We doubt Trump will take any action to reduce oil prices...we expect prices to eventually fall back from current levels as higher oil prices encourage significant additional non-OPEC production, especially in the U.S.."
- The House should pass a bipartisan bank-deregulatory bill that last month cleared the Senate, Sen Mark Warner (D, Va) said, warning the bill won't become law if House lawmakers tinker with it. Warner, who co-sponsored the legislation in question, said the measure "will not pass" if the House makes changes that necessitate another vote on the measure in the Senate. "We've streched this about as far as we can go," Warner said, speaking at a conference hosted by the American Bankers Association. "The House of Representatives needs to accept this legislation."
- Things like peers in the House of Lords voting to keep the EU charter of fundamental rights in force after Brexit, or to keep the U.K. in the customs union, as part of the EU withdrawal bill, may be good for the pound, but a "softening of Brexit plans could destabilize the U.K. government by alienating the Brexiteers, and thereby potentially increasing the risk of a Jeremy Corbyn-led coalition government," says MUFG. This "would be the worst outcome for the pound." The adoption of less business friendly policies under a Corbyn-led coalition government would encourage a weaker pound, even if the U.K. was much more likely to remain in the customs union," MUFG says.
- The Reserve Bank of Australia isn't likely to "consider a rate hike any time soon whatsoever," especially after the 1Q inflation dropped to 0.4% from 0.6% quarter-on-quarter, Commerzbank says. Year-on-year inflation stayed put at 1.9%, however, though still below the central bank's target of between 2% and 3%. Moreover, "a possible trade conflict between China and the U.S. constitutes a considerable risk factor for Australia in particular" because China is Australia's main trading partner and "over the past few years growth was driven...mainly by foreign trade," says Commerzbank. AUD/USD is flat at 0.7603, having dropped to a four-month low of 0.7578 earlier on the back of the lower inflation data.
- Sterling has lost ground in the past few days due to weak U.K. economic data and a broad-based stronger dollar, and it may fall even further, according to ING. "GBP has come lower with most currencies against the stronger dollar and we think looks a little vulnerable into a potential House of Commons vote on Thursday," the Dutch bank says, adding that there are risks of a GBP/USD fall to 1.3920 and 1.3890. The House of Lords voted on the EU withdrawal bill and this week may be the House of Commons' turn to vote. GBP/USD is slightly higher at 1.3950 on Tuesday. EUR/GBP is flat.

Apr 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady as a rising U.S. rig count pointed to further increases in American output, marking one of the few factors tamping back crude in an otherwise bullish environment.
- Gold prices slipped to their lowest level in nearly two weeks as the dollar rose on the back of climbing U.S. Treasury yields and as global political concerns eased.
- London aluminium prices rose by as much as 1.6 percent as a rally driven by supply concerns after the United States slapped sanctions on Russian producer United Company Rusal regained momentum. 
- Chicago wheat rose, with prices underpinned by patchy rains bringing only limited relief to the drought-hit U.S. winter crop
- Mexico's President Enrique Peña Nieto said on Sunday that he is confident that Mexico,
the U.S. and Canada will succeed with their efforts to overhaul Nafta. Speaking at an industrial trade fair in Hannover, Germany, he said that "we fully trust and we have optimism as well that we are going to conclude the re-negotiation and the modernization of the North American Free Trade Agreement [...], ensuring benefits for all its partners." Mr. Nieto didn't comment on the timing nor the details of a possible outcome. U.S. officials have indicated that if a Nafta deal is not reached within the next few weeks, an agreement probably won't come until toward the end of the year due to upcoming elections in Mexico and the U.S.

Apr 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose to their highest since the end of 2014 as U.S. crude inventories declined and as top exporter Saudi Arabia pushes for higher prices by continuing to withhold supplies.
- Gold prices rose for a fourth straight session helped by a rally in base metals that has fuelled concerns of inflationary pressures, with lingering U.S.-China trade tensions lending further support to the yellow metal. 
- Aluminium prices surged as much as 5 percent to their highest level in almost seven years amid enduring concerns over strained global supply following U.S. sanctions on major Russian producer Rusal, with similar worries also spurring nickel.
- Chicago wheat futures rose for a third consecutive session and hit their highest since April 10, with the market underpinned by lower-than-expected rains across the drought-hit U.S. southern Plains. 
- The dollar was steady against a basket of its peers, supported by higher long-term U.S. Treasury yields on improving investor appetite for risk assets, though lingering concerns over U.S.-China trade tensions checked the greenback.
- Lawmakers dialed up pressure for further action to battle unwanted robocalls. Robocalls are one of the biggest sources of consumer complaints, yet existing government rules have proved inadequate to stop the barrage. Unwanted robocalls have run at a rate of hundreds of millions per month, with many coming from overseas. Commerce Committee Chairman John Thune said at a hearing that the unwanted calls "have got to stop." A group of Democratic senators, meanwhile, introduced legislation to implement narrow changes in existing law, and called on the FCC to tighten its own rules in the wake of a federal appeals court decision that threw out some existing ones. FCC Chairman Ajit Pai already has made a big priority of stepping up enforcement actions.
- Businesses cited building-material costs as a key driver behind their expectation for further price increases in the months ahead, the Beige Book report said. In the Boston District, businesses said that industrial and office construction have been restrained by the relatively high building costs in comparison with rent costs. An Arkansas firm reported an increase in construction costs, while strong construction activity drove further price growth for building materials like lumber and sheetrock in the San Francisco District.
- Though prices across the 12 Fed Districts rose only moderately in March and early April, businesses across industries reported that steel prices rose briskly due to the new tariffs, according to the Beige Book report. In the Cleveland District, for instance, firms noted that recently imposed tariffs accelerated price appreciation of steel products, sometimes at double-digit rates. One steel manufacturer in the District said that customers are attempting to stock up as prices rise. In the Chicago District, manufacturers anticipated passing about half of the increased steel and aluminum costs onto customers.
- While businesses across 12 Fed Districts expressed a generally positive economic outlook in Wednesday's Beige Book report, a wide range of companies expressed concern about the newly imposed and/or proposed tariffs. In the Boston District, for instance, one toy manufacturer that sources 75% of its production from China said the tariffs present a major risk. Another in the Boston District said that tariffs on Chinese aluminum had already had a big effect: "these tariffs are now killing high-paying American manufacturing jobs and businesses."
- SolarWorld Americas, one of the solar manufacturers whose petition for trade protection led the Trump administration to levy tariffs on imported solar panels and cells, is being bought for an undisclosed amount by rival SunPower. "The time is right for SunPower to invest in US manufacturing," SPWR CEO Tom Werner said, calling SolarWorld Americas among the "most respected manufacturers." The praise is somewhat at odds with past statements put out by the Solar Energy Industries Association, whose board is chaired by Tom Starrs, vice president of market strategy and policy at SunPower. In opposing the tariffs, SEIA characterized SolarWorld and its co-petitioner Suniva as mismanaged, foreign-owned companies.
- Bank of Canada governor Stephen Poloz declines to weigh in on the heightened political battle underway to save Kinder Morgan's expansion of the Trans Mountain pipeline. Pipeline operator has threatened to scrap project unless there's certainty construction can proceed amid fierce British Columbia opposition, and has given lawmakers until May 31 to find solution. Poloz said "it is a very fraught situation, but it's not our job to comment on that per se." He said BoC's outlook indicates investment in the energy sector is lower than it otherwise would be due to transportation bottlenecks. Those bottlenecks are causing western Canadian crude to trade at a discount versus other benchmarks. "If that situation changes, we would go through and change our assumptions in our models," he added.
- Bank of Canada governor Stephen Poloz reveals a significant change is in the works on how Canada's main data-gathering agency will report on trade. Poloz says Statistics Canada, some time later this year, is expected be begin issuing monthly figures on trade of services. At present, Statistics Canada issues monthly data on the trade of goods, and services trade comes out separately on a quarterly basis.  Officials from Statistics Canada were not immediately available for comment. Canada's official merchandise trade data suggests Canada is running a trade surplus with the US. But Canadian officials have pointed out when trade in services is incorporated, the US runs a slight trade surplus with Canada.
- A partisan battle over the Farm Bill in the House Agriculture Committee is starting to sound a lot like war. During a meeting to consider the five-year bill unveiled in the House last week, committee Democrats lambasted a legislative process they say has upended a long tradition of bipartisanship on the committee and text that is deeply flawed. Top Democrat Collin Peterson (D, Minn.) kicked off opposition to the bill, calling proposals to expand work requirements for food-stamp recipients an "ideological crusade," and expressing concern for the coalition of rural and urban lawmakers tasked with providing a safety net for farmers and needy Americans. "This bill ruins that coalition," Peterson said, lamenting that "we're turning friends into enemies."
- The dollar could rise versus the Japanese yen and trade between 108 and 110, according to Morgan Stanley, which notes that some risk appetite has returned to the markets amid receding geopolitical tensions. There is a small tightening in the LIBOR-OIS spread, which shows emerging signs that funding pressures are easing in the U.S., which also points to a stronger risk appetite, says Morgan Stanley. USD/JPY is up by 0.3% at 107.26 on Wednesday.
- The Canadian dollar falls after the Bank of Canada kept its main interest rate on hold at 1.25% and didn't give any clues about whether it would raise the rate in coming months. Investors were largely expecting rates to remain unchanged on Wednesday, but many had expected the central bank to suggest that rates could rise in May or June. It didn't do this and USD/CAD rose, breaking above the 200-day moving average--currently at 1.2623, according to Factset--and rising to an eight-day high of 1.2632. The BOC did say that "higher interest rates will be warranted over time," however.
- Investors haven't priced in an interest rate increase by the Bank of Canada, but they did price in a hawkish central bank, and so if the BOC fails to deliver on expectations, USD/CAD could rise further toward the 1.28 resistance level, according to Saxo Bank. USD/CAD is up by 0.3% at 1.2585. The Canadian dollar is supported by higher oil prices and the fading concerns that Canada may pull out if NAFTA.
- Most people in the market don't expect the Bank of Canada to raise the interest rate on Wednesday, but the Canadian dollar could still gain from the meeting. That is likely to happen if "Governor Poloz signals sufficient confidence over the economic outlook--as well as hopes for a Nafta deal-- such that investors raise their odds of a May BOC rate hike," ING says. It says people are pricing in a 50% chance of it. But even if this doesn't happen, the Canadian dollar will nonetheless firm up slightly, given higher oil prices and lower risk aversion, ING says, eyeing USD/CAD at 1.2400 to 1.2450.

Apr 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, lifted by a reported fall in U.S. crude inventories and by the ongoing risk of supply disruptions. 
- Gold prices slipped after rising for three straight sessions as the dollar held its gains on the back of upbeat U.S. economic data and equities edged up, whetting investor risk appetite.
- London aluminium futures rose to their strongest level since 2011 as growing worries over tighter supply following U.S. sanctions on key producer Rusal sustained a rally that has lifted the metal by 20 percent this month.
- Chicago wheat futures rose for a second session, as investors bought the commodity after prices dropped to a 10-day low earlier this week.
- Farm-state senators want a national security review for the latest purchase of a US agriculture company by a foreign-based entity. Brazil's Marfrig Global Foods this month agreed to buy a majority stake in National Beef, the fourth-largest cattle processor in the US, raising eyebrows among US lawmakers who noted last year's corruption probe into Brazil's meat safety system -- which they say included some shipments from Marfrig. Senators including Chuck Grassley (R., Iowa) and Sherrod Brown (D., Ohio) want the Committee on Foreign Investment in the US to probe the National Beef deal, which follows China National Chemical Corp.'s purchase last year of pesticide maker Syngenta, and the 2013 purchase of Smithfield Foods by China's WH Group.
- Commerce Secretary Wilbur Ross, considered by many as the Trump administration's space policy czar, is working hard to gain industry credibility by identifying more and more specific issues he aims to tackle. "It doesn't seem to be very logical," he says, that "it takes longer to get a license to launch," an earth-imaging satellite than "it took to design and build the spacecraft," itself.  Ross boasts that since taking office, his department has cut the average licensing time for satellites in half, including cutting-edge radar and in-orbit servicing models. Looking ahead more broadly, Commerce intends to improve coordination with the Pentagon, as well as the State and Interior Departments, to become the "one-stop shop" for commercial space ventures seeking federal licenses or assistance.
- Fed Vice Chair for Supervision Randal Quarles was asked at a House hearing about how he would handle pending legislation loosening how the "leverage ratio" rule is calculated for State Street, Bank of New York Mellon and Northern Trust. He said the Fed "would then have to consider how to calibrate" its rules if the legislation passes as expected, to account for how trust banks' ratios would be calculated differently. That adjustment could affect any benefit banks receive from the bill.
- Democratic FCC Commissioner Mignon Clyburn, a member of the panel for almost nine years, said today's monthly meeting would be her last. Clyburn legally could have served until the end of the current Congress without a successor being confirmed, but her early departure had long been expected. Speculation on her successor has focused so far on Geoffrey Starks, a top official in the agency's enforcement bureau. Fellow FCC members praised her tenure, which included a stint as acting chairwoman. Clyburn, daughter of Rep Jim Clyburn (D, SC), was known for her willingness to engage all sides in pursuit of a policy goal. She pushed hard to promote and protect telecommunications services for disadvantaged people.
- Oil investors should start paying closer attention to next month's presidential elections in OPEC-member Venezuela, where expected voter participation is rising and leading candidate Henri Falcon wants to boost oil production and make the USD Venezuela's official currency. While many opposition leaders are still calling for an election boycott, a new Datincorp poll shows the number of Venezuelans that "definitely won't vote" has fallen to 11% in April from 26% in February, while those "determined" to vote is now 62% vs 51% in February. Oil bulls have become somewhat dependent on a continuation of oil problems in Venezuela, which produced a multi-decade low 1.5M bpd last month, helping to keeping OPEC's overall production numbers in check.
- Ford, a relative latecomer to China, says it is encouraged by the government's efforts to walk back some of the rules requiring auto makers to set up 50-50 joint ventures with Chinese partners. In a statement, Ford described the move as "a clear demonstration of the Chinese government's commitment to further open the automotive industry." Ford, which has two joint-venture partners in China, has been struggling to reverse a sales and profit slide in the world's largest auto market. The company is also in the midst of setting up a third joint venture with Chinese electric-car maker Zotye, a deal that it forged in part to comply with the country's manufacturing rules and avoid a 25% tariff by producing battery-powered cars locally. Ford declined to comment how the recent easement would affect that partnership.
- London shares gain after geo-political tensions eased and Wall Street reacted positively to earnings reports. The FTSE 100 Index climbs 0.5%, or 35.11 points, to 7233.41, while the Dow Jones Industrial Average rises 264 points. "A lack of news, be it about a U.S.-China trade war, or military action in Syria, or an escalation of aggression between the U.S. and Russia, has helped the Dow get its swagger back, the index further boosted by a so-far strong season of earnings," says Connor Campbell at Spreadex. Associated British Foods PLC advances 4% after it said 2H profit at Primark is likely to rise.
- JPMorgan went short on the Russian ruble before the sanctions, took a profit from it, and is now neutral on the currency, mainly when traded against the euro, according to Michael Bell, global market strategist at JPMorgan. Mr. Bell says the bank may actually consider going long on the ruble if it falls further. Moreover, Mr. Bell adds that JPMorgan has a relatively good view on Russian equities. "We certainly wouldn't short them," he says. Russian stocks are trading at an even bigger discount after the U.S. imposed sanctions on some Russian companies and the oligarchs associated with them. USD/RUB is last up 0.6% at 61.51.
- Sterling rose on Tuesday to its highest level against the dollar since June 24, 2016, the day after the Brexit referendum and reached an 11-month high against the euro. Looking at where the pound is relative to the euro, "there is still quite a large Brexit risk premium" priced in sterling, says Michael Bell, global market strategist at JPMorgan. Therefore, assuming trade talks between the U.K. and the EU go well, the pound could rise this year, Mr. Bell says, adding a fair assumptions would that GBP/USD could go up to 1.45. GBP/USD last trades down 0.2% at 1.4311, having reached a 22-month high of 1.4377. EUR/GBP last at 0.8624, having fallen to 0.8621.
- China has decided to phase out rules for foreign auto makers that require them to share factory ownership and profits with domestic companies by 2022, a move that is welcomed by Germany's auto industry at a time when the U.S. is increasing trade barriers. "China's announcement is an important step towards more open markets and a clear sign of free competition," says German auto industry group VDA. China is not only an export market for German manufacturers and suppliers, but also an important production location, VDA says, noting that improved investment conditions would strengthen the countries' cooperation and enable China to better achieve its economic goals.
- President Donald Trump's tweet Monday accusing Russia and China of "playing the currency devaluation game" was intended as a "warning shot," Treasury Secretary Steven Mnuchin says on CNBC. Trump's tweet came just days after a Treasury report declined to designate China as a currency manipulator. Mnuchin acknowledged that China was not currently devaluating its currency but said it had in the past. Russia's currency has fallen in recent weeks in part as a result of US sanctions.
- Several small makers of fiber-optic networking gear were punished by investors after the US said it would ban them from selling to China's ZTE. Acacia Communications tumbled 36% on Monday while Oclaro fell 15%. Both count ZTE among their biggest customers. Acacia got a 30% of its $385M in 2017 revenue from ZTE, while Oclaro got 18% of its $600M from the Chinese company in its last fiscal year, according to their annual reports.

Apr 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose amid worries there could be a high risk of disruptions to supply, especially in the Middle East.
- Gold prices were steady as the U.S. dollar remained on the back foot, with the metal supported by festering worries over U.S.-China trade tensions.
- Shanghai aluminum futures hit their strongest in almost three months amid supply worries after Rio Tinto declared force majeure on some customer contracts after the United States imposed sanctions on the firm's Russian partner Rusal.
- Chicago wheat futures edged higher, recouping some of the losses suffered in the last four sessions although the gains were limited after the U.S. Department of Agriculture said the condition of the winter crop was improving.
- Peruvian President Martin Vizcarra is starting his administration with a 57% approval rating, according to pollster Ipsos. Vizcarra took over last month after Pedro Pablo Kuczynski stepped down, a resignation supported by 73% of Peruvians, Ipsos says. Maintaining strong approval, in a country where low presidential support is common, will be important for Vizcarra, who lacks his own political base. At the same time, there is little appetite among Peruvians for the opposition-controlled Congress to continue a highly confrontational stance with the executive, according to Ipsos. "The majority of people don't want to see a weak president, but one who makes decisions," Ipsos Peru director Alfredo Torres says.
- Kroger says it will use a cash infusion from the federal tax cut to fund up to $3,500 in education a year for workers and increase retirement plan matches to 5% of pay from 4% today. The US's largest supermarket chain also says it will expand bereavement grants and in-store discounts for its 450,000 workers. "We intend to make significant investments in our associates," CEO Rodney McMullen says. Kroger is hiring 11,000 new employees to compete in the cut-throat food retail industry, and is competing for workers with other retailers given the tight labor market.
- Europe shares drop as traders eye rising currencies as Syria tensions eased. The Stoxx Europe 600 closes 0.4%, or 1.46 points adrift at 377.74, while Germany's DAX is down 0.4% and France's CAC-40 falls 0.04%. The euro gains 0.29% against the dollar to $1.2369. "The limited and targeted strikes in Syria that provoked no serious response from Russia relieved markets that were pricing in escalation," says London Capital Group's Jasper Lawler. "Stocks fell across Europe but that may have been more to do with a resurgent euro than concern about Syria." Polymetal International PLC falls 9.3% after an asset-swap deal with the Russian Copper Company. Whitbread shares gain 7.5% on break-up talk after stake-building by activist investors.
- Given that global trade tensions have moderated, risk appetite is likely to come back, which means the South African rand could rise, says Morgan Stanley, advising to sell USD/ZAR for a target of 11.60 and a stop at 12.35. Morgan Stanley buys USD/ZAR at market price. "After retracing some of its gains over recent weeks, we think the risk reward of a short USD/ZAR position looks more attractive at current levels," the bank says. "Moreover, we continue to hold our overall bullish view on South Africa and think that inflows into EM local markets will help to drive ZAR stronger," it adds. USD/ZAR is flat at 12.0808.
- The Canadian dollar maintains its strength on Monday, with USD/CAD trading down 0.3% at 1.2575, but if the Bank of Canada doesn't suggest further rate increases on Wednesday, or there isn't a breakthrough in NAFTA negotiations, USD/CAD is likely to rise to 1.28, says Societe Generale. The rise in USD/CAD would also re-align it with the two-year and the ten-year U.S.-Canadian interest rate differentials, SocGen says.
- Bank of America said it released $77M in loan-loss reserves in the first quarter, driven by continued improvement in its consumer real estate and energy-loan exposure. That means the big four national banks released a total of $899M in the first quarter, the bulk of it from Wells Fargo, which said it was releasing reserves because of a much-improved outlook on hurricane losses for which it had added to reserves last year. The $899M was up from a $115M total reserve release in 4Q, when BofA and Wells released some of their reserves but Citigroup and JPMorgan added to theirs.
- Like other big banks, Bank of America not only is paying much less in taxes in this year's first quarter because of the new tax law's sharp reduction in the corporate tax rate, but it's paying at a rate that's below even its own previous projections. BofA's effective tax rate was 17.6% in the first quarter, down from 27.1% in last year's first quarter and even lower than the 20% rate the bank had said in January it was projecting for 2018. The other three big national banks -- JPMorgan, Citigroup and Wells Fargo -- all similarly reported first-quarter effective tax rates on Friday that were below their previous 2018 estimates
- If U.S. core retail sales come in below market expectations on Monday--which would mark a third straight monthly miss--, the dollar could fall further. That would be "hardly a sign of healthy consumer buoyed by low unemployment rates and lower tax burdens," says BK Asset Management. "If consumption suddenly stalls, the market will have to rethink its hawkish assumptions" about the prospects for further U.S. interest rate rises, BK says. EUR/USD rises 0.3% to 1.2366, though still below 1.24. USD/JPY falls 0.1% to 107.24, though still above 107. The consensus in a WSJ poll is for retail sales excluding autos to rise 0.2% on the month in March, while overall sales rise 0.3%. Data is due at 1230 GMT.
- Aluminum prices push 2.9% higher to $2,340 a metric ton as the tumultuous effects of U.S. sanctions on Russian entities keep roiling the market. On Friday, 107,000 tons of likely non-Russian aluminum were withdrawn from warehouses at Malaysian Port Klang, ING says. That came a day after port warehouses in the Netherlands announced a huge 102,000-ton delivery of metal. Those moves are indicative of traders' attempts to close out any Russian metals deals before the London Metal Exchange ban on Rusal-branded metal takes effect this Tuesday. Those traders are scrambling to pre-empt the inevitable supply gap to be left by soon-to-be untradable Rusal metal.
- Here's a look at how much the new tax bill helped Bank of America: the bank paid $1.476B in income taxes, compared to $1.983B in the year-ago quarter. The bank's income before income taxes -- a good way to look at the bank's performance without the benefit of the tax bill -- also increased about 15% to $8.394B from $7.320B a year earlier.
Shares rise 0.7% premarket.
- The U.S. could impose further sanctions on Russia due to its involvement in Syria, but MUFG says this won't necessarily mean a further sharp drop in the ruble. "If the sanctions are mainly directed at individuals and entities that are directly related to supporting [President Bashar al-] Assad, then the broader negative impact on Russia's economy and the rouble is likely to be limited." The Russian ruble has stabilized after days of being sold off on the back of fresh U.S. sanctions directed at Russian oligarchs and their companies, with USD/RUB last trading down 0.75% at 61.8786. The ruble should "rebound further ... as geopolitical tensions continue to ease," MUFG says.
- The dollar could consolidate "in this uncertain world," while "global markets lack any clear direction" due to risks of a trade war and geopolitical uncertainties still looming. However, "structural downside factors still outweigh and point to a further 5%-10% multi-year decline" in the dollar, the Dutch bank says. The U.S. is pushing its twin deficits up while also increasing interest rates. A 'buy-the-dip' mentality in risky assets "will endure if sell-offs are not a result of a broader shift in economic fundamentals," ING says. The dollar trades slightly weaker Monday, with EUR/USD up 0.2% at 1.2359 and USD/JPY down 0.1% at 107.20.

Apr 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as markets opened the week cautiously following western air strikes in Syria over the weekend, and as American drilling for new production continued to rise.
- Gold prices rose on safe-haven buying following the U.S.-led missile strikes against Syria at the weekend, but the gains were limited by the likelihood that the operation may be a one-off event.
- Shanghai aluminium prices hit a two-month high after Rio Tinto said it would declare force majeure on certain customer contracts in light of U.S. sanctions on its partner, Russian aluminium giant Rusal.
- Chicago wheat futures slid 1 percent to a 10-day low as forecasts of rains across key U.S. winter crop areas eased fears about yield losses following a severe drought.
- The dollar dipped as markets weighed the impact of strikes on Syria by the United States and its allies at the weekend, although losses were limited as the military action did not result in broad risk aversion.
- With Trump indicating that the U.S. is ready to continue acting against Syria should Assad continue to use chemical weapons, market remain on watch for any escalation of geopolitical tensions, ANZ says. Trump has also called out Iran and Russia for their support of Assad, stating "the nations of the world can be judged by the friends they keep." Treasury Secretary Steven Mnuchin is expected to announce fresh sanctions on Russia, which are said to be targeted at companies "dealing with equipment related to Assad and chemical weapons use."
- A federal appeals court strikes down Maryland's new law barring generic-drug companies from price gouging, finding that it violates the Constitution's commerce clause, which reserves for Congress the power to regulate interstate commerce. Judges wrote the Maryland law "would impose a significant burden on interstate commerce involving prescription drugs." They reversed a lower-court ruling upholding the Maryland law in a lawsuit filed last year by the Association for Accessible Medicines, a trade group for generic drugmakers including Teva and Mylan. Maryland enacted the law last May, in a victory for supporters of many bills in state legislatures targeting the high cost of medicine. Maryland attorney general's office, which defended the law, couldn't immediately be reached for comment.
- The EU's antitrust watchdog's case to settle competition concerns with Russian state-owned energy company Gazprom is "moving forward" and both sides are in a "constructive discussion," EU antitrust chief Margrethe Vestager says. She says the EU is taking into consideration recently announced US sanctions against Russian individuals, including Gazprom chairman Alexei Miller, but that they would try to keep what happens geopolitically "strictly apart from the case specifics" since the details of the case are what would eventually be scrutinized in court. Vestager says she cannot be more specific on the timing of any final decision in the case.
- Singapore, one of the 11 countries to have signed the Trans-Pacific Partnership pact sans the US, is backing Washington's renewed interest in the trade deal. That, even as economists flag concerns and uncertainties related to the US interest, a little over a year after it withdrew from the agreement. "TPP was designed to be an inclusive agreement which is open to like-minded countries willing and able to meet its high standards," a spokeswoman for the Ministry of Trade and Industry says. "Singapore welcomes the US' interest to rejoin the other TPP parties and achieve the original vision of the agreement."
- In an apparent reference to President Trump's social media habits, Citigroup CEO Michael Corbat said in response to a question about global growth driving the bank's business: "The volatility we see from morning tweets, or stances that vary from time to time, I won't say the world is numb or numbing to that, but the positive things happening are overwhelming that." He added: "When you think about Latin America and Asia, we talk about this global synchronized growth. You feel it from the consumer perspective and from the corporate perspective."
- Not everyone seems to welcome the potential return of the US to the Trans-Pacific Partnership. Malaysia, despite being identified as one of the major beneficiaries of the trade bloc with US included, doesn't sound that enthusiastic on the hint by President Trump for the US to return to the trade pact. Malaysia Trade Minister Mustapa Mohamed tells WSJ that renegotiating the Trans-Pacific Partnership agreement to make significant changes may be difficult. "We have achieved a balanced deal for all parties involved," he says. "Renegotiation will not only take a long time but also alter the balance of benefits for parties."
- JPMorgan, Wells Fargo and Citigroup are all starting to reap the benefits of the new tax law. All three banks had expected their effective tax rates to decline dramatically, thus boosting earnings, because of the lower corporate tax rate -- and all three posted 1Q tax rates that were below even those projections. JPMorgan had an effective 1Q tax rate of 18.3%, below the projection of 19% it announced in January (though the bank says it now expects its 2018 rate to be "closer to 20%"). Wells had a 1Q effective rate of 18.8%, compared to a projection of 19% for the full year. Citigroup's 1Q effective tax rate was 23.7%, lower than the 25% the bank said it expected for this year. (Citigroup's rate tends to be higher than those of other big banks because of the distribution of its business overseas.)
- After nearly two decades of debate over the potential for preliminary arms-control talks focused on space systems, the top staffer on the White House Space Council has made it clear that such negotiations are highly unlikely, at least for the foreseeable future. Scott Pace, a longtime Republican aide, former senior NASA policymaker and Commerce Department official, has emphasized that aggressive anti-satellite weapons development over the years by China and Russia make such agreements moot. "I frankly don't see a prospect for arms control," he said. Stressing that US satellites must become more resilient and capable of withstanding attacks. "We have to recognize that dialogue alone is not going to be enough."
- There is more or less a month until Americans have to divest their exposure to some Russian companies given the new wave of sanctions imposed on Russia. To take advantage of that by positioning for moderate Russian ruble weakness, UniCredit recommends going long USD/RUB, while selling a one-month USD/RUB strike call at 63.50. "The best case is that USD/RUB ends up close to the 63.50 strike in a month's time, allowing us to pocket 3.25% return from the spot recommendation as well as 1.08% from the option premium," the bank says. UniCredit went long USD/RUB at 61.50. USD/RUB is down 0.04% at 61.9375.
- President Donald Trump will appoint John Ring to become chairman of the National Labor Relations Board, replacing Marvin Kaplan, who the president put in that position in December. Ring won Senate confirmation to join the board this week. Kaplan is expected to remain a member of the panel that oversees employer-union disputes. In swapping roles, the White House is putting an attorney with a long record of representing business in charge of the board's direction. Kaplan, also a Republican who Trump nominated for the board last year. His most notable act in his short time as chairman was siding with Democrats in overturning a high-profile ruling concerning joint-employment, after it was determined the fellow Republican board member William Emanuel should have recused himself from the case.
- The fair value of the Russian ruble is "inexpensive" after it fell to years-low versus the dollar on Russian sanctions, says Goldman Sachs. But the bank also says "we would need to see much more significant moves in Russian assets to find similar premia as witnessed in the 2014 sell-off," when Russian annexed Crimea. "Given the heavy positioning and near-term uncertainty, we would not recommend a tactical trade here," Goldman Sachs analysts say. The ruble has come off its lows in the past two days, but USD/RUB last trades up 0.4% at 62.2387.
- The Republican tax bill is helping PNC too. The bank said it expects to pay an effective tax rate of 17% this year. In the past three quarters of last year, it averaged 25%. (In the fourth quarter the bank essentially got a big tax refund, because the cost of its expected future taxes went down.) Overall, the tax law slashed the corporate tax rate to 21% from 35%.
- German companies' outlook for activities abroad improved significantly, but businesses are increasingly concerned about trade hurdles, a survey shows. The DIHK chambers of commerce's survey of 2,100 companies, "Going International 2018," indicates that 40% encountered more trade barriers over the past year, such as additional certification processes and tariffs. "There is a risk of things getting out of control," DIHK President Eric Schweitzer says. Still, a quarter of the companies polled are upbeat about their outlook, while 10% see deterioration ahead. The DIHK says the U.S. calling for closed borders and being against free trade is almost a turning point in history. This will, in the end, create losers on all sides, Mr. Schweitzer says.

Apr 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged lower after U.S. President Donald Trump tempered remarks warning of an imminent missile attack on Syria, but were still set for their biggest weekly gains in more than 8 months.
- Gold rose and was set to post a small gain for a second week running, supported by tensions over Syria.
- London aluminium slipped but was on track for its biggest weekly gain on record after the United States imposed sanctions on Russia's UC Rusal, the world's second biggest producer of the metal.
- U.S. wheat futures fell nearly 1 percent as ample global supplies weighed on prices, although the grain remains underpinned by fears of crop losses across the United States and was poised to finish the week in positive territory.
- The dollar neared a 1-1/2-month high against the yen, as an improvement in investor risk appetite buoyed equities and pushed U.S. yields significantly higher.
- EUR/USD trades flat at 1.2333 as "lingering fears of possible direct U.S. involvement in Syria continue to favor quite subdued activity across currency majors and prevent investors from riding more sustained trends," according to UniCredit. The inability of EUR/USD to drop much below 1.23 "may suggest that investors are not too willing to sell the euro aggressively" because "the ongoing global risk picture may actually prove USD negative whatever occurs in the Middle East," UniCredit says. The U.S. involvement in Syria could boost safe-haven currencies, and push USD/JPY lower.
- Don't look to macroeconomic data for as an explanation for dollar weakness, UniCredit says. "New data releases in the U.S. can be...almost irrelevant for now," it says, given that politics is what's pushing it lower, such as potentially deeper U.S. entanglement in Syria. The University of Michigan Sentiment Index for April is due at 1400 GMT, and even if it comes in softer, it can at most "offer EUR/USD just more cushion to the downside and lock the pair between 1.23 and 1.24," UniCredit says. A WSJ poll suggests the sentiment should come in at 100, compared with 102 a month earlie. EUR/USD is flat at 1.2326.
- The U.S. having a more pronounced involvement in Syria would be negative for the dollar because it would push USD/JPY down, but if there's "no new increase in global uncertainty," that "will probably be ultimately USD-negative as well," according to UniCredit. That's because other high-beta currencies--that are riskier and higher-yielding--would then rise against the dollar, UniCredit says.
- Trump may be using the recent tariffs on steel and aluminium as "a bargaining chip" to encourage Japan to enter into bilateral trade talks, says Marcel Thieliant at Capital Economics. A deal "would benefit Japanese exporters and consumers, though those gains wouldn't materialize for years," he added. Earlier, Japan welcomed the potential of the US rejoining TPP. But a later Trump tweet suggested he feels 2-way deals are better to ones like TPP.
- Nordic markets are expected to edge lower Friday with IG calling the OMXS30 down 0.1% at around 1517. Risk sentiment was positive Thursday as equity indices rose across Europe and in the U.S. "Overnight, news from Trump indicates that the U.S. may want to join the Trans-Pacific Partnership (a trade deal which Trump withdrew the U.S. from after taking office)," says Danske Bank. "This suggests another conciliatory signal from the U.S. in recent days and should support risk appetite." University of Michigan consumer confidence data is due later. OMXS30 closed at 1518.88, OMXN40 at 1488.86 and OBX at 768.86.
- London shares are set to open marginally lower ahead of potential military action in Syria. Dealers expect the FTSE 100 Index to open about five points adrift at 7253. "Shares in Europe look set for a mixed open following a rise on Wall Street ahead of likely military action in Syria," says Jasper Lawler at London Capital Group. "The uncertain timeline for airstrikes makes timing an entry into the market tough." Later, the eurozone will release its own trade balance and the surplus is expected to have grown in February, he adds.
- Folks should be skeptical just how much the US--and Trump in particular--might be regarding being part of TPP, OCBC economist Selena Ling tells WSJ. She adds there's also the matter of whether the 11 countries currently partaking would want to reopen negotiations to potentially get the US back in. Trump tweeted Thursday night that the country "would only join TPP if the deal were substantially better than the deal offered to Pres. Obama."
- The leader of Canada's westernmost province, British Columbia, says courts should determine what power BC has in influencing Kinder Morgan's proposed Trans Mountain pipeline expansion. Ahead of a weekend summit with Canada PM Trudeau, BC Premier John Horgan warned against any "saber rattling or provocation," from the federal and Alberta governments, which want the pipeline project--now in peril-- built. Horgan said his province is preparing references to provincial and federal courts to seek what jurisdiction BC has when it comes to protecting the province's coastline in event of a crude-oil spill. Those should be allowed to proceed. BC opposition to the project prompted Kinder Morgan to issue an ultimatum that it will scrap the project by May 31 unless it has clarity on whether expansion can proceed.
- Hours after the House Agriculture Committee unveiled its Farm Bill, the committee's top Democrat rejected the legislation thanks to plans included to overhaul the nation's food-stamp program. The Republican-sponsored plan subjects 5M to 7M people to tougher work requirements in exchange for benefits, a proposal that angered Democrats and prompted them to abandon negotiations. "This bill attempts to change SNAP from a feeding program to a work program," said Collin Peterson (D, Minn), adding that "pursuit of partisan ideology" puts farmers at risk during a difficult period for the agricultural economy. The bill is "a dangerous and unproductive step that will only sow division and jeopardize both this and future farm bills," he said.
- Senior officials with the government of British Columbia acknowledge they don't have the legal authority to stop Kinder Morgan's proposed expansion of its existing Trans Mountain pipeline. The western Canadian province's opposition, including the threat of new rules governing shipment of crude, prompted Kinder Morgan to warn Canadian officials they had until May 31 to guarantee the project could proceed or else company would scrap project. According to transcripts of legislative debates this week, BC's Environment Minister, George Heyman, said government has received legal advice "that we did not have the authority to stop a project that had been approved by the federal government within its jurisdiction." Instead, BC could try to attach additional conditions company must comply with in order to protect province's coastline, Heyman told provincial lawmakers. Federal Liberal government approved project in late
- Discussions are already underway between federal officials and Kinder Morgan executives to find a way to save company's proposed Trans Mountain pipeline expansion project, Canada's Finance Minister, Bill Morneau, told a conference in Toronto. "Failure is not an option. We are going to get this done," he said, adding he's "highly confident" federal government has the policy tools available to push project forward. Morneau's comments at a blue-chip policy conference come shortly after PM Justin Trudeau announced he will convene meeting this weekend with Alberta Premier Rachel Notley, who backs Trans Mountain expansion, and BC Premier John Horgan, whose government's opposition prompted Kinder Morgan to threaten to scrap pipeline project on May 31 unless certain guarantees provided that expansion can proceed.
- Canadian PM Justin Trudeau plans to hold a meeting Sunday with the premiers of Alberta and British Columbia to find a breakthrough on a dispute thwarting construction of Kinder Morgan's Trans Mountain pipeline expansion. This means a detour on his planned foreign travel plans. He'll return to Ottawa from Peru after the Summit of the Americas to convene the gathering, before heading to Europe.   Kinder Morgan has threatened to scrap the project unless there's a government guarantee the project can proceed, despite British Columbia opposition.

Apr 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets remained tense on concerns over a military escalation in Syria, although prices remained some way off Wednesday's highest since late 2014 as bulging American supplies weighed. 
- Gold eased off multi-week highs as minutes from the Federal Reserve's last policy meeting raised expectations of a faster pace of U.S. rate hikes, but concerns about possible U.S. military action against Syria limited losses.
- London zinc fell to a four-month low, tracking the prices of other steel materials as demand from construction got off to a slow start in the usually strong second quarter.
- U.S. wheat futures fell 1 percent after the U.S. Department of Agriculture raised its forecast for world supplies, easing fears about potential supply issues in the world's No. 1 exporter.
- The dollar edged up against the yen, but its gains were tepid as concerns over possible Western military action against Syria lent support to the safe-haven Japanese currency.
- Fed officials said consumer spending and business investment likely slowed in 1Q after a strong 4Q of 2017, according to minutes from the Fed's March 20-21 meeting. Yet officials expected the softness to be transitory, and said delayed payment of tax refunds and residual seasonality could be behind the weaker economic readings.
- What's been keeping the unemployment rate at 4.1% for months on end despite strong payroll gains? According to many participants at the Fed's last policy meeting, it's the higher-than-expected labor force participation rate--and they saw that as a sign of continued strengthening in the labor market, especially given the aging population. Minutes from the Fed's March 20-21 meeting show "a few participants thought that these favorable developments could continue for a time, others expressed doubts."
- A few officials at the Fed's March policy meeting warned against inferring too much from comparisons of the current low unemployment rate with similar periods in decades past, according to minutes of the gathering. The current  workforce's much higher education levels, and lower unemployment rate of more educated workers, "suggested that the US economy might be able to sustain lower unemployment rates than was the case in the 1950s or 1960s," the minutes said.
- Fed officials expect the Republican tax plan to deliver "a significant boost" to the economy over coming years, though some expressed wariness about its fiscal sustainability, according to minutes from the central bank's last policy meeting. "There have been few historical examples of expansionary fiscal policy being implemented when the economy was operating at a high level of resource utilization," Fed officials said at last month's FOMC meeting. As a result, they "generally regarded the magnitude and timing of the economic effects of the fiscal policy changes as uncertain." A number of meeting participants also suggested higher budget deficits, which could eventually drive up interest rates, may pose a threat to the economic outlook.
- Fed officials meeting in March said they planned to continue raising interest rates as the economy strengthens, according to meeting minutes released Wednesday. "All participants saw some further firming of the stance of monetary policy as likely to be warranted," the minutes said. Some even said they now believed it would be appropriate to raise rates more than previously anticipated, the minutes said. Officials raised interest rates by a quarter-percentage point in March and penciled in two more rate increases this year.
- A stronger economy and firming inflation made Fed officials more confident they would achieve their 2% target, according to minutes of the central bank's March meeting released Wednesday. Officials said the upbeat economic data "had increased the likelihood of progress toward the committee's 2% inflation objective," the minutes said. The Fed's preferred inflation measure has undershot the goal for much of the past five years but has been strengthening over the past few months.
- Federal Reserve officials meeting in March worried that a trade war could hurt the US economy, according to minutes of the meeting released Wednesday. Although officials did not expect the Trump administration's announced tariffs on imported steel and aluminium to have a big effect on the outlook by themselves, they nonetheless expressed concerns about escalating the trade dispute. "A strong majority of participants viewed the prospect of retaliatory trade actions by other countries, as well as other issues and uncertainty associated with trade policies, as downside risks for the US economy," the minutes said.
- The Russian ruble reversed earlier losses against the dollar after Fox News reported that satellite images showed Russian warships leaving a Syrian port. The dollar was recently down 0.6% against the ruble, after being up more than 2% earlier in the session. Earlier President Trump warned that US missiles "will be coming" to Syria, signaling a willingness to challenge Russia directly in launching a military strike over an alleged chemical-weapons attack.
- Despite settlement discussions described as "swift" by special master Kenneth Feinberg, Fiat Chrysler Automobiles remains months away from reaching deal with US and California officials over more than 100K diesel-powered trucks and SUVs that allegedly violate legal limits on pollution. FCA is "a number of months from having signed documents with the government," outside lawyer for company Robert Giuffra told US district judge during a hearing in San Francisco. Government lawyers echoed his sentiments. Justice Department sued FCA on behalf of EPA, accusing auto maker of using illegal software similar to kind Volkswagen installed to cheat on government emissions tests. Case affects 2014-2016 Jeep Grand Cherokee SUVs and Ram pickup trucks with diesel engines. Settlement with owners of affected vehicles looms once deal reached between FCA and government officials.
- Shares of energy companies jump, posting the biggest gains of the S&P 500's 11 sectors, as fears of escalating tensions in the Middle East send crude oil prices higher. The S&P 500 energy sector was recently up 0.8%, bucking the broader S&P 500's 0.5% decline, while U.S. crude oil rose 2.6% to $67.18 a barrel--extending gains from earlier in the session when President Trump said to Russia on Twitter that missiles "will be coming" to Syria.
- Wall Street remains as bullish as last year on a potential Sprint/T-Mobile tie-up, though there's some head-scratching about timing. Wells Fargo notes Sprint's announced plans to plow billions of dollars into its network likely lit a fire under talks, since the more Sprint invests now, the lower the value of joining forces becomes. The political calendar also adds haste. The current administration's been "less merger-friendly than many would have anticipated," research firm MoffettNathanson says. "But the odds of merger approval under a Democratic administration would almost certainly be worse."
- BNY Mellon advises keeping a close eye on Russian stock and bond markets and the Russian ruble after U.S. imposed new sanctions, because "volatility in the RUB has often coincided with broader global market unrest." The ruble wasn't always the causal factor, but "it certainly was a significant influence both in 1998," when the Russian government devalued the ruble, and in late 2014, when the central bank said it would allow the ruble to trade freely. "If you take the history of the last 20 years where there has been unrest on Russian markets it has fed through into broader uncertainty," says Simon Derrick, chief currency strategist at BNY Mellon. USD/RUB is last up 2.1% at 64.4905.

Apr 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices eased away from 2014 highs reached the previous session as escalating Middle East tensions were offset by increasing inventories and production in the United States. 
- Gold prices touched their highest in a week early, as the dollar index hovered near two-week lows and investor jitters about a host of geopolitical tensions stoked demand for the safe-haven metal.
- London aluminium prices traded higher for a sixth straight session, as the fallout from U.S. sanctions on Russian producer United Company Rusal continues to roil metals markets.
- U.S. soybean futures rose more than 0.5 percent to linger near a one-month high hit in the previous session after the U.S. Department of Agriculture cut its forecast for end-of-season supplies beyond market expectations.
- The former leader of the WTO doesn't get Trump on trade. His views are "very different" from what most people believe in, Pascal Lamy contended at the BOAO Forum in Hainan. He added the President believes at the same time that imports to the US are bad while exports are great. "To be frank, I don't understand what is the purpose of Mr.Trump. I doubt whether we live on the same trade planet."
- The FTSE 100 is set to fall in opening deals as jitters about a trade war and potential air strikes on Syria dampen sentiment. London's blue-chip index is tipped to drop 24 points lower to 7242 after markets digest comments by Chinese President Xi Jinping about opening up the country's economy. "What President Xi actually said wasn't much different to his previous speeches," says Michael Hewson at CMC Markets. "For equity markets to regain a sense of equilibrium, we need to start to see progress on the road away from a potential trade war, and currently there's no evidence of that." On the data front, attention is set to focus on February U.K. industrial and manufacturing production data.
- General Mills' non-executive board member Brad Anderson stepped down from his post after reports surfaced that a political group he donated to contributed to anti-Muslim ads in the 2016 presidential campaign. Anderson, who is the former CEO of Best Buy, said in statements that he wasn't aware the group was anti-Muslim. He has also stepped down from several other boards of directors, including the Mayo Clinic, in recent days.
- Mark Zuckerberg is on the Senate hot seat but Apple has already been dragged into the fray. During Senator's opening remarks, Apple was mentioned among the tech companies that collect data on users. The mention is likely to generate some angst in Cupertino. Apple has tried to draw a distinction between its approach to data collection and tech peers like Google and Facebook. It often disassociates data from users and keeps voice data from Siri for less time than peers. But the mention of Apple in opening remarks shows those distinctions can be lost in a broad look at data collection without regard for how it's done or how the data is used.
- Wheat supplies are swelling. The USDA forecast a global wheat surplus of 271.2 million metric tons for 2017-18, well above last year's 254.6 million as countries across the world produce more and more of the grain. This time it's Morocco's turn to add to the surplus with its own larger harvest, but Russia and other countries around the Black Sea drive much of the growth. Those countries are now the most important players in the global wheat trade. "Russia continues to displace the EU and other exporters in several markets," the agency says. CBOT May wheat futures fall 0.5% to $4.88 1/2 a bushel.
- USDA says soybean exports are on track to meet its target this season despite recent upheaval over trade with China. In its most recent supply-and-demand report, the agency left its oilseed export forecast unchanged at 2.065B bushels. In a twist, the USDA separately announced a sale of 120,000 metric tons to drought-stricken Argentina, usually a competitor in the export market. Analysts say that's a sign that the trade dispute has helped make US soybeans a bargain, which could help demand going forward. CBOT May soybean futures rise 1.1% to $10.58 1/2 a bushel.
- Large Canadian companies with US businesses are more likely to expand their southern arms after US tax changes and growing protectionism there, says Brian Porter, Scotiabank's CEO. "That's a reality today," he says. Smaller businesses, though, are "pretty buoyant," and investing in their businesses to grow, he adds.
- In case of a recession, some central banks may not be able to cut interest rates by enough, "which means currencies may have to act as the key shock absorber," analysts at HSBC say. "In G10, this points to weakness in the SEK, EUR, CHF and JPY" against the U.S. dollar, the analysts say. The "markets will deliver the necessary easing through FX where other options are not available," HSBC says.
- Kinder Morgan's threat to pull the plug on the Trans Mountain expansion could hurt Canada's competitiveness, says Brian Porter, Scotiabank's CEO. He says equity market underperformance and weak capital flows suggest companies are already wary of Canada. "I'm concerned as a Canadian on the economic impact," he says.
- As a risk-on environment returns, "the rally in risk appetite could see the AUD/JPY comeback pulling higher toward the 84.00 resistance area, before facing more significant resistance," according to Saxo Bank. AUD/JPY is up by 1.1% at 83.10, having earlier reached a near one-month high of 83.19. Saxo Bank says the fall in the Japanese yen could also be because "the transition to a financial year in Japan has led to a slackening of hedging flows."
- The market may be overreacting by no longer pricing in Russian rate cuts after the U.S. imposed sanctions on Russia, says Capital Economics. The sanctions pushed the ruble to a 16-month low against the dollar and a two-year low against the euro, which drove expectations of higher inflation and no rate cuts in the next year. Last week markets expected 75 basis points of cuts, says Capital Economics, but it still expects the policy rate at 6.0% by year-end, versus 7.25% currently. Sanctions-related ruble sell-offs "tend to be temporary," it isn't clear the weaker ruble will "drive inflation up sharply," and 2.4% inflation is "well below" the central bank's 4% target.
- Facebook Inc. Chief Executive Mark Zuckerberg must avoid sparring with U.S. lawmakers when he testifies to Congress on the social-media company's data security later Tuesday, says Evercore ISI. He needs to highlight Facebook's social benefits, reiterate its investment in improving user privacy and preventing abuse of the platform, and confirm it doesn't sell user data, the brokerage says. "Success will be measured by Mr. Zuckerberg's ability to appear genuine, plain-spoken, and reassuring." Evercore cuts its revenue estimates for 2H 2018 and 2019, citing the potential impact on Facebook of EU General Data Protection Regulation. It also cuts its price target to $200 from $205. Shares closed Monday up 0.5% at $157.93, down from more than $193 in early February.

Apr 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets rose for a second day, with Brent rising above $69 per barrel on hopes a trade dispute between the United States and China, the world's two biggest crude consumers, may be resolved without greater damage to the global economy.
- Gold prices erased early gains to trade lower after Chinese President Xi Jinping promised to lower import tariffs on certain products, helping soothe fears over an escalating trade row with the United States.
- London aluminium prices rose for a third session, striking a five-week high, as U.S. sanctions on Russian producer United Company Rusal continue to fuel concerns over supply.
- U.S. wheat futures fell for the first time in four sessions to retreat from a near one-month high, though losses were checked as the U.S. Department of Agriculture pegged the condition of the crop below market forecasts.
- The dollar bounced against the yen, with broader risk appetite improving after a speech by Chinese President Xi Jinping promising to cut import tariffs eased concerns about a trade conflict between the world's two largest economies.
- EUR/USD trades flat at 1.2318 given that the markets "have taken Chinese President Xi Jinping's keynote speech at the Boao Forum positively, and are paying little attention to news" that the offices of U.S. President Trump's personal lawyer were raided by the FBI, says RBC. Mr. Xi reiterated that Cold War, zero-sum mentalities are out of place and that dialogue is the way to resolve disputes, which suggests a trade war could be avoided. Hence, USD/JPY
is up 0.4% at 107.15.
- London shares are set to open higher as China announced economic reforms thought likely to open up the country's economy. The FTSE 100 Index is tipped to rise 44 points to 7238 after Chinese President Xi Jinping unveiled plans including tariff reductions. "Xi's apparent desire to balance out his country's international payments is clearly great news for countries and companies selling goods to China," says London Capital Group's Jasper Lawler. Still, the Dow Jones Industrial Average pared earlier gains to close just 46 points ahead, as news of an FBI raid on the office of Donald Trump's lawyer Michael Cohen hit sentiment.
- Asian stocks have started lower after US indexes gave up 2% gains in the last 2 hours of trading there as investors digest the latest Trump investigative news. The FBI searched the office and home of longtime Trump lawyer Michael Cohen. The Nikkei is down 0.5% as overnight yen gains continue this morning; the dollar is at Y106.65. Meanwhile, Korea's Kospi is down 0.8% with Samsung reversing yesterday's 1.6% gain. Benchmarks in Australia and New Zealand are off 0.2%.
- Hours after Canada PM Justin Trudeau said officials are looking at options to save Kinder Morgan's Trans Mountain pipeline expansion, another Canadian minister weighed in and provided a bit more specifics. "The government has lots of tools available -- including financial ones, and we will look for ways in which we can provide a level of certainty that's necessary for the project to proceed," Resources Minister Jim Carr said in interview with Canadian Broadcasting Corp. The province of Alberta said it's mulling taking an equity stake in project if needed -- something Kinder Morgan CEO said he would be "open" to. Amid stiff opposition from the British Columbia government, Kinder Morgan has set a deadline for May 31 for clarity or else the expansion would be scrapped.
- Amid charges and counter-charges flying between Washington and Moscow, the Kremlin has awarded its "Order of Friendship" to Charles Bolden, a former astronaut who served as NASA administrator during the Obama administration. During his tenure, Bolden stressed the importance of maintaining close cooperation between US and Russian space agencies. Current NASA officials also have talked about the importance of broad international support for planned human exploration of the Moon and Mars. Many US industry and government space experts have fretted that strained Washington-Moscow relations over geopolitical issues could spill into the space arena. NASA is dependent on Russian rockets and capsules to transport US crews to and from the international space station through late 2019.
- Canadian PM Justin Trudeau says officials are reviewing a "broad range of options" to ensure Kinder Morgan's proposed expansion of the Trans Mountain pipeline. It's first time Trudeau has signaled government might take steps, such as through legislation, to ensure project gets built. His remarks come day after Kinder Morgan threatened to scrap expansion project, given resistance posed by British Columbia government and ensuing intergovernmental squabbles. Trudeau, who approved Trans Mountain project in 2016, said expanding new markets for Canadian crude was in national interest. He added Canada is "a prisoner at the moment to the US market, and because of that we are making less money from our resources than we should be making."
- Thirteen property-casualty insurers, four life insurers and two insurance brokers increased their quarterly dividends in 1Q, and the trend should continue through 2018, says RBC Capital Markets. The P&C companies and brokers upped their dividends by 18% on average, versus a 15% increase for the life insurers. Investors are more eager for dividends than for buybacks, RBC says. "There have been a few big dividend increases following the passage of US tax reform, but we could just as easily make the case that these dividend increases would have taken place even without tax reform."
- The nonpartisan Congressional Budget Office on Monday released a two-handed assessment of how recent tax cuts and spending bills will affect US economic growth. On the one hand, the CBO expects stronger GDP growth in the short term: 3.3% in 4Q 2018 compared with a year earlier, then slowing in subsequent years. On the other hand, underlying growth trends look only modestly better. The CBO estimated potential GDP growth at 1.9% over the next decade, up only a bit from last year's 1.8% estimate--and nowhere near the Trump administration's hopes for sustained 3% annual growth.
- The US Treasury Department's sanctions against Russian aluminum producer United Company Rusal could tighten supplies of imported aluminum in the US, further driving up aluminum prices already affected by the US's 10% tariff. The Treasury late Friday froze the assets of seven Russian business oligarchs and 12 companies they control. Rusal accounted for a majority of the 700,000 metric tons of raw aluminum the US imported from Russia last year, says Cowen. The firm predicts the sanctions could raise the US delivery charge for aluminum, which is already elevated in the wake of the tariff. "The supply chain disruptions could be rampant given that automakers that ship vehicles to the US that use Rusal aluminum could be prohibited from selling those vehicles in the US," Cowen says in a note to investors.
- The DXY dollar index currently trades at around 89.94, and Rabobank says a rise above 91 would likely improve the outlook for the dollar. This would then leave 92.50 as "another important level to watch," Rabobank says, adding that a close above this level would indicate that "the USD bulls are gaining the initiative." The index, which measures the dollar's value against a trade-weighted basket of currencies, has been anchored to the 90 level since the end of February "as the market has been evaluating the pace of tightening by the Fed and whether a full-scale trade war between the U.S. and China may erupt."
- Shares in Raiffeisen and OMV tumble on market concerns about how new U.S. sanctions on Russia might affect them and other Austrian companies. Raiffeisen has a strong presence in Russia, but one trader calls the share plunge an overreaction. OMV is also active in Russia. Raiffeisen trades 11.6% lower; OMV is down 5.3%. The ATX blue chip index trades down 2.5%, underperforming other European exchanges.
- JPMorgan says it closed its long EUR/AUD trade and was stopped out of its short USD/CHF trade as it shifts away from its "defensive stance in the portfolio." The bank held these trades over the past month because it expected high-beta currencies, such as the Australian dollar, "to be susceptible to trade frictions." The aim of the short USD/CHF trade was "to trade conflict and erosion in the dollar's reserve status due to missteps on trade and fiscal policy." But the market is "becoming more consigned to the reality that the U.S.-China trade dispute will unfold least the next 2-3 months before the threat of actual tariffs is either delivered or avoided," JPMorgan says.

Apr 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets stabilised after slumping around 2 percent last Friday on concerns over an intensifying trade dispute between the United States and China, as well as increased U.S. drilling activity. 
- Gold prices were little changed as investors awaited fresh developments on the simmering trade spat between the United States and China.
- London aluminium rallied two percent and is expected to rise further on concerns that sanctions by the United States on aluminium giant Rusal could hamper trade in some seven percent of the world's annual supply of the metal.
- U.S. wheat futures jumped more than 1 percent to hit a three-week high as cold weather threatens to cause further harm to crops, already damaged by dry weather.
- The dollar steadied, having retreated late last week due to concerns over U.S.-China trade tensions and following data that showed the U.S. economy created the fewest jobs in six months in March.
- Rusal's Hong Kong-listed shares have sunk after the Russian aluminum producer and its controling shareholder were hit with US sanctions on Friday. The company notes the sanctions, due to a connection to Russian billionaire Oleg Deripaska, may result in technical defaults. Rusal adds it's evaluating the impact of such defaults on its financial position. Shares have hit 17-month lows in slumping 36% to HK$2.98. They're now down 46% this year. London-listed EN+, Deripaska's holding company and which owns a majority of Rusal, slumped 20% on Friday.

- The U.S. Congressional Budget Office releases its 10-year economic and budget outlook later Monday, giving the first official glimpse at how tax reform has affected the country's fiscal deficit. "We expect these to be the worst-ever debt-to-GDP projections the CBO has released," ING says. The possibility of an increase in the U.S. deficit on the back of tax reform has been one of the reasons behind the dollar's muted reaction to Fed's interest-rate rises.
Moreover, ING says CBO's projections "will be an understatement of the true debt trajectory," adding "actual debt-to-GDP has on average been 11% higher than the CBO estimates after year 5."
- With risk diminishing, USD/JPY is rising 0.2% to 107.08 on Monday. A tweet from U.S. President Donald Trump "suggested the war of words and threats of tariffs to date have just been part of the negotiating process" with China, says RBC. "Adding to the improved risk tone was news [that] North Korea has confirmed directly to the U.S. that it is willing to negotiate denuclearization." 
- The dollar is flat Monday, with EUR/USD at 1.2276 as the possibility of a trade war is still a worry for the stock market. The U.S. payrolls on Friday reported higher earnings, and "accelerated earnings growth should be USD positive and put an upward pressure on yields, but recently the strongest correlation has been with stock markets," says SEB. Over the weekend there wasn't any news to change that, except that "U.S. Treasury Secretary Steven Mnuchin acknowledged potential risks of a trade war but at the same time argued that he does not expect one," says the bank.
- London shares are set to open higher after the U.S. moved during the weekend to ease fears about its trade rift with China. The FTSE 100 Index is tipped to start the first session of the week up 25 points at 7208, as Asia indices shrug off Friday's 572-point loss on Wall Street to trade higher. Donald Trump said during the weekend that with respect to China, taxes will become reciprocal and a deal would be made on intellectual property, according to
London Capital Group. "Trump's softened stance offers some hope for calm," says LCG's Jasper Lawler. The resiliency of the tech sector will test markets again after it emerged that Facebook Inc. has suspended another data analytics firm, he says.

Apr 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell after U.S. President Donald Trump's threat of new tariffs on China reignited fears of a trade war between the world's two biggest economies.
- Gold prices rose as investors fled to safe-haven assets after U.S. President Donald Trump re-ignited trade war fears by proposing $100 billion in new tariffs on China.
- London copper eased as the dollar rose, but steadied for a second week as worries over an escalating trade conflict between China and the United States eased and expectations of rising seasonal demand in the second quarter supported prices.
- U.S. soybean futures fell as much as 2.5 percent after Washington threatened further tariffs on China, fueling fears of a full-scale trade war between the world's two largest economies that may hit demand for American supplies of the grain.
- The dollar fell against the yen after U.S. President Donald Trump said he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China.
- There are more arguments in favor of weaker U.S. non-farm payrolls, but "considering the recent strength of the dollar, investors are positioning for stronger labor-market numbers," according to BK Asset Management. "It means there should be big reaction depending on the direction of the surprise." If payrolls exceed 200,000, wage-growth rises by 0.3% and the unemployment rate falls as expected, USD/JPY will break 108 "easily," BK says. However, if wages rise by only 0.2%, the unemployment rate holds steady and payrolls are 200,000 or less, we should see USD/JPY below 106.80, BK adds. USD/JPY is flat at 107.36.
- German Bund yields appear to continue their range trading, reflecting twists and turns in the continuing U.S.-China trade conflict, a market-driving factor. The 10-year Bund yield is trading at 0.51%, down 1 basis point, according to Tradeweb. "With Bunds repeatedly rejected below 0.5%, markets seemingly getting used to [US President] Trump's trade tactics and Fed risks looming tonight, we suggest selling into payroll strength," Commerzbank's rates strategist Christoph Rieger says. Fed Chairman Jerome Powell will hold a speech on economic outlook at the Economic Club of Chicago, while U.S. payroll data are due for release.
- The Malaysian ringgit is unusually stable versus the dollar despite Prime Minister Najib Razak announcing the parliament's dissolution to pave way for fresh elections. Oanda's Stephen Innes says the move was expected and the odds of a status quo existing are high and hence the support for the ringgit. The USD/MYR is up 0.1% at 3.8670 ringgit despite the dollar's broader 0.3% gains against others. Innes, however expects a severe deterioration of inflows into Malaysia till elections as foreign investors will becaome cautious.
- By stepping up its tariff threats, Washington could be missing out on its best chance to resolve its trade problems with Beijing, says Chinese state media Xinhua, commenting on the Trump administration's proposal to impose tariffs on an additional $100 billion of imports from China. "Trade protectionism will hurt other's interests without benefiting the US," it says. The state media also reiterated that China is open for negotiations and that China will unswervingly uphold international trade rules.
- After threatening Beijing with tariffs on another $100B worth of goods, President Trump vowed to shield one of the more vulnerable US economic sectors--agriculture--by calling on the USDA to formulate a plan to protect farmers from any Chinese retaliation on US farm exports. A spokesman for the American Farm Bureau Federation, among the biggest US agricultural lobbies, says the group's not yet heard of such a plan, but "our farmers would much rather hitch their wagons to trade." US agriculture is heavily dependent on exports, and China's one of the biggest customers. USDA Secretary Sonny Perdue, on a Midwestern tour this week, has tried to reassure farmers as trade tensions with China deepen.
- The volatile situation between the US and China on trade will continue, but with a reasonable outcome ultimately likely, says BMI Research. "In particular, China appears willing to prevent a trade war through compromise and overall we believe a more reasonable agreement is likely to be reached," it says. Tariffs on soybeans, which represent a risky negotiation tool for Chinese authorities given the potential impact on domestic inflation, may be watered down or abandoned, it adds.
- Singapore shares start lower Friday as early Asian morning news of President Donald Trump's order for more tariffs on Chinese imports hurt market sentiment that was on the mend. The Straits Times Index falls 0.6% to 3385.75 in early trades, falling below a 3400 support level. Three shares are down for each that is up, with banks and rigbuilders among the biggest losers. Singapore Airlines is down 0.8%. Singapore Telecommunications, generally favored by investors in volatile markets, is flat.
- Gains in Japan's stock market are meager as investors tread carefully despite an overnight equity rally as they digest the latest from Trump regarding the US and China trade spat. With the Nikkei barely ekeing out gains, about half the Topix sectors are in the red. Mining sector shares are up 1.1% on Topix, with Inpex gaining 1.3%. The dollar is at Y107.09 versus Y107.38 in late New York trade.
- Gains in equity markets overnight are unlikely to be repeated in Asia trading today as investors deal with Donald Trump's latest trade salvo against China. Trump is considering tripling the amount of Chinese goods that could be targeted. Australia and New Zealand shares are flat. South Korea's Kospi is down 0.7% while the Nikkei is up just 0.2%. The dollar sheds some of its overnight gains against the yen following the latest Trump comments, though at Y107.11 it still remains above its level at the Tokyo stock close yesterday. The latest from Trump confirms "the view that trade war rhetoric is unlikely to leave the picture anytime soon," says Stephen Innes, senior trader at Oanda.
- US benchmark oil prices fall, shedding all its modest gains during the US trading session, after President Trump ups the ante on a tit-for-tat trade battle with China. The US leader says Beijing's "unfair retaliation" to his earlier tariffs proposal may lead him to slap tariffs on another $100B of Chinese imports. The tariff threats by both sides are mostly just posturing for now, but some oil analysts say even that could reduce oil demand if fears of a global economic slowdown impact spending habits and consumption. The Nymex oil contract for May falls 0.6% to $63.15/bbl after ending the NY session at $63.54/bbl.
- President Trump, at an event Thursday in West Virginia to talk about the new tax law, promised to review a new proposal that has big implications for coal country. FirstEnergy is asking for an emergency declaration on behalf of coal-fired and nuclear plants in the Midwest and Mid-Atlantic states that would ensure the plants are shielded from competition from cheaper fuels that have caused many to close already. It could also raise consumer electricity prices and hurt rivals in natural gas, wind and solar. FirstEnergy made the request under section 202(c) of the 83-year-old Federal Power Act, claiming a national-security threat. "We'll be looking at that 202," the president said.
- Shares in ArcelorMittal close sharply higher Thursday as the U.S. and China signaled they would be open to negotiating a resolution to their standoff over tariffs. ArcelorMittal, which has 23 production sites in the U.S., has repeatedly called for tougher measures against cheap imports from China, but a full-blown trade war would weigh heavily on global metals demand. China's announcement on Wednesday that it would impose retaliatory tariffs on several U.S. exports, including cars and airplanes, drove the steelmaker's stock down nearly 2.7%. ArcelorMittal closes 5.6% higher at EUR26.10

Apr 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, buoyed by the U.S. government data showing a surprise drawdown in crude stockpiles and an easing of tensions over a trade row between the United States and China. 
- Gold prices fell, pulling back from one-week highs reached the session before, as risk appetite recovered after the United States expressed willingness to resolve an escalating trade fight with China. 
- London metals edged higher as the global market mood lifted after comments by the U.S. on China soothed concerns about an escalating trade spat between the world's two biggest economies.
- U.S. soybean futures edged higher after sliding to their lowest in nearly two months in the previous session, although concerns that the imposition of Chinese tariffs may temper demand for U.S. cargoes capped gains.
- The dollar inched up against the yen as stocks bounced back from a sell-off triggered by an escalating U.S.-China trade dispute.

- USDA Secretary Sonny Perdue acknowledges farmers are fearful as China puts tariffs onto some US agricultural products and threatens more, but during an appearance in Ohio, he passes on a reassurance from President Trump. "I talked to the President as recently as last night," Perdue says. "And he said, 'Sonny, you can assure your farmers out there that we're not going to allow them to be the casualties if this trade dispute escalates. We're going to take care of our American farmers. You can tell them that directly.'"
- Food giant Cargill says it's "deeply concerned" as the US and China exchange tariff threats, after applying penalties to one another's exports in recent weeks. The interconnected nature of global markets mean that such actions inevitably will impact the world economy, and in the case of China -- the no. 2 market for US food and agricultural exports -- a bigger impact will be felt by US farmers and companies like Cargill, which is due to report quarterly earnings Thursday. "The impact of trade conflict between the world's two largest economies could lead to a destructive trade war with serious consequences for economic growth and job creation," the company says. "There are no winners in a global trade war."
- Don't be so sure that China won't eventually target US oil exports in an escalating trade battle, Standard Chartered analysts say. China has become a major market for sales of U.S. crude abroad, accounting for about a quarter of shipments this year. But the US accounts for a relatively small share of China's oil imports-- just 4%, the analysts say. That "strong asymmetry" means tariffs are not out of the question. " A tariff would not necessarily cause a significant bottleneck for US shale output, but would likely complicate marketing significantly and increase its discount on international markets," Standard Chartered says.
- While China's import taxes on US goods leave crude oil and liquefied natural gas alone, energy commodities are not immune. Propane and polyethylene--plastic pellets made from natural gas--would both be subject to new tariffs. US exports of propane have surged in recent years, and about 13% of shipments go to China, Cowen says. If the tariff is imposed, analysts predict any disruption would be temporary, as trade patterns shift and US propane exports find new outlets. But the move shows energy could play a greater role if a trade war escalates. "Investors may have expected energy and petchem commodities to be excluded from Chinese tariff retaliation as they are strategic to China and cost-advantaged in the US," the analysts say. "However, the inclusion of propane and petchem products escalates fears, in our view, and opens the possibility for other energy commodities to be included as "trade war" pieces."
- Oil and other commodities remained under pressure Wednesday afternoon in the wake of spiraling trade tensions between the U.S. and China. China earlier announced it would impose a 25% import tax on a wide range of U.S. goods worth roughly $50 billion, triggering "heavy selling in global stock market indices with an escalating trade war potentially impacting growth and demand," according to Ole Hansen, head of commodity strategy at Saxo Bank. For the energy sector, the "biggest damage has been done by bullish traders being caught on the wrong side of the market," Mr. Hansen wrote in a note. "WTI and not least Brent crude oil saw heavy buying during the past couple of weeks as traders turned their attention to the potential risk of supply disruptions from Venezuela and Iran," he says.
- Proposed Chinese tariffs on US soybeans could have a tangible impact on trade even if they don't go into effect. The mere threat should prompt Chinese soybean crushers to cancel some unshipped orders of soybeans from the US and source beans in Brazil instead, analysts say. American soybean exports have already suffered this year. The possibility that sharply lower prices prompts non-Chinese buyers to look to the US could help soften some of that blow, says trader and commodity newsletter author Ken Morrison, but "it wouldn't offset what otherwise would have been Chinese demand." CBOT May soybean futures fall 3.1% to $10.05 3/4 a bushel.
- Threatening tariffs on US soybean futures is a shrewd negotiating tactic by the Chinese, says Ken Morrison, trader and author of commodity newsletter Morrison On The Markets. The mere threat of disruption to trade with China, by far America's most important market, could help hurry the US to the negotiating table. But if that doesn't work China is well positioned to secure its soybeans in Brazil, which is at the peak of a bumper harvest season. Chinese buyers could potentially shut out the US for the rest of the year. "I've always viewed the soybean tariffs as the nuclear option," Morrison says. "They've now put the nuclear option on the table."
- In the coming weeks "attention is likely to be drawn to Japan's particular trading arrangements with the U.S," Rabobank says, adding that U.S. President Donald Trump said before that trade with Japan is neither fair, nor open. According to media reports, Japanese officials are concerned that Mr. Trump could push a bilateral trade deal which may not favour Japan at the summit in Florida later this month, says Rabobank. Still, "it is unlikely that bilateral trade discussion between the U.S. and Japan will offer strong direction for USD/JPY," Rabobank says. USD/JPY is down by 0.3% at 106.26.
- Cattle futures fall as beef joins pork in China's trade retaliation crosshairs. China said it plans to slap US beef imports with a tariff after moving ahead with a pork duty this week. China is a still a small market for US beef, but one that US traders and producers had hoped would grow after renegotiating access last year. Livestock markets in the US have fallen in recent weeks as traders bet that disruption to trade will make offloading large domestic supplies harder. CME April live cattle futures fall 1% to $1.109 a pound. April hog futures rise 0.6% to 51.975 cents a pound.
- After rising slightly after higher-than-expected U.S. private sector jobs data, the dollar soon falls again, with sentiment dominated by the U.S. list of tariffs on Chinese-made goods and China's retaliatory measures. Against the safe haven Japanese yen, the dollar has traded lower since the London morning, last down 0.3% at 106.33. The dollar also falls against the euro and sterling, with EUR/USD up 0.2% at 1.2302 and GBP/USD up 0.1% at 1.4078, but rises against the Canadian dollar and Mexican peso, as well as against most emerging market and commodity-linked currencies. Despite reports the U.S. wants to present a preliminary NAFTA agreement, it's unclear how this will look "against the background of the demands of the U.S. being dominated by the 'America First' approach," Commerzbank says.
- US farmers are gearing up for the spring planting season, but some are now scrambling to rethink plans after China announced potential 25% tariffs on US soybeans. Less than two weeks out from planting on his 2,000 acre farm, Illinois farmer Aaron Wernz said a sharp drop in soybean prices and concerns that the tariffs would slash US exports of the oilseeds would likely prompt him to sow more corn -- and less soybeans -- than originally intended. He'll also take a harder look at future seed and fertilizer purchases if crop prices remain depressed, he said. "I probably just lost $50,000," said Wernz.
- Shares of companies involved with everything from airplanes to soybeans to cars are tumbling ahead of the opening of the US stock market, as China's unveiling of penalties on 106 types of US goods has investors fearing trade policies could hit profitability at a number of firms. Aerospace giant Boeing was recently down 5.6% premarket, while Deere, which manufactures agricultural machinery, fell 4.2%. Auto-related businesses also fell: General Motors lost 3.2%, while used car retailer CarMax lost 4.9%. And CF Industries Holdings, whose production of agricultural fertilizers could get hit by China's tariffs on chemicals, fell 3.3%.

Apr 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)  
- Oil prices slipped on expectations for a build-up in U.S. crude inventories, but Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.
- Gold prices gained, as investors stayed away from risk assets after the United States slapped tariffs on $50 billion worth imports from China, raising the stakes in a growing trade showdown with Beijing.
- Most Shanghai base metals fell after the United States announced fresh tariffs on 1,300 Chinese products, including some metal products, escalating a trade row with China, which has vowed to respond.
- U.S. wheat futures rose nearly 1 percent to linger near an eight-day high amid fears of widespread crop losses in the world's largest exporter after a report pegged the condition of the crop at a 16-year low.
- The dollar eased against the yen, with the outlook clouded by worries that escalating U.S.-China trade tensions could exert a toll on the global economy and U.S. growth.
- AAC Tech margins could be eroded, if hit by US trade tariffs, says Smartkarma analyst Henry Soediarko. About65% of the smartphone component maker's revenue is derived from the US market, and a 5% tariff on its products could mean a 36% decline in gross margin. Still, the long-term outlook on the company appears positive, provided the company keeps on upgrading its product. Heading to a 2-month closing low, AAC stock was recently down 5%.
- London stocks are expected to open flat, despite a strong rise in U.S. equities on Tuesday. Concerns about trade tensions resurfaced after the Trump administration detailed which Chinese goods it could hit with tariffs, with China responding by saying it would take corresponding measures against U.S. products. "Reignited fear of a trade war is handicapping the nascent recovery that had started on Tuesday," says Jasper Lawler at London Capital Group, adding that "lack of confidence" will continue to hamper technology stocks. WPP shares will be in focus after a reported probe by the board into whether Chief Executive Martin Sorrell misused company assets. Eurozone inflation data are due at 0900 GMT, U.K. construction PMI at 0830 GMT and U.S. ADP payroll data at 1215 GMT.
- The Global Times retweated its Editor-in-Chief Hu Xijin as saying that the government will announce trade retaliation measures Wednesday afternoon, in response to the U.S.'s new tarrifs plan unveiled overnight. "According to information I received, China's massive plan in retaliation of U.S. tariffs will be released this afternoon Beijing time," according to Hu's twitter account. The Global Times is a tabloid newspaper managed by the People's Daily. China's Vice Finance Minister Zhu Guangyao and Vice Commerce Minister Wang Shouwen will jointly hold an official briefing in the evening.
- President Donald Trump's threat to put tariffs on $50 billion in Chinese imports will hurt Japan too--more, in fact, than the tariffs imposed directly on Japanese steel. So says Richard Katz, a longtime trade watcher now at the Carnegie Council for Ethics in International Affairs. Katz says that for every dollar of manufactured goods China ships to the U.S., seven cents consist of made-in-Japan products. So Trump's tariffs on China could hit $3.5 billion of Japanese goods, which compares to around $2 billion in Japanese steel exports to the U.S. affected by a recently imposed 25% tariff.
- While the latest US tariffs on Chinese goods is triggering some market volatility, says BlackRock, the door for talks is still left open and China will negotiate to avoid a trade war. China's possible measures, including opening up its service sector, loosening technology transfer requirements and increasing US imports, may enable the US to claim victory without hurting the global economy, the investment firm says. Yet the path to such an outcome may be bumpy for markets, it adds.
- The initial impact of the latest US trade tariffs on China's economy is likely to be limited, if they go ahead, but they would still put some downside risk on growth, says UBS economist Tao Wang. China's response to the measures detailed by the US overnight is expected to "remain proportional to avoid escalation while trying to engage in negotiations with the US," Wang says. Items in China's toolbox that it could use to hit back are tariffs against key US exports including agricultural products, aircrafts and autos, as well as non-tariff actions, such as restricting US investment in China, Wang says. Beijing is unlikely to use the exchange rate as a tool in the dispute, he adds.
- Beijing and Washington will eventually reach agreement to solve their trade disputes, says Cui Fan, a professor at Beijing's University of International Business and Economics. "Eventually, agreements will be made through talks, but it's hard to say whether it happens before or after a [trade] war," says Cui, who is also a researcher at the China Society of WTO Studies, a think-tank affiliated with China's commerce ministry. The Trump administration has detailed its plans to slap stiff tariffs on some $50 billion in Chinese imports across 1,300 categories of products, but none of the tariffs go into effect immediately. The scope and tariffs announced by the US are within expectations, Cui adds.
- The U.S. imported around $1.2 billion in aerospace-related goods and parts from China last year and exported $16.3 billion, so the sector is nervous about a list of proposed tariffs that includes 29 aircraft-related items. "China is a significant market for aerospace goods and we export far more to them than we import," said the Aerospace Industries Association in a statement. "AIA will be studying the administration's release, coordinating with our members and will almost certainly be filing public comments."
- Hog farmers are already bracing for lower prices after China this week applied a 25% tariff on imports of US pork, in response to the Trump Administration's tariffs on Chinese steel and aluminum. But President Trump's new list of hundreds more Chinese products targeted for tariffs could squeeze more US crop producers: the list includes Chinese-made machinery for sorting seeds, incubating poultry and preparing animal feed, potentially raising prices for farmers, according to the coalition group Farmers for Free Trade. And, the group says, the new list invites further trade reprisals from China, with US agricultural products widely considered an easy target.
- US aerospace stocks turn negative after the Trump administration releases a list of Chinese-made goods that would be subject to tariffs, including an array of aircraft-related products. China's state-owned Avic is "a key supplier on every Boeing Commercial Airplanes program," says the US aerospace giant on its website, and the list of affected products runs from aircraft seats to motors and other electrical equipment. Boeing down 0.2% in after-hours trade, with United Technologies off 1.1% and business-jet maker Textron almost 1% lower.
- Retail REITs are higher today, after President Trump's sustained attacks on Amazon raised expectations that retailers could get some respite from online competition by the Seattle-based firm. Trump suggested that he could compel Amazon to pay higher rates to the Postal Service, which would make online deliveries more expensive. Landlords of shopping centers which are facing pressures from higher numbers of store closures and retailer bankruptcies-- in part because of the convenience of online shopping--could stand to benefit if online shopping is more subdued. Shares of mall REITs such as Simon Property Group, Taubman Centers and Macerich, as well as grocery anchored landlords such as Kimco Realty and DDR Corp are up between 0.8% to 2.3% Tuesday.
- FBI background checks on new gun sales surged 11% in March to a monthly record of 1.5M, driven by a jump in interest for rifles and other long guns. The closely-watched proxy for sales broke three months of year-on-year declines, with checks for long guns up 17% while handguns rose 4%. While higher than expected, shares in American Outdoor Brands edge lower and Sturm Ruger gains 0.5%.

Apr 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices inched up as rising Russian output and expectations of a reduction in Saudi Arabian crude prices were offset by a potential slowdown in U.S. production.
- Gold prices eased after gaining more than 1 percent in the previous session, even as a sell-off in global equities amid concerns over a trade war between China and the United States continued to support the safe-haven metal.
- London copper climbed to the highest level in more than a week, supported by stronger-than-expected manufacturing growth in top metals user China.
- U.S. wheat futures edged higher after the U.S. Department of Agriculture said the condition of the winter crop was lagging well behind previous years after recent dry weather.
- The yen held firm as escalating U.S.-China trade tensions stirred up fears over the outlook for global growth, sapping investors' risk appetite.
- The RBA's comment that rising equity market volatility this year partly due to US trade policies comes on the back of concerns how growing trade protection would hurt Australia. Promoting this issue from the minutes to a policy statement shows that it is rapidly rising up the RBA's lists of possible risks, says Capital Economics.
- China will fight back US trade measures proportionally, says Cui Tiankai, Chinese Ambassador to the U.S., in a TV interview with state media. "We will certainly take countermeasures of the same proportion and of the same scale, same intensity," if the U.S. announces China tariff list under the Section 301 investigation, Cui says. At the same time, he highlighted China's efforts at protecting intellectual property rights and called for international cooperation in this area.
- The Chinese yuan is likely to appreciate against the dollar in coming weeks as U.S. and China shift their approach to trade issues from tariffs to currencies, says Koukichiro Mio, senior economist at Tokyo-based think-tank NLI Research Institute. Mio expects the USD/CNY to trade in a 6.0-6.4 range until the end of June, compared with 6.2882 now. He says in a note that U.S. import tariffs on more goods beyond steel and aluminum will likely hurt its economy, while a higher yuan could limit rising inflation in China, which has been buoyed by exports.
- Shares of manufacturers are sliding after China imposed tariffs on a range of US agricultural goods, following through on a promise to retaliate against the Trump administration's penalties on imports of Chinese steel and aluminum. Heavy machinery maker Caterpillar fell 2.9%, extending losses for the year, while aerospace giant Boeing lost 2.3% and farm machinery maker Deere lost 2.8%. Industrial stocks rallied after President Donald Trump's election, although some now fear that increasingly protectionist trade policies from the US could set off a trade war that ultimately slows earnings growth. The S&P 500 industrial sector is down 4.4% for the year after jumping 19% in 2017.
- Grain and soybean futures give back most of their overnight gains. Corn inches higher as traders continue to absorb last week's USDA report forecasting lower-than-expected acreage. China's move to start levying tariffs on US agricultural products this week, meanwhile, has concerned soybean traders, some of whom are betting that their crop could be next. "The mere threat that they could still be added tends to change buyer behavior," says Arlan Suderman of INTL FCStone. CBOT May soybean futures are unchanged at $10.44 3/4 a bushel. May corn futures rise 0.3% to $3.89 a bushel. May wheat contracts slide 0.7% to $4.48 a bushel.
- A few of Amazon's desires for its HQ2 are crystallizing. The company appears to be leaning toward a more urban site, despite requesting proposals that included sites in the suburbs. It also wants to come to a city prepared to handle its growth and the influx of high-paid employees. In its home base of Seattle, the company has faced criticism for contributing to traffic and higher housing costs. "They believe there is no American city that can provide for all their needs," says one person familiar with the visits. Another person said the company expects to have to compromise no matter which location it selects. Amazon has also placed particular emphasis on the tech talent pipeline: How much already exists locally, and how much Amazon can attract from around North America and the rest of the world.
- Amazon has asked for tons of data from its HQ2 finalists, including things as granular as ACT and SAT scores from local high schools. The company is doing deep dives on that research, according to people familiar with the matter, to help it make a data-driven decision on where to locate.
- Cut the fluff. That's the strategy many of Amazon's HQ2 short-list cities are taking to try to win the notoriously frugal company over on site visits. Instead of fancy hotels and private planes, they are attempting to be creative by bringing in university officials, younger people and professionals who can speak to talent and growth in the area. Officials are adding visits to trendier neighborhoods to highlight the draw for younger employees. And cities have even ferried Amazon executives around by bicycle and boat as modes of transportation. At stake? Amazon says more than $5B in investments and as many as 50,000 jobs.
- President Donald Trump has taken specific aim at Amazon's use of the US Postal Service, which delivers many of the online retail giant's packages. "THEY LOSE A FORTUNE," he tweets. Yes, the USPS loses billions annually, due largely to an unusual requirement it prefund its pensions. But the agency and its regulators say that the Amazon piece of the business is profitable, and by law the agency is required to at least cover its costs. Amazon is one of a few companies large enough to use a special USPS last-mile delivery service -- something used by UPS and FedEx, too -- which is priced lower than other services.
- Investor fears are again pushing down Amazon share prices as President Donald Trump continues to slam the company in a series of tweets. But how likely is new regulation? Policy experts say not very. Targeting Amazon on anticompetition grounds would be difficult, requiring an overturn of the principles that have guided US antitrust enforcement for decades. If the president did decide to pursue new regulations, he would either have to push a law through a Republican Congress that is unlikely to be receptive to more regulation or involve the Justice Department and other regulators to bring a case before the courts, says Stanford law professor A. Douglas Melamed. "It's a huge amount of work, with a very dubious pay off," he adds.
- President Donald Trump renewed his attack on Amazon Monday morning, marking his fourth tweet about the online retail giant in less than a week. He again criticized Amazon's use the of US Postal Service, adding "our fully tax paying retailers are closing stores all over the country...not a level playing field!" The president's tweets have triggered investor fears that he could take action to regulate them more heavily, although experts think that would be a difficult task under current law. Amazon shares fall 3.9% to $1,391.48.
- Enormous US hog supplies could come at a particularly bad time for producers. China said that the previously announced 25% tariffs against US pork would take effect on Monday, the latest salvo in a trade spat between Washington and Beijing. With growing domestic supplies, American hog farmers and pork packers need exports to help offset a domestic surplus. Analysts say that could weigh on the market until evidence emerges that demand is ticking higher. The USDA said last week that inventories of hogs and pigs totaled 72.9M head as of March 1, 3% above last year and the highest for the quarter since records began.

Apr 02 - China Retaliates Against Trump Tariffs With Duties on American Meat and Fruit (Dow Jones)
China imposed tariffs on a range of U.S. goods, following through on a promise to retaliate against the Trump administration's penalties on imports of Chinese steel and aluminum.
     The Chinese Finance Ministry said in a statement dated Sunday that the previously announced tariffs on the imports of American goods would take effect Monday. Penalties range from 25% on American pork and eight other kinds of goods to 15% on fruit and 120 types of commodities, the ministry said.
     The Finance Ministry renewed China's criticisms of the Trump administration's 25% tariffs on steel and 10% tariffs on aluminum under Section 232 of the Trade Act as violating global trading rules. At the same time, the ministry suggested Beijing's response is designed to be limited doesn't seek to escalate tensions.
     The tariffs on Chinese steel and aluminum "produced severe damage to our country's interests," the ministry statement said. It said the Chinese penalties were being taken "to protect our country's interests and balance the damage created by the U.S. 232 measures."
     The Trump administration didn't immediately comment on the Chinese action.
    Beyond the steel and aluminum tariffs, President Donald Trump has ordered a series of actions to punish Beijing under Section 301 of the Trade Act for the use of intimidation and other unfair practices to acquire American technology. Those actions include tariffs on as much as $60 billion in Chinese imports, a complaint filed with the World Trade Organization against Chinese technological licensing practices and limits on Chinese investment in U.S. tech.
     U.S. and Chinese officials are engaged with each other to try to resolve the disputes, or at least prevent tensions from escalating, people familiar with the matter have said.
     Beijing had threatened to retaliate against the U.S. actions. Soybeans and other products from American farm states which supported Mr. Trump are high on the list of potential targets, as well as other big-ticket U.S. goods like Boeing Co. aircraft.
    Beijing is expected to begin rolling out additional retaliatory measures once the Trump administration announces the specific tariffs to be imposed in the Section 301 action.

Mar 30 - Many Cash Prices Unavailable due to Easter holidays (Commodity3)
There will be very little to NO cash prices today March 30 through April 2 due to the Easter bank holidays.

Mar 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- The dollar will continue to fall in the second quarter, but the euro, the pound, and the Japanese yen, are likely to rise, says FX Knowledge. The eurozone common currency should benefit from further progress on EU integration. Sterling looks "appealing again in diversification strategies." And the yen, besides being a safe-haven investment, should benefit from "the Japanese domestic context may start to look more appealing."
- Disposable personal income, or after-tax income including earnings from salaries, investments and other sources, rose 0.4% in February after posting a revised 1% jump in January. January's increase reflected the impact of tax law changes that reduced withholding and led to one-time bonuses for some households, the largest monthly gain since December 2012.
- Amazon shares had been trading slightly higher premarket until President Trump reiterated criticism of the company through a tweet. Amazon shares had fallen about 8% over the last two sessions on broad tech weakness and reports that the White House wanted to curb the company's growing retail dominance. Trump tweeted, "I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!" Amazon shares are down 0.4% to $1426 premarket after topping $1450 earlier in the morning.
- The dollar trades marginally lower Thursday, retracing some gains it made earlier. USD/JPY rose briefly above 107 Wednesday night on a combination of North Korean leader Kim Jong Un's visit to China, stock-halt declines, higher U.S. 4Q GDP revision, and due to a technical break above 106.7, according to BK Asset Management. USD/JPY is now below key level, trading down 0.2% at 106.64. EUR/USD is flat at 1.2309. ING says "the risk environment will stay fragile" and that Thursday "the FX market will be largely effected by the month-end re-balancing flows."

Mar 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as the producer cartel OPEC and other suppliers look set to continue withholding output for the rest of the year and potentially into 2019. 
- Gold prices inched up on buying after the bullion hit a one-week low and posted its biggest one-day percentage fall in nearly 9 months in the previous session.
- London copper edged up but has dropped nearly eight percent in the first quarter, reflecting complex wide losses on fears that an escalating trade spat could slow the demand for metals.
- Chicago wheat futures ticked higher after hitting a near two-month low in the previous session, with the market poised for a consecutive fourth week of decline as rains in parched U.S. Plains boost crop prospects.
- The dollar eased against the yen, losing some momentum after hopes of detente in East Asia provided the spark for its largest daily gain in six months the previous session.
- Amazon's stock price falls on a news report that President Donald Trump was considering taking action against the online retail giant. During a press briefing, his spokeswoman said no specific policies or actions are planned at this time. "The president has said many times before, he's always looking to create a level playing field for all businesses, and this is no different," Sarah Huckabee Sanders said. Amazon has long drawn public criticism from the president, who has tweeted about issues including taxes and the retailer's use of the US Postal Service. Amazon shares fall 5% to $1,422.35.
- Head of Volkswagen's North American operations says it's necessary for US officials to reach a deal with California on emissions standards. It's an important "milestone which needs to be achieved," says Hinrich Woebcken at New York International Auto Show. He echoes concerns from other auto makers that want to avoid different regulations at federal level and in California and other states following its rules that make up roughly 40% of US market. EPA is expected to undo an Obama administration decision to lock in standards requiring car companies to cut emissions enough to vehicles sold average more than 50 mpg by 2025. Woebcken hopes new rules will have "a certain flexibility" such as recognizing electric-car efforts to help auto makers meet regulatory targets. He points to VW's investment in electric vehicles in coming years on heels of massive penalties for emissions fraud.
- Tim Cook said he will personally lobby Congressional leaders on DACA. He called the situation a "moral issue" during a TV taping for MSNBC today and said "it's unthinkable this is happening in this country. This is not who we are." He said that it's not a partisan issue and he's "very disappointed with both parties." He said kicking out 2 million people who have been living in the US since they were young is "not worthy of discussion." He said he spoke with Congressional leaders about the issue on a recent trip to D.C. and will continue to do so. "I believe the right thing will happen here, but I'm very unhappy we're having to go through the angst," Cook said.
- Tim Cook took pains to dispel the notion that the iPhone isn't made in the US, saying that the product is assembled in China but Apple relies on glass from Kentucky, silicon chips from across the US, and eventually a Face ID system assembled in Texas. Speaking at a taping for an MSNBC show in Chicago, Cook said people "just see where the final product is assembled and say, 'Oh that's not the US'" He added, "We have always made many of our parts here."
- Walgreens Boots Alliance is the latest company to hike wages following the US tax overhaul, promising to increase spending on employee pay by $100M by year end. But while other companies have made a point to credit the tax plan for worker raises, Walgreens says the move is unrelated. "This has nothing to do with the tax benefit," said Alexander Gourlay, Walgreens co-operating chief. "It's something we planned to do, but it is helped," by the new tax law, he said. CVS Health last month said it will use extra cash from the tax overhaul to raise its starting hourly pay to $11 for US workers. "We are confident that what we're doing will keep us in a very competitive situation," Gourlay said.
- Japanese steel makers are more worried about the fallout in Asia from US tariffs rather than the direct impact in the US, according to a top Japanese trade official. If producers in China, Russia and other nations hit by the 25% US tariff on steel divert production to Asian markets where Japanese steel makers are strong, "that could have a bigger impact on Japanese industry," he says, adding that the majority of their market is in Asia. Japan's top steel maker by volume, Nippon Steel & Sumitomo Metal, got 62% of its overseas revenue from Asia in the year ended March 2017.
- A top Japanese trade official says Tokyo isn't getting bent out of shape after the US granted South Korea and other allies, but not Japan, exemptions from steel tariffs. "Throwing harsh language at each other--we're long past that," says the official in a briefing for foreign journalists, saying no retaliation is planned. One reason is that the immediate impact on Japanese steel makers is minimal, he says, and they may still win exemptions on individual products. Another reason he doesn't mention: Picking a fight with the Trump administration could lead to US demands for concessions that would be far more damaging to Japan's economy.
- Expectations of plenty of extra steel sloshing around the global market are fading fast. With many big steel shippers at least temporarily exempt from US tariffs, consultancy Wood Mackenzie slashes its forecast of displaced steel to 4 million metric ton. It had predicted 18 million tons would be priced out of the US. After trade dominated the start of 2018, "it seems that all this talk was 'much ado about nothing' as the actual measures imposed are just a small part of those proclaimed in January."
- With President Trump's threat to use tariffs to address trade imbalances, Genworth's pending deal to be acquired by China Oceanwide has seemed increasingly unlikely. But this afternoon Genworth said it and the Chinese firm have agreed to yet-another extension of the 2016 pact--to July 1-- as they seek regulatory approval including from the Committee on Foreign Investment in the US. "Our CFIUS refiling includes meaningful additions to our mitigation approach to further protect the personal data of Genworth policyholders," Genworth CEO Tom McInerney said. Oceanwide's chairman said his firm is "diligently working with Genworth to obtain the remaining regulatory approvals and satisfy other conditions necessary to close the transaction."

Mar 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell, with Brent dropping back below $70 per barrel and U.S. West Texas Intermediate crudes dipping below $65, pulled down by a report of increasing U.S. crude inventories that surprised many traders.
- Gold was little changed after falling in the previous session as concerns about a potential trade war between the United States  and China eased which supported the dollar and reduced the incentive to hold bullion as a safe-haven asset.
- London copper prices ticked upward for a second day as the U.S. dollar, which had gained about 0.3 percent overnight, lost ground on lingering global trade tensions.
- Chicago wheat futures ticked higher after falling for the past two sessions, as rains in parts of the U.S. southern Plains improved crop prospects.
- With President Trump's threat to use tariffs to address trade imbalances, Genworth's pending deal to be acquired by China Oceanwide has seemed increasingly unlikely. But this afternoon Genworth said it and the Chinese firm have agreed to yet-another extension of the 2016 pact--to July 1-- as they seek regulatory approval including from the Committee on Foreign Investment in the US. "Our CFIUS refiling includes meaningful additions to our mitigation approach to further protect the personal data of Genworth policyholders," Genworth CEO Tom McInerney said. Oceanwide's chairman said his firm is "diligently working with Genworth to obtain the remaining regulatory approvals and satisfy other conditions necessary to close the transaction."
- Sliding technology shares are dragging the Nasdaq Composite sharply lower, as a fresh wave of bad news has sent investors fleeing the sector. Facebook was recently down 3.9%, on reports that its CEO Mark Zuckerberg expects he will have to testify at US congressional hearings. Lawmakers have also called on executives from Google and Twitter to appear at the hearings, putting pressure on the broader technology sector. Alphabet was recently down 2.7%, while Twitter slid 10%. Nvidia, which suspended its self-driving car tests in the wake of Uber's fatal crash, also came under pressure, falling 7.3%.
- Miners rise as base-metal prices increase on hopes of progress in U.S.-China talks to avoid a trade war. Glencore PLC gains 4.2%, Anglo American PLC advances 3.3% and BHP Billiton PLC lifts 3.1%. Specialist mining brokerage S.P. Angel notes that copper was trading at $6,695 a ton in early Tuesday trading versus $6,577 a ton on Monday while other metals also rose. "Concerns surrounding a potential trade war eased as senior U.S. officials negotiate with China to cut tariffs on imported cars, allow foreign majority ownership of financial services firms, and buy more U.S.-made semi-conductors," it says. "The positive news saw London Metal Exchange copper prices pull away from a three-month low on Monday."
- ING expects the Hungarian forint to fall slightly after the Hungarian National Bank monetary policy announcement, due 1300 GMT, if the central bank revises 2019 inflation forecasts much lower. EUR/HUF should rise modestly towards 313 in that case, ING says. The rise should be "short-lived" though, it says. The NBH is still expected to lower 2019 CPI forecasts by a notch--to 2.8% from 2.9%--"in line with the modest downward revision to the ECB's own CPI forecast earlier this month." The NBH is largely expected to keep the interest rate unchanged at 0.90%. EUR/HUF falls 0.1% to 312.72.
- The Hungarian National Bank is largely expected to keep the interest rate unchanged at 0.90% at 1300 GMT. Commerzbank will be watching for "signs that the central bank might be mulling an expansion of its interest rate swap programme in light of a steeper yield curve recently." But it thinks an expansion of QE measures is "unlikely today" because the yield curve has "flattened somewhat" since the middle of March. It adds that "the political air surrounding Hungary is not that pleasant." The Hungarian forint is "always vulnerable" to risk aversion and markets haven't ruled out a global trade war yet. EUR/HUF down 0.1% at 312.71.
- The Chinese renminbi is rising against the U.S. dollar, with USD/CNY falling to a more than two-and-a-half year low of 6.2432, driven mainly by an improved political backdrop for China. Reports that North Korean leader Kim Jong Un might have visited China "is a sign of North Korea smoothing relations with China ahead of its planned summit with the U.S. in May," according to RBC. Over the weekend, WSJ reported that the U.S. was negotiating improved access to Chinese markets, lowering the chances of the trade war escalating.
- London's blue-chip shares are set to open in positive territory as fears of trade wars between the U.S. and China ease. The FTSE 100 Index is expected to start the session 82 points higher at 6970. The Dow Jones Industrial Average ended Monday 669 points ahead following reports of progress in talks between Washington and Beijing. "A healthy number of countries have now been granted exceptions from U.S. steel and aluminum trade tariffs and now it is starting to look as if China could join them," Jasper Lawler at London Capital Group says. In corporate news, GlaxoSmithKline PLC said it plans to take full ownership of its consumer-health joint venture with Switzerland's Novartis AG for $13 billion.

Mar 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)  
- Oil prices rose, pushed up by concerns that tensions in the Middle East could lead to supply disruptions. 
- Gold prices rose for a third session as the dollar languished near a five-week low, as investors eyed rising tensions between  Russia and the West even as a U.S.-China trade spat appeared to ease. 
- Base metals prices climbed across the board, lifted by a rebound in equities on hopes that a trade war between top metals  consumer China and the United States may be avoided.
- U.S. soybean futures edged lower, retreating further from a one-week high touched in the previous session, despite easing fears of a potential trade war between the world's two largest economies.
- Sen. Edward Markey (D., Mass.) blasts the EPA's apparent decision to ease future vehicle emissions standards, calling it "imperative" to maintain rules that the Obama administration locked-in requiring car companies to cut tailpipe pollution enough so cars and trucks sold average more than 50 mpg by 2025. That target equates to 36 mpg in real-world driving. Trump reopened review of standards covering 2022-2025 and the EPA plans by April 1 to determine rules should be revised, an action long sought by auto makers, according to a person familiar with the matter. "Despite what EPA Administrator Scott Pruitt and his Big Oil cronies say, these standards are not only economically feasible and technologically achievable, they are imperative," said Markey, a longtime environmentalist and industry critic.
- European shares close lower, with the Stoxx Europe 600 down 0.7% at 363.18, turning down late in the session as the euro rises to a 5-week high against a weak U.S. dollar. Investors remain wary of trade tensions despite reports of talks between the U.S. and China. "There remains a clear feeling of unease that we could see this current lull break into another hostile comment [from Donald Trump]," says IG analyst Joshua Mahony. Precious metals miner Fresnillo gains 4.5%, however, helped by gains in the gold price and a Goldman Sachs upgrade. The U.K.'s FTSE 100 ends down 0.5%, Germany's DAX down 0.8% and France's CAC 40 down 0.6%. Italy underperforms, with the FTSE MIB ending down 1.2%, while Spanish stocks perform better, ending down 0.1% after S&P upgraded Spain's sovereign rating late on Friday.
- When the White House released its long-awaited national strategy for space dominance, defense analysts and industry officials expected specific policies and details beyond various objectives spelled out previously. Instead, the Trump administration put out a two-page fact sheet restating those broad principle but lacking any implementing guidelines. Much of the material was announced earlier by White House and Pentagon officials, though the actual policy document supporting the new space strategy wasn't made public. The fact sheet reiterated US vital interests "to ensure unfettered access to, and freedom to operate in space." The fact sheet also warned potential adversaries that any interference or attack on "critical components of our space architecture," would be "met with a deliberate response at a time, place, manner and domain of our choosing."
- JPMorgan advises keeping "a modest USD short versus other reserve currencies like CHF." It says "directional clarity remains elusive" for the dollar, while the potential of a trade-war breakout may extend "well into Q2." USD/CHF is last down 0.4% at 0.9435. There are reports, however, that the U.S. and China are negotiating U.S. access to Chinese markets, which may mean the U.S. refrains from introducing new import tariffs that could spark global trade wars.
- In case "the current trade skirmish morphs into a war and triggers a material contraction in global trade volume," UniCredit says investors will likely put their money in risk-free assets such as U.S. Treasuries and German Bunds, "though gold might play a more muted role." In this environment, the U.S. dollar "should be better supported against most currencies" but is likely to stay "under pressure" against the euro and, to a lesser extent, the Japanese yen, UniCredit says.
- Though the path for GBP/USD is clear--that it will rise further due to a mix of a good backdrop for sterling a bad one for the dollar--the one for EUR/GBP is less clear, says Societe Generale. The case for EUR/GBP to rise back above 0.90 "has certainly diminished, as the tail risk of no Brexit deal has decreased," the bank says. Euro falls are also likely to be limited, however, as the European Central Bank is expected to "spell out its intention on QE and clarify its forward guidance on rates in June/July." This "should temper the advance of GBP relative to EUR," says SocGen. EUR/GBP trades 0.1% higher at 0.8757.
- Precious metals miners boost the FTSE 100 index of U.K. blue-chip stocks, which rises 0.3% to 6942.16, as risk aversion caused by trade-war fears ebbs on reports of talks between the U.S. and China. Silver and gold miner Fresnillo PLC is the biggest riser, up 6.4% after Goldman Sachs upgraded the stock to buy and added it to its conviction list. Goldman also upgrades gold miner Randgold Resources, which rises 1.7%. Royal Bank of Scotland is the second biggest riser, up 2.6% after an upgrade to buy from Deutsche Bank. Oil stocks rise, with BP PLC up 2.2%. Packaging company Smurfit Kappa Group is the biggest faller, down 3.8%, after the company rejected a revised bid from International Paper.
- The Japanese yen is the world's cheapest currency, says investment manager Kames Capital. That's on a purchasing power parity, behavioural equilibrium exchange rate, and fundamental equilibrium exchange rate basis. The yen is likely to continue to strengthen in this year, thanks to "the shape of Japan's positive economic fundamentals, attractive valuations, and supportive technical data," Kames says. "Central bank plans to tighten the money taps also provides support," it adds. From the beginning of 2018, the Japanese yen has risen continuously against the U.S. dollar, with USD/JPY falling to below 105--reaching its lowest since late 2016--from around 113 in early 2018. It last trades at 105.14.
- Last week's surge in oil prices after rising geopolitical tensions is "likely to be temporary," says Thomas Pugh, commodities economist at Capital Economics. Fresh signs the Trump administration could pull out of the Iran nuclear deal have lifted prices, though if this happens, "production is unlikely to fall by much," he says. "We still think that OPEC will probably begin to increase output next year, as OECD stocks fall to their five-year average and the U.S. continues to grab market share," Mr. Pugh says in a note. He also says higher oil prices should likely incentivize U.S. producers to expand production, putting a cap on prices.
- Morgan Stanley advises buying CAD/JPY at market price for a target of 84.50 and a stop at 80.60. A new financial year in Japan starting in April means investors will be buying foreign assets again, which means more Japanese yen will be sold to buy foreign currencies. Moreover, Morgan Stanley thinks purchases of U.S. Treasuries, for instance, will likely be un-hedged, due to "high hedging costs." The Canadian dollar is set to strengthen on the other hand, "as constructive NAFTA news suggests...a continued reduction in the trade risk premium priced into CAD." CAD/JPY trades up 0.5% at 81.65.
- U.S. President Donald Trump may eventually have to reverse his approach to tariffs, says Yee Kok Wei, equity portfolio manager at Fidelity International. "I believe Trump will have to eventually reverse course, so maybe the markets going down harder and faster in the near term might be a price worth paying," he says. A trade deficit is no longer a straightforward zero sum game of a trade deficit country versus a trade surplus country, due to the globalized supply chain and globalized ownership of corporations, he says. Trump's current trade strategy doesn't even have broad support domestically, let alone internationally, "mainly because it is a bad approach that does not play into the US's strength," he says.
- There is still room for USD/JPY to fall and for GBP/USD to rise, mainly due to the likelihood of continued dollar weakness, UniCredit says. Still, it advises lightening up on exposure for now as both the Japanese yen and the pound "are approaching overbought levels." On the yen, it notes that "headline risk emanating from trade rhetoric may cause some JPY whipsawing." On Monday, USD/JPY last trades up 0.3% at 105.03 on reports that the U.S. and China are negotiating U.S. access to Chinese markets. UniCredit "would look for levels around 1.4050 in GBP/USD to increase long risk and around 106 in USD/JPY to reload on shorts." GBP/USD last up 0.5% at 1.4203.

Mar 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent and WTI crude oil futures dipped as concerns of a looming trade dispute between the United States and China weighed on global markets.
- Gold prices rose to a five-week high as the threat of a trade war between the United States and China weighed on the dollar and equity markets, driving investors to seek refuge in safe-haven assets.
- London metals extended their declines as concerns over U.S.-China trade relations continued to batter global stocks and threaten to blunt the demand for metals.
- Chicago wheat rose for a fifth consecutive session, climbing to a one-week high as concerns over dry weather in the U.S. southern Plains underpinned the market.
- Randal Quarles, the Federal Reserve's vice chairman for supervision, will testify before the House Financial Services Committee on April 17 at 10 a.m., the committee said. Quarles will testify on the Fed's oversight of financial institutions. The 2010 Dodd-Frank law created the vice chairman for supervision position and required that official to testify twice a year before Congress. Quarles is the first person to hold that job. In the past, former chairwoman Janet Yellen addressed Congress on matters of bank regulation and supervision.
- Zero surprise that the nomination of the hawkish John Bolton as national security adviser boosts defense stocks, with analyst Byron Callan at Capital Alpha lifting his own views on the chances of US conflict with North Korea or Iran. Lockheed Martin and Northrop Grumman both up more than 3%, with Raytheon and other contractors not far behind. Boeing, the Pentagon's second-largest supplier, may also have received a boost despite investors focus on its commercial airliner arm.
- Qualcomm shareholders re-elect the chipmaker's 10 board nominees, who ran unopposed after President Trump earlier in March disqualified candidates nominated by Broadcom in its $117B hostile takeover effort. But the results may not portend a period of stability for the troubled company. Institutional Shareholder Services had recommended investors vote for some Broadcom candidates, even though they were no longer eligible, to register discontent with Qualcomm's handling of Broadcom as well as disputes with regulators and customers including Apple--votes that weren't counted in Friday's result. Qualcomm within a few days is expected to issue a more detailed tally in a regulatory filing, which may reveal weak support for some directors. And then there's former executive chairman Paul Jacobs, whom the board dismissed last week after he revealed his own intention to buy the company.
- European shares are broadly a sea of red as China hit back at Washington's imposition of $60 billion in trade tariffs with a more modest $3 billion tariff package. The Stoxx Europe 600 falls 1.1% or 3.9 points to 365.25 while all other major European indices apart from the Norway Oslo All-Share decline. Germany's DAX is down 1.85% and France's CAC-40 is off 1.5%. "Stock markets in Europe are off the lows of the session, but are still on track to finish in the red," says David Madden at CMC Markets. "This is only the beginning of the economic standoff between the two largest economies in the world, and investors are jittery." Next PLC is the biggest pan-European riser, up 6.8% after full-year results weren't as bad as some might have expected.
- The Australian dollar is rising against the U.S. dollar on Friday, up last 0.4% at 0.7728, even though usually the Australian dollar tends "to be most sensitive to a decrease in risk appetite," says Rabobank, explaining that one reason behind this "unusual" move is that "AUD bulls are arguing that Chinese tariffs on U.S. goods could open opportunities for other producers." But "the AUD along with the currencies of other commodities producers would be in the firing line if a trade war caused the Chinese economy to slow."
- Broadcom shareholders overwhelmingly approve the company's "redomiciliation" to the United States from Singapore, easing CEO Hock Tan's strategy of growth by acquisitions. Tan announced the move in early November in a televised appearance at the White House, paving the way for US approval of Broadcom's purchase of Brocade, which had been held up in a national-security review, and its unsolicited bid for Qualcomm. But President Trump nonetheless blocked a Broadcom-Qualcomm merger on national security grounds, leaving Tan to look for other targets that meet his criteria: leading technology and market share, strong defenses against competition, foreseeable revenue, opportunities to cut cost and appeal to his current customer base of smartphone vendors and networking equipment makers. Broadcom expects to complete its relocation on April 4.
- Agricultural commodities are selling off as investors anticipate escalating trade tensions hitting Chinese demand for U.S. exports like soybeans and corn. Though China's initial response to the Trump administration's steel and aluminum tariffs hasn't included soybeans, investors are concerned that if tensions escalate further they could extend to include oilseed--a key component in animal feed. China is by far the world's largest importer of soybeans and also the largest buyer of U.S. beans. Chinese product was trading higher, with the price of the front month Dalian Commodity Exchange soybean meal contract trading up around 1%. The price of soybeans is down 1.3% to $10.16 a bushel--paring some heavier losses--as corn's losses soften.
- Sterling could suffer if trade tensions escalate after U.S. President Trump announced import tariffs, says Commerzbank currency strategist Esther Reichelt. "The whole Brexit strategy is based on achieving beneficial trading agreements with other countries," and these hopes "will diminish as the global system is moving towards trade protectionism," she says. According to Ms. Reichelt, investors have been overly positive on the pound, which this week reached a seven-week high against the dollar and nine-month high against the euro. "The U.K. economy is basically moving on the edge. If anything brings things out of balance it is in deep trouble [...] other countries will be better positioned and will be more attractive," she says. GBP/USD up 0.4% at 1.4152, EUR/GBP flat at 0.8727.
- Because retaliatory duties imposed by China have been on minor imports, investors fear Beijing is leaving room for more punitive measures, should the U.S. escalate trade protectionism. Analysts say that retaliation from China may be aimed at U.S. agricultural exports, which often originate in areas with some of the president's staunchest supporters, such as the rural Mid-West. "The Chinese have essentially found a vulnerability in the U.S. political system," says CME Group's Erik Norland. "The U.S. is an enormous producer of corn, wheat, and soy, all of which come from a variety of states in the Midwest where the Chinese can exert pressure on their political system." In 2017-18, the U.S. will produce 36% of the world's corn and 35% of its soybeans, the U.S. Department of Agriculture estimates.
- There aren't many signs yet that China would retaliate against U.S.'s tariffs by weakening the Chinese Renmnibi, but "should China bring the CNY into play, the USD may rally sharply," says Morgan Stanley. Chinese entities have increased their external debt, which is likely to be mostly dollar-denominated, and so a lower yuan "would increase the local debt burden and may trigger a wave of USD hedging, which entails USD buying." USD/CNY is down by 0.3% at 6.3142.
- The New Zealand dollar versus the Canadian dollar is trading at a premium relative to the prices of milk and oil, according to Morgan Stanley. It therefore advises selling NZD/CAD. "With NAFTA negotiations in good progress and oil rallying, we see value in the CAD, using NZD as the funding currency." If the U.S. were to cancel the Iran deal in May, the Canadian dollar and other oil currencies "would likely benefit," Morgan Stanley adds. NZD/CAD last trades down marginally at 0.9318.
- U.S. President Donald Trump needs to understand that trade is "not a zero-sum game," says Robert Lea, head of global equity research at Ashburton Investments. It is more efficient and cost effective for the U.S. to import aluminum from its Canadian neighbor than producing the metal at a higher cost domestically, he says. While domestic U.S. steel mills stand to benefit from the proposed tariffs, it is unlikely that these mills will be able to respond fast enough to a rise in local demand, and this, in turn would drive domestic steel prices higher and drag on profitability in the manufacturing sector, Lea says. "Therefore, the import tariffs are likely to create an imbalance of supply and demand, driving domestic steel prices higher and acting as a drag on profitability in the manufacturing sector."

Mar 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)  
- Oil prices rose by around 1 percent, pushed up by Saudi plans for OPEC and Russian led production curbs introduced in 2017 to be extended into 2019 in order to tighten the market.
- Gold prices rose on a faltering dollar and equities as investors scurried to safety after U.S. President Donald Trump moved towards long-promised anti-China tariffs, prompting a response from China amid fears of a global trade war.
- Base metals in Shanghai and London fell on fears that an escalating trade spat between China and the United States, the world's top two economies, could derail global growth and damage demand.
- U.S. wheat futures edged higher, though the grain was poised to record its third consecutive weekly loss as rains across a key producing region eased fears of widespread crop losses.
- US trade restrictions have largely aimed at China so far, but other countries including India could get caught in the crossfire. India's exports, which have been faltering of late, could receive a fresh setback if global trade volumes shrink. Higher inflation and slower growth in the US and China resulting from tit-for-tat measures could further hurt demand for Indian shipments. Worse still, if President Trump takes aim at India--he has been critical of high duties American companies such as Harley Davidson pay in India--it could further weigh on India's international trade. Any trade battle would make the local currency volatile and India should brace for impact, says Care Ratings.
- Markets will eventually come around to the idea that China won't be affected that much by the new US tariffs, with the slump in the past 24 hours driven by "a lot of short-term money and a lot of investors that get unsettled by headlines," says Nomura's Jim McCafferty, head of Asia research ex-Japan. Actions by President Donald Trump may appear erratic but he says there is a pattern. "I think the market is having to get used to how Trump deals with issues. He presents the worst outcome and then negotiates a better point." That's what takes Trump's from a "fire and fury" comment to a possible meeting with Kim Jong Un. He thinks the latest move may prompt Chinese firms to set up manufacturing facilities in the US.
- The FTSE 100 is expected to open sharply lower and drop to fresh multi-month lows after U.S. President Donald Trump announced plans to levy up to $60 billion of tariffs on Chinese imports, causing sharp falls in equities in Asia overnight. The U.K.'s blue chip index is seen opening more than 1% lower, down 74 points at 6878, which would mark its lowest since late 2016, according to London Capital Group. Retailers could be in focus after Next PLC released results.
- Australian Prime Minister Malcolm Turnbull says he's focused on supporting good constructive negotiations to avoid an escalating trade war between the US and China. "Donald Trump has said this is the beginning of a negotiation" and "the important thing is no one wins in a trade war, no doubt about that," he tells reporters, adding that he hopes the US and China are able to negotiate an arrangement that suits both sides.
- European stocks are expected to open sharply lower after U.S. President Donald Trump announced plans to levy up to $60 billion of tariffs on Chinese imports. Germany's DAX is expected to open 220 points lower at 11880, and France's CAC 40 is expected to be 91 points lower at 5076, both falls of about 1.8%, according to London Capital Group. China responded with its own plans for tariffs, and fears of a retaliatory trade war spooked stocks in the U.S. and Asia. "The negative sentiment engulfed Asian markets and the domino effect now looks ready to strike Europe on the open," says Jasper Lawler, analyst at London Capital Group, who also says investors have "rushed to sell out of equities."
- The impact of Trump's proposed US tariffs on Chinese imports will be gradual and lasting, says He Fei, senior researcher at Bank of Communications. "It will hurt China's economic growth and new job creation in the long run, and even ripple through some national initiatives such as Internet Plus and Made in China 2025," he says. On top of some "necessary, reasonable and moderate" retaliatory measures, he suggests that China could cut exports of products with low added-value and increase imports of high-tech products in order to address the trade imbalance.
- Fears of trade frictions between China and US escalating into "a serious trade war" could extend bearishness in markets, says Citi. Combined with that is the appointment of John Bolton, a well-known hawk, to be Trump's next national security adviser. That could make investors worry about geopolitical risks in Asia, the investment bank adds. Stock indexes in the region are widely down at least 2% after the 2.5% slide in US benchmarks Thursday.
- China is capable of countering against external economic hits, says CICC, calling any impact from a US trade offensive controllable. The exports subject to the tariffs equal 2.2% of the country's overall total and 0.4% of 2017 economic output.
- Trade wars and financial markets usually don't mix well. Equity markets in Asia are feeling the pain, with indexes in China, Japan and Hong Kong down about 3% apiece after the Dow dropped more than 700 points on Thursday. "Tariffs mean a trade war, and the news has the world's investors running for the exits," says Chris Rupkey, managing director at MUFG. China unveiled plans Friday for tariffs against $3 billion in goods in response to Trump's move. "When you pick a fight with China, you are really picking a fight with the creme de la creme of corporate America," adds Rupkey. This all as "trade wars cause economies to slow as export-driven growth dries up."
- Although the economic impact of the US tariffs should be small on China, ANZ economists say Trump's move may push other countries to take sides. That would broaden the scale of any trade war between the world's 2 biggest economies. "This is the biggest risk lying ahead," the economists add.
- As metal tariffs go into effect in the US, shippers fear a trade war is brewing that will hamper demand for cargoes transported around the world. "We are seeing more trade-restrictive measures introduced," notes Peter Sand, an analyst with shipping association Bimco. He added it's "a worrying trend that limits demand for shipping globally." Sand said it's not the metal tariffs themselves that shippers fear, arguing they will have a limited impact on the international commodity trade. Instead, the worry is "shortsighted political positions that may have lasting consequences for everyone involved in global industries like shipping if a large-scale trade war emerges."
- China's move to impose retaliatory tariffs on imports of US pork--threatening a $1.1 billion-and-growing market for American hog farmers--prompts a howl of frustration from the National Pork Producers Council. It, like other agricultural groups, has sounded alarms for months about  trade's importance for farmers. "No one wins in these tit-for-tat trade disputes, least of all farmers and the consumers," says Jim Heimerl, an Ohio-based hog producer serving as the group's president. The Council adds that "all countries" ought to follow international trade rules, but when those are broken, disputes need to be resolved "in a way that doesn't harm businesses."

Mar 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)  
- Oil prices were firm, buoyed by a surprise decline in U.S. crude inventories as well as ongoing supply cuts led by OPEC, although a relentless rise in U.S. oil output threatens to undermine efforts to tighten the market.
- Gold prices inched lower as investors took profits after the yellow metal hit a two-week high in the previous session on a weaker dollar after the U.S. Federal Reserve disappointed investors expecting more hawkish comments on interest rate rises.
- London copper climbed off its lowest in three months after the U.S. Federal Reserve signalled a slower pace of rate rises this year, which weighed on the dollar.
- Chicago wheat futures lost ground and were hovering near a one-month low hit in the previous session on prospects of more rains in the parched U.S. winter crop areas.
- The situation in Catalonia remains delicate, but, after a few months "of heightened uncertainty" sparked by tensions in the region, "optimism on the economic outlook has returned to Spain," ING says. It notes, for example, that the Bank of Spain has recently upgraded its growth forecast for the year, mentioning the situation in the region among the reasons. "Recent polls show that there is dwindling support for independence, which reduces the prospect of turmoil in the coming year," ING says.
- The benchmark IPC index closes up 0.9% at 47,522 points, while the Mexican peso strengthens against the US dollar to its highest level since early February, after US top trade negotiator said the US, Mexico and Canada were "starting to converge" on the key issue of auto rules amid Nafta negotiations. The peso closed in Mexico City at 18.4750 to the greenback, compared to 18.7675 late Tuesday. Telecom giant America Móvil up 0.1%, while bread-maker Bimbo gains 0.9%.
- In the wake of a closely-watched meeting between Donald Trump and Saudi Crown Prince Mohammed bin Salman, oil prices have been rising on expectations the U.S. could re-impose economic sanctions on Iran, frustrating its oil output. But the market's "bullish response to this news, however, is probably as much of a technical reaction as anything else," Ole Hansen, head of commodity strategy at Saxo Bank, wrote in a note Wednesday. He suggested a reduction in Iranian oil production or exports would likely only incentivize participants in the Organization of the Petroleum Exporting Countries' output cutting deal-particularly Saudi Arabia and Russia--to ramp up production. "The biggest short-term risk to supply remains Venezuela, where production has fallen to a multi-decade low," Mr. Hansen
- The tax bill passed in December is having less of an impact on the upper-end market than the National Association of Realtors had anticipated, according to Lawrence Yun, the trade group's chief economist. "Surprisingly consumers are not looking at the mortgage interest deduction or the property tax deduction," he said. Sales in the pricey Western region were particularly robust in February. This comes even though changes in the tax law limited deductibility of the most expensive mortgages and made it pricier to live in states with high property taxes.

Mar 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, lifted by tensions in the Middle East and healthy demand, although rising U.S. output continued to weigh on markets. 
- Gold prices rose as the dollar fell as investors await the outcome of the U.S. Federal Reserve's meeting this week for signs of the pace of monetary tightening, which could limit the demand for bullion going forward.
- Shanghai copper prices fell for a fourth day, touching their lowest in almost six months amid fears of a trade war as investors waited for news on a U.S. interest rate hike.
- Chicago wheat futures were largely unchanged, hovering near last session's one-month low as forecasts of more rains in U.S. southern Plains further eased concerns over drought-damage to the winter crop.
- U.S. Citizenship and Immigration Services said it is again suspending fast-track consideration of H-1B visa petitions, a move that may slow the hiring of high-tech workers. The system allowed companies that pay a fee to get fast consideration of visa applications, but that option will be suspended during the months when most of the applications are processed. The agency said the decision will help it "reduce overall H-1B processing times." It said expects to resume fast-track processing on Sept. 10. The H-1B program is heavily used by U.S. tech firms such as and Microsoft, as well as outsourcing companies such as Infosys and Wipro.
- In response to local and state laws prohibiting employers from asking job candidates about their current or prior salaries, 37% of US employers now prohibit managers from asking about salaries nationwide, according to a new survey from WorldatWork, a trade group for compensation professionals. Another 35% of employers prohibit the practice only where local laws are in place. The rest of the 838 respondents say they do not operate in areas where the bans are law. Nearly half of companies that have adopted bans say that doing so was very or extremely simple to do, while more than half say it was difficult. Managers ask candidates about prior salaries to assess candidates' pay expectations and to help determine an acceptable offer. Critics argue that salary histories often serve to reinforce pay gender disparities since a low salary in one job may affect future offers.
- Caterpillar expects to pay more for steel this year but thinks it will be able to mitigate the impact of higher costs -- including those related to tariffs -- with procurement strategies and pricing, Caterpillar's director of investor relations Amy Campbell said. "We do definitely see some risk to the P&L," Campbell said at a conference. "We talked about just steel and generally tariffs would complicate that, but I think there are a lot of things that we're doing to limit the impacts of that on the P&L."
- A proposal to resolve an error known as the "grain glitch" in December's tax law remained in limbo Tuesday afternoon as lawmakers negotiated. There is bipartisan agreement to scale back the inadvertent tax benefit for farmers who sell to cooperatives. But Democrats' proposed trade-off -- an expansion of the low-income housing tax credit -- has met resistance among Republicans. "It's been dead, revived, dead, revived," said Sen John Thune (R, SD), who said he hoped a deal could come together soon.
- Investors are trading Facebook options in a frenzy as the stock continues to fall. Some of the top trades on Tuesday were bearish option contracts, puts, with a strike price of $115, well below the current level, Trade Alert data show. Facebook shares fell 5.6% on Tuesday to $162.82. This could indicate that traders are betting on a decline or hedging their stock exposure to the social media giant. Yesterday Facebook shares recorded the biggest swoon in almost four years after news that a firm tied to President Donald Trump's election campaign gathered data from millions of Facebook profiles without authorization.
- Institutional investors were already dubious about using Venezuela's new digital currency, the petro, and President Trump's executive order banning it from Americans removes any uncertainty, say analysts at Eurasia Group. The White House decision "cements previous threats about the petro violating US sanctions, which, along with other doubts about the petro has already prevented major interest from US-based investors," it says. Venezuelan President Maduro sees it differently, saying the currency must be "going in the right direction," if Trump feels the need to make so much hubbub. "The light of the petro will filter through every orifice of his walls built on hate," he says in a tweet.
- It's been a while since investors were this worried about a potential trade war. Thirty percent of fund managers say a trade war ranks as the top rail risk to the markets, according to a Bank of America Merrill Lynch survey conducted March 9-15, while 23% worried most about inflation and 16% were most concerned about a slowdown in global growth. The last time fund managers voted trade tensions as the top risk to the markets was January 2017, when President Donald Trump took office promising to crack down on what he said were unfair trade practices. Stocks managed to close out the year with strong gains, but have in recent months struggled for traction, as the White House has made fresh moves toward protectionist policies that some fear could dull earnings growth at multinationals.
- Sterling broke above 1.40 against the U.S. dollar on Monday after news that the U.K. and the EU have agreed on a Brexit transition deal, but further rises in GBP/USD are likely to come from dollar weakness, says UniCredit. The Italian bank forecasts a rise towards 1.45 by mid-2018. This compares with a current GBP/USD level of 1.4006, down 0.1% on the day. However, it says EUR/GBP "looks unlikely to break out of its established range between 0.87 and 0.90 any time soon" because the euro still has "supportive fundamentals" which "should offset" sterling strength. This would keep EUR/GBP "relatively stable," UniCredit says. EUR/GBP last down 0.3% at 0.8771.
- Investors are currently factoring in a risk premium to reflect the possibility of a trade war and the consequences this might have, says Benjamin Melman, head of asset allocation and sovereign debt at Edmond de Rothschild Asset Management. The asset manager is somewhat less concerned. "For the moment, we believe it is too early to overplay this risk even if we are likely to see other twists and turns," he says. The U.S.'s introduction of import duties on steel and aliminium has, for the moment, only been symbolic as it will have no visible impact on the global economy. A race to protectionism most likely would, however, even if it is objectively tricky to gauge to what extent, he says.
- Switzerland is keeping a wary eye on world trade disputes, even though it is largely untouched so far. "The protectionist measures recently announced in the US pose negative risks for the global economy," the government's expert group said in its spring forecasts Tuesday. "Although the tariffs recently imposed on metal imports are unlikely to affect the Swiss economy very much, any escalation to a trade war between the major economic zones would have a considerable dampening effect in the medium-term," they wrote. The group expects Swiss GDP growth of 2.4% this year and 2% in 2019, with the unemployment rate falling below 3% this year. Dollar trading at 0.9515 francs, little changed from Monday.

Mar 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose by almost 1 percent, lifted by a weak dollar , tensions in the Middle East and concerns of a further fall in Venezuelan output. 
- Gold was firm, having recovered from over a two-week low hit in the previous session, as traders waited to gauge the path of U.S. monetary policy for the rest of the year from the two-day Federal Reserve meeting that kicks off later. 
- London Metal Exchange (LME) copper prices fell for a fourth session, tracking a fall in equities as investors trimmed positions ahead of a U.S. Federal Reserve meeting starting later in the day. 
- Chicago wheat prices rose, clawing back some ground from their biggest three-day decline since 2013 after rains brought relief to the parched U.S. winter wheat crop in the southern Plains.
- Facebook could face scrutiny on Capitol Hill over reports that a firm with ties to the 2016 Trump campaign obtained data concerning tens of millions of the social network's users, and kept it for years despite saying it had destroyed the records. House Commerce Committee leaders are "examining this incident closely," a spokeswoman said Monday. Some state attorneys general also are planning investigations. Some experts believe the incident also could lead to renewed investigation of Facebook's privacy practices by the Federal Trade Commission, although the company has said it believes it did not violate an earlier FTC consent decree. Facebook shares are off 7.2%.
- Wells Fargo predicts drug prices will become an election-year issue. Wells Fargo cites a new Oregon law, which requires drug companies justify price increases above 10% and the pricing of a drug above $100 a month. The law marks the latest effort by a state to tackle high drug prices through transparency, and Wells Fargo suspects the moves are a sign that high drug prices will figure in mid-term elections later this year and the Trump Administration "will try to blunt any criticism that it hasn't done enough with plans of its own before then."
- As the euro falls to its lowest in more than two weeks against the U.S. dollar, ING says "the threat of retaliation against the European (German) auto industry" may be weighing on the currency. EUR/USD is last down 0.2% at 1.2270, having hit a low of 1.2258. Still, ING expects EUR/USD should hold above support at 1.2200 and 1.2250 this week. Although the U.S. is expected to raise interest rates this week, this is widely expected and ING doubts that Wednesday's Federal Reserve meeting "will be the source of a significant dollar rally."
- Whether or not Abe makes it through the land-sale scandal, Japan may not be able to fend off an increasingly protectionist US with a leader with "reduced or diminished political capital," says Mizuho Bank's Vishnu Varathan. That's helping pressure Japanese stocks anew today, he adds; the Nikkei ended morning trading down 0.9%.

Mar 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Gold prices extended losses into a fourth session, with the dollar remaining supported as investors expect the U.S. Federal Reserve to raise interest rates this week.
- Oil prices fell as increased drilling in the United States pointed to more output, raising concerns about a return of oversupply. 
- London metal prices slipped on simmering unease that tensions between the world's top two economies could dent demand, while markets turned to this week's Federal Reserve meeting in expectation it could push up the dollar.
- Chicago wheat fell to its lowest in more than three weeks with the market facing pressure from abundant global supplies and improved weather in parts of the U.S. Plains.

- Trade Associations to Petition Trump Administration to Halt China-Tariff Plans
Forty-five trade associations, representing a wide swath of the U.S. economy, are petitioning the Trump administration to halt plans to levy tariffs on China and to work instead with other nations to press Beijing to end restrictions on foreign firms.
     Imposing heavy tariffs, said a letter by the trade groups, "would trigger a chain reaction of negative consequences for the U.S. economy, provoking retaliation; stifling U.S. agriculture, goods, and services exports; and raising costs for businesses and consumers."
     The White House is putting together a package of measures, including tariffs on at least an annual $30 billion of Chinese imports, to pressure Beijing to end requirements that U.S. companies transfer technology to Chinese firms, The Wall Street Journal has reported.
     A decision may come this week or the next. While it may be too late for the group to fend off tariffs, it hopes at least to slow down the process. The group wants U.S. industries affected by any tariffs to be able review proposed levies and make comments before they go into effect.
     "We request that the administration allow industry experts the opportunity to comment on these issues, including the economic impact of any potential actions," said the letter, which is dated Monday.
     The group includes trade associations covering the technology, retail, agricultural and consumer-goods industries. It includes household names such as Apple Inc., Alphabet Inc.'s Google, IBM, Nike Inc. and Walmart Inc.
     "We focused on tariffs because we know they don't work," said Dean Garfield, the chief executive of the Information Technology Industry Council, which organized the letter.
     The group's preferred way of dealing with Beijing is to "work with like-minded partners to address common concerns with China's trade and investment policies," the letter said. "Imposition of unilateral tariffs by the administration would only serve to split the United States from its allies."
     Mr. Garfield said international pressure sometimes prompts China to roll back actions that discriminate against foreigners. U.S. technology firms, from Intel Corp. to Apple, depend on China operations for a big chunk of their profits earned by working in China and selling there.
     The administration has said that change in China happens too slowly, resulting in a $375 billion U.S. merchandise trade deficit with China. Many in U.S. industry agree with the administration that Beijing uses its enormous market to force companies to improperly transfer technology and submit to other discriminatory practices. But they want the administration to take a less confrontational approach.
     The administration is also considering bringing a case before the World Trade Organization alleging that China is violating trade rules, which would be a way to try to build a coalition of nations. But it is unclear whether that will proceed; a case would be overshadowed by any move to levy tariffs before getting WTO approval.
     Countries bring cases to the WTO in Geneva for adjudication. If a country wins a claim, it is authorized to assess tariffs, unless the losing nation changes its offending practices.
     Such actions take years to complete, and the Trump administration is looking for faster action.
     The move against China comes on the heels of a White House decision to assess tariffs of 25% on steel products and 10% on aluminum, citing national-security concerns. Industry groups also had urged the administration to take a multilateral approach in that case and to form a coalition to press China to cut its excess metals capacity, which is widely seen as the source of a global glut. Instead, the U.S. chose tariffs.
     Mr. Garfield, though, said he saw hopeful signs in the way the administration handled the metal cases. Initially, the administration said it would apply tariffs across the board to all nations. Now it has carved out exceptions for Mexico and Canada and is considering them for other nations. It also has set up a formal process for companies to win exclusions for their products.
     The group wants the administration to set up a similar process before assessing any tariffs, as a way to guard against potential economic harm. Tariffs on information and communications technology products would lower overall U.S. productivity growth, said a report on Friday by the Information Technology and Innovation Foundation, a research group in Washington, D.C., that takes a hard line on China.
     "Let's create a process where the administration shares their thinking and allows people to comment," Mr. Garfield said.

Mar 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were set to fall this week, with both benchmarks dropping slightly, on concerns among investors about rising supply from the U.S. and other nations threatening to undermine efforts by OPEC and other producers to tighten the market.
- Gold prices held firm as tensions between the United Kingdom and Russia and renewed U.S. political concerns offset worries about a possible U.S. rate hike next week.
- London copper prices recovered from early losses to trade flat, with the dollar giving up some of Thursday's gains following reports of another shake-up in the White House.
- Chicago wheat ticked up but was poised for a second week of decline, weighed down by abundant global supplies and improved weather in some key northern hemisphere suppliers.
- The dollar fell versus the yen, after a report that U.S. President Donald Trump would remove his national security adviser added to concerns about recent White House personnel changes and what that meant for policy.

- US protectionist policies could also hurt Indian exports, says Capital Economics, potentially exacerbating a slowdown in overseas shipments seen in the last few months. The research firm says the Trump administration appears to be gearing up for more trade restrictions that could ensnare others including India despite their focus on China. Earlier this week, the US launched a challenge to subsidies India provides its exporters at the World Trade Organization. Recently announced import tariffs on steel and aluminium sent Indian metal shares sinking.
- The US Chamber of Commerce urges Seoul and Washington to close "any openings for North Korea to drive a wedge" between the allies in the run up to separate summits among their leaders. The call comes amid growing US-South Korean trade friction over President Trump's planned steel tariffs and disagreement over a 2012 free trade deal Trump has blamed for widening the US trade deficit. "Economic tensions are likely to be exploited and may provide leverage to adversarial powers," the Chamber of Commerce says in a statement marking the 6th anniversary of the deal. Unlike Trump, the chamber has defended the pact as expanding US exports and creating more jobs in America.
- The yen jumped this morning on fresh reports that Trump is moving on from National Security Adviser McMaster, says Akira Moroga at Aozora Bank. He adds concerns are growing about a US hardline stance ahead of any talks with North Korea. The yen rose some 0.3-0.5% for the morning, but added that once the dollar broke back below Y106 buyers quickly emerged. Meanwhile, yen-long speculators have been quick to take profits. The dollar is at Y106 after getting to Y105.94; it was at Y106.30 before the yen's jump. That also sent the Nikkei to session lows; it's now off 0.3%.
- Senior Pentagon officials increasingly worry that China, Russia or other potential adversaries could blind or otherwise attack US satellites used to identify and track hostile missiles. The Air Force has scrapped plans to build two more of the current design, opting instead to switch to different versions with smaller, more defensible sensors. Air Force Secretary Heather Wilson tells lawmakers the service is accelerating "efforts to deter, defend and protect our ability to operate," in space, and has asked for an overall 18% boost in space spending in the next budget. But critics, including some former senior Pentagon planners, contend next-generation satellite designs don't go far enough and the Pentagon lacks a clear focus on space priorities.
- Top civilian and uniformed Air Force leaders appear to have been caught flat-footed by President Trump's statements about the need to establish a "space force," or separate branch of the armed services. Testifying before a House defense appropriations subcommittee, Gen. David Goldfein, said he was "really looking forward to the conversation," about the topic, without elaborating. Air Force Secretary Heather Wilson was even more noncommittal. In the past, both officials as well as Defense Secretary James Mattis strongly opposed the concept, arguing such a major structural change would be time-consuming, expensive and counterproductive.
- U.S. tariffs have sparked debates over possible global trade wars, but geo-political risks weren't once the cause of the eight periods of high volatility in the past 47 years, says BNY Mellon. "Despite recent events, 21-day realized volatility has continued to trend lower, much as it has since late February," according to BNY Mellon. The VIX volatility index reached 50 beginning of February on fears of higher U.S. inflation, but on Thursday the index is at around 16. The U.S. Treasury interventions were, in fact, the most common reason of a spike in volatility. "In other words what happens in Washington definitely seems to matter," BNY Mellon says.
- Could President Trump follow through on his threat to withdraw the US from Nafta if ongoing trilateral negotiations don't bear fruit? Economists surveyed in recent days by WSJ see it as possible, but not likely. On average, the odds of a Nafta pullout were 29% in this month's survey, up a bit from 26% back in November. "As in the case of North Korea, we must separate posturing from policy," says Sean Snaith of the University of Central Florida.
- Economists don't think President Trump's recent tariff announcement (25% on imported steel and 10% on imported aluminum) will blow a huge hole in the national job market. On average, forecasters surveyed in recent days by WSJ saw a net loss of about 53,000 nonfarm jobs due to the levies. They on average expected roughly 137,000 jobs lost if other nations retaliate with tariffs of their own. There remains enormous uncertainty about what might happen if matters escalate into a full-blown trade war remain, with economists' estimates for job losses ranging from 10,000 to 5M.
- Economists surveyed in recent days by WSJ still expect the US will see healthy growth in 2018, with an average prediction of 2.9% GDP growth this year. But 51% of forecasters surveyed say the risks to growth are tilted to the downside, jumping from just 30% a month earlier. The likely explanation: President Trump's steel and aluminum tariffs have some economists worried about the potential for retaliation and escalation into a full-blown trade war.
- The fact that CNBC Senior Contributor Larry Kudlow is being appointed as the White House economic adviser, replacing Gary Cohn, won't materially alter "unfavourable dollar prospects," says ING. Mr. Kudlow "stands behind the current administration's tough stance on tariffs" and he "hinted at phase two of tax cuts," which are dollar-negative, particularly against high quality G10 low yielders such as the euro and the Japanese yen, ING says. EUR/USD trades down 0.3% at 1.2326.
- The newly appointed White House economic adviser, CNBC Senior Contributor Larry Kudlow, is in favor of tax cuts which U.S. President Donald Trump has recently implemented, but he is also in favor of a stronger dollar. Mr. Trump is the opposite--in favor of a weaker dollar--but "perhaps Kudlow's demand for a so-called 'king dollar' might yet convince the President," says Commerzbank. Mr. Kudlow said Mr. Trump's policies actually point towards a stronger dollar and he also argued in a recent commentary that a weak currency doesn't create jobs but only leads to higher inflation, which in turn would reduce wealth.
- The International Energy Agency raised its global oil demand estimate for 2018, but warned that "signs of protectionism from the U.S." threaten that forecast. The agency said steel and aluminum tariffs recently imposed by Washington "raise the possibility" of a global trade war, noting that a slowdown in global trade would have "strong consequences" for oil demand. However, the IEA also cited the International Monetary Fund's recent prediction that world trade should grow by 4.6% this year, "suggesting continued support."

Mar 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held steady, supported by healthy global demand but capped by the relentless rise in U.S. production that is undermining efforts led by producer cartel OPEC to cut supplies and prop up markets.
- Gold prices edged up, lingering near one-week highs hit in the previous session on political tensions between Britain and Russia and as worries over a potential trade war dragged on stocks and the dollar.
- London aluminium hovered near its lowest since late December on Thursday on expectations of rising supply as China's winter pollution controls expire.
- Chicago soybean futures ticked higher after dropping to a three-week low early in the session as the market remained under pressure from a forecast of a higher planted area in the United States.
- The dollar touched a one-week low against the yen, as lingering worries about global trade tensions weighed on investors' risk appetite.
- The FTSE 100 is tipped to open broadly unchanged after Wall Street ended Wednesday in the red over escalating trade tensions. Analysts expect London's blue-chips to start the session around Wednesday's closing level of 7132 after the Dow Jones closed nearly 250 points down. "Investors are growing increasingly nervous as Trump rebuilds a White House team more in line with his interventionist approach to foreign policy and as reports surfaced that he's looking to put $60 billion of tariffs on imported goods from China, no longer just steel and aluminum," says Jasper Lawler at London Capital Group. In corporate news, Anglo-Dutch consumer product company Unilever outlined plans to combine its two legal entities--NV and PLC--into a single holding company incorporated in the Netherlands, dealing a blow to the U.K.'s plan to leave the EU.
- There is a risk of a "a dangerous decline" in the dollar as markets price in a "Donald Trump risk premium," says Chris Turner, head of FX strategy at ING. He says ING began 2018 thinking that the dollar would weaken "for good reasons," because the global economy was performing well and as other countries "catch up." But recently U.S. Treasury yields have seen "the wrong kind of rise", due to fears of excessive fiscal spending causing U.S. deficits to increase. Under this scenario all U.S. assets could weaken. ING forecasts USD/JPY to fall to 100 by year-end, but if its fears play out "we could easily be looking at 90." USD/JPY last trades at 106.17. However, this is "maybe more of a 2019 story," Mr. Turner says.
- As US stocks fall, shares of industrial and materials companies are among the biggest decliners. The two sectors had come under pressure last week, when talks of US trade tariffs on steel and aluminum imports stoked concerns among investors of retaliatory measures from other countries. While the White House softened its trade stance late last week, helping stocks rebound, stocks and bond yields have dropped anew amid fresh comments from the Commerce Department signaling there will be few product exclusions granted from the tariffs, as well as a stern rebuke from German Chancellor Angela Merkel. Boeing falls 4%. Arconic, a firm specializing in lightweight metals engineering, falls 3%, adding to the S&P 500 industrials sector's losses.
- Rabobank continues to expect the Australian dollar will fall this year due to the threat that Chinese growth could slow down and on the assumption that the Reserve Bank of Australia remains cautious with monetary policy. Any potential trade war between the U.S. and China, would also leave the Australian dollar "undoubtedly ... caught in the cross-fire." Rabobank forecasts AUD/USD will fall to 0.75 by the end of 2018. AUD/USD last trades up 0.2% on the day at 0.7876, having earlier risen to a three-week high of 0.7917, as the Australian dollar "has taken some comfort from the releases of better than expected Chinese economic data overnight."
- Energy Transfer's Rover pipeline is dealing with its latest setback as West Virginia regulators made public a March 5 cease and desist order on construction of the natural gas pipeline Tuesday. The state cited 14 violations in three counties on the 713-mile pipeline and construction can only resume once officials decide it is complying with clean water regulations. The order is latest from state regulators halting construction of the pipeline, as officials in West Virginia and Ohio previously halted construction on Rover. According to Height Securities, the order is a signal from generally pipeline-friendly West Virginia that it is watching and not afraid to halt construction.
- The Federal Energy Regulatory Commission will tackle tax issues at its monthly meeting Thursday, as utilities and pipeline companies wait to hear whether they will be forced to reduce rates as result of the corporate tax cut. FERC's top agenda items for electric companies and natural gas pipelines are the impact of the tax overhaul. Clearview Energy Partners thinks FERC will take a mixed approach that could result in reductions in electric and natural gas rates in the near-term to account for the tax rate decline in 2018, but may need more time to address deferred tax balances.
- Analysts have pointed out that the U.S. tariffs are negative for the dollar because it could spark global political risks. Commerzbank says President Donald Trump's actions should only put pressure on the dollar if "the status of the dollar as lead currency could be at risk" and if the market assumes "the U.S. administration...might end the sovereignty of the Fed." Otherwise, "protectionism - as stupid and unfortunate as it may be - leads to an appreciation of the currency of the country that is implementing it," Commerzbank says.
- Boeing shares now more than 11% below their all-time peak two weeks ago following latest dip Wednesday, erasing some $25B in market value. True, 1Q deliveries were light, but 2018 guidance remains unchanged and execution still looks good aside from blips such as the new Air Force tanker. Investors may just be finding better value elsewhere in aerospace, given Boeing's long run-up, and industrial stocks have been pressured by the steel tariff discussion. Still, not the backdrop executives might want as they welcome President Trump to its St Louis defense facility later Wednesday.
- Farm groups and Capitol Hill staff have spent weeks hammering out legislative language to resolve one of the biggest unintended consequences of the new tax law -- a provision that enables larger tax savings if farmers sell their crops to cooperatives, versus private grain companies. But one prominent agriculture organization opposes that fix. The National Farmers Union calls on Congress to reject the proposal, arguing that after the tax law massively cut corporations' tax rates, the provision helped level the playing field for cooperatives, which are farmer-owned entities that collectively market crops and buy supplies. Under the proposed fix, "not only would corporations be better off, but farmers would be disadvantaged by working with their cooperatives," NFU President Roger Johnson says.
- European shares rise on expectations of a U.S. stock bounce-back as fears about Donald Trump's decision to oust Secretary of State Rex Tillerson subside ahead of economic data. The Stoxx Europe 600 gains 0.4% to 377.15 as analysts predict a 110-point leap when the bell rings on Wall Street. "Whether those gains actually materialize at the open may depend on the U.S. retail sales and PPI readings," says Connor Campbell at Spreadex. Adidas AG led the pan-European index higher after posting a fourth-quarter net loss due to a one-off negative tax effect, but upgraded its long-term profitability target. Shares gain 10.8%. Shares in Bpost SA fall 20% after it forecast lower-than-expected 2018 core earnings.
- The focus is again on the 1.3015 level in USD/CAD after the currency pair broke above 1.2950 in response to comments on Tuesday from Bank of Canada Governor Stephen Poloz, who pushed back expectations for the next interest rate increase, says RBC. The probability of an April rate rise has declined from 35% to 25%, while U.S.-Canadian interest rate differentials have widened, it says. RBC "would caution against getting carried away with over-interpreting Poloz's speech." USD/CAD last trades at 1.2946, down 0.1% on the day.
- Gold is down 0.37% at $1,326.55 a troy ounce, giving up some of its overnight gains while remaining above its level prior to an unexpected tweet from U.S. President Donald Trump on Tuesday announcing the firing of Secretary of State Rex Tillerson. Gold maintains its on-the-day gains even after the U.S. dollar recovered from its losses on news of Mr. Tillerson's departure, with investors seeking haven protection from U.S. political uncertainty, according to John Meyer, an SP Angel analyst. However, with CME Group data forecasting an 88.8% probability of a Federal Reserve interest rate increase when the central bank meets next week, any gains in gold prices may prove short-lived.

Mar 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable after posting two days of declines at the start of the week.
- Gold prices rose to a one-week high on a weaker dollar following U.S. Secretary of State Rex Tillerson's sudden dismissal, which invigorated concerns of protectionist policies hampering global risk appetite.
- London metals logged a slow start as concerns about an escalation in U.S. trade tariffs kept traders cautious, although better-than-expected China industrial production figures for the start of the year lent support to prices.
- U.S. corn futures fell, retreating from a seven-month high touched in the previous session, as fears mounted about U.S. protectionist trade policies with the firing of U.S. Secretary of State Rex Tillerson.
- London shares are likely to fall at the open in response to political turbulence after U.S. President Donald Trump ousted Secretary of State Rex Tillerson. Traders expect the FTSE 100 Index to drop 21 points to 7117 while Germany's DAX is tipped to decline 71 points. Mr. Trump is thought to have taken the decision following a disagreement over Iran. "There have been many changes to Trump's administration and investors dislike the political unpredictability," says David Madden at CMC Markets. In corporate news, Wm. Morrison Supermarkets declared a special dividend of 4 pence while insurer Prudential said it was de-merging its investment arm M&G Prudential.
- The 10-year German bund yield is trading marginally lower as impetus may come today from supply as well as from speakers at "The ECB and its Watchers" conference in Frankfurt. "A prominent line-up of ECB speakers is likely to reiterate dovish guidance and EU-cheerleading with 'Trump risks' augmenting," Christoph Rieger, head of rates and credit research at Commerzbank, says. The 10-year bund yield is trading at 0.61%, down 1 basis point, according to Tradeweb. On the supply front, Germany is offering EUR1.5 billion in the August 2048 bund, while Portugal auctions EUR1 billion to EUR1.25 billion in October 2028 and February 2045 bonds.
- If hawkish trade moves by the US end up with it slapping a 10% tariff on all imports from China, that would slice 2 percentage points off China's overall export growth and pull down real GDP growth by up to 0.4 point, UBS estimates. The effect could be smaller "if exporters and retailers decide not to fully pass on the tariffs but sacrifice a portion of their profit margins." But if tariffs on Chinese exports push buyers to source their imports from other economies, the impact on China could be amplified, it says.
- President Donald Trump's recent moves on tariffs suggest an all-out global trade war isn't likely, says AMP Capital Chief Economist Shane Oliver. The move to hit China hard with import tariffs "smacks a bit of The Art of the Deal--go in hard, then back down to something that sounds more acceptable," says Oliver. Trump is unlikely to push tariffs too far as the resultant price increases would hurt his base while stock market falls would constrain Trump's ability to take credit for gains, he says. "Trump is trying to appeal to his base ahead of the mid-terms, but a full-blown global trade war is unlikely."
- Just as air pressure is irrelevant to New England Patriots' wins, tariff rates are not the reason for America's high trade deficits, says David Kelly, chief global strategist at JPMorgan Funds. One reason for the high trade deficit is that US products are too expensive and everyone else's are too cheap, and a too-high dollar is the chief culprit, Kelly says. A key second factor boosting the trade deficit is the US budget deficit, he says. Both domestic and international economies look healthy, but international economies have more room to grow, he says. If "tariff frustration" finally leads to a lower dollar, international equity returns could be amplified, helping them outpace US stocks over the next few years as they did in 2017, he says.
- President Donald Trump's decision to fire secretary of state Rex Tillerson could undermine the Iran nuclear deal and roil oil markets, says Helima Croft, head of commodity strategy at RBC Capital Markets. Mr. Trump has repeatedly attacked the Iran agreement and warned he may scrap it and bring back sanctions. Mr. Tillerson had advocated for the U.S. to remain in the deal, Mr. Croft says, while his successor, CIA director Mike Pompeo, has been much more hawkish and has repeatedly denounced the deal. If the U.S. exists the agreement, this will impact the Iranian oil sector as it will curb the enthusiasm of European and Asian companies to invest in the Iranian oil industry and could force foreign refineries to source less crude from Iran, she said.
- JPMorgan Chief James Dimon said he agrees with President Trump that there are "some major issues around trade," but that the "right way to go about it is to think about it strategically with the allies and not do these one-off things that tend to backfire." Dimon, who is also chairman of the Business Roundtable trade group, spoke on the pro-business trade group's media call which also shared that CEO projections for sales and plans for capital spending and hiring over the next six months have reached the highest level since the survey began in 4Q 2002. Dimon reiterated that he respects Gary Cohn and hopes the next NEC head is "someone strong." Dimon added and has heard "great things" about incoming Secretary of State Mike Pompeo.
- The U.S. consumer price index rose slightly in February and core CPI stayed flat, meaning inflation fears were averted and indicating that "the Fed need not get overly aggressive" next week at the monetary policy announcement, according to BNY Mellon. Still, the Fed is widely expected to raise interest rates at the meeting. Inflation got overlooked by the dollar, however, as the firing of Secretary of State Rex Tillerson and President Trump's personal assistant John McEntee took precedence and pushed EUR/USD to a five-day high of 1.2386 and GBP/USD to a high of 1.3974.
- Chief executives of America's largest companies are expressing increasing optimism in the economic outlook following the passage of sweeping tax reform. CEO plans for sales, capital investment and hiring each rose to record highs, according to the Business Roundtable's first quarter survey of executives, which dates back 15 years. CEOs boosted their projection for 2018 gross domestic product growth, predicting growth at a 2.8% rate compared to an earlier estimate of 2.5%. Jamie Dimon, chairman of the Business Roundtable and chief executive officer of JPMorgan Chase, said the survey results should translate into more jobs for Americans. "We must do everything possible to continue to build on this strong momentum," Dimon said. The survey, however, doesn't take into account President Donald Trump's steel and aluminum tariffs announcement.
- GBP/USD rises to a two-week high of 1.3971 on a mix of sterling gains after U.K. Chancellor Philip Hammond said the U.K. would need smaller debt to finance the budget and dollar falls after U.S. President Donald Trumps fired Secretary of State Rex Tillerson and Mr. Trump's personal assistant John McEntee. WorldFirst says in a note the rise in GBP/USD "was more a function of the in-line U.S. inflation number and the reaction to the sacking of Rex Tillerson than anything going on in the House of Commons." During the U.K. Spring budget announcement, Mr. Hammond also increased the U.K. GDP growth forecast for 2018 to 1.5% from 1.4%. EUR/GBP falls to 0.8855 from 0.8883.
- The dollar falls after the list of White House people ousted by U.S. President Donald Trump grows, with Secretary of State Rex Tillerson and Mr. Trump's personal assistant John McEntee the latest to be fired. Mr. McEntee was escorted without being allowed to collect his belongings and without his jacket, WSJ reports. EUR/USD rises to a five-day high of 1.2386 and USD/JPY falls to 106.76, from 107.24 previously, on the back of the news. Mr. Tillerson will be replaced by Central Intelligence Agency Director Mike Pompeo.

Mar 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, extending losses from the previous session, as the inexorable rise in U.S. crude output weighed on markets.
- Gold prices crept lower on a firmer dollar as investors waited for U.S. consumer price data due later in the day to gauge the outlook for inflation and the Federal Reserve's rate hike stance.
- Shanghai aluminium prices fell more than 2 percent, slipping below the 14,000 yuan ($2,213) a tonne mark for the first time since late 2016, just two days before winter output restrictions on Chinese smelters are due to be lifted.
- U.S. wheat futures edged higher as the U.S. Department of Agriculture said production in a key growing region was hit by adverse weather last week.
- Steel and aluminum tariffs might take a smaller bite out of General Motors' and Ford's bottom lines than originally thought, JP Morgan says. The bank lowered EBIT projections for Ford by $200M this year and $400M in 2019. Its profit estimate for GM this year is unchanged; it drops by $300M in '19. The bank cites price protections in annual steel contracts and the auto makers' ability to partially offset the tariff impact through cost cuts. An earlier Goldman Sachs estimate put the impact around $1B/year for each auto maker. JPM forecasts FY'18 EPS for GM of $6.41 and $1.51 for Ford.
- The government's deficit-exploding tax and spending plans are getting noticed by the general public. The New York Fed finds in its Survey of Consumer Expectations for February that the median expected growth in government debt a year from now increased "sharply" to 7.5% rise last month, from 5.9% expected gain in January and a 2017 average of 5.6%.
- GBP/USD could "find some upside potential towards 1.40" if market expectations of an improvement in U.K. fiscal projections are validated, says UniCredit, a day before U.K. Chancellor of the Exchequer Philip Hammond's Spring Statement. Societe Generale expects Mr. Hammond to say that Britain needs to borrow less this fiscal year given that, after Brexit, both earnings and expenses have been better than expected. "Our house forecast is for gilt issuance to fall to a new post-Lehman era low of GBP109.5 billion in 2018-19, down from GBP115.1 billion last year," SocGen analysts write in a note. GBP/USD rises 0.4% to 1.3900.
- USD/JPY falls, partly influenced by large USD/JPY option expiries at 107, says Kenneth Broux, head of corporate research and forex at Societe Generale, adding that investors who bought the options may try and keep USD/JPY below that level. USD/JPY last trades at 106.53, down 0.3%. Japanese investors' repatriation of earnings ahead of fiscal year-end also contributes to USD/JPY fall, Mr. Broux says. Moreover, the political scandal in Japan may be undermining Prime Minister Shinzo Abe's authority, and by affiliation his Abenomics policy, which targets a lower yen, he adds. Otherwise, the fall in USD/JPY is "counterintuitive" given that rate spreads are widening in favor of the U.S. again. USD/JPY down 0.2% at 106.63.
- U.S. President Donald Trump should consider that German car makers contribute significantly to the U.S. automotive trade balance, says Bernhard Mattes, head of German automotive industry association VDA. BMW is the second biggest exporter of cars in the U.S., Mr. Mattes says in response to threats made by President Trump that the country would impose tariffs on European cars, singling out German car makers BMW and Daimler's Mercedes-Benz. "Emotions and threats won't bring us further in this debate," he says and stresses that a trade war between the U.S. and EU has to be avoided in any case.
- EUR/USD is likely to trade in a 1.2250-1.2300 range this week, according to ING, saying "with the post-ECB move lower a good opportunity to buy again." Eurozone finance ministers are meeting on Monday, but it's unlikely they will talk down the euro given the eurozone's current account surplus and since the euro is not particularly volatile, ING says. Also, talking down the common currency wouldn't be a good idea as it could provoke U.S. President Donald Trump, especially when Europe is proposing to be exempt from Mr. Trump's tariffs, ING adds. EUR/USD rises 0.2% to 1.2330.
- The U.S. dollar falls Monday, taking EUR/USD up 0.3% to 1.2338, given that global risk sentiment is back on after news that Australia was exempted from the U.S.'s recent steel and aluminum tariffs. RBC says "risk appetite has recovered back to the highest level since January 23." The Australian dollar, also a risk-on currency, rose to a
two-week high of 0.7880 against the U.S. dollar on the news, and is last up by 0.4% at 0.7875.

Mar 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Crude oil futures rose as Asian stock markets gained on news that North Korean leader Kim Jong Un will meet with U.S. President Donald Trump.
- Gold prices extended losses into a third session as the dollar strengthened against the yen on hopes of easing tensions between the United States and North Korea and ahead of U.S. non-farm payroll data later in the day.
- Shanghai copper touched its lowest since September as the dollar edged upwards and investors focused on escalating tensions over U.S. metal imports.
- Chicago wheat prices slid around 1 percent and were set for their first weekly decline in eight weeks, pressured by an improving outlook for the U.S. winter wheat crop and ample world supplies.
- The European steel industry on Friday condemned Mr. Trump's decision to include them in the tariffs, saying it " will suffer significantly from the loss of one of its major export markets." "The national security justification the President has used - and the linking of these tariffs to NATO funding - is an absurdity", said Axel Eggert, the director of general of EUROFER, the biggest European steel industry association, in a statement. He said that redirected steel exports to Europe could cost "tens of thousands of jobs" in the European steel sector and adjacent industries and called on leaders in Brussels to strike back. "We cannot stand idly by while the US lights a match under the global trading system," Mr. Eggert said.
- The FTSE 100 index is expected to open flat at 7203, according to CMC Markets, in subdued trading before U.S. jobs data and after U.S. markets shrugged off confirmation of the U.S. imposition of a 25% tariff on steel and 10% on aluminum. Markets are likely to have a tentatively positive reaction to news that U.S. President Donald Trump agreed to meet North Korea's Kim Jong Un for talks on nuclear weapons, analysts say. Inmarsat shares will be in focus after the company announced results, as well as GVC, which also released results. U.K. industrial production and trade data for January will be watched at 0930 GMT.
- If Donald Trump is up early in the morning and looking closely at German trade data, he might see something he'll like. A detailed look shows that Germany's trade surplus with the U.S. has narrowed over the last 12 months. For example, in January 2017, Germany exported nearly EUR 9 billion in goods to the U.S., while it imported only about EUR 5 billion. This January, the numbers were EUR 8.6 billion and EUR 5.1 billion, respectively--a slight narrowing of the surplus. One wonders if this would give Mr. Trump confidence as he fights with Europeans over tariffs.
- Australia's prime minister argues the US has "no case" for placing tariffs on Aussie steel, with Turnbull telling reporters that "whatever complaints the United States may have about other trading relationships it has no complaints with respect to Australia." The US has a trade surplus with the country. Turnbull added he'll be "relentless" in pursuing an exemption for the country; Canada and Mexico will get ones initially. "We make our case very simply--that whether you look at it from a strategic point of view, from an overall economic relationship point of view, whether you look at it from a trade point of view--there is no case for imposing tariffs on Australian steel exports to the United States, principally to the West Coast."
- Increased risk appetite is reflected in the Japanese debt market soon after President Trump agrees to meet with North Korean leader Kim Jong Un. Japanese government bond yields are higher across the board on Friday. The 40-year JGB yield is up a basis point at 0.890%, the 20-year is also up 1 basis point at 0.545% and the 10-year is higher by half a pip at 0.550%. Meanwhile, the dollar is at session highs of Y106.70.
- Australia continues to seek confirmation it will be able to obtain an exemption from US metal tariffs, says foreign minister Julie Bishop. President Trump hasn't explicitly said there will be an exemption for Australia and representatives continue to advocate strongly for a deal, Bishop tells ABC radio. "We are all over it," she says. "All our diplomats, our ministers have been making contacts with counterparts throughout the administration," Bishop says.
- Mexico's government concurs with Canadian officials in saying that steel-tariff exemptions announced today by the US aren't part of Nafta talks and can't be used as leverage to revamp the trade treaty. The Economy Ministry said that Mexico has imposed import tariffs on steel products from countries producing more steel than demand necessitates and redirecting steel to North America. "It's possible to address this problem and comply with our international commitments within the framework of the WTO."
- Canada applauded the US decision to exempt the country from steel and aluminum tariffs on national-security grounds. However, Foreign Minister Chrystia said the decision would have no impact on Canada's approach at the Nafta negotiating table. Some observers say Canada could find itself in a predicament, with US demanding further Nafta concessions in return for reworked free-trade pact and no steel/aluminum tariffs. The Trump administration's exemption for Canada is also contingent, it said, on the state of trade negotiations. Freeland, however, said the tariffs and Nafta are "distinct" issues, and Canada's approach and strategy on Nafta "are unchanged." The US, Canada and Mexico have sparred at times over some of the White House's most aggressive Nafta demands on cars, the dispute-resolution regime and government procurement.
- The European Union held out hope that the US would exempt the 28-nation bloc from import duties on steel and aluminum that President Donald Trump officially unveiled Thursday evening. "On tonight's announcement--the EU is a close ally of the US and we continue to be of the view that the EU should be excluded from these measures," the bloc's top trade official, Cecilia Malmstrom, said in a tweet from her official account. "I will seek more clarity on this issue in the days to come." Malmstrom will meet with US Trade Representative Robert Lighthizer and the Japanese Trade Minister in Brussels on Saturday to discuss the US tariffs as well as how the trilateral trade alliance can counter unfair Chinese economic policies.
- Cumberland Advisors always thought it was a mistake that municipal bonds were left off the list of high-quality liquid assets allowable under rules aimed at ensuring banks can raise enough cash during a financial-market meltdown, says John Mouseau, the company's executive vice president and director of fixed income. High-quality corporates were included as high-quality liquid assets and munis weren't when on a credit-quality basis, munis have outshone corporates for many years, he says. Bipartisan legislation with a section aimed at making it easier for the nation's megabanks to buy state and local bonds is expected to clear the Senate as early as this week. Yes, some munis could become illiquid during times of crisis, but in the most severe crisis, anything other than Treasurys could, Mouseau says.
- Canada's biggest private-sector union warns Liberal government that exemption from Trump administration's steel and aluminum tariffs could carry a steep price. Unifor, which represents among others auto and aerospace workers, says Trump administration will now try to exact a steep price at the Nafta negotiating table in return for the tariff exemption. It is "simply a stay of execution," said the union, whose leader, Jerry Dias, has spoken extensively to Canadian Foreign Minister Chrystia Freeland and other senior officials on the Nafta team. "The US is now holding tariffs over Canada's head at the NAFTA table ahead of the next round."
- Following a speech in Vancouver, Bank of Canada deputy governor Timothy Lane made two points during an audience Q&A that's likely to stick with Canada watchers. First, he said the US corporate tax cuts now "tip the scales a bit" toward making business investment in the US more attractive compared to Canada. BoC has already incorporated a downgrade to its outlook due to that fact. Meanwhile, he said BoC's cautious approach on rate policy is justified in part due to elevated household debt. BoC wants "to make sure we are not overdoing the increases in light of the effect it might be having on households," Lane said. "It's an important factor in background."

Mar 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices steadied, supported by healthy demand, after falling the previous day on the back of record U.S. crude production and rising inventories. 
- Gold prices held steady as investors awaited more details on U.S. President Donald Trump's proposed steel and aluminium tariffs, the outcome of the European Central Bank's policy meeting, and U.S. jobs data. 
- Metals at risk of a tariff on U.S. imports largely recovered from steep falls after an official said certain key partners could be exempt from duties allaying concerns over demand.
- U.S. soybeans edged lower to hit a one-week low, as traders readied for a widely watched U.S. Department of Agriculture report that is expected to confirm lower production from Argentina, one of the world's largest exporters.
- The dollar recovered ground, drawing relief from positive labour market data and the White House saying Canada and Mexico, and possibly other countries, may be exempted from planned U.S. import tariffs on steel and aluminium.
- There is a risk that money coming into CEEMEA assets "may not only slow down, but could be partially reversed if the risk of full blown trade wars increases significantly," according to Rabobank. This would hurt local currencies, which until now have held "relatively well" because "at least some foreign investors would opt to convert their profits back to a hard currency," Rabobank says, adding it will look at technicals "to assess whether we are witnessing a major shift in the Goldilocks trend in risky assets."
- At times it has been hard to get an accurate steer on what the actual stance of the White House on trade is given mixed headlines and tweets, says ANZ. President Trump tweeted that the US has asked China to cut its trade surplus with the US by $1B this year. But that is barely the equal of a statistical rounding error considering the US-China imbalance was US$36B in January alone. Perhaps it hints that Washington's appetite for a trade war is actually not that high, ANZ ads. But trade as a topic is not going to go away anytime soon and according to the Atlanta Fed, net exports are currently expected to subtract 0.6 percentage points from US 1Q GDP.
- Australian stocks appear poised for a modest recovery, with futures pointing to a gain of 16 points at the bell after the S&P/ASX dropped 60.4 yesterday to 2902. And IG notes that 11.2 points come out of the market today as QBE Insurance and BHP Billiton trade ex-dividend. Still, it waits to be seen how much conviction investors have in a rebound after global markets stumbled yesterday on news White House economic advisor Gary Cohn was resigning, reigniting global trade concerns. Crude oil continued its decline, and ANZ says base metals fared similarly and iron ore followed the trend. The Australian trade balance for January is due before midday.
- Canada's Prime Minister Justin Trudeau said President Trump told him in a phone call earlier this week that he was focused on moving forward on Nafta. "He was very clear that he was focused on moving forward on Nafta and felt that if we could get a good deal on Nafta there would be no need for tariffs," Trudeau said. He said he told Trump during the call that it makes "no sense" to impose tariffs on Canada because the North American steel and aluminum market is deeply integrated. "I made it very clear that moving forward with tariffs would be entirely unacceptable."
- General Motors Chief Executive Mary Barra called for federal tax credits on electric vehicles to be "expanded so our customers continue to receive the benefit as we go forward." She was speaking to energy-industry executives at the CERAWeek conference in Houston. As GM expands production of the Chevrolet Bolt, it will soon hit a 200,000 electric-car sales cap that triggers the gradual end of the credit. She also called on the energy industry to partner on the development of an electric-car vehicle-charging infrastructure.
- Firms in districts ranging from Dallas to San Francisco reported rising steel prices in the Fed's beige book report. President Donald Trump's push to begin implementing steel tariffs could drive these prices even higher. In Cleveland, steel makers reported ramping up selling prices "because of a decline in market share for foreign steel and expectations about potential outcomes of pending trade cases." San Francisco firms also cited decreased competition from abroad as resulting in elevated steel prices. Atlanta- and Dallas-area manufacturing firms reported increases in steel costs, while in St Louis, steel prices increased moderately.
- Agriculture Secretary Sonny Perdue said he's concerned about potential retaliation against US agricultural exports if President Donald Trump imposes global steel and aluminum tariffs, adding that the the US should "maintain relations with out allies that make sense." Perdue, who hails from the peanut-growing state of Georgia, said in an interview he's aware that the European Union this week week included American peanut butter along with other products in its list of US products facing possible retaliation. "Most people believe that China has been the real issue," he said at an event co-sponsored by The Wall Street Journal.
- Whipsawed oil markets embark on another round of selling on falling stock markets, with crude recently dropping under $61/bbl for the first time this week. Oil prices began the day lower on risk-averse moves before rebounding briefly with the release of a weekly EIA oil report that wasn't as bearish as some feared. But when losses in the Dow began topping 300 points, oil investors began looking for the exits again. The resignation of President Trump's top economic adviser Gary Cohn is "making the implementation of Trump's steel tariffs more likely," notes JBC Energy. The Nymex crude oil contract for April delivery is 2.7% lower at $60.93/bbl.
- It may be time to reconsider restrictions on natural-gas exports to countries without free trade agreements with the US, Energy Secretary Rick Perry says at a CERAWeek. Exports to countries like Singapore and South Korea, which have free trade agreements, can be authorized quickly, but shipments to countries that don't -- including big buyers like Japan -- require special Energy Department permission. "I do think it's worth having the conversation about," Perry says. "Just because that's the way they've been done for 20 years or even longer in some cases, I don't consider anything to be particularly sacrosanct." Perry is also promoting new exports to poor countries, especially in Africa, to help spread electricity as a way to lift people out of poverty, and many those countries don't have free-trade
agreements with the US.
- US trade policy will be a major factor in the Bank of Canada's next interest rate decision, due out in April, Royal Bank of Canada says. The central bank on Wednesday held its key rate at 1.25%, citing developments in trade policy as a source of growing uncertainty for Canada's economic outlook. "The BoC has been worried about the impact of Nafta uncertainty for some time and the latest rhetoric from our largest trading partner has clearly increased the odds of a negative outcome," RBC economist Josh Nye said. He said the bank's caution on further rate increases is appropriate given recent "tough talk" on trade from the US.
- European shares gain as Wall Street got off to a better start than was promised by futures trading. The Stoxx Europe 600 gains 0.26%, or 0.96 points, to 372.33 as the Dow Jones Industrial Average shrugged off fears of impending trade wars to stand 132 points down in early deals. The DAX rises 1.0% and the CAC-40 gains 0.2%. "Things calmed down somewhat this afternoon, though the Dow Jones is still looking pretty fearful of Trump's trade intentions now that Gary Cohn is gone," says Connor Campbell at Spreadex. Aerospace, airline and airport stocks rise after upbeat full-year results from jet-engine maker Rolls-Royce Holdings PLC.
- Deutsche Bank says General Electric may be vulnerable to steel/aluminum tariffs because, well, the company makes gigantic metal machines. The firm also notes GE's products could be a target for trade retaliation from other countries and that higher costs could make the for-sale locomotive business less attractive to potential buyers. In response, GE says it is monitoring the situation, but internal data shows the consumption of imported metals hit by the tariffs is minimal. "Reports on the impact of potential steel and aluminum tariffs on GE's costs are completely ungrounded," a spokesperson said.

Mar 07 - Virtual currencies are commodities, U.S. judge rules 

Virtual currencies like bitcoin can be regulated as commodities by the U.S. Commodity Futures Trading Commission, a federal judge ruled Tuesday. U.S. District Judge Jack Weinstein in Brooklyn ruled that the CFTC had standing to bring a fraud lawsuit against New York resident Patrick McDonnell and his company Coin Drop Markets, allowing the case to go forward.


Click here to read full stories.


Mar 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell, pulled down by weaker stock markets after a key advocate for free trade in the U.S. government resigned, stoking concerns Washington will go ahead with import tariffs and risk a trade war. 
- Gold prices inched up to their highest in a week as the dollar weakened and equities dropped after U.S. President Donald Trump said he would push ahead with punitive tariffs on imports, rekindling fears of a potential trade war.
- Most London metals slipped on heightened fears of a trade war that could derail global growth after U.S. President Donald Trump said he would push ahead with his plan to impose heavy tariffs on steel and aluminium imports.
- U.S. wheat futures slid 1 percent after the U.S. Department of Agriculture (USDA) said the condition of crops across several regions has improved despite recent unfavourable weather.
- Italy, which held elections on Sunday, lines up for scheduled reviews by Fitch and Moody's on March 16. While Moody's may well wait to see what form the next government in Italy takes, "it could also act on its outlook outside of the usual calendar, as it did with Greece recently," says Societe Generale rates strategist Ciaran O'Hagan. Moody's holds Italy at 'Baa2' with a negative outlook. Fitch, which has 'BBB' rating with stable outlook on Italy, said Tuesday that the general election result increases the likelihood of some fiscal loosening in Italy, and further weakens the prospect for structural economic reforms.
- The dollar falls early Wednesday after the resignation of U.S. President Donald Trump's chief economic advisor Gary Cohn reignited trade war fears as Cohn had opposed trade tariffs. USD/JPY is down 0.4% at 105.68, and EUR/USD up marginally at 1.2408. However, the dollar rises against the currencies of countries heavily reliant on trade with the U.S. USD/CAD rises 0.4% to 1.2929 and USD/MXN rises 0.5% to 18.8287. Commodity-linked currencies also fall, with AUD/USD down 0.4% at 0.7802. "We are wary of unchecked protectionist forces turning to the USD as a policy tool," RBC says.
- London stocks are expected to open lower, along with other European stocks, after the resignation of President Donald Trump's top economic adviser Gary Cohn, who had opposed Trump's plan for tariffs on steel and aluminum. The FTSE 100 is expected to open 50 points lower at 7096, according to London Capital Group. Cohn's resignation "leads to the conclusion that Trump has won and is serious about his tariffs," says Jasper Lawler, head of research at LCG. Housebuilders will be watched when Halifax house price data is released at 0830 GMT. Shares in Rolls-Royce in focus after results, as well as NMC Health, Paddy Power Betfair and Legal & General. Packaging stocks will stay in focus following Tuesday's bid for Smurfit Kappa by International Paper Co., with DS Smith releasing a trading update.
- The yen, which tends to benefit in periods of market stress, has done well today in the wake of Cohn's resignation. "It's been a classic risk-off reaction," said Sue Trinh, head of Asia FX Strategy at RBC. The currency is up 0.4% versus the dollar, euro and pound. That as "there's a greater chance that the tariffs go ahead without Cohn leading the National Economic Council."
- Unlike say the EU, Canada or Brazil, Japanese officials have yet to react to Trump's tariff talk on steel and aluminium. Japan is the 7th-largest exporter of steel to the US, though that was just 0.04% of Japan's economic output last year, according to Capital Economics. Meanwhile, US-bound aluminium from Japan is even smaller. As the firm says "restrictions on these metals therefore won't make much difference to Japan's economy," it adds a bigger concern is that they may be "the opening salvo in a broader trade war." Japanese officials are likely to react if Trump targeted a more-important sector: the car industry. It makes up 40% of Japanese exports to the US.
- The head of Australia's central bank enters the ring regarding potential US metals tariffs, warning it could go "very badly" for the world economy. "If it's just confined to the current higher tariffs on steel and aluminum, then I think it's manageable for the world economy," says Philip Lowe. But "this could turn very badly though if it escalates. If we see retaliation and a counter-retaliation, this could turn into a very-big shock for the global economy." He argues the best path forward is for other countries to just sit and do nothing, "not respond and to continue advocating for open trade."
- Prices edged down in the overnight Global Dairy Trade auction and are liable to fall more into the end of the season, says ASB rural economist Nathan Penny. The GDT price index fell 0.6% Tuesday, and he sees the market possibly getting caught in the crossfire if a trade war develops following US plans for steel and aluminium tariffs. "At this stage, there is still a good chance that President Trump backs down on his threats," adds Penny. "Nonetheless, the threat of a trade war is something that bears keeping in mind."
- As Australia Foreign Minister Julie Bishop says she will urge the US to abandon a planned tariff on steel and aluminum imports during a meeting with Secretary of State Tillerson, she calls the departure of Trump economic adviser Gary Cohn over the issue "a loss to the White House." His resignation will further erode support for free-trade policies in DC, she adds. "I believe we will be closer to his view in terms of benefits of open, liberalized trade."
- Gary Cohn's resignation from the White House "should prove far-more meaningful than the tariffs that caused it," says Mike O'Rourke, chief market strategist at JonesTrading. With regard to a potential trade war, "the execution risk is massive and that is why most political leaders try to avoid trade wars," he adds. "Right now, the only upside to the current situation is that tariffs on imported consumer goods would lead to higher inflation, but this is not how the Fed wants it to happen." O'Rourke says, "Had Cohn stayed, he would have been viewed as the counterbalance to temper future protectionist measures. Now there is nobody."
- North Korea's willingness to talk to the US about its nuclear program and to meet with South Korea in what would be the third inter-Korean summit is good news, says Eurasia's Evan Medeiros. But the former Obama administration official adds, "Pyongyang's commitments are more manipulation than opportunity." While noting, "we have been here before," Medeiros says, "The North Koreans are masters of manipulation, and their latest move is par for the course." While Mark Tokola at the Korea Economic Institute of America says the North's willingness to talk should be approached with skepticism, it shouldn't be to the point that DC overlooks the possibility that this could lead to a bigger breakthrough on its nuclear program. "If maximum pressure and isolation were to work, wouldn't it lead to something
like the March 5 headlines?"
- The resignation of Gary Cohn as national economic council director increases the prospects of the US going ahead with import tariffs and clouds its economic outlook, says Yuji Kameoka, chief FX strategist at Daiwa Securities. "The US economy could be damaged by this," he says. The USD/JPY is at 105.62 after falling to as low as 105.45, down from 106.11 late Tuesday in New York. The pair is now down 6.4% in 2018. While Japanese officials have warned against the yen's recent appreciation, Kameoka says any intervention is unlikely unless the yen rises sharply higher.
- Australia PM Turnbull says he will continue to make a very strong case for Australia's steel exports not to be affected by tariffs threatened by the US, but downplays the likelihood of retaliatory trade measures. Turnbull tells a conference that he discussed the issue exhaustively with President Trump and senior members of his administration. "We'll continue very intense private engagement," he says. "There is literally nothing to be gained, even theoretically, in the US from imposing a tariff on Australian exports of steel." Australia exports around A$500 million of steel and aluminum to the US annually.

Mar 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil futures rose for a third session, underpinned by robust demand forecasts and as ministers from OPEC touted the strength of its agreement to cut output to bolster prices. 
- Gold prices edged up on a softer dollar and as investors covered short positions amid jitters about a global trade war due to U.S. President Donald Trump's plan to impose steel and aluminum tariffs. 
- Shanghai zinc prices fell to their lowest since December, tracking a decline on the London Metal Exchange (LME) after LME warehouse inventories rose and on-warrant zinc stocks - those not earmarked for delivery - nearly doubled. 
- U.S. wheat futures fell 1.3 percent as traders squared positions after a sustained rally that saw prices hit their highest in nearly eight months.

- The head of a US trade group representing the videogame industry will attend a White House meeting Thursday afternoon on violence in videogames. Press Secretary Sarah Huckabee Sanders last week said Trump would meet members of the industry. He's raised concerns about the influence of violent videogames and other media on young folks in the wake of last month's shooting at a Florida high school that left 17 dead. "Like all Americans, we are deeply concerned about the level of gun violence in the United States," said the Entertainment Software Association in a statement. It added that videogames are "not the issue," saying, "Numerous authorities and reputable scientific studies have found no connection between games and real-life violence."
- BHP Billiton CEO Andrew Mackenzie slams planned US steel and aluminum tariffs and says he frets about rising anti-free trade sentiment. "Though it may be just a small issue, we need to speak up loudly against these measures being bad for America and bad for the world," he says. Although, Mackenzie, speaking at a Sydney conference, adds that a little caution over whether the controversial tariffs will go ahead as proposed is appropriate.
- You can bet President Donald Trump had one question for new Fed Chair Jerome Powell, according to Kenneth Rogoff, the Thomas D. Cabot professor of public policy at Harvard University: "Are you going to raise interest rates and ruin my beautiful stock market?" says the former chief economist at the International Monetary Fund. Rogoff says the outlook for interest rates is one of his key concerns too. He tells a conference in Sydney the world isn't ready for a quick rise in real rates, and that if US rates start rising faster than expected, "we should worry."
- The fallout in currency markets over mounting trade war concerns was surprisingly more towards a weaker USD. While this may reveal still underlying bearishness for the USD, other currencies, including EUR and AUD, appear to be more at risk than the USD, says Greg Gibbs, strategist at AmpGFX. There are risks that AUD comes under additional pressure. As a large provider of steel-making commodities to China and Asia, it faces a more significant risk that steel tariffs undermine confidence in the global steel sector. Iron ore prices fell on Monday, and maybe a sign of risk building in the China steel sector.
- New Republican leadership in Washington supports the energy industry and will continue pushing for a streamlined permitting process and other changes to help boost the sector's growth, Sen. Dan Sullivan (R., Alaska) tells conference-goers at CERAWeek in Houston. "Yes there is a lot of chaos in DC," he says. "But if you get behind the daily headlines and the daily tweets... there has never been a more exciting time for the American energy sector." Some critics of the Trump administration say its limited changes don't follow through on massive promises for energy, but even just the effort helps change sentiment, which helps investors spend and projects move, says Sullivan and Greg Armstrong, chief executive at Plains All American Pipeline. Federal workers are now proactively offering to guide companies through permitting processes, Armstrong says.
- Canadian stocks rose Monday as fears about President Donald Trump's tariff plan for steel and aluminum ease somewhat. Trump tweeted Monday that Canada could be exempt from the tariffs if a new NAFTA deal was created and signed. The S&P/TSX Composite Index rose 156.69 points, or 1%, to 15541.28. The blue-chip S&P/TSX 60 Index rose 10.1 points, or 1.1%, to 919.77.
- Aluminum and steel tariffs are a bad idea and the US needs to work with global allies on alternatives, Sen Dan Sullivan (R, Alaska) says at CERAWeek. Those alternatives include joint statements, or agreements on quotas to limit the amount of Chinese steel imported by the US and its allies, Sen Sullivan says. He agrees with conclusions from the Commerce Department made public last month that metals imports eroded the country's ability to make its own weapons, tanks, and aircraft, and fingered China for oversupplying the market. "Nobody is talking about China and (tariffs) are splintering what should be aligned interests," Sullivan tells the Wall Street Journal. The Trump administration should be working with the members of the Group of Eight or Group of 20, especially Canada, South Korea and Germany, he says.
- Europe's steel companies will be negatively affected by newly introduced US tariffs, as they limit access to a core export market, according to Moody's Investor Service. The tariffs could also lead to more overseas imports into Europe from countries looking to redirect cheaper steal from the US, Gianmarco Migliavacca, a senior credit officer, said. "The tariff, which is expected to be in force for several years, is credit negative for the European steel industry," Migliavacca wrote.
- It's a big week for the Pentagon's effort to transition a myriad of services to the cloud, but it's started with a whimper rather than a bang. A procurement and pricing contract worth up to $950M awarded last month to Amazon Web Services partner REAN Cloud is being scaled back to $65M, and limited in scope. The announcement is awkward as the Pentagon will host an industry day on March 11 as part of its effort to import and leverage commercial cloud technologies.
- Aeroospace and defense stocks were among those hit by White House talk of aluminum and steel tariffs. But CFRA Research says investors got unnecessarily spooked. " In 2017, aluminum prices (with no tariff) rose about 30%, while steel saw a roughly 40% rise, and the market rewarded aerospace & defense companies with higher valuations, while the companies themselves largely saw higher profit. Large backlogs, strong demand and lower tax rates should help more than tariffs would hurt," analyst Jim Corridore writes. Boeing shares are 0.2% lower and Lockheed Martin falls 1%.
- Boeing must launch it's proposed middle-of-the-market jetliner this year as it's a "strategic imperative", says Avolon CEO Dómhnal Slattery. Boeing says it's still building the business case for a plane dubbed by some as the 797. The veteran head of the Chinese-owned aircraft lessor also warns at an industry conference that any US-inspired trade war "will make Brexit look like a regional warm up act." A quarter of new jetliner deliveries are being taken by Chinese airlines. Slattery, in prepared remarks, calls planned Boeing-Embraer and Airbus-Bombardier tie-ups a "duo duopoly" that will "provide even greater stability for all industry stakeholders."
- Lockheed Martin CEO Marillyn Hewson says customers haven't asked about the potential effect of proposed US steel and aluminum tariffs, and declines comment on the corporate impact given the absence of policy details. Hewson, at Lockheed's media day, flags a longstanding need to support export deals with offsets that create overseas jobs. "Elected leaders and policy makers increasingly want us to purchase products and services from their local companies to help broaden their industrial base, build capability, and support their economy," she says in prepared remarks.

Mar 05 - U.S. Stock Futures Weighed By Italy Election, Trade Worries (Dow Jones)
U.S. stock futures pointed to a weaker open on Monday, as investors appeared unsettled by signs of further political instability in Italy after elections and on lingering trade-war fears. Dow futures  stumbled 113 points, or 0.5%, to 24,423, while S&P 500 futures  dropped 16.2 points, or 0.6%, to 2,674.25. Nasdaq 100 futures  slid 37.25 points, or 0.6%, to 6,768. Major indexes posted hefty weekly losses, with the Dow industrials  tumbling 391 points at one stage on Friday before paring that loss to 70.92 points. That weakness came after President Donald Trump, in a surprise move, on Thursday announced tariffs on steel and aluminum imports, ramping up rhetoric around a potential trade war. Meanwhile, investors were looking at results of Sunday's Italian elections, with no clear winner emerging thus far. That could mean a prolonged period of political uncertainty in one of the eurozone's biggest economies. The euro  was weaker against major rivals. Asian markets were mostly lower, led by a 1.4% drop for Hong Kong's Hang Seng Index . Gold prices  rose modestly, while oil prices  were largely flat.

Mar 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose early ahead of a meeting between OPEC and U.S. shale firms in Houston, raising expectations that oil producers would discuss further how to clear a global oil glut.
- Gold prices rose as the dollar remained subdued on fears of a global trade war, with uncertainty surrounding the outcome of elections in Italy, which could spell new concerns for the euro zone, lending further support to the yellow metal.
- London copper edged up as upbeat comments on China's economy at the annual opening to parliament underpinned prices, while aluminium and metals used in steel fell on concerns over proposed U.S. trade tariffs.
- U.S. soybeans extended gains into a fifth consecutive session as prices lingered near their highest in more than seven months, though rising trade tensions between the world's two largest economies capped the advances.
- The euro clawed back earlier losses but remained prone to volatility as initial results in Italian elections pointed to stronger-than-expected showing for euro-sceptic parties, with no major party blocs winning an outright majority.

- Shares in most European car makers fell in early morning trade following threats over the weekend by U.S. President Trump that the country could impose higher tariffs on European car imports. At the moment, these remarks can be dismissed as "merely saber-rattling," says Evercore ISI. However, if tariffs materialized into policy, BMW would likely see the biggest impact among its German peers, Evercore says. The U.S. is a significant market for BMW and Daimler SUVs and other vehicles, while the contribution of U.S. earnings for Volkswagen is minimal, says Evercore. BMW trades down 2.0%, while shares in Daimler and Volkswagen are down 1.3% and 0.8% respectively. Fiat Chrysler trades 1.0% lower.
- The euro falls, erasing overnight gains. Worries that Italian anti-establishment parties could up take the reins after Sunday's general elections resulted in a hung parliament offset news that the SPD party in Germany voted to form a coalition with Chancellor Angela Merkel. U.S. President's Donald Trump's tariffs on aluminium and steel imports also threaten to hit Germany, Europe's biggest exporter, and intensify the threat of a global trade war. EUR/USD trades down 0.2% to 1.2302, while EUR/JPY is down 0.4% at 129.72 and EUR/CHF down 0.3% at 1.1520.
- The FTSE 100 index is expected to open 35 points higher at 7105, according to London Capital Group, on relief after Germany's SPD party voted strongly in favor of a coalition with Chancellor Angela Merkel's CDU party. Sentiment is likely to be fragile, however, with concerns about the risk of President Donald Trump's plans for import tariffs sparking a trade war and as Italian elections look likely to have resulted in a hung parliament and with far-right parties making strong gains. The latest purchasing managers' survey on services activity in February will be released at 0930 GMT.
- Shares of German car makers will be in focus, following threats by U.S. President Donald Trump to increase tariffs on imports of European cars. "Americans buy almost no French and comparably few Italian cars, therefore German manufacturers would be impacted the most," says analyst Heino Ruland at Ruland Research. Apart from this, Volkswagen shares will be watched closely as media reports on Sunday said the company is planning to change the legal structure of its truck division, moving closer to a potential IPO of the unit. If the tariffs are no longer an issue, Volkswagen shares could benefit from the news, says Mr. Ruland.

- The euro is generally down slightly versus other major currencies as Italian parliamentary election results show no clear winner--as expected. That as Germany is about to finally have a governing coalition after 2/3 of some 460,000 SPD members backed the party being the junior party to Merkel. The center-right coalition, which includes former PM Berlusconi, appears poised to have taken the most seats in both the Italian House and Senate. But the outsider 5 Star Movement thumped the ruling center-left coalition. The euro is down 0.1% at around $1.23-even. But the big early mover in Asia is the yen, broadly up some 0.25% to extend recent strength. The dollar late Friday was at a 16-month low versus the Japanese currency.
- AUD/USD looks to have support around 0.7770, but it could get choppy for the currency if this tariff and trade spat turns into a tit-for-tat battle of wills between global leaders and their economies, says Greg McKenna, currency strategist at AXi Trader. It is a risk because in this increasingly nationalistic western democratic environment aggressive posturing and retaliation to President Trump's proposed tariffs on steel and aluminium could play well with domestic audiences and at the ballot box, he adds.

Mar 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices were mixed, after three days of declines, but any gains were limited as Asian share markets extended a selloff on Wall Street after news of planned U.S. tariffs on steel and aluminium raised fears of a trade war.
- Gold prices rose slightly as the dollar eased on fears of an imminent trade war.
- Shanghai aluminium prices touched their highest level since Feb. 12, shrugging off Trump's pledge to impose a 10 percent tariff on imports of the metal.
- Chicago wheat futures were on track for their biggest weekly gain since late June 2015 as forecasts of more dry weather across the U.S. Plains supported the market.
- The government of Ontario, Canada's biggest province and home to the bulk of the country's steel production, says she wants PM Justin Trudeau to "aggressively explore all options," in the event the Trump administration pushes ahead with broad tariffs on imported steel and aluminum. Ontario is led by Premier Kathleen Wynne, who is a close ally of PM Trudeau and faces a stern re-election test later this year. Trudeau will be under pressure to respond in kind should the US fail to exempt Canada from steel and aluminum tariffs, at a time when it is trying to save Nafta in what's been a contentious renegotiation process.
- CIBC World Markets warns that unless Canada gets an exemption, US tariffs on steel and aluminum "could be more biting" for Canadian economy than other retaliatory measures to date from Trump administration. Firm said in event Canada is caught in steel and aluminum tariffs, share of the country's exports to the US that face tariffs would sit under 10% once other items--such as softwood lumber and newsprint--are incorporated. Expect some further depreciation in C$ should Canadian steel and aluminum get hit by broad US tariff push, CIBC said, and "leans toward a more patient" Bank of Canada on the rate-policy front.
- AUD/USD is softer with the announcement of steel and aluminium tariffs by President Trump. The reason for this is a linkage through risk appetite and the fall in US stocks, but also through the global growth channel as well, says Greg McKenna, chief strategist at AxiTrader. On trade wars the argument would run that if the US action leads to retaliation and the erection of trade barriers across the globe then prices rise, companies and countries are cut off, and overall growth across the globe suffers. If this really impacts sentiment across global markets on the stocks and economic outlook the Aussie will suffer, he adds.
- Smith & Wesson owner American Outdoor Brands says firearms demand may have normalized this year -- but at a new, lower level. Company cuts fiscal 2018 sales and profit guidance, and says January's weak FBI background check data -- a proxy for industry sales -- could be the "new normal." Checks fell 8% year on year in January on an easy comp, and were more than 40% below December after a strong end to the year. Shares still halted after the market close ahead of investor call, having climbed 5% during the session to erase Wednesday's decline.
- Canadian bonds shoot up in midday trading as investors move to safety following President Trump's announcement to levy tariffs on steel and aluminum imports. The yield for Canada's two-year bonds recently at 1.764% from 1.787% late Wednesday, according to CanDeal. The 10-year bond yield at 2.175% from 2.236%. Canadian bond trading volume surged as President Trump said he plans broad-based tariffs of 25% on steel and 10% on aluminum. The move is expected to be deflationary for Canada, according to CIBC.
- President Trump's announcement that he would impose tariffs of 25% on imported steel--as well as 10% on imported aluminum--pleased some Democrats but upset many Republicans. "Tariffs on steel and aluminum are a tax hike the American people don't need and can't afford," said Sen. Orrin Hatch, the Utah Republican who oversees trade and tax policy. "You'd expect a policy this bad from a leftist administration, not a supposedly Republican one," said  Sen. Ben Sasse, a Nebraska Republican.
- The Trump administration's proposed tariffs on steel (25% duties) & aluminum (10%) would come as rising commodity prices already are hitting auto makers' bottom lines. A UBS report this week estimated overall raw-material costs will increase 11% in 2018 year-over-year, to $2,950 per US vehicle. That translates to a $1B headwind for Ford, $800M for GM, the bank says. Tariffs would "add more commodity risk," for auto makers and suppliers, UBS says. GM said today it purchases 90%+ of its steel for US production from domestic suppliers. It didn't weigh in on the tariffs, citing the need to "better understand the details."
The European Union strongly criticized President Trump's plan to impose tariffs on steel and aluminum imports on national security grounds. "We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification," said the president of the European Commission, Jean-Claude Juncker." The commission will bring forward in the next few days a proposal for WTO-compatible countermeasures against the US to rebalance the situation."
- Any tariffs or import quotas the US decides to impose on Canadian steel and aluminum "would be unacceptable," Canadian Trade Minister François-Philippe Champagne tells Canadian lawmakers during legislature's daily question-period session. "Any decision would have an impact on both sides of the borders." He added Canada is monitoring what the Trump administration has planned, and the government stands prepared to defend Canadian workers should the US move ahead with tariffs against the country. Canada supplies roughly 17% of the foreign steel the US imports, according to a Commerce Department report. The Canadian steel sector representatives and trade lawyers suggest it's worth waiting for any formal announcement on US tariffs, as proposed Thursday by President Trump.
- Canada provides just over 17% of the foreign steel US imports on an annual basis, according to US data. That means a 25% tariff from the US could have negative implications for the Canadian economy. For what it's worth, Canadian industry representatives and trade lawyers aren't hitting the panic button just yet. Mark Warner, a trade lawyer who practices in Toronto and New York, tells WSJ that once the final executive order is published, it's quite possible Canada gets an exemption from the tariff. He noted at least one former senior US military official testified before US officials that Canada is the one foreign steel supplier "I have complete confidence [in]," citing the Commerce Department's report on proposed steel tariffs.
- It's been a while since US stocks have fallen this much three days in a row. The Dow Jones Industrial Average was recently down 493 points, or 1.9%, to 24542, extending declines after the Trump administration announced new tariffs on steel and aluminum imports. If it closes around these levels, the blue-chip index will notch its third straight decline of at least 1%--something it last did in January 2016, when sliding oil prices and fears that global growth could be weakening sent stocks worldwide lower.
- Shares of smaller, more domestically-focused companies aren't sliding as much as their larger counterparts in the US stock market, with the Russell 2000 index of small-capitalization companies recently down 0.2% versus the S&P 500's 1% loss. One potential reason why: small caps have less international revenue exposure, Bespoke Investment Group notes, making them less vulnerable to any backlash that could result among US trade partners. Today, they're "outperforming large caps big time ... on trade war fears," Bespoke says.

Mar 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were little changed after falling in the previous two sessions as investors shied away from riskier assets amid volatile equity markets and the U.S. dollar gained, limiting overall interest in commodities.
- Gold prices fell for third day, weighed down by a stronger dollar while investors awaited the second session of Federal Reserve Chairman Jerome Powell's testimony before the Senate Banking Committee later in the global day.
- Shanghai copper prices fell for a fourth day to touch their lowest level in more than two weeks as the dollar strengthened and stock markets declined, but other metals gained ground after upbeat manufacturing data from top consumer China.
- U.S. wheat futures rose for a sixth consecutive session as adverse weather threatens production across a key producing region, pushing prices towards a seven-month high.
- Smith & Wesson, owner American Outdoor Brands, and Sturm, Ruger both closed at multi-year lows following more talk of tougher gun regulation. These same stocks have spent more than a year declining on the absence of extra oversight after President Trump's election, prompting a glut of inventory which has now largely cleared in retail channels. Demand in 2017, as measured by background checks, was still double that of 2008. Limiting retail distribution ought to bolster margins already north of 30%. A bullish outlook when American Outdoor Brands reports quarterly results Thursday could trigger yet another rally.
- President Donald Trump's official trade policy agenda emphasizes China's economic rise as a potential national security threat, citing the administration's national security strategy. US officials are currently weighing imposing significant tariffs on steel to protect the US industry on national security grounds. "We will resist efforts by China - or any other country - to hide behind international bureaucracies in an effort to hinder the ability of the United States to take robust actions, when necessary, in response to unfair practices abroad," according to the report, released by the office of U.S. trade representative Robert Lighthizer.
- Eversource Energy said it is prepared to commit to a slew of conditions in order to move forward with its proposal to build a transmission line to bring Canadian hydropower through New Hampshire and into Massachusetts. The utility asked New Hampshire regulators to void a decision made earlier this month rejecting the project, called Northern Pass, and recommence deliberations. Eversource provided a list of roughly 75 things it is willing to do to address concerns about the project, including putting $25Mn toward tourism promotion in New Hampshire, and making whole nearby landowners who can demonstrate a loss in home value because of the project.
- More executives are wading into divisive political issues, taking stances on topics like gay rights, immigration and now gun control. Mike Cannon-Brookes, the co-CEO of software-tool maker Atlassian, said corporate leaders have a responsibility to speak out on social issues. "It's important to set an example for the people inside the company, to set an example for the customers you want to have," he said. "It's a company's job to have a set of beliefs and stand up for those beliefs." Still, he acknowledged that formulating company positions on issues like climate change takes time and can come with challenges. "You don't want to lead to employees feeling marginalized or the company's against them," he said.
- US Senators Debbie Stabenow (D, Mich) and Chuck Grassley (R, Iowa) flag concerns to USDA over farm subsidies made to the estates of dead farmers. In a letter, the ranking and senior members of the Senate Agriculture Committee tell USDA they're worried about policies that allow farms to collect federal payments authorized by the Farm Bill even two years after a farmer has passed away. The letter comes as Congress prepares to debate the nation's next Farm Bill, the always-contentious multibillion dollar piece of legislation governing food and farming in America. Senators note GAO has previously panned payments that have allowed heirs to "game the system," collecting benefits on behalf of dead farmers as well as themselves, exceeding federal limits.
- After years of interim legislation continuing FAA programs, Congress appears poised to pass a longer-term extension expected to set new directions for regulating drones and other pressing safety issues. The reason is that Rep Bill Shuster of Pennsylvania, the Republican chairman of the House transportation committee, has formally abandoned his years-long bid to shift control of the nation's air-traffic control system to a nonprofit corporation. Acknowledging that his bill never "reached the obvious level of support needed" for adoption, Rep Shuster pledged to work with Senate leaders to provide "long-term stability for the FAA." With controversial air-traffic control privatization off the table, Democratic Rep Dina Titus of Nevada has said the rest of the pending FAA bill "seems to have pretty much bipartisan and industry agreement."
- Retailer Dick's Sporting Goods says it will stop selling all assault-style rifles and any firearm to anyone under 21 years old following the shooting in a high school in Parkland, Florida which killed 17 people. The move raises the bar among companies reacting to the shootings as others have cut promotional ties to the National Rifle Association in the wake of the shooting. Dick's will also stop sales of high-capacity magazines, CEO Edward Stack said in an interview on "Good Morning America." Dick's shares rise 1.6% in pre-market trading.

Feb 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as weak Chinese and Japanese industrial data triggered concerns of an economic slowdown that could lower oil demand, and as an industry data report showed an increase in U.S. crude stockpiles amid soaring output.
- Gold prices fell slightly, extending the decline from the previous session, as investors interpreted comments from Federal Reserve Chairman Jerome Powell to mean that the U.S. may raise interest rates more frequently than anticipated this year.
- Shanghai metals mostly lost ground after Powell's pledge to stick with gradual rate hikes boosted the dollar, and as China's manufacturing growth slowed more than expected.
- Chicago wheat futures rose for a fifth session, poised for a second month of gains as dry conditions in U.S. winter crop areas buoy the market.
- Fed Chairman Jerome Powell bemoaned the lack of governors on the Fed's seven-member board, saying he and his colleagues are "all three quite eager to get more people on board." The Fed currently has four vacancies. "We don't necessarily need all seven immediately, but we'd sure like to get there," Powell said, noting the Fed has never been down to three governors for an extended period before. The Trump administration has nominated former Richmond Fed economist Marvin Goodfriend to fill one of the open slots. Goodfriend's nomination was narrowly approved by the Senate Banking Committee earlier this month, but it's not clear when the Senate will vote on his nomination or whether he has the votes to win confirmation.
- Bank of Montreal will take a small charge on its US business from the base erosion and anti-abuse tax, but expects the lower corporate rate to add a net C$100M a year to its earnings, says Tom Flynn, CFO. BMO records a $425M loss in its 1Q after revaluing net deferred tax assets.
- The US has never defaulted on its debt and never should, Fed Chairman Jerome Powell tells lawmakers. Before joining the Fed in 2012, Powell was instrumental in urging lawmakers on Capitol Hill to raise the debt ceiling in 2011. Asked about the borrowing limit at a hearing Tuesday, Powell said "the debt ceiling should be something that we always raise in a timely fashion." He also stressed that Congress should address rising debt levels. "We really need to get on a sustainable fiscal path, and the time to really be doing that is now."
- Have tax cuts helped increase wages? Fed Chairman Jerome Powell tells lawmakers it's "very hard to trace through the effects of a change in tax policy into things like wage growth and the economy." Powell said lower corporate taxes should lead to higher investment, which should lead to higher productivity over time, and higher productivity should lead to higher wages over time. But "it's very hard to put your hands on how much that would be," he said.
- US Commerce Department says in its Advance Economic Indicators report that wholesale inventories were up 0.7% in January from the prior month and retail inventories grew 0.8% from December. The data were adjusted for seasonal variations but not price changes. The full business-inventories report for January will come out March 14.
- The top trade Republican in the Senate is warning the Trump administration against enacting broad tariffs on steel and against China. "We must keep in mind that tariffs aren't paid by foreigners," Utah Sen. Orrin Hatch said in a Tuesday morning speech to the US Chamber of Commerce. "Tariffs are taxes paid by American businesses and American families, and new tariffs would jeopardize some of the opportunities we successfully created through tax reform," added Hatch who chairs the Senate Finance Committee, which oversees both tax and trade policy. The White House is currently completing studies on whether to impose, big, broad tariffs on steel and aluminum imports in the name of national security, and a separate study on whether to punish China for alleged intellectual property theft.
- The US trade deficit in goods was a seasonally adjusted $74.4B in January, widening 3.0% from December. Exports of goods fell 2.2% on the month and goods imports slipped a narrower 0.5%. That's according to this morning's Advance Economic Indicators report from the Commerce Department. The decrease in exports reflected fewer shipments of capital goods and industrial supplies, including oil. The US imported less capital goods and consumer goods. The full report on foreign trade during January, including services data and employing a somewhat different methodology, will be released on March.
- Macy's 4Q earning surged, boosted by 7 cents a share from the new tax law. The company's same-store sales grew modestly, reversing several quarters of declines as new merchandising initiatives took hold. The company continues to evaluate opportunities for its real estate, including its Union Square store in San Francisco. Shares jump 10% in premarket trading.
- Blame weak sales of transportation equipment for the sharp, 3.7% drop in durable goods orders last month. New orders of transportation equipment fell 10%. Outside of transportation, durable goods orders declined 0.3% over the month, after rising in each of the prior six months. January was simply a bad month, for reasons that aren't immediately apparent. But over the past year, overall durable-goods orders are still up 8.9%.
- The big tax cut hasn't yet led to a boost in investment spending by US firms, according to the latest durable-goods data. A key measure of business investment-sales of nondefense capital goods, excluding aircraft--fell 0.2% last month after dropping 0.6% in December. The drop isn't that concerning-orders over the year are still up 8%. And it's way too soon to assess the tax cut's effects. Other reports-including the ISM survey-suggest business equipment sales continue to climb after a solid 2017.
- New Zealand PM Ardern uses her first major foreign-policy speech to praise China for its backing of climate change and trade-liberalization measures, while avoiding criticism of Beijing's territorial muscle-flexing and soft-power interference. She said her greatest international concern is the breakdown of post-war agreements covering trade and security. "Naturally, there are areas where we don't see eye to eye with China," but Ardern added that Chinese leadership on issues like climate change and trade liberalization could "add momentum to our collective efforts in those areas." Meanwhile, she expressed disappointment with the US withdrawal from the Paris climate agreement and the Trump administration's trade positioning.
- US President Trump's tax overhaul couldn't have come at a better time for recreational vehicle company Apollo Tourism & Leisure. That's because the reduction in the US federal tax rate from FY19 onward will offset a jump in Apollo's interest costs following the recent purchase of a new rental fleet and its buyout of Canadian rental vehicle business CanaDream, Ord Minnett says. Apollo's net debt rose to A$197.7 million at end-Dec, from A$120.1 million six months prior. "We expect net debt to increase to around A$202 million as at 30 June 2018 and then increase marginally in future years," Ord Minnett says. It retains a hold call on Apollo's stock.

Feb 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices erased earlier gains as investor concerns about rising U.S. oil output offset signs of stronger demand and faith in the ability of OPEC production curbs to curtail supply.
- Gold prices were steady as the dollar was also little changed while investors awaited U.S. Federal Reserve Chair Jerome Powell's first congressional testimony for clues on the future pace of monetary tightening.
- London copper prices inched up, lifted in light trade by a weaker dollar ahead of U.S. Federal Reserve Chairman Jerome Powell's highly-anticipated first congressional testimony later in the day.
- Chicago wheat prices rose for a fourth consecutive session, trading near a seven-month high as the condition of the U.S. winter crop declines following dry weather, threatening to curb yields.
- Power generator Vistra Energy reports a $254M loss in 2017 that it blames primarily on tax reforms. Vistra Energy said it took a $451M write-down of its deferred tax asset balance as a result of the reduction in the federal corporate tax rate. A company executive said Vistra Energy also expects solar power to take a hit as tax reforms "negatively impact the appetite for tax equity investments" that have helped finance renewable energy projects and "dampen the case for new construction." It won't be the first hit for solar. Last week, First Solar reported a fourth quarter loss it attributed primarily to higher tax expenses.
- The oil and gas industry uses plenty of steel, and the Commerce Department's calls this month for steeper tariffs for the hard metal to curb imports would mean higher costs for the increasingly efficiency-focused shale sector. "It doesn't really matter quite frankly -- we think -- what the administration decides to eventually do here, they're going to do something," says Evercore's James West. "It appears that steel price inflation is coming to US shale ... in the end it makes wells more expensive." President Trump is due to make a decision by early April.
- Gun maker stocks mixed ahead of the open as calls for investor and consumer boycotts of firearm-affiliated entities intensified over the weekend. Investing giant Blackstone asking managers for related positions, notable as funds associated with the group among the largest investors in the sector, with stakes of 16% in Sturm, Ruger and 10% in American Outdoor Brands as of Dec. 31, according to FactSet. Vanguard, Capital Research, Invesco and Fidelity among the sector's other big investors. Sturm, Ruger down 0.4% in pre-open trade, with AOBC up 1%.
- Dean Foods is now planning $150M in cost cuts by 2020 as challenges mount for the top US milk company by sales. Despite the new US tax law deeply cutting corporate tax rates and a declining cost for raw milk, Dean projects weaker than expected profits for the year ahead, and CEO Ralph Scozzafava says the Texas firm "must dramatically reduce our cost structure." The newest moves come as Dean faces mounting transport costs due to constrained US trucking networks, and also follows about a decade of previous cost-cutting programs. Shares fall 12% in premarket trading.
- Warren Buffett is outspoken on politics, but he doesn't want to impose his political views on Berkshire's investment decisions or business operations, he says on CNBC. Berkshire doesn't own any gun manufacturers, he says, but there is no rule that they wouldn't. And he points out that though he doesn't think cigarettes are good, Berkshire's subsidiary McLane distributes cigarettes to retailers like Walmart. Some companies have cut ties to the National Rifle Association in response to pressure from students following a Florida high-school shooting. "I think what the kids are doing is very admirable, but I don't think Berkshire should say we're not going to do business with people who own guns. I think that would be ridiculous," Buffett says.
- EUR/USD is likely to fall towards 1.21 or 1.2130 this week on the "politically-induced downside risks" of the Italian general elections and the SPD vote on the grand German coalition on Sunday. The market "may be underestimating the risks" of these events, ING says. "The EUR's pro-cyclical and portfolio inflow-driven rally could run out of steam if political risks stay slightly elevated in the near-term." EUR/USD last trades up 0.3% at 1.2330 on broad-based dollar weakness due to the U.S. Treasury yields falling.
- Australia's competition regulator says it could require internet giants like Facebook and Google to provide stronger privacy guarantees for consumers following an inquiry into their growing consumer power. The Australian Competition And Consumer Commission has called for submissions from Australian media outlets and publishers to determine whether Facebook and Google algorithms have breached consumer protection laws as part of a public inquiry into the impact of digital platforms on competition in media and advertising services. ACCC Chairman Rod Sims says there could be changes to the way the giants safeguard privacy and the use of consumer data. The inquiry is being closely watched outside Australia, Sims says, as internet giants face mounting scrutiny from lawmakers and regulators around the world. It will be the first to examine the business models used and the impact digital platforms are having on competition in media and advertising markets, with a preliminary report to government due in December.

Feb 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices extended gains to hit their highest level in nearly three weeks, supported by comments from Saudi Arabia that it would continue to curb exports in line with the OPEC-led effort to cut global supplies. 
- Gold prices edged up after declining more than 1 percent last week, buoyed by a weaker U.S. dollar as investors waited for possible clues on the pace of U.S. monetary tightening. 
- London metals climbed bolstered by reports over the weekend that base metal imports to China surged in January, underlining the country's healthy demand. 
- Chicago soybean futures rose for a fifth consecutive session, climbing to a 1-year high with no let up in dry weather curbing yields in the world's third-largest exporter, Argentina.
- President Trump says it would take a "much better deal" to lead his administration to rejoin the Trans-Pacific Partnership, or TPP, the unratified Asia-Pacific trade bloc President Trump exited after taking office a year ago. "There is a possibility we would go in, but they would be offering us a much better deal," Trump, joined by Australian Prime Minister Malcolm Turnbull, told reporters at the White House. Trump raised the idea of a possible return to the TPP at the annual economic gathering in Davos, shortly after the other 11 members of the original group agreed on a new deal without the US. Trump repeated his preference for bilateral trade deals Friday, and his administration backs policies that differ from the TPP.
- Eversource Energy CEO James Judge says his team was "humbled" when New Hampshire regulators voted down the utility's Northern Pass transmission proposal to pipe Canadian hydropower through the state and into Massachusetts. "Clearly, we have not fully addressed all the major concerns in New Hampshire yet," Judge said on a call to discuss company earnings. Eversource is hoping to get a rehearing on the matter and spent time on the call touting the project's potential benefits to investors, including what it says would be billions in economic benefits, hundreds of millions in regional energy cost savings, and tens of millions in property tax revenues.
- Sterling is benefiting from expectations that the Bank of England will raise interest rates again in May, but it has "the capacity to be knocked around by political developments," says Jane Foley, senior currency strategist at Rabobank. It is likely to become increasingly vulnerable as March 29, 2019 approaches--the date when Britain is scheduled to leave the EU--if uncertainty over future U.K.-EU trade relations continues. "The shorter the timeframe left, the more vulnerable sterling will be," while businesses may increasingly choose not to invest in Britain, she says. Sterling rises to a two-week high of 1.1382 per euro, while GBP/USD is up 0.2% at 1.3982.
- Chubb is pulling out of an insurance program that provides financial protection for lawful gun owners to defend themselves against civil and criminal legal actions involving use of those guns. "Three months ago, Chubb provided notice of our intent to discontinue participation in the NRA Carry Guard insurance program under the terms of our contract," a spokesman said today. The program has provided coverage for legal fees and access to support services including an attorney-referral network. The Wall Street Journal reported in October that NY's Department of Financial Services was probing whether the NRA has improperly promoted the policy and received commissions without proper licensing.
- MetLife became the latest big company to sever ties with the NRA in wake of Parkland school shooting. The big insurer is ending a discount program for car- and home-insurance for NRA members. MetLife said: "We value all our customers but have decided to end our discount program with the NRA."
- Royal Bank of Canada CEO Dave McKay says he's "hopeful for a good outcome" about NAFTA talks, but expects more volatility in discussions before any new deal. Markets are "looking through" the potential for a failure in talks, but some of the bank's commercial borrowers remain concerned, he says. The uncertainty is "certainly impacting longer-term investment decisions they are making," he says during a post-earnings call with analysts. There is still "a reasonable possibility" the US will invoke an exit clause that would give the country 180 days to leave the trade deal, he says, but adds he feels the deal will ultimately get resolved.
- The Olympics rapprochement between North and South Korea is likely to quickly fade as the South and the US proceed with joint annual military exercises in the spring, says Evan Medeiros at Eurasia Group. He thinks North Korea is likely to respond with more missile tests, including a possible "full-horizontal test across the Pacific," which "would accelerate US planning for a limited military strike against the North despite recent denials of the 'bloody nose' option."
- Canada says Boeing is among five companies that cleared the first hurdle toward supplying the country with 88 new fighter jets. Recall that Boeing and Canada were locked in a bitter trade row regarding financing for commercial aircraft. That was settled last month when the International Trade Commission rejected Boeing's allegation that Montreal-based Bombardier unfairly won a big sale of its new line of jets to Delta Air Lines with illegal financial support from Canada. The Canadian government will discuss over the next year specifications regarding a new fighter jet with the five firms -- which, along with Boeing, include Lockheed Martin, Airbus, Dassault, and Saab, an official said. Canada is expected to formally request bids to supply new fighter jets some time next year, the official added.

Feb 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped as high U.S. crude exports outweighed lower crude inventories in the world's biggest consumer of the fuel. 
- Gold prices slipped and were headed for their sharpest weekly drop in 2-1/2 months as the dollar strengthened during the week.
- London copper prices eased and were heading for a small weekly drop as the dollar strengthened, but the outlook for demand looked bright due to healthy global economic growth.
- Chicago soybean futures rose for a fourth consecutive session, with the market set for a third week of gains as a severe drought in parts of Argentina's oilseed producing regions is expected to reduce production.
- Ontario, Canada's most populous province, has demanded the federal Liberal government provide C$2.7B in financial assistance over a decade to help food processors and the auto sector cope with any negative fallout from the Trans Pacific Partnership trade pact. Ontario Premier Kathleen Wynne had warned previously she would be aggressive in defending the province's interests, after Canada announced its intention to sign on to a tentative agreement among Pacific-Rim countries. The auto sector had been most vocal in criticizing the Liberal government's decision in joining TPP, due to TPP's lower regional-content provisions. The demand likely poses a headache for PM Justin Trudeau, who's trying to open new markets for Canadian goods amid a protectionist-leaning Trump administration.
- Commodity giant Cargill says aging US infrastructure, once the envy of the world, is holding back American farmers and exporters. Chief Risk Officer Joe Stone points to Wyalusing, Penn, where a weak bridge forces truckers to take a more circuitous route when traveling to and from the company's beef plant. That's created about half a million dollars in additional cost, he says. A lack of funds to repair the bridge shows why a national infrastructure upgrade is urgent, Stone tells an audience at a USDA conference, also citing seaports that can't fit the latest large vessels: "These are really bottlenecks to our prosperity."
- Sprouts Farmers Market says on 4Q earnings call that the natural grocer will invest roughly a third of its $30M in tax savings from the federal law into labor benefits. The rate is one of the highest among retailers, analysts say. The $10M will boost pay, healthcare benefits and expand maternity leave. The Phoenix-based natural grocer also hopes to use the wage boosts to get ahead of minimum wage increases rolling out in states they operate in, executives say. Walmart also used savings from the tax law to boost starting wages and parental leave. Sprouts shares fall 1.2% to $25.78.
- Rising grain and soybean production in countries like Brazil and Russia will contribute to falling US farm income, says USDA Chief Economist Robert Johansson. Much of that production will be exported, pressuring commodity prices. "As a result, long-run expectations are for net farm income in the US to fall in real terms," Johansson says. There is hope, however: He says everything from regulatory and tax reform to adjusted programs in the upcoming Farm Bill could tip the scales in the other direction.
- The US needs to do more to lure foreign agricultural laborers, says USDA Secretary Sonny Perdue, who backs creating a new stream for those wanting to work temporarily on American farms and ranches. Perdue says he has worked hard to convince others in government that there aren't enough Americans to do those jobs, and wants more than the current H-2A guest worker program. "We could literally have a separate category for agricultural immigration,"  Perdue says. "The people who come to America to work on farms and ranches are not taking jobs from Americans."
- Under the new US tax law, Hormel Foods expects its effective tax rate to be 17.5% to 20.5% in 2018, down from its original guidance of 32.3% to 33.3%. The meat processor increased its 2018 earnings guidance to $1.81 to $1.95 a share as a result but kept its sales guidance as is. Hormel says it plans to use savings from the lower corporate tax rate to invest in technology and automation, grow key domestic brands such as Jennie-O and Skippy and raise the starting wage for its employees to $13 per hour by the end of the year, among other things. Hormel shares, down 12% over the past year, are inactive premarket.
- Now that the U.S. Congress has lifted a hold on arms exports to Saudi Arabia, BAE wants to press ahead with the sale of M109 self-propelled howitzers and Bradley armored vehicles to Saudi, BAE Systems U.S. boss Jerry DeMuro says. Talks with Saudi about in-country workshare are now restarting, Mr. DeMuro says, with the company also engaging U.S. regulators and Congress to push the deals through. Shares in BAE down 2.8% after sales missed estimates and a lackluster outlook.
- Oil and gas pipeline companies already battling Native Americans and environmentalists may soon also be fighting Texas farmers. Gene Hall, communications director for the 500,000 member-strong Texas Farm Bureau says companies are using eminent domain to force pipelines through farmers' lands, and says the bureau aims to take it up with the legislature in 2019. "Low-ball things are going on right now and pipeline companies are among some of the worst offenders," Hall tells a Lions Club luncheon in Ennis, Texas. "They'll come out and offer you a ridiculously low price for the land or the property, and then if you say 'That's not enough' they'll say 'Fine, come to court.' And what they know is their pockets are deep and yours are not."

Feb 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, pulled down as a firmer dollar outweighed a report of a decrease in U.S. crude inventories.
- Gold prices held steady around a one-week low, weighed down by minutes from the last U.S. Federal Reserve meeting that showed policymakers backed further interest rate rises.
- London metals fell after U.S. policymakers backed the need for more rate rises, pushing up the dollar and putting pressure on metals as trading in Shanghai resumed after a week-long break.
- Chicago soybeans edged lower, hovering just below a seven-month high reached on the back of dry weather curbing yields in Argentina, the world's third largest exporter.
- The stock market initially rose after the Fed minutes as the central bank increased its economic-growth projection, but didn't materially increase its inflation expectations, says Michael Arone, chief investment strategist at State Street Global Advisors. But investors should keep in mind that the minutes are from before the early February jobs report that signaled some inflation pressures and the release of January's consumer price index figure, which was stronger than expected, Arone says. The market will very quickly focus on Fed Chairman Jerome Powell's first Congressional testimony set for Feb 28, he says. It wouldn't be surprising if Powell, "walked back some of this dovish sentiment that's being interpreted," Arone says.
- Minutes of the Fed's January 30-31 policy meeting shed light on why officials added a telling new word in their policy statement: "further" gradual rate increases. According to the minutes, officials "agreed that the strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate." That's why they decided to update the characterization "while maintaining the target range at the current meeting," according to the minutes. The Fed said in the January statement that officials expected "economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate," an addition from the December statement.
- After staff presentations on inflation analysis and forecasting, nearly all Fed officials who commented at the January meeting were in agreement that the Phillips curve model is a useful tool for understanding inflation. The value of the Phillips curve has been brought into question as declines in the unemployment rate offered scant evidence of translating into faster wage growth. Fed officials noted that estimating the link between resource utilization and inflation in recent years was difficult because of factors including the transitory changes in prices and more competitive business pricing. Of course, a couple of participants questioned the value of the Phillips curve, citing its limitations in capturing the relationship between economic activity and inflation.
- Several Fed participants "cautioned that imbalances in financial markets may begin to emerge as the economy continued to operate above potential," according to meeting minutes. The remarks occurred before a February market selloff, but indicate some central bankers were growing anxious about high asset prices and increased borrowing. Months before the recent bout of market volatility, some Fed officials had articulated concerns that signs of easing financial conditions had been undercutting the Fed's efforts to tighten them.
- Federal Reserve officials in their latest policy meeting offered a range of viewpoints on recent wage developments, according to meeting minutes. Participants generally noted few signs of broad-based wage pickup, though some heard more reports of increased wage pressure from businesses. A number of officials agreed that continued labor market tightening would likely translate into faster wage growth "at some point." The meeting occurred before the release of the Labor Department's January jobs report, which showed faster-than-expected growth in average hourly earnings and served as a catalyst for a market selloff.
- At their last policy meeting, several Federal Reserve officials expressed "considerable uncertainty" about the extent to which the recently enacted $1.5 trillion tax cut package would boost business investment. "Firms may be only just beginning to determine how they might allocate their tax savings among investment, worker compensation, mergers and acquisitions, returns to shareholders, or other uses," these participants said. Still, businesses in a number of districts are indicating plans to further expand and invest, the minutes note. Additionally, while the effects of tax reform on consumer and business spending remain uncertain, its effects "might be a bit greater in the near term" than officials previously thought, the minutes say.
- The U.S. was once again the number-one destination for Germany's exports, as German businesses shipped EUR111.5 billion of goods to the world's largest economy in 2017, according to the Federal Statistical Office. German imports from the U.S., meanwhile, totaled EUR61.1 billion last year and its bilateral trade surplus with the U.S. was the largest it had with any country in the world. By comparison, in 2016, Germany had the largest bilateral trade surplus with the U.K. U.S. President Donald Trump--a critic of Germany's export prowess--might not like that development.

Feb 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, weighed down by a rebound in the U.S. dollar from three-year lows hit last week and an expected rise in U.S. oil production.
- Gold prices fell further and hit a one-week low as the dollar steadied after a recovery from last week's three-year low, while investors awaited the minutes of the U.S. Federal Reserve's last policy meeting for clues on the pace of interest rate hikes this year.
- London copper futures edged lower as the dollar touched a one-week high versus a basket of major currencies, with trading volumes in Asia staying lean as Chinese markets remained shut for the Lunar New Year break.
- Chicago wheat prices slid for a third session to mark a two-week low, pressured by plentiful world supplies and crop-friendly weather in some key exporting countries.
- The Trump administration has rolled back many burdensome US oil industry regulations, but in Canada regulations are still causing migraines. And that's helping fuel real-world problems for Canada whose benchmark WCS oil is in a major slump. "Virtually every plan to add new takeaway capacity out of Alberta - Canada's #1 energy-producing province - continues to face regulatory hurdles, and it remains to be seen which of the pipeline projects will be completed, and when," says RBN Energy. It adds that "pipeline constraints out of Western Canada [are] worsening by the month and having profound negative effects on the price of Western Canadian Select (WCS)."
- The White House has chosen an unwieldy group of more than 20 members to serve on a long-awaited space advisory group, including a number of former astronauts and advocates for commercial ventures. The outside group of experts, which could include more participants as representatives of the largest US aerospace contractors are added, was created to help the White House Space Council identify policy priorities. The appointees include former Apollo-era astronaut Buzz Aldrin, along with commercial-space champions Stuart Witt, Eric Stallmer, president of the Commercial Spaceflight Federation, and Bob Smith, CEO of Blue Origin. Some academics and officials from Orbital ATK, a Boeing-Lockheed Martin joint rocket venture and closely held Sierra Nevada round out the first batch of names. There has been a fair amount of jostling by industry players to be named to the panel.
- The House Committee on Oversight and Government Reform sent a letter to Equifax today asking that the company extends its offer of free credit monitoring and identity theft protection services to at least three years for breach victims. The letter, addressed to Equifax interim CEO Paulino do Rego Barros, states that in October the company's chief information security officer told the committee staff that fraudsters who steal consumer data are unlikely to disseminate it when law enforcement is actively searching for it. The letter says the security chief stated that the fraudsters would likely wait a year or more before trying to sell the data on the black market.
- The EIA reviews the US coal industry's performance in 2017, a year in which the US "ended the war" on coal, according to President Trump in last month's State of the Union Address. Indeed, the report shows, US coal production, exports and prices all increased in 2017, figures Trump has often highlighted on Twitter. But the EIA report also indicates coal's share of US power generation continued to play second fiddle to natural gas -- even though gas prices were higher in 2017. Coal's 2017 contribution to electricity generation "is expected to be 30%, the lowest on record and lower than the natural gas share for the second consecutive year."
- U.S. President Donald Trump's trade protectionism isn't just bad for the dollar, it is bad for markets overall, according to MUFG. The U.S. Commerce Department said Friday it recommended imposing heavy tariffs or quotas on foreign producers of steel and aluminum. If global trade tariff measures appear to rise, "it will prompt a dramatic deterioration in the current optimism over the outlook for global growth," MUFG says. This would lead to increased forex volatility, which would "benefit safe-haven currencies at the expense of growth- and commodity-based and emerging market currencies," MUFG says.
- The Office of Financial Research, a new U.S. agency tasked with gathering and standardizing financial data, has struggled to achieve its mission, The Wall Street Journal reported Monday. One of the agency's multiyear projects, known as a financial instrument reference database, has yielded only a 16-paper calling for "information gathering sessions", the report says. Fees on big banks and other financial firms fund the agency's budget, to a tune so far of nearly $500 million.
- Early backers of the Office of Financial Research thought it would become an authoritative source when financial markets experienced volatility, as they have of late, The Wall Street Journal reports Monday in an in-depth look at the agency. While the OFR does publish a monitor of financial vulnerabilities, it isn't widely cited and is mostly based on already available information, not the private data Congress empowered the agency to collect. After one 2014 incident, the agency's director declined to use his data collection powers, The Journal reported.
- The seven-year-old U.S. Office of Financial Research has struggled to establish a place for itself in Washington and is now an easy target under the Trump administration, The Wall Street Journal reported Monday in an in-depth look at the agency's record. "If you're not happy here, you should leave," Craig Phillips, a counselor to Treasury Secretary Steven Mnuchin, told the agency's staff in November, the report says. A Treasury spokesman told The Journal the administration isn't eliminating the agency but rather is making it leaner and more effective.

Feb 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets were split, with U.S. crude pushed up by reduced flows from Canada while international Brent prices eased.
- Gold prices fell for a third straight session as the dollar rebounded from over three-year lows hit last week, while investors waited for the minutes of the latest Federal Reserve meeting for clues on the outlook for U.S. interest rates.
- London copper drifted lower as a firm dollar dictated direction in a thinly traded market, with holidays in top metals user China.
- Chicago soybean futures rose to a seven-month high with the market climbing for five out of six sessions, buoyed by poor rains over the weekend in Argentina's drought-hit oilseed growing areas.
- A higher property tax called the stamp duty, coupled with uncertainty over the short-term prospects for price growth in London's sales market, is keeping everyone out of the market, including those with larger pockets. Around 140 properties with rent at GBP5,000-plus a week have been rented in 2017, compared with around 100 properties in 2016, according to Knight Frank. "In the three-month period between July and September there were 49 transactions, which is a record for a single quarter in 12 years of LonRes data," the real estate advisor says in a note.
- The Commerce Department's recommendations for President Trump to curb steel and aluminum imports have prompted South Korean President Moon Jae-in to call for a resolute response. Moon tells his deputies Monday to see if US measures would violate a bilateral free-trade pact or World Trade Organization rules, and to actively complain if there is any unfairness on the US side. Trump has until April to decide on the recommendations that would cut imports from China and third countries, including South Korea, that import Chinese steel and re-export it to the US. Seoul says Chinese imports account for only around 2% of South Korea's steel exported to the US.
- The Trump administration's plan to set new limits on imports of steel and aluminum, which is expected to affect Chinese makers in particular, could also weigh on Japanese companies, says SMBC Nikko Securities chief market economist Yoshimasa Maruyama. The importance of the impact on Japan will depend on whether the tariffs are imposed on all countries or just a subset, he says. That may also be the key point that determines "whether or not a storm of trade friction will spread from the US to all over the world," he adds. Japan's trade surplus with the US fell 12.3% on year in January to Y349.6 billion.
- USD is set for a week of consolidation, says CBA. Growing US-China trade tensions, amid a proposal to impose tariffs on steel and aluminum imports, has fueled warnings of reprisal from China. This could amplify safe haven flows toward USD. Still, CBA says any relief rallies in USD will be contained because market participants are not yet convinced the Fed will quicken the pace of tightening. US markets are closed Monday for a public holiday.

Feb 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices extended gains to hit their highest level in nearly two weeks, buoyed as Asian shares joined a global recovery in equity markets and by worries over tensions in the Middle East.
- Spot gold prices edged up on a weaker U.S. dollar and as investors looked to hedge against inflation. London metals started the week lower as a resurgent dollar dragged down prices from one-month highs hit the session before and the Lunar New Year holidays reduced liquidity.
- The dollar found some traction following last week's steep fall and managed to hold above a three-year low against a basket of currencies. 
- U.S. soybean futures fell from their highest since late July on Friday as traders locked in profits from this week's weather-driven rally.
- The Trump Administration's bid to eliminate NASA's next-generation space telescope is shaping up as a major legislative battle, extending to broader arguments over how the agency plans, budgets and executes big-ticket astronomy programs. The controversial project, dubbed WFIRST and carrying a price tag of more than $3B, is strongly backed by much of the scientific community. But White House budget officials, who want to stop all funding, emphasize that the agency is finishing up an $8.8B space telescope that suffered a series of high-profile delays and cost overruns, making it eight years late. The administration's attack against the ambitious follow-on project, according to scientists and aerospace industry officials, is partly to save money but partly to force changes in NASA's traditional program management practices.
- Markets extend their winning streak as the S&P 500 and Nasdaq have their best weekly performances in seven years and the DJIA posts its biggest weekly jump since President Trump's election. The Dow was up 232 points midday, but political uncertainty gives investors a reason to pare gains ahead of the long weekend after the Justice Department charged Russian nationals with interfering in the 2016 US presidential election. While earnings season is winding down, we'll get more clues on the strength of the consumer with quarterly results from Home Depot and Walmart on Tuesday. DJIA rises 19 points to 25219, the S&P edges up 1 to 2732, while the Nasdaq slips 16 to 7239.
- The commerce department proposals for tariffs on aluminum and steel imports may be driven by national security issues, but military contractors are vexed that they may come to pass and inflate costs. "We are concerned that tariffs may have an unintended impact on the global supply chains that our industry depends on," said a spokesman for the Aerospace Industries Association. "It's particularly true of aluminum and steel." The lobby group is currently chaired by Raytheon CEO Tom Kennedy, and represents all of the main contractors, including Lockheed Martin, Boeing and Northrop Grumman.
- Shares of steelmakers and aluminum producers soared on the US Commerce Department's recommended steel tariffs Friday, but stocks of manufacturers that use the metals didn't fare as well. Caterpillar and Harley-Davidson stocks, for example, took a hit around the time of the announcement. Both have already complained of higher raw material costs including steel and aluminum. CFO Brad Halverson said in a January interview Caterpillar was worried about new tariffs: "Our principal concern is with the price of domestic steel: It potentially could lead to a very significant price increase," he said. Caterpillar is down 0.7% to $158.83, while Harley falls 1.2% to $47.09.
- President Trump will face broad pressure to scale back tariffs and quotas on steel and aluminum that the Commerce Department recommended on national security grounds. Some lawmakers, worried about the effect on metal prices, this week pressed Trump to make any final steel trade barriers highly targeted to avoid disrupting users of the metal in their states. Countries potentially affected by the tariffs--including allies such as South Korea and Turkey--could lobby to be dropped from the list of countries targeted under one option the administration is considering.
- Nucor, the largest US steel producer by sales, rose almost 5% and US Steel Corp and AK Steel Holding gain 10%. Aluminum stock reaction more muted, with market leader Alcoa recently up 2% and Arconic up 1.5%, both off earlier highs.
- U.S. plans for fiscal stimulus via infrastructure spending and tax cuts should be positive for the dollar in the short-term and only negative longer term, say analysts at Bank of America Merrill Lynch. The dollar's recent falls suggest the market "has already priced the long term," ignoring the short-term implications, and "getting the sequence wrong," analysts say. "We still expect that U.S. fiscal stimulus, inflation divergence, more Fed hikes than markets expect beyond 2018, and repatriation of profits will lead to a stronger USD in the months ahead," they say. The DXY dollar index earlier fell to a three-year low at 88.25, according to Factset.
- The Trump administration said it will make public Friday internal reports laying out the options for restricting imports of steel and aluminum in the name of national security. But officials will "not announce the president's decision," according to a Commerce Department press release. Commerce had submitted the reports to the White House in January, following studies launched last April, and extensive internal debate. The administration faces
an April deadline on whether to impose broad tariffs or quotas on steel and aluminum imports by invoking a little-used 1962 law that gives presidents broad discretion to curb foreign goods if they are deemed a "national security" threat. The Commerce Department said the reports would be made public at 11 a.m. EST.
- Deere reports a fiscal 1Q loss of 535.1M from one-time charges related to the new federal tax code, but raises its profit outlook for the year from its machinery lines. Excluding tax-related charges, Deere logged net profit of $430M, or $1.31 a share. Equipment sales rise 27% to $5.97B. Wall Street analysts were expecting EPS of $1.20 on $6.42B of equipment sales. Deere raises its adjusted net income forecast to $2.8B, up from $2.6B predicted in November and $2.7B estimated by analysts. Shares rise 0.7% to $168.02 premarket.

Feb 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged higher as the dollar stood near a three-year low in subdued Asian trade, with many markets closed for the Lunar New Year holiday.
- Gold prices edged higher, heading for their biggest weekly percentage gain in nearly two years, buoyed by a weaker U.S. dollar and as investors looked to hedge against inflation.
- London copper edged up in thin trade amid China's new year holidays and was on track for its strongest weekly gain in more than one year, backed by resilient global manufacturing growth and a persistently weak dollar.
- U.S. soybean futures edged higher and were poised for its biggest weekly gain in seven months as dry weather threatens production of the oilseed in Argentina..

- White House's proposed cuts to Supplemental Nutrition Assistance Program would likely have a significant effect on sales at dollar stores, while relatively little impact at grocers like Walmart and Kroger, said Barclays which reviewed the quarterly correlation between SNAP spending and retailers' sales since 2007. Both Dollar General and Family Dollar, which is owned by Dollar Tree, sell mostly food and consumables to core low-income shoppers, leading to a high correlation between SNAP spending and quarterly sales. Walmart's sales historically don't track SNAP spending as closely, though Walmart earns a significant amount of the total dollars spent through SNAP. "While we have no way of knowing what will play out in the political arena we find the SNAP data to be striking, and given the data and correlations - the proposal needs to be carefully monitored," especially at dollar stores, the note says.
- As some investors are left puzzled as to why the dollar is falling as U.S. bond yields rise, Deutsche Bank strategist George Saravelos has a simple answer: U.S. bond prices are lower, resulting in higher yields, "because investors don't want to buy them." The U.S. twin deficit--the current account and fiscal balance--is set to "deteriorate dramatically" in the coming years due to U.S. President Donald Trump's plans for fiscal spending and tax cuts. "Under conservative assumptions the US twin deficit is set to deteriorate by well over 3% of GDP over the next two years," Mr. Saravelos says. With flows into Europe and Japan also "improving dramatically," he concludes: "embrace dollar weakness, it has more to run."
- The U.S. fiscal easing by cutting taxes and increasing the budget deficit isn't likely to "accelerate knowledge creation and spur productivity growth," says UniCredit. "Although lower regulation is a step in the right direction for increasing capex investment, our analysis has found only limited evidence that lower corporate tax cuts boost growth, employment and wages." UniCredit adds: "Instead, they primarily benefit shareholders." This could also "potentially add to already high income inequality," which is already happening.

- The dollar is likely to fall further on the back of U.S. increasing its budget deficit in order to fund newly-implemented tax cuts and infrastructure plans. "Foreign investors require a lower exchange rate to compensate for the higher risk premiums associated with a policy that is out of sync with the U.S. business cycle," says UniCredit. Usually economies towards the end of the cycle don't require such a boost via fiscal easing.
- The fall in USD/ZAR to a three-year low of 11.6014 is partly due to ZAR strength on the back of Jacob Zuma resigning as President of South Africa, but also reflects broad-based dollar weakness. The rand gains against the euro too, but these gains are less pronounced, with EUR/ZAR falling to a seven-month low of 14.4820. The dollar weakens despite data Wednesday showing a pick-up in U.S. inflation, due to investor worries about a possible rising U.S. deficit and a maturing economic cycle. Most other emerging market currencies are also higher against the dollar, including the Russian ruble, the Turkish lira, and the Mexican peso.
- Repeated chatter in Washington of a possible hike to a gasoline tax that hasn't been touched in over 20 years may not result in anything, but does reflect the Trump administration's struggles to pay for its massive infrastructure plan. The gasoline tax passed in 1993 adds 18 cents to the price of every gallon, and Transportation Secretary Chao admits herself this week it's a "regressive" tax that hits poor folks more than the rich. Still, all
ideas are "on the table," she says, suggesting the tax is a sort of warning to what's possible if the administration faces too much push-back on including the private sector in its infrastructure plans.
- Navy shipbuilder Huntington Ingalls expects its tax rate to fall to around 21% this year, a fall of 10 percentage points that's in line with declines at defense peers. It's bumping up planned capex by 0.5 percentage points to as much as 6% of sales. Shares up 2.6% in light pre-open trade after forecast-beating 4Q profits, including a modest turnaround in the technical services business that has weighed on the stock. New budget deal paves the way for a planned 7.5% rise in the Pentagon's shipbuilding spending over the next two years compared with 2017.
- Despite the Trump administration's emphasis on modernizing infrastructure nationwide, its proposed 2019 budget calls for cuts in Federal Aviation Administration funding for air-traffic control modernization. And the moves have prompted opposition from various groups, including the Aerospace Industries Association representing contractors working on defense and civilian programs. The trade group complains that the $952M for so-called NextGen initiatives is "far below what is required for success and even below" the $1.1B Congress approved last year. Along with cuts to research accounts, AIA has said "Congress should reject these reductions."

Feb 15 - US Debt Disaster Will Take Down the Markets (the Trading Source)
Billionaire Carl Icahn – a strong supporter of Donald Trump during the 2016 campaign – told CNBC that the market is a "casino on steroids" because of too many exotic, overly-leveraged funds. “One day these securities are going to blow up the market.”
So the massive Fed-induced stock market bubble has finally run its course. The U.S. has borrowed its way into oblivion. We’ve had a 9-year bull market and still managed to add TRILLIONS to the debt. The national debt has topped $20 trillion! Annual deficits will now reach $1 trillion! The new tax cut will add another $1 trillion to the deficit, because everyone loves tax cuts and NO ONE wants to pay for them!
This quarter, the U.S. will need to borrow the largest sum since 2010, when the economy was emerging from the worst downturn since the Great Depression!
So did anything change after the 2016 election? Absolutely not. The new tax cut will add another TRILLION DOLLARS to the debt. Proving once again that neither party is serious about savings us from a debt disaster!
Meanwhile, average Americans have buried their heads in the sand, piling into index funds thinking they'll never go down. "The market has become a much more dangerous place," according to Trump’s man, Icahn. "It's telling you something, giving you a warning."
Did anyone pay attention when Bear Stearns when defunct in March of 2008? No, they said it was just an isolated incident. And then six months later, the other dominoes finally fell and ignited the global financial collapse!
So it’s time to WAKE UP and start heeding the warning signs. Icahn is telling anyone who will listen that these overly-leveraged funds are the "fault lines" that will eventually lead to an earthquake on Wall Street. "One day this thing is just going to implode. Eventually worse than 1929.”

Feb 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose more than 1 percent to extend gains from the previous session, lifted by a weak dollar and Saudi comments that it would rather see an under supplied market than end a deal with OPEC and Russia to withhold production.
- Gold prices rose further, supported by a weaker dollar and as investors bought the yellow metal as a hedge against inflation after a faster-than-expected rise in U.S. consumer prices last month.
- London copper rose for a fourth day to the highest in 10 days, supported by a decline in the dollar and robust prospects for global growth.
- U.S. soybean futures climbed to their highest level in almost seven months, propped up by fears that adverse weather conditions in Argentina will crimp production in the world's No. 3 exporter.
- Despite the Trump administration's emphasis on modernizing infrastructure nationwide, its proposed 2019 budget calls for cuts in Federal Aviation Administration funding for air-traffic control modernization. And the moves have prompted opposition from various groups, including the Aerospace Industries Association representing contractors working on defense and civilian programs. The trade group complains that the $952M for so-called NextGen initiatives is "far below what is required for success and even below" the $1.1B Congress approved last year. Along with cuts to research accounts, AIA has said "Congress should reject these reductions."
- US farmers and grain traders are nervously watching China's stance toward US crops since the country recently opened an anti-dumping investigation into US sorghum, after President Trump placed tariffs on imported washing machines and solar panels. Soybeans, where China is by far the biggest buyer, could present a much bigger target, and Bunge, the world's largest soybean processor, is hoping that "calm minds" prevail on the matter, according to CEO Soren Schroder. "Given the significance of the US (soybeans) to China, I'd think this can be worked out," he says. "If not, we have plenty of beans in Brazil," referring to Bunge's extensive crop transporting and processing network there.
- South Korea's move to challenge US import tariffs on Korean steel and transformers at the WTO shows Seoul's intention to ramp up its fight against President Trump's "America First" trade policy. Seoul's trade ministry requested a bilateral consultation with the US via the global trade watchdog, a move that could lead to a WTO dispute panel. The dispute centers on US anti-dumping duties of up to 61% that date back to 2016. Trade Minister Kim Hyon-chong earlier this week pledged to take a separate case of US tariffs on washing machines and solar panels to the WTO in March. Both sides are already at loggerheads over a free trade pact criticized by Trump for expanding the US trade deficit.
- Shares of steel and aluminum companies are trading higher after President Trump told a meeting of lawmakers he's considering additional tariffs and or quotas on imported metal. Trump says he's mindful that duties or volume restrictions could drive prices higher for US-made steel and aluminum, pushing up costs for domestic manufacturers. Companies and some lawmakers have warned that other countries could retaliate against the US by creating barriers for US exports. The administration is expected to release a decision in April. Among the companies trading higher are United States Steel, Nucor, Commercial Metals, Alcoa and AK Steel Holdings.

Feb 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable, supported by healthy economic growth and expectations that a weaker dollar could spur fuel demand.
- Gold prices rose for a third straight session to hit a one-week high, buoyed by a weaker dollar, while investors awaited U.S. inflation data for clues on the pace of future U.S. interest rate increases.
- Shanghai copper prices rose for a second session, tracking a strong jump in London the previous day, as traders took up new positions in the metal before the Shanghai Futures Exchange (ShFE) closes for a week-long holiday.
- U.S. wheat futures fell more than 1 percent as traders squared positions despite continued threat of dry weather across a key producing region.
- The USD weakened overnight ahead of US CPI and more talk of President Trump taking action on trade, but New Zealand inflation expectations will also be in focus, with the Reserve Bank of New Zealand's survey out later today. "We expect NZ inflation expectations will hold around 2%, but there are risks of a modest easing which would pressure this cross lower," Australia and New Zealand Banking Group says. The NZD/USD was at 0.7282 early in Asia on Wednesday.
- The National Grocers Association says it's "extremely concerned" with the Trump Administration's proposal to steer a portion of food-stamp dollars from retailers to a Blue Apron-style food delivery service. "It abandons the proven free-market model on the ill-advised assumption that the government can purchase and provide food more efficiently," says Greg Ferrara, executive vice president of advocacy. Retailers were caught off-guard by the budget proposal and have pushed back vocally since. Blue Apron Holdings declined to comment on the plan.
- Food, drinks and other products inside airports are notoriously overpriced, and there are growing fears President Trump's infrastructure plan seeks to commercialize interstate highway travel in the same way. The National Association of Convenience Stores says while infrastructure investment is a good thing, it shouldn't "involve sacrificing the investments of small businesses located along interstate highways and the thousands of jobs they create." It warns commercialized rest stops, sometimes called "travel centers," would have a virtual monopoly, forcing tourists, truckers and others to pay 30% markups while also hurting the livelihood of people in rural communities. It could also strip US road travel of its diversity and uniqueness.
- A reality check on the 2019 defense budget request from Ken Herbert at Canaccord. While investment spending spiked 14% from the prior request, he still expects growth in the mid single digit range after Congress gets hold of it and requests deficit-reducing cuts. That's pretty much what's baked into consensus guidance for defense contractors' revenues in 2019 and beyond, even if stocks popped over the past two sessions.
- Chief lobbyist for Canada's blue-chip CEOs largely applauded the Liberal government's approach to the Nafta talks. Still, John Manley, Canada's former finance minister and now head of the Business Council of Canada, said at a trade-policy conference in Ottawa that Canada had a misstep in US relations when it decided before the 2016 US election to restrict US access to the Canadian market for ultrafiltered milk, a product used for cheese. This angered farmers in Wisconsin and New York. "That was not a smart thing to do," Manley said. He added Canada "can't sit back and be moralists" on trade. "We've to admit that we have to clean up some of our act... to get the outcome we want."
- A higher U.S. budget deficit, which would translate into more U.S. government bonds, at a time when the Federal Reserve is tightening its monetary policy and removing demand for Treasuries, as well as potentially adding to their supply, "is not appropriate" towards the end of the economic cycle, says Kit Juckes, macro strategist at Societe Generale. "I'm not a fan of fiscal accommodation in a late cycle," Mr. Juckes says. What this could bring is an earlier recession, he says. Still, before that, an accommodating fiscal policy would boost growth, albeit briefly, Mr. Juckes says.
- With U.S. President Donald Trump proposing a budget that would increase the U.S. budget deficit, the U.S. economy "is going to get a push when it doesn't really need one," says Kit Juckes, macro strategist at Societe Generale. This "will have an impact on the markets," Mr. Juckes says. The foreign exchange market could feel the impact, since recent dollar weakness has been partially due to the U.S. budget and trade deficits. Compared with other G10 currencies, such as the euro, which enjoys a trade surplus in the eurozone, the dollar could be losing its shine, especially as a safe haven investment.
- The top bureaucrat at Canada's trade department said he doesn't accept the Trump administration's view on the evils of trade deficits, and is "less enthusiastic" about how the US wants to make the Nafta renegotiations about eliminating trade shortfalls. Still, "it is possible to find something that works for all of us," in the Nafta talks, said Timothy Sargent, Canada's deputy minister of trade at an Ottawa conference. He cited progress at the most recent round of Nafta talks in Montreal, and Canada's efforts to address US demands such as on autos. Sargent said even in the event of a successful Nafta renegotiation, he warned Canada will face further turbulence in trade relations with US, as witnessed with recent tariffs on lumber and newsprint.
- Further loosening of U.S. fiscal policy which adds to government debt levels, "could put further upward pressure on U.S. yields," say Rabobank rates strategists. The comment comes after President Donald Trump presented his plans for a U.S. budget on Tuesday. Rabobank says if Trump's budget plans are approved--and if these plans along with his tax reforms lead to higher growth--the U.S. Federal Reserve could be forced to speed up its tightening pace. This in turn would cause Treasury yields to rise further. However, Rabobank notes several "ifs" down the road.

Feb 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, lifted by a rebound in global stock markets that followed sharp falls last week. 
- Gold prices held firm, buoyed by a weaker dollar, while investors waited for U.S. inflation data for clues on the pace of interest rate hikes.
- London copper prices climbed for a second day on a weaker dollar and as global equities bounced back from two-month lows seen last week.
- U.S. wheat futures rose to hit a six-month high as dry weather across a major producing region stoked concerns about potential shortfalls in output.
- Further loosening of U.S. fiscal policy which adds to government debt levels, "could put further upward pressure on U.S. yields," say Rabobank rates strategists. The comment comes after President Donald Trump presented his plans for a U.S. budget on Tuesday. Rabobank says if Trump's budget plans are approved--and if these plans along with his tax reforms lead to higher growth--the U.S. Federal Reserve could be forced to speed up its tightening pace. This in turn would cause Treasury yields to rise further. However, Rabobank notes several "ifs" down the road.
- Leading agricultural lawmakers reject the Trump Administration's latest budget proposal, which proposes abolishing subsidies for high-income farmers and curbing others tied to crop insurance. Key proposals include a plan to ditch subsidies and other payments for farmers with adjusted gross incomes over $500K, and to limit "overly generous" crop insurance premiums subsidies so that government, on average, funds just 48% of farmers' premiums versus the current 62%. Chairmen of the House and Senate agriculture committees, Chairman Mike Conaway (R., Tex.) and Pat Roberts (R., Kan.), dismiss the budget, which calls for slashing USDA funding by 16% and cutting $47B from Farm Bill programs over a decade, saying the budget won't prevent them from writing a bill that maintains a robust safety net for US farmers and ranchers.
- The Food Marketing Institute trade group quickly criticized President Trump budget proposal to redirect food-stamp dollars from retailers as wasteful and shortsighted. "Retailers are looking to the administration to reduce red tape and regulations, not increase them with proposals such as this one," says Jennifer Hatcher, policy officer for the group representing Kroger, Walmart and other major retailers. The FY2019 spending plan calls for food-stamp recipients to get half of their nutrition assistance in the form a boxful of food administered by local governments. That would be less efficient than supply chains crafted over decades by retailers, Hatcher says.
- The Grocery Manufacturers Association is shaking up its ranks, with CEO Pamela Bailey retiring after nearly a decade of leading the main lobbying group for food makers. It's the latest in a string of events rattling the trade organization, as several of the biggest food and beverage companies have cut ties with the GMA in recent months, including Nestle, Mars and Campbell Soup. The group is losing membership dues and support as companies have become deeply divided as to how to address consumer demands for more transparency and healthier ingredients. Bailey oversaw the GMA at a touch time for the industry, as they raised concerns with Congress over a law requiring labeling of foods made with genetically modified ingredients and with regulators over their decision to change the way nutrition facts are labeled on food packages.
- Tucked inside President Trump's FY2019 budget is a proposal for millions of food-stamp recipients to get half of their nutrition assistance in the form a boxful of US-grown food. According to the budget, which calls for slashing $214B from SNAP, or the food-stamp program, between FY2019 and FY2028, half of the benefits for about 16.4M households would come in a box containing food grown in the US, like milk, cereal, beans, canned fruits and vegetables and meat, poultry or fish. USDA Secretary Sonny Perdue called the plan "a bold, innovative approach," though the spending cuts and proposed reforms aren't likely to pass muster with some lawmakers set to debate SNAP in coming months as they negotiate the nation's next Farm Bill.
- New presidential aircraft would account for almost $1.6B in spending in the Pentagon's 2019 budget request. After agreeing to buy two unwanted Boeing 747-8s to serve as the future Air Force One, the USAF work on converting the planes would rise to $673M from last year's $434M request. The biggest rise is in the new presidential helicopters being developed by Lockheed Martin, with requested spending almost doubling to $894M in 2019 from last year.
- Florida Senator Marco Rubio's suggestion Friday that US military intervention might fix the problems in crisis-filled, OPEC-member Venezuela has received a smattering of support from hardliners, but many others have quickly called it behind the times. "The Venezuela government is abominable," Adam Isacson, Director of Defense Oversight for the Washington Office on Latin America, writes in a Twitter post in response to Rubio. "But those of us with longer memories remember the nightmare years of the 50s through 80s when militaries ran most governments in Latin America. The cure is as bad as the disease, maybe worse. No, gracias."
- Morgan Stanley recommends buying EUR/USD for a target of 1.28, with a stop at 1.2050, given that the CDU and SPD have reached a coalition agreement in Germany. This "should support the prospect of European integration further and reduce risk premia, while bolstering continued FX-unhedged inflows." The bank entered it at 1.2165. EUR/USD last trades at 1.2270, up 0.1% on the day. "Economic data in Europe continue to surprise to the upside...which keeps expectations for euro area growth high," Morgan Stanley says, adding that strong "global growth [is] aiding USD weakness."
- BMI Research says US sanctions on Venezuelan oil are unlikely to be implemented given the country's crude still supplies about 7% of the US market. That market share, however, has been on the decline due to Venezuela's falling oil production and because US buyers are growing more risk-averse to the embattled South American country, the analysts say. Venezuelan exports to the US have averaged less than 550,000 bpd since August vs 2015 when they were as high as 850,000bpd, BMI notes. They add that Venezuela's declining crude output means that it is unlikely to recover that market share, making Canada the clear beneficiary because of Canadian heavy crude's high compatibility at
facilities that currently process Venezuela's tar-like oil.
- Restaurant Brands International, which engineered an inversion deal back when it was known as Burger King Worldwide and acquired Canadian coffee chain Tim Hortons, making Canada its new tax home, said it expects its corporate tax rate to remain about the same. Companies like Restaurant Brands that shifted their tax homes to other countries in order to reduce their tax rates are now finding that the new US tax law will restrict some of the deductions that made such inversion deals attractive. But companies that derive much of their sales from the US could still benefit from the reduced tax rate. "There are a lot of puts and takes," CEO Daniel Schwartz says in an interview, adding that the company is still trying to assess the impact. "We expect our tax rate to be in the low 20% range, which is consistent to where it has been."
- The fiscal stimulus contained in the two-year budget signed by U.S. President Donald Trump on Friday could hurt the dollar, Unicredit says. The new budget will increase the budget deficit, which coupled with full employment in the U.S., would threaten "to throw USD-denominated assets into a vicious feedback loop of higher risk premia and increasing vulnerability to a potential downturn," it says. President Donald Trump is proposing a budget which is estimated to increase the federal deficit in fiscal 2018 and come close to if not exceed $1 trillion in fiscal 2019. The deficit was $587 billion in fiscal 2017 and grew to $666 billion in fiscal 2017, Mr. Trump's first year of presidency.

Feb 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose by 1 percent, recovering at least some of last week's steep losses as Asian stock markets found their footing after days of chaotic trading. 
- Gold prices rose as the U.S. dollar slipped after last week's rally though investors are watching for inflation data from the United States later this week for signs of the intensity of expected U.S. interest rate increases.
- London copper climbed away from its lowest in nearly two months as the dollar dropped, although traders remained cautious about demand after the Lunar New Year holiday that starts this week.
- U.S. soybean futures rose more than 1.5 percent to a their highest in nearly two weeks as a fall in the dollar helped to lift commodity prices.
- The yen edged higher versus the dollar, but traded below a five-month high as a bounce in U.S. equities late last week dampened demand for traditional safe haven currencies.

Feb 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell for a sixth day after Iran announced plans to boost production and U.S. crude output hit record highs, adding to concerns about a sharp rise in global supplies.
- Gold held steady amid tumbling equity markets, but a firmer dollar and worries about rising global interest rates dragged on prices.
- Copper prices fell in London and Shanghai, extending recent declines following a renewed plunge in global equity markets and another big rise in copper inventories.
- Chicago wheat ticked lower but the market is poised for a fourth week of gains, with prices underpinned by concerns over U.S. weather and short-covering by investors.
- The yen neared a four-month high against the dollar as global stock markets plunged again, triggering a rush into traditional safe-haven currencies.
- The euro is benefiting from the current rise in risk aversion, says Commerzbank, as EUR/USD rises 0.1% to 1.2263 and after the Dow Jones Industrial Average fell by more than 1,000 points on Thursday. "That may be due to the fact that increasingly voices can be heard who sound critical about the U.S. budget policy," Commerzbank says, adding that "the budget deal agreed on by Congress would further increase the budget deficit." The Senate approved a breakthrough two-year budget deal and stopgap spending bill early Friday, sending the package to the House, but too late to prevent a government shutdown that began at midnight.
- Canada Foreign Minister, Chrystia Freeland, tells lawmakers at a legislative committee that the government would only accept a revised Nafta that's in the country's interest. "We are resolute," she said in testimony before the foreign-relations committee. While progress was made, "serious challenges do remain," in addressing the Trump administration's most contentious demands, dealing with autos and the trade pact's dispute-resolution system. Her comments are largely in line with PM Trudeau's comments late last week and Wednesday in Chicago.
- Canadian Foreign Minister Chrystia Freeland lauded country's proposal to beef up labor standards among the Nafta countries during testimony before a legislative committee. She said the labor proposals are among the "strongest" Canada has introduced as part of a trade negotiation, and are meant to protect those who believe globalization has left them behind. "This is a set of proposals that would bite," she said. "It's not fair for Canadian workers to be exposed to the race of the bottom where labor standards are lower." At last round of Nafta talks, labor leaders and some lawmakers lamented lack of progress on labor. PM Justin Trudeau said Wednesday at a Chicago event stronger labor rules in Nafta could address US concerns about manufacturing jobs headed toward Mexico.
- A group of UK lawmakers calls on the British government to keep up pressure on Boeing, even after the company's loss last month in a high-profile trade case following a complaint over state subsidies for Bombardier. The Northern Ireland Affairs Committee says Boeing's existing UK contracts and future deals should be reviewed in the wake of Boeing's actions, which they said created months of uncertainty for Bombardier's factory in Belfast. US trade officials are due to issue a report next week detailing why they found against Boeing.
- Most auto parts suppliers will benefit from the recent US tax overhaul, but a handful will fare worse, due mostly to an interest rate deductibility cap, according to Moody's Investors Service. Of 37 US parts suppliers tracked by Moody's, only eight are considered to be at highest risk for negative impact from the new tax rules, the credit rating agency says. Most are "on the lower end of the ratings spectrum, and tend to either focus on the aftermarket or have considerable amount of foreign cash," it said. Among those expected to suffer most are Dayco Products LLC, Horizon Global and Key Safety Systems, Moody's says. Those likely to do best include BorgWarner, Lear and Dana Holding, it said.
- Pushing human space exploration beyond low-earth orbit is expected to cost many tens of billions of dollars, and NASA for years has indicated it will require close international cooperation. But now the Trump White House, which has revived a high-level council to coordinate space policies government-wide, seems ambivalent about certain tie-ups. Scott Pace, the top staffer for the council, says "we've been able to protect," Russian partnership on the international space station "from the rest of the turmoil." But he notes "we have to think really hard," about new space partnerships with the Kremlin. He adds "we probably need to be very careful and cautious," regarding China, as well.
- Meatpacking giant Tyson Foods figures the US tax overhaul will drop its effective tax rate to 24% in fiscal 2018 from about 32% the prior year, and the company is slicing up the estimated $300M it will save this year alone. One-third of that will go to pay bonuses for "frontline employees," with some of the rest going toward speeding up expansion projects, employee training and developing new products. The tax savings are "obviously significant for us," says CEO Tom Hayes. Shares rise 0.9% to $74.02.
- The funding deal congressional leaders agreed to on Wednesday would boost discretionary spending levels in 2018 and 2019 by around $300B above caps set in law earlier this decade, plus another $89B in relief for regions rebuilding after last year's natural disasters. The levels represent a substantial increase over what President Barack Obama submitted in his final budget request to Congress two years ago. The current proposal would spend around 13% more for the current budget year that ends on Sept 30 than Obama had proposed spending in the same year, and around 14% more for the budget year after that. President Donald Trump signaled his support for the agreement in a statement on Twitter on Wednesday evening. But the increased spending levels prompted derision from Paul Winfree, who served as a budget adviser to Trump last year, on Twitter on Thursday morning. "This is getting comical," he wrote.
- Even before President Trump formally releases a proposal to halt US funding of the international space station by 2025, industry and Congressional leaders are stepping up attacks on the concept. Republican Senator Ted Cruz of Texas, who chairs a commerce subcommittee overseeing NASA, has been lambasting the proposal as short-sighted and contrary to earlier legislation. John Mulholland, who runs Boeing's commercial crew program, has warned against the White House initiative. "We should not advocate for, or allow, premature retirement" of the station, he argues, unless there is a clear follow-on plan to continue research in orbit.
- T-Mobile bought Layer3 TV for $325M last month, according to a securities filing, placing a small bet on the future of video delivered through a wireless carrier. The move was widely considered a defensive one as cable rivals like Comcast dabble in the cellphone business, but much remains to be done. The premium cable-like service must spend much more to acquire streaming rights for TV channels if T-Mobile wants to play them on phones and on home devices, according to people familiar with the matter.
- T-Mobile's forecasts show it's not just the big incumbents reaping the benefits of new tax law. The No 3 US wireless carrier expects "a positive impact of next cash taxes paid" between $6.5B and $7B from 2020 to 2027, less than (but in the neighborhood of) the many billions in annual savings expected at rivals AT&T and Verizon. But the lower tax rate and new expensing rules mean T-Mobile also doesn't expect to be a material cash tax payer until 2024, four years later than its earlier projections. The changes add up to a 24%-25% effective tax rate this year and a nearly $2B paper gain folded into 4Q earnings.

Feb 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices eased, taking Brent crude to a 2018 low, as soaring U.S. output undermined OPEC efforts to tighten markets, although a North Sea pipeline outage and record Chinese imports offered support.
- Gold prices dropped for a third consecutive day, holding near four-week lows hit in the previous session, on a firmer greenback amid expectations of more U.S. interest rate hikes this year.
- London copper prices climbed off seven-week lows, buoyed by solid China import figures that bolstered optimism over the health of demand from the world's biggest metals user.
- U.S. wheat futures edged to a six-month high, as concerns about dry weather across key U.S. growing regions stoked fears over potential production losses.
- The dollar hovered above its recent lows against major rivals, benefiting from the euro's weakness and higher U.S. yields but capped by concerns about recent equity market volatility.
- Dating app collection Match Group took a $92.3M charge related to the new US tax law, the company said in its 4Q financial results. The tax charge contributed to Match's net loss of $9M; excluding the tax charge, Match would have reported net income of $83M, it said.
- The US solar industry lost about 9,800 jobs in 2017 -- a nearly 4% decline from the previous year, and the first drop since the nonprofit Solar Foundation released its first jobs census in 2010. Many of those losses occurred in California and Massachusetts, which have the two largest solar workforces of any state. The Foundation's 2017 census shows more than 250,000 Americans working in the industry, more than half doing installations. Manufacturing accounted for about 15% of all solar jobs. A new breakdown showed most manufacturing activity doesn't involve making solar panels or cells -- a recent point of contention in the industry. New tariffs imposed by the Trump administration against imported solar cells and panels are meant to help domestic panel makers compete with foreign rivals and boost US solar manufacturing.
- There is a risk of the U.S. economy "overheating" later this year, perhaps forcing the Federal Reserve to raise interest rates five or six times this year, instead of the three projected, says Gero Jung, chief economist at Mirabaud Asset Management. "If tax cuts are coming and if fiscal stimulus is implemented later this year then this could lead to some overheating," he says, adding this would be a risk for the second half of 2018. However, he adds concerns about rising inflation after data Friday showed U.S. annual average earnings growth rising to 2.9% may prove unfounded as the number of hours worked declined.
- U.S. tax reforms forced GlaxoSmithKline PLC (GSK) to take a £1.6 billion accounting charge in the fourth quarter, but will lower the company's effective tax rate on adjusted profits in 2018 by two or three percentage points. The accounting charge relates to the higher valuations of the HIV and Consumer Healthcare businesses due to lower U.S. tax rates, and a reduction in the value of U.S. deferred tax assets held against future liabilities. The cash impact of this charge will be spread over eight years from 2018. GSK shares trade up 0.6%.
- With focus on sharp slides in equity markets on Tuesday, data showing a "notable deterioration" in the U.S. trade balance in December "slipped under the radar," say MUFG currency analysts. MUFG views the likely widening of the U.S. twin deficits as "structural negatives for the US dollar in the medium to long-term." The data showed the U.S. posted its largest monthly trade deficit in nine years in December as it widened to a seasonally adjusted $53.1 billion. The widening trend is likely to remain in place in coming years and could heighten concerns about Donald Trump's administration implementing protectionist trade policies, MUFG says. EUR/USD last down 0.1% at 1.2360.
- ING says the dip in GBP/USD to below 1.40 is "a good buying opportunity" amid a structurally weak dollar backdrop. It says there is risk of a "more hawkish tilt" from the Bank of England on Thursday, even though it won't result in "material GBP upside" until a Brexit transition deal looks more definitive. ING says it continues to target a rise to 1.45 in 1Q "as the U.K. economy regains some of its cyclical swagger." It also says it believes Brexit dynamics "have not been the driving force" behind sterling's recent falls, despite heightened risks of a "hard" Brexit. GBP/USD last down 0.1% on the day at 1.3940, but above the three-week low of 1.3837 reached Tuesday.
- Lockheed Martin drops any mention of President Trump from the "Risk Factors" in its latest annual report. A year ago, the world's largest defense contractor by sales flagged the president's publicly-expressed concerns over the cost of the F-35 combat jet in its 10K, which included a call for Boeing to price out a competitive offering. No such mention in the 2017 annual report, with F-35 production increasing and already accounting for 25% of Lockheed's total sales.
- Two environmental groups and 11 state attorneys general sue the federal government in separate lawsuits over the Trump administration's recent delay of an Obama-era rule that sought to protect clean drinking water. The Natural Resources Defense Council and the National Wildlife Federation file one lawsuit, while New York and California lead the states, with both groups filing against EPA and Army Corps of Engineers. They had announced last week a decision to delay the Waters of the United States, or WOTUS, rule for two years in order to sort out several court cases over its implementation. The Trump administration says the Obama-administration's update overreaches, expanding Washington's power to regulate major rivers and lakes as well as smaller streams and wetlands. The environmental groups and states suing the government claim the delay decision came too quickly, without enough public comment and with an insufficient record of support required by law.

Feb 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose amid a share market recovery and supported by a report that U.S. crude inventories fell last week, although analysts warned that soaring U.S. output and a seasonal demand drop could soon weigh on crude.
- Gold prices rose as investors used dips to accumulate the yellow metal after it dropped more than one percent to its lowest in over three weeks in the previous session.
- London base metals recovered some of the ground lost in the previous session as global equities bounced back after days of sharp falls and investors focused on fundamentals.
- Chicago soybean futures rose for a second session to hit their highest in almost a week, with prices underpinned by dry weather curbing Argentina's crop yields and excessive rains slowing Brazil's harvest.
- The dollar steadied against a basket of currencies as calm returned to global financial markets with investors partially reversing their rush to safe haven assets and moving back into stocks.
- Walt Disney enjoyed a $1.6B tax benefit in the quarter ended Dec 30 thanks to the new tax law, it said Tuesday as part of its announcement of financial results. The entertainment giant said it recognized a $1.9B one-time benefit from remeasuring its deferred tax balance at the new statutory rate and that it paid $300M from taxes on overseas money it repatriated. Those moves, combined with a reduction in its tax rate to 24.5% from 35%, gave Disney an effective tax rate of -19.4% in the quarter, compared to 33.2% the prior year.
- Chipotle plans to invest savings from a lower corporate tax rate in employee benefits such as enhanced parental leave and short-term disability. The burrito maker also said it will make all restaurant managers and crew eligible for a one-time cash bonus and that it will award one-time stock bonuses to a broad group of employees. The lower tax rate will result in savings of approximately $40M-$50M in 2018. The company said its 2017 effective tax rate was 36.1%, a 4.7% decrease from 2016.
- Russian debt markets should have little to fear from the Trump administration, according to US Treasury Secretary Steven Mnuchin. "We're targeted on specific sanctions to bad individuals and companies as opposed to sanctions on the debt," Mnuchin tells lawmakers at a House Financial Services hearing. A new law passed last year required Treasury to examine the potential impacts of hitting Russian debt markets as a possible penalty for Russia's international activities that Washington perceives as a threat. Still, the Treasury Secretary says that Moscow should expect rolling sanctions over the next couple of months against the most egregious offenders on the classified version of the so-called Russian Oligarch list Treasury presented to Congress last week.
- Treasury Secretary Steven Mnuchin says the administration supported a fully operating Export-Import Bank. "He does want to open the Export-Import bank for business," said Mnuchin at a House Financial Services Committee hearing, referring to President Trump. But, he adds, "I think we need to make sure sure there are proper reforms there." President Trump's pick to run the agency, Scott Garrett, was rejected by the Senate Banking Committee in December.
- Jim McGovern (D, Mass) fired a warning shot in Congress as the process to reauthorize the Farm Bill ramps up, promising a fight if Republican lawmakers seek to gut nutrition assistance to the poor. McGovern, in a hearing on the rural economy held by the House agricultural committee, complained that Democrats yet hadn't seen any language on
SNAP, or the food stamp program, which Republicans have promised to reform as they draft the nation's next Farm Bill. "I want a Farm Bill just as much as everybody does on this committee but if it eviscerates our nutrition, our SNAP program, there's going to be one hell of a fight on the floor," he said.
- USDA Secretary Sonny Perdue tried again to soothe fears over the fate of agricultural trade during his second appearance before the House agriculture committee, where lawmakers fretted over exports of goods like sorghum, soybeans and beef. Perdue acknowledged that the farm economy is highly sensitive to trade disruptions, saying sorghum prices recently dropped 25% after news that China, a major market for the US grain, had launched a probe into sorghum imports that could result in large tariffs. "We think the sorghum issue will mollify over a period of time," Perdue said. On Nafta, he said, "If we get the Mexico politics out of the way, I think we'll have a deal before the end of the year."
- Sterling is likely to fall versus the dollar, taking GBP/USD down to 1.34 by the end of 2018, Commerzbank forecasts. "Arduous Brexit negotiations, some disappointing economic data and disagreement within the British government suggest that downside risks to the pound still remain high." On top of that, "the pronounced USD weakness seen since mid-December is fundamentally unjustified and will therefore be corrected over the coming months," says Commerzbank. At the end of 2019, however, GBP/USD will likely rebound slightly to 1.37 as "the USD strength is likely to come to an end once Fed rate hikes cease to support the US currency," Commerzbank says. GBP/USD is marginally down at 1.3951.
- Treasury Secretary Steven Mnuchin told lawmakers the government is monitoring stock markets carefully but suggested he isn't worried about recent turmoil. "They're functioning very well, and we continue to believe in the long-term impact of the stock market," he told the House Financial Services Committee. Mnuchin noted the stock market is still up "significantly" since President Donald Trump was elected in November 2016.
- Global risks to the oil market could result in a spike in prices this year, says Richard Robinson, manager of the Ashburton Global Energy fund. "More balanced inventories, the low number of projects delivering first oil between 2019-2021, years of slashed maintenance spend and empty government coffers in producing countries is contributing to a significant rise in the oil risk premium," Mr. Robinson says in a note. Meanwhile, political tensions in major oil-producing countries in the Middle East puts upward pressure on prices. If the Trump administration renews economic sanctions on the Iranian regime, "we can expect a much tighter, higher oil market and price in 2018," he says.
- Centene gives some more detail about the big benefit of the tax overhaul, which it said will increase its earnings by around $280M this year. The company will spend around $60M of its windfall on investments including employee initiatives and technology. CEO Michael Neidorff plays down efforts being considered in New York and California that might claw back some tax benefit, which he says is "not something we see having a short-term or long-term effect on us." When asked about other states's Medicaid programs potentially moving to siphon off some of the company's federal tax windfall, he points to "legislative constraints" and says he's "not making any decisions on the basis that that's going to happen." Shares rise 4.1% to $103.49
- BP PLC chief executive Bob Dudley showered praise on the U.S. tax overhaul Tuesday, saying that the move to roll back an "avalanche" of regulation is "quite transformational" from a business standpoint. BP took a $900 million charge in the fourth quarter related to the tax changes, but says in the long-term the reduction in corporate tax rate will be positive for the company. "For us, there's no doubt we'll increase investments," Mr. Dudley says. BP shares trade down 0.9%.
- Procrastination pays off for AmerisourceBergen, which easily beat earnings per share expectations in calendar 4Q thanks to a reduction in the US corporate tax rate. AmerisourceBergen had deferred payment on some $2.5B in income taxes at the end of calendar 3Q. By applying the new 21% tax rate, ABC's future tax bill is reduced by $840.5M,
offset in part by a one-time charge of $318.7M to repatriate cash held in non-US tax jurisdictions. ABC shares inactive pre-market.

Feb 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dropped by more than 1 percent, extending falls from the previous session as global financial markets tumbled lower in the wake of one of the biggest intra-day falls ever registered on Wall Street.
- Gold prices rose as a rout in global equities prompted investors to seek shelter in safe havens such as gold, although expectations of more U.S. rate hikes this year weighed on the market.
- London nickel fell three percent, leading the base metals complex towards late January lows as "risk off" sentiment soured sharemarkets and safe-haven buying lifted the dollar.
- Chicago wheat futures slid for a fifth consecutive session with prices weighed down by improved weather across the U.S. Midwest that boosted expectations of higher yields.
- The dollar stood tall as a rout in global equities prompted anxious investors to cut exposure to riskier assets and seek shelter in the relative safety of the greenback.
- Sterling could fall to 1.38 or 1.35 against the U.S. dollar if "the front end of the U.K. curve flattens further," according to Societe Generale. GBP/USD is down by 0.8% at 1.4008, having fallen to a one-week low of 1.3987 after weaker-than-expected U.K. services PMI suggested growth in the U.K. was running below Bank of England's projections, it says. However, since sterling's recent rise has been largely due to dollar weakness, any retreat also depends on the dollar. "The [U.S.] government shutdown and debt ceiling politics could inspire investors to maintain their short dollar bias despite the optimism over wages and re-steepening of the U.S. yield curve."
- Booz Allen Hamilton doesn't expect its tax windfall to be competed away with lower prices, even though its government IT sector was in the crosshairs of Pentagon efforts to push lowest-price, technically-acceptable pricing. CEO Horacio Rozanski says he's not seeing the pricing pressure evident three years ago. "We believe that we can drop a lot of this tax upside to the bottom line and do investments in the business as it makes sense' he says on investor call after fiscal 2Q beat and 2018 raise, but expected rate of 25% to 27% is higher than peers, and shares fall 3.4%.
- EUR/USD trades down 0.1% on Monday at 1.2442 since the dollar "has held onto most of its gains with limited pullback" after Friday's U.S. non-farm payrolls, says RBC. The euro has also shown limited reaction to news that German Chancellor Angela Merkel's conservatives and the Social Democrats failed to conclude coalition negotiations in time to meet a self-imposed Sunday deadline. Friday U.S. payrolls came in higher than expected and "the dust is still settling," RBC says.
- The Nikkei logs its biggest drop since the knee-jerk selling which followed results going Trump's way on Election Night, falling 2.5% today to 22682.08 following the sharp Friday selling in the US and Europe. It's well below the 25-day moving average (now at 23537.39) that supported the Nikkei for weeks, a short-term negative. But with the Bank of Japan's determination to keep yields low and some risk-off sentiment, 10-year JGBs were steady at 0.08% despite Friday's fresh jump in Treasury yields. Meanwhile, the dollar is  Y109.92 versus Y110.19 late Friday in New York.
- European Stocks Opening Calls:
    #FTSE 7093 -3.30%
    #DAX 12030 -5.18%
    #CAC  5037 -4.70%
    #MIB 21892 -4.08%
    #IBEX 9661 -4.01%

Feb 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices extended declines from the end of last week amid a wider market sell off and a stronger dollar, with Brent crude falling to its lowest in nearly a month.
- Gold prices inched down after robust U.S. jobs data late last week potentially increased the chances of more U.S. interest rate hikes this year.
- London nickel steadied after posting its largest daily loss in two months in the session before, but prices were seen tailing off ahead of the Lunar New Year next week.
- Chicago wheat futures slid 1.5 percent, falling a fourth consecutive session to its lowest in more than a week, as heavy snow across the U.S. Midwest eases dry weather worry.
- The dollar steadied after rallying on upbeat U.S. jobs data, which sent bond yields surging on the prospects of increasing inflation and hammered equities.
- Canada PM Justin Trudeau faced a raucous crowd at a townhall event on Vancouver Island, about 50 miles west across the Strait of Georgia from Vancouver, about federal government approval of Kinder Morgan's planned expansion of Trans Mountain pipeline system. He approved project in late 2016, but now left-leaning provincial government looking to thwart expansion through environmental legislation. "We will be moving forward with the Kinder Morgan pipeline," Trudeau told townhall, adding his government has implement measures to protect British Columbia's coastline -- including rejecting Enbridge's proposed Northern Gateway corridor. His townhall event was disrupted myriad times by anti-pipeline protestors, and police at event removed people on at least two occasions.
- Spirit AeroSystems says tax reform helping the big aerospace supplier boost R&D and alter its view on what counts as a low-cost manufacturing country. CEO Tom Gentile says it looked to buy a Mexican machining company, but after failing to agree terms it acquired its machines instead, and installed them at a plant in McAlester, OK. Gentile says productivity gains from domestic production coupled to tax windfall helped seal that approach. Spirit shares down more than 8% despite 4Q beat and outlook, with additional cash being aimed at R&D rather than buybacks.
- The economics team at Bank of Nova Scotia puts the odds of a Nafta agreement struck in 2019 at 75%, versus 20% probability of a US withdrawal. The prolonged sense of uncertainty over the fate of the trade pact will bite mildly into growth in both Canada and Mexico, by 0.2 percentage points, but no impact on the US. "Extended negotiations are preferable to the annulment of the accord," the firm adds. The lack of clarity has already prompted Bank of Canada to warn it would move gradually and carefully on further rate rises, given the impact from trade uncertainty on capital spending and export growth.
- The Port of Corpus Christi says it will be ready to receive very large crude carriers (VLCCs) by 2021 if the federal government approves a $60M funding request to dredge the port's channel. The Texas port handles 60% of US crude exports and six energy CEOs wrote a letter to President Donald Trump asking for the funding. Some $50B of energy projects are currently underway in South Texas that "rely on the Corpus Christi ship channel to move our products," the CEOs said. VLCCs are the industry's largest crude carriers and a must for major oil terminals looking to grow their business.

Feb 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil rose for a third day after a survey showed strong compliance with output cuts by OPEC and others including Russia, offsetting concerns about surging U.S. production.
- Gold prices edged down ahead of U.S. jobs data later in the day, with traders looking for any implications for the outlook for U.S. monetary policy over the rest of the year.
- Shanghai nickel rose after a rollercoaster week, tracking an overnight jump in London prices as investors took up new long positions.
- Chicago wheat futures slid for a third session, with prices under pressure from bumper supplies and stiff competition in the export market.
- The dollar nursed losses against a basket of currencies and was on track for a weekly fall as investors focused on renewed economic strength in the eurozone.
 - Papa John's prediction in November that its 4Q sales would fall below targets is looking to be true, according to Second Measure, which analyzes credit card data. The pizza chain, a major sponsor of the NFL, blamed declining TV viewership on the league's handling of the national anthem protests. The data analysis firm found that sales worsened since company founder John Schnatter criticized the NFL during the chain's 3Q earnings call, suggesting that what really hurt sales was not the declining football viewership but a PR crisis the chain created for itself. Schnatter in December stepped down as CEO. While 4Q is usually the biggest quarter for pizza sales, Papa John's sales fell short of what they had been in the first half of last year, according to Second Measure. Meanwhile, sales are up at rivals Domino's, Pizza Hut and Little Caesars.
- Bit of political tension emerged in Canada over Liberal government's decision late last month to sign on to a Trans Pacific Partnership. The premier of Canada's biggest province by population, Ontario, said economic benefits emerging from TPP deal among Pacific-Rim countries "should not ... [be] created at the expense of Ontario's auto sector." Kathleen Wynne, who is seeking re-election later this year, said she would advocate for the auto sector, a major employer in Ontario and vocal critic of Canada's decision to sign on to TPP. TPP's lower regional-content provisions could put employment in Canada's auto sector and its suppliers at heightened risk, industry stakeholders say -- especially at a time when US is pushing for much higher regional content levels in Nafta talks.
- Microsoft CFO Amy Hood downplayed the significance of being able to repatriate cash held overseas that had been subject to higher tax rates before recent changes in the law. Microsoft holds the vast majority of its cash, which rose to $142.8B in the quarter, overseas. That's the second largest amount of cash held abroad by US corporations, behind only Apple. "When we have seen an opportunity to invest, we have not really waited for tax reform to do that," Hood said during a conference call with analysts. "We also didn't wait when we thought about capital return" to shareholders. While she didn't set a timetable for bring funds to the US,  Hood said the cash will mitigate Microsoft's need to tap debt markets. "I am pleased obviously to be able to access the cash more easily and not have to go through the debt market to be able to make these choices," she said.
- Rexnord credited its fiscal 3Q profit margin growth to a restructuring that included closure of an Indianapolis factory and shifting production south of the US border, a move that drew the ire of then-President-elect Donald Trump's Twitter in late 2016. In a call with analysts, Rexnord finance chief Mark Peterson cited "our move to Mexico," adding: "The SCOFR benefits would be, hands down, the largest driver," referring to the company's Supply Chain Optimization and Footprint Rationalization plan. RXN's 3Q operating margin in its process & motion control segment rose to 15% from 11% year over year, while its water management segment margin rose to 14% from 11%. RXN shares are up 5.3% to $29.59.
- ING downgrades forecasts for USD/JPY to 100 from 110 for 2018, expecting a weaker dollar on U.S. protectionism and policy uncertainty. It says "it will now be very difficult for Washington to put the weak-dollar genie back in the bottle." U.S. trade protectionism fuels fears of a trade war. Add that to a late U.S. economic cycle, high U.S. asset valuations, and a U.S. deficit, and there is a "natural tendency...for the greenback to fall over the course of 2018." On top of that, "Japan is looking like less of an economic outlier these days" and JPY is no longer "a sell on the Japanese macro story."
- For those looking for the S&P 500 index to dip after its 5.6% gain in January, a BofA Merrill Lynch Global Research report advises caution. When the S&P 500 is up 4% or more in January, February has also been strong, with the index gaining 65.4% of the time going back to 1928 with a "well-above average return," of 1.1%, says Stephen Suttmeier, chief equity technical strategist at BofA Merrill Lynch. The first year of Donald Trump's presidency was the ninth-strongest presidential-cycle year-one for the S&P 500 out of the 23 cycles going back to 1929, BofA Merrill Lynch says. But the S&P 500's performance in Trump's first year lagged behind the first years of both of Barack Obama's terms, the company adds.
- Ralph Lauren's net loss in the recently completed period was due to changes in the tax law which resulted in a $230M charge to repatriate foreign earnings and write down the value of some tax assets. On an operating level, profits increased in the quarter. "We believe that a reduction in promotional activity is helping to strengthen Ralph Lauren's brand image," wrote Neil Saunders, Managing Director of research firm GlobalData Retail. But he added that the company still has work to do. "Ralph Lauren has not regained all of the ground it lost over the past ten years and is a long way from where a luxury brand of its kind should be."
- UPS makes a $5B pension payment late last year to take advantage of the new tax law. On 4Q earnings call, CFO Richard Peretz says the payment will allow UPS "to optimize tax benefits" in the way of the tax law and free up cash flow going forward. The payment follows moves by rival FedEx and other large companies to accelerate pension funding so they can write it off at a higher tax rate.
- South Korean Trade Minister Kim Hyun-chong has indicated that progress was slow in the latest round of negotiations with the US on revising a 2012 free trade deal. "It was tough, and we still have a long way to go," Kim told reporters on his way out of a Seoul hotel Thursday night after both sides wrapped up 2-day talks. The US demand for increasing access to the Korean market for US cars in order to reduce a trade deficit and South Korea's complaints against President Trump's safeguard tariffs on Korean washing machines and solar panels were on the agenda to discuss, Kim said. The next round of talks will be in Washington, DC.
- AECOM CEO Mike Burke expects a boon to his company and others if Trump's planned $1.5 trillion infrastructure plan, touted in the State of the Union, comes to fruition. Coupled with spending by companies expected to use repatriated cash to relocate factories to the US or expanding operations here, he tells WSJ "we are in for some halcyon days for the engineering-and-construction industry." Still, Burke admits he would have liked more details from the president about how his plan would be funded. He adds that without speeding up the federal permitting process, as Trump called for, the spending plan may never become a reality.
- At a CFR event in New York, Canadian Foreign Minister Chrystia Freeland was pressed by audience members on what is the country's "red-line" Nafta issues. She mentioned 2, the first being the US demand on autos to have more regional content, including a minimum level for the US. Canada offered an informal proposal that broadens the definition of what counts as car content, but US Trade Representative Robert Lighthizer dismissed the idea this week, warning it could lead to job losses on the continent. Freeland also cited Nafta's Chapter 19 provision, which lets expert, binational panels settle disputes on tariffs between Nafta parties. "It was probably from the Canadian perspective the single biggest thing the original" created, she said, adding Canada could be open to modifying or improving the process.
- Canada Foreign Minister Chrystia Freeland tells a New York audience that the biggest challenge in Nafta talks is to mesh 2 competing visions. She contends Canada wants to update the pact and expand the country's trading relationship with the US while the Trump administration wants to "shrink" trade ties in some areas. She described talks, which completed the 6th round in Montreal this week, as taking place on 2 tracks. Things are "going well" on so-called bread-and-butter trade issues while "there is more distance" on 5 of the most-contentious US demands for a new Nafta, such as on autos.

Feb 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices extended modest gains as OPEC's strong compliance with a supply reduction pact offset news that U.S. production topped 10 million barrels per day for the first time in nearly half a century.
- Gold prices were little changed as investors awaited the U.S. nonfarm payroll data for cues on the health of the world's largest economy, a day after the Federal Reserve left interest rates unchanged.
- London copper traded barely changed, supported by optimism over the outlook for global manufacturing but pressured by expectations that demand could tail off ahead of the Lunar New Year in mid-February.
- The dollar held steady against a basket of major currencies after the Federal Reserve signalled its confidence about inflation and growth in the world's biggest economy, reinforcing views it will raise rates several more times this year.
- Chicago wheat futures slid for a second session as the market started the new month lower with funds selling off positions to cash in on a recent rally and on signs that supplies remain abundant.
- The Trump administration places a two-year stay on an Obama-era rule that sought to protect clean drinking water by expanding Washington's power to regulate major rivers and lakes as well as smaller streams and wetlands. Facing several outstanding court cases over the Waters of the United States, or WOTUS, rule, EPA and the Army set a new rule that delays its application. The agencies have a separate process to review and replace what the Obama administration created. Environmental groups criticize the decision, saying it puts into limbo rules that were to provide better protections for the drinking water supply of one in three people in the US. Farmers, property developers, chemical manufacturers and oil-and -gas producers have long complained of the rule.
- The Canadian dollar was up as Canada's GDP advanced in November, while the Fed left rates unchanged. The USD was is C$1.2306 from C$1.2337 late Tuesday, according to CQG. The Canadian dollar reacted strongly in the morning session as Canada's monthly GDP rebounded from a sluggish October to climb up 0.4% in November, in line with expectations. Also pushing the loonie higher was the absence of any stark comments on Nafta from President Trump during the State of the Union address.
- Expanding and improving US airports as part of the White House's public-private infrastructure drive will require substantial legislative work even before the first project can be identified. Lawmakers first need to grant cities which operate airports much more latitude in how airport funds can be used. That promises to be a lengthy process, according to government and industry officials, and no such proposal is expected to be part of the next
interim FAA reauthorization bill. Before any airports can participate in the initiative, trade associations will need to band together to generate support for legislative changes. And US industries must come to recognize that foreign companies--with decades of experience organizing government-industry partnerships in the aviation sector--are likely to be first in line to benefit from the concept in this country.
- Fed-watchers hoping to glean more insight into how Fed officials view the new tax law will be disappointed by Wednesday's policy statement, which didn't mention the expected fiscal stimulus or the market's response. Since officials' meeting last month, Congress approved and President Donald Trump signed into law a $1.5 trillion tax cut. Yellen said at her December press conference officials' had largely incorporated the prospect of faster growth from the tax cuts into their projections, which didn't result in any change to their expectations for the path of rates. The minutes from Wednesday's meeting could offer more details on their thinking now that the proposal has become law.
- Eli Lilly shares are down 4.6% on new concerns about drug pricing and weakness in the company's animal-drug business. Lilly reported better-than-expected fourth-quarter results, but CEO Dave Ricks said on a conference call he expects "a busy year regulatory-wise in Washington" as the Trump administration takes steps to reduce out-of-pocket drug costs for consumers, including potentially requiring middlemen to pass through rebates to patients covered by Medicare's drug benefit (Last night Trump said in his State of the Union address he wanted to cut drug prices). And Lilly said its diabetes treatments are under pricing pressure. Leerink says Lilly's comments about pricing and Washington appear to be hurting other drug stocks, too. Gilead is down 3.3% and Bristol-Myers is off 2.5%.
- Steel maker ArcelorMittal would benefit from President Trump's proposed $1.5 trillion infrastructure spending program and the additional duties on imported steel the president is considering, says Chairman Lakshmi Mittal "If this [infrastructure] bill is passed, it will provide more opportunities to grow our business in the United States," Mittal said in an interview with The Wall Street Journal. The company's 4Q North America business results were
disappointing as profit fell by 39% and sales slipped 7%. Shipments of steel declined by 9% during the quarter, from a combination of mill outages and continued market pressure from cheap imports, especially in long-length steel products, like pipes.
- New FX regulations released by Venezuela suggest some liberalization of the country's tight currency controls, Torino Capital says. As part of the measure, the government eliminated a system where it had auctioned a limited supply of dollars at a highly overvalued rate of 10 bolivars per dollar vs the 260,000 bolivars that one greenback fetches on the streets. It implies the government will return to a more conventional currency market with one
exchange rate, instead of a  multi-tiered system, Torino says. Analysts warn that Venezuela's government has a poor track record on exchange policies, which many economists blame for the country's malaise. Still, Torino notes the latest move "suggests that at the very least the intention of authorities is to take significant steps towards liberalization."
- The volatility experienced by U.S. stocks over the past two days may be just a taste of what's to come, according to Andrew Harmstone, managing director and a portfolio manager at Morgan Stanley Investment Management. "Given our outlook for higher interest rates and inflation-which can lead to market destabilization, especially given soaring valuations--we do not expect historically low volatility to continue," he says. Geopolitical risks are likely
to continue this year, and if Democrats win big in mid-term elections, "political friction could spill over into markets," Harmstone says. The current consensus expectation for a 2.17% increase in inflation may be too conservative, he says.
- In Canada, there's some relief after President Trump's State of the Union address. Why? Just 80 words in the address were dedicated to trade, and Nafta wasn't specifically singled out. Cambridge Global Payments said the C$ largely held onto gains, and then added some following a strong November GDP report. Bank of Nova Scotia says Trump's trade talk was "surprisingly very light. That's a good thing..." Scotiabank adds that Trump did mention how the era of "economic surrender" was over, and how trade agreements needed to be reciprocal, but even then, "nothing substantive."
- Canadian PM Justin Trudeau said he won't hesitate to "push back" against overzealous US trade actions, such as tariffs on softwood lumber, despite a heated warning this past week from US Trade Representative Robert Lighthizer. Lighthizer, while in Montreal for Nafta talks, issued a fierce broadside against Canada, accusing it of launching a "massive attack" on the US trade regime with its WTO complaint on the US use of tariffs. Lighthizer added it was "imprudent, and in my suspicion, spiteful." In an interview with Canadian Broadcasting Corp., Trudeau said he's "always going to stand up for Canadian jobs ... [and] for what is right," even amid sensitive talks to update Nafta. "I will push back and I have said that directly to President [Trump] a number of times."
- Canadian Prime Minister Justin Trudeau says he does not believe President Trump will ultimately withdraw from Nafta, given the economic repercussions such a move might entail. In an interview with Canadian Broadcasting Corp., Trudeau said he's been optimistic about the Nafta talks from the beginning. Still, Canada launched an extensive lobbying campaign in the US, targeting local business groups and lawmakers from all levels of government, to make the case for the trade pact. Canceling Nafta "would be bad for American works, American jobs--and obviously bad for Canada, too," Trudeau said. "So I don't think the President is going to be cancelling it."
- While trading sterling be "prepared not to be married to a position," says Audrey Childe-Freeman, chief strategist at FX Knowledge. The pound is not being traded on fundamentals while Brexit headlines are taking charge of its direction, Ms. Childe-Freeman says. She advises to trade the pound versus the euro instead of against the dollar, given that the dollar has its own idiosyncratic drivers. Trade-weighted sterling broke from the range it has been trading since Brexit last week, mostly pushed up by dollar weakness. EUR/GBP rises 0.2% to 0.8786 and GBP/USD is up 0.2% at 1.4176.

Jan 31 - Asia-Pacific Markets Weaker, Brushing Off Trump Speech (Dow Jones)
     Asia-Pacific shares were broadly weaker, following losses on Wall Street overnight even though President Donald Trump struck a mostly conciliatory tone in his first State of the Union address.
     Investors were focused on Mr. Trump's comments, in case he made comments which could impact trade or the global economy, but his speech mentioned little in the way of new policies and Asian markets quickly looked to local factors.
     "It is not a market-upsetting speech; rather a motherhood and apple pie in the great American tradition," said Rob Carnell, head of research for Asia-Pacific at Dutch bank ING.
     He noted there was no major criticism of Russia and China while details on infrastructure spending were thin. Elaborating on the latter could have pushed bond yields higher still, playing into recent market nervousness. Mr. Trump mostly stayed away from surprises and signaled a willingness to work across party lines. S&P 500 futures were recently up 0.1% after rising 0.3% earlier.
     The Nikkei ended down 0.8%, notching its first six-day losing streak in two months following fresh gains for the yen against the dollar. But it wasn't enough to keep the index from rising a fifth-straight month, the longest since the opening five months of 2015.
     The dollar was recently at Yen108.70, after briefly topping Yen109 during Mr. Trump's speech. The WSJ Dollar Index was down 0.2% and at session lows ahead of the start of European trading.
     Chinese equities fell early amid the expiration of futures contracts Wednesday and a decline to eight-month lows for a key manufacturing reading for January.
     The pain was strongest in Shenzhen, where many smaller companies trade. The Shenzhen Composite Index was down 1.6% in afternoon trading while the startup-heavy ChiNext slid 2.5%, putting it on pace for a third-straight monthly drop.
     After some of the biggest declines in several months on Tuesday indexes in Australia, Hong Kong and Korea rose as much as 0.5% around midday before pulling back.
     New Zealand's NZX-50 saw the biggest gain and finished up 1.7% thanks to a late surge, allowing the index to rise 0.5% for the month. It was the 13th straight monthly gain for the index, which jumped 22% in 2017.
     Oil futures extended this week's pullback, falling nearly 1% in Asia after a U.S. industry group said domestic crude supplies rose nearly double the amount expected to be shown in Wednesday's government release.
     Bitcoin futures largely stayed slightly below $10,000, according to CoinDesk, after dropping more than 15% the prior two days.

Jan 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell for a third day after data from an industry body showed crude stocks rose more than expected last week, while a selloff in other commodities, stocks and bonds added to investors' bearish mood.
- Gold prices edged up after hitting a one-week low in the previous session, with the dollar falling against a basket of major rivals and traders awaiting the outcome of the U.S. Federal Reserve's two-day meeting.
- London metals shrugged off slightly softer-than-expected Chinese manufacturing data, marking time as markets waited for U.S. President Donald Trump's State of the Union address and the outcome of the Federal Reserve's two-day meeting.
- Chicago wheat futures rose for a sixth consecutive session in their longest rally since June, as concerns over poor winter crop conditions in the United States and short-covering by investors supported prices.
- Australian 4Q CPI at 0030 GMT is the main data point coming up for markets in Asia, but not the only event of interest. Economists expect the CPI to rise 0.7% on-quarter and 2.0% on year, with core measures slightly softer. Higher petrol and vegetable prices will drive the expected strong headline outcome; with downside pressure from telecommunication charges. China's PMIs for both manufacturing and non-manufacturing are also due out. Manufacturing is seen unchanged at 51.6, services st 54.8 down from 55.0, according to NAB. President Trump will deliver his first State of the Union address to Congress at 0200 GMT, and then comes the FOMC meeting, Janet Yellen's last in the chair.
- "The Science Guy" Bill Nye faces backlash from fans and a group of women scientists for planning to attend President Trump's State of the Union speech. Nye said he'll attend the speech as a guest of congressman Jim Bridenstine, who's nominated to head NASA and has expressed skepticism regarding aspects of climate change. Nye said attendance shouldn't be interpreted as support for Trump, but a group of 500 women scientists writing in Scientific American magazine say by going as Bridenstine's guest, Nye "tacitly endorses climate denial," and "uses his public persona as a science entertainer to support an administration that is expressly xenophobic, homophobic, misogynistic, racist, ableist, and anti-science."
- Delta Air Lines CEO Ed Bastian calls the US-Qatar accord on aviation oversight 'an absolute victory', having led the long-running charge against alleged state subsidies to Persian Gulf carriers. 'The longer term risk wasn't the first $50 billion, but the next $50 billion," he says of support for the three carriers, Emirates, Etihad and Qatar Airways. Critics are not so sure. JetBlue General Counsel James Hnat says push by airlines led by Delta, American and United has "officially failed".
- American Airlines says it has no plans to revive a marketing deal with Qatar Airways, even after the US and Qatar moved to end a long-running spat over alleged state subsidies to the Middle East flag carrier. American split with Qatar Airways -- a fellow member of the Oneworld airline alliance -- after the latter tried to buy a stake in the world's largest airline.
- Any surprises in Australian CPI and Chinese activity indicators today could weigh on the Kiwi, but President Trump's State of the Union speech will also be closely watched. If he continues to suggest a "more pragmatic view" on trade this should provide some support for NZD/USD, Australia and New Zealand Banking Group says. The NZD/USD was at 0.7335 early in Asia  Wednesday.
- Treasury Secretary Steven Mnuchin's congressional testimony was bullish for regional US banks hoping for the Senate to pass regulatory relief legislation, Cowen analyst Jaret Seiberg says. Capital Alpha Partners' analyst Ian Katz called the remarks "mildly helpful" for the legislation. Mnuchin endorsed efforts to raise from $50B to $250B the asset threshold at which large banks face stricter rules. Senate Banking Committee Chairman Mike Crapo (R, Idaho) told reporters after the hearing he believes the bill will be considered by the full Senate "soon. I can't put really tight parameters on that yet."
- With President Trump's nominee to head NASA stalled in the Senate, some senior Democrats are pushing alternate candidates for top political posts at the agency. Florida Sen. Bill Nelson, who has been talking up the skills of Robert Lightfoot, currently acting NASA administrator, says the career official has been "running it for a year and doing a very fine job." Other names that have surfaced include former astronaut Robert Cabana, head of the Kennedy Space Center, for the Number 2 job. Proponents argue such appointees would help create consensus around NASA budgets and policies. But White House space and legislative officials contend just as strongly that Democratic-backed leaders would support status quo programs and torpedo proposals to rev up private-public partnerships for manned exploration.
- United Food and Commercial Workers International Union, which represents meat plant employees, claims victory after the USDA rejected a US chicken industry petition to eliminate poultry processing line speeds in meat plants. The organization and other consumer groups opposed the request, saying it could make food less safe and pose risks to meat plant workers, who already deal with higher rates of injury than other industries. The union says it
remains "concerned" that the USDA plans to let some chicken plants apply to run processing lines at speeds up to 175 birds per minute, with most currently capped at 140.
- The US Department of Agriculture denies a request by the National Chicken Council to lift all limits on how fast poultry plants can process birds -- but the agency says it does plan to let some plants speed up. USDA's Food Safety and Inspection Service says the chicken industry group's Sept 1 petition to eliminate speed limits in chicken plants didn't demonstrate that inspectors could effectively check each carcass for safety at speeds beyond 175 birds a
minute -- nearly three chickens per second. But FSIS said that the agency plans to lay out criteria for poultry plants, most of which are limited to processing 140 chickens each minute, to run at speeds up to 175, as long as they demonstrate how they'll assess food safety and meet other criteria.
- Nordic markets close lower with Sweden's OMXS30 index ending the day down 0.4%, the pan-Nordic OMXN40 index off by 0.7% while Oslo's oil-heavy OBX index fell 1.4%. Stocks had a negative start to the session after a sell-off in Asia overnight and as US markets had also seen selling pressure. Sentiment was hurt by the yield on 10-year Treasuries rising to its highest level since April 2014, noted SEB. There was also anxiety about President Trump's State of the Union address where markets were poised to scrutinize his speech for any signs of trade policy turning more protectionistic, SEB added.
- Exxon Mobil on Monday announced plans to spend $50B in the US in the next five years, adding that the investment decisions were "enhanced" by the US tax overhaul passed late last year. But from 2012 to 2016, Exxon spent more than $50B in the US, and the company's investment level from 2012 to 2015 averaged about $12B a year, according to company filings.
- If the dollar regains some strength following the big fall it has seen recently, the rise should only be temporary and won't point to "any sustainable USD bullish force," says FX Knowledge. "We see any USD bounce to prove short-lived and a good selling opportunity," the foreign exchange advisory says, adding that "last week's policy remarks by [U.S. Treasury Secretary Steven] Mnuchin can only reinforce our bearish cause." The DXY dollar index is down 0.3% at 89.02.

Jan 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell for a second day as rising U.S. output and a strengthening dollar sapped demand for crude, pushing Brent below $69 a barrel for the first time in six days.
- Gold fell for a second straight session as the dollar strengthened and U.S. bond yields rose, while traders awaited a U.S. Federal Reserve policy meeting for any indications on interest rate hikes this year.
- Most base metals gave up early gains due to a strengthening dollar, as investors awaited positive signals about infrastructure building in U.S. President Donald Trump's State of the Union address later in the day.
- Chicago wheat rose for a fifth session to hit a four-month high, with gains fuelled by dry weather in parts of the U.S. Plains and short-covering by investors.
- Unless the dollar loses major ground against safe-heaven currencies, such as the Japanese yen or the Swiss franc, and USD/JPY falls through 107/107.50, ING recommends buying EUR/USD, as it falls 0.3% to 1.2349 on Tuesday. "We doubt current price action marks the start of a major new trend," ING says. U.S. President Donald Trump's first State of the Union speech is at 0200 GMT and he is expected to talk about immigration and U.S. economic growth.
- Australia's top legal representative body has called on Parliament to reject or amend proposed laws aimed at countering concerns about Chinese meddling in its domestic affairs. Addressing a parliamentary inquiry into the effect of the proposed sharpening of espionage and foreign political interference laws, the Law Council of Australia calls the legislation too broad. Australia's intelligence agencies have been warning about increasing foreign interference for several years, telling major political parties about the dangers of accepting donations from wealthy businessmen linked to the Chinese Communist Party. Earlier this month, the Trump administration ordered an investigation into China's meddling in US internal affairs as a direct result of Australia's worries about interference from Beijing.
- Coming up, ANZ consumer confidence starts things at 2230 GMT, while the NAB monthly business survey is released at 0030 GMT. Business confidence has been improving in trend terms for a time now, but it's only recently that consumer sentiment has noticeably closed the gap. EU 4Q GDP and EU Business Climate Indicator are out during the European trading session and the market will be looking for signs of ongoing robust economic growth. German CPI is also published ahead of the Eurozone CPI estimate on Wednesday. President Trump's State of the Union speech will be watched to see if it fans any further tensions with China.
- Stocks retreat from Friday's records weighed down by falling energy, utilities and real-estate stocks as oil prices drop below $66 a barrel and the recent pickup in bond yields continues. The 10-year Treasury yield tops 2.7% for the first time since April 2014. Utilities and real-estate companies lose some appeal as higher bond yields compare more favorably with their dividend payouts. The Fed starts its two-day monetary policy meeting tomorrow with some analysts anticipating the laying of ground-work for a March rate hike. Also tomorrow night President Trump will deliver his first State of the Union address. DJIA falls 177 points to 26439, the S&P drops 19 to 2853 and the Nasdaq slips 39 to 7466.
- US Trade Representative Robert Lighthizer and Canadian Foreign Minister exchanged verbal volleys over Canada's complaint with the World Trade Organization over how Washington applies tariffs. "Clearly the case they brought at the WTO is unprecedented, and it is imprudent, and my suspicion is, spiteful," Lighthizer told journalists following closing press event at the sixth round of Nafta talks. Freeland said the complaint was triggered by US
tariffs on Canadian softwood, which it views as unfair and punitive. She added Canada was clear it would take this legal route if necessary. " I don't think I need to have to defend Canada's actions when it comes to protecting our workers and our industry," she said, adding a negotiated settlement on softwood lumber could lead to withdrawal of Canada's complaint.
- Canadian Foreign Minister Chrystia Freeland confirmed the bulk of a WSJ report on Sunday in which a scenario is emerging where an investor-state dispute settlement system could disappear from Nafta. Canada and Mexico rejected a Trump administration proposal to remake the corporate arbitration system, which is favored by business but frowned upon by the US Trade Representative Robert Lighthizer and labor groups. Freeland said Canada floated the proposal in which ISDS is retained between Canada and Mexico. "We think that's the kind of creative approach that we are looking for on a lot of these positions--finding ways to meet what the US needs while preserving the benefits that businesses come to enjoy."
- The Trump administration confirmed it will seek the renewal of its authority to negotiate trade agreements that are eligible for expedited consideration in Congress. "The president has decided we're going to ask for fast track," also known as trade promotion authority, US trade representative Robert Lighthizer told journalists in Montreal. "I think it's extremely likely, given the process, that we will get that." Fast track renewal is largely automatic unless lawmakers decide to put forward and pass a specific resolution disapproving of an extension of the authority.
- The Bel-20 closes 0.2% lower at 4155.19 on Monday, as European markets slumped amid a global selloff ahead of the Federal Reserve's monetary policy meeting and President Trump's first State of the Union address. Telenet Group Holding NV, Belgium's largest provider of cable broadband services, was the worst performer with a 1.4% decline, followed by the 1.3% drop in the shares of Belgian manufacturer Ontex Group NV. Companies that bucked the downturn include Galapagos NV, with a 3.1% rise, and steelmaker Aperam with a 1.4% gain.
- Nordic markets finish mixed with Sweden's OMXS30 index ending the day lower by 0.1%, the pan-Nordic OMXN40 index up by 0.2% while Oslo's oil-heavy OBX index fell 0.7%. Stocks had a muted start ahead of a full calendar of earnings and important data later in the week. The dollar stabilized after the volatility that followed the ECB's meeting and President Trump's speech in Davos. Regional investors are now looking ahead to a batch of blue chip
earnings in the Nordics as well as eurozone inflation, the Federal Reserve meeting and the US jobs report later in the week.
- US President Donald Trump, who withdrew the US from the Paris Agreement on climate change, gives perhaps his most detailed view yet on the issue in an interview aired Sunday with British journalist Piers Morgan. "There is a cooling and there is a heating and I mean, look -- it used to not be climate change. It used to be global warming. Right?" Trump says. "That wasn't working too well, because it was getting too cold all over the place. The ice caps were going to melt, they were going to be gone by now, but now they're setting records, so OK, they're at a record level. There were so many thing happening, Piers. I'll tell you what I believe in. I believe in clear air. I believe in crystal clear beautiful water. I believe in just having good cleanliness in all."
- Lockheed Martin plans to contribute $5B into its pension plan this year, implying a discretionary payment of some $4B to take advantage of higher deductions offered by tax reform. That will leave Lockheed, fresh off a three-year pension holiday, with no defined requirements until 2021, giving free cash flow a temporary boost. Some analysts had expected a slightly higher pre-funding payment. Among defense peers, Raytheon also announced a pre-funding payment. Lockheed shares up 3.8% after 4Q beat and modest raise to 2018 guidance.
- AUD/USD recently broke above the key 0.80 level, but it's unlikely to rise much further from now on and could even fall in the near term, according to ING. U.S. President Donald Trump's speech Tuesday will likely reinforce possible U.S. steel tariff fears. "In this environment, it would be difficult to see anything but AUD tracking iron ore prices lower." The market still doesn't expect the Reserve Bank of Australia to increase interest rates this year and "recent AUD strength may also keep the RBA on the more dovish side for now," ING says. AUD/USD trades down 0.2% at 0.8094.

Jan 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held firm, supported by strong demand, a weak dollar and ongoing supply cuts lead by OPEC and Russia, although soaring U.S. output means many analysts expect crude prices to fall later in the year. 
- Gold prices eased as the U.S. dollar gained some lost ground and continued gains in equities weighed on the bullion.
- London zinc surged nearly 3 percent to its highest in more than 10 years, with a weaker dollar triggering buying amid bets that tightening global supply will propel prices even higher.
- Chicago wheat rose for a fourth consecutive session to its highest since early October with prices buoyed by concerns over dry weather curbing U.S. winter crop output.
- The rise in U.S. bond yields is doing little to support the U.S. dollar, "simply because yields elsewhere are also moving higher," says Hussein Sayed, chief market strategist at FXTM. He adds, however, that if spreads continue to widen, the dollar should attract some inflows. Near-term factors potentially affecting the U.S. dollar include President Donald Trump's State of the Union address to Congress Tuesday, the U.S. Federal Reserve's rate decision Wednesday--even if it is expected to leave policy unchanged--and the U.S. job reports Friday. The euro/dollar exchange rate stands at 1.2411, barely changed from last Friday.

- Trump Calls Trade With EU Unfair ( WSJ )
     President Donald Trump extended his threats of action against America's trading partners, this time hinting at major retaliation against the European Union for what he described as its "very unfair" trade policy toward the U.S.
     Mr. Trump has repeatedly complained about global trading arrangements that he says discriminate against the U.S. and has threatened steps that have fanned anxieties around the world about U.S. protectionism and the possibility it could set off a global trade war. His comments about the EU come days after he imposed steep tariffs on imports of solar panels and washing machines, a move aimed mainly at curbing imports from Asia. They were the first of what administration officials said would be a series of trade-enforcement actions in the coming months.
     "I've had a lot of problems with European Union, and it may morph into something very big from that standpoint, from a trade standpoint," Mr. Trump said in an interview with the U.K. broadcaster ITV, conducted on the sidelines of the World Economic Forum in Davos, Switzerland, and broadcast Sunday. The U.S. response would be "very much to their detriment," he said of the EU.
     "It's a very unfair situation. We cannot get our product in. It's very, very tough," he said. "And yet they send their product to us -- no taxes, very little taxes."
     The EU's executive branch -- the European Commission -- didn't immediately respond to a request for comment. Mr. Trump has frequently criticized multilateral trade agreements, and suggested he favored bilateral deals, while expressing concern about America's trade deficits with other countries.
     The U.S. runs a substantial trade deficit with the EU, importing over $93 billion more in goods and services than it exported to EU members in 2016, according to the U.S. Department of Commerce. Germany itself accounted for more than two-thirds of that.
     The deficit with China stood at nearly $310 billion in 2016, with imports from Japan and Mexico also exceeding U.S. exports, by $57 billion and $63 billion, respectively.
     Shortly before taking office, he called the EU a "vehicle for Germany." After his trip to Europe in May, his first foreign visit as president, he also threatened action against Berlin.
     "We have a MASSIVE trade deficit with Germany.... Very bad for U.S. This will change," President Trump tweeted after meeting last year with EU and European leaders during a North Atlantic Treaty Organization summit in Brussels.
     The EU has regularly warned that U.S. actions smack of protectionism and risk undermining international free trade. The U.S. and the EU are already locked in a number of disputes at the World Trade Organization, including over aircraft subsidies and poultry treatment.
     Mr. Trump's decision to impose levies on solar panels and washing machines drew ire from Brussels. European solar panels make up about 2% of all U.S. imports. An EU official said the bloc would review the measures and react "firmly and proportionately" if the measures significantly impacted European exports.
     Mr. Trump has long promised to pursue a harder trade line in defense of U.S. manufacturers. On his first workday in office a year ago, he signed an order withdrawing from the Trans-Pacific Partnership, a 12-nation trade agreement being negotiated by his predecessor, Barack Obama. The president, however, signaled a potentially major policy shift on Friday in Davos, saying the U.S. "would consider negotiating" a trade deal with TPP countries, individually or as a group. Mr. Trump also is renegotiating the North American Free Trade Agreement, a 1994 trade pact between the U.S., Canada and Mexico.
     Difficult negotiations over an EU-U.S. deal, the Transatlantic Trade and Investment Partnership, have ground to a halt after an October 2016 meeting, which was followed by Mr. Trump's election and a busy election cycle in Europe. The EU's trade chief, Cecilia Malmstrom, said days after Mr. Trump's inauguration that talks are likely "firmly in the freezer at least for a while." The parties have yet to reengage.
     In the interview Sunday, Mr. Trump also criticized Britain's approach to negotiating its exit from the EU, scheduled for March 2019, saying he "wouldn't negotiate it the way it's [being] negotiated."
     Mr. Trump said "I think I would have said that the European Union is not cracked up to what it's supposed to be. And I would have taken a tougher stand in getting out."
     Mr. Trump, however, reiterated his commitment to striking a bilateral trade deal with the U.K. once its departure from the EU made that possible, saying the U.S. will be Britain's "great trading partner."
     "We are going to make a deal with U.K. that'll be great."

Jan 29 - Baht Strength Should Weigh on Thai Rice Exports (Dow Jones)
Thai rice prices have risen more than 4% the past week to put the month's jump at 12%. It's not bound to last as the increase should make the country's rice exports less competitive, says Capital Economics. Thailand is one of the world's largest exporters. The firm notes the price gains in no small part currency-related, with the baht up more than 4% versus the dollar to start this year.

Jan 29 - Aussie Dollar Eases a Touch for Now (Dow Jones)
The Australian dollar eases a touch in Asia on Monday, slipping to a low of 0.8079 after a 1% fall in iron ore futures prices and as the US dollar shows more resilience. But CBA says the Aussie may strengthen again this week as favorable economic reports in Australia and China come out. Aussie 4Q CPI Thursday is expected to show inflation running at 1.9% on year, above the RBA's projection. China's official manufacturing PMI is expected to indicate a continued expansion in the sector, CBA adds.

Jan 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell ahead of the end of the peak-demand winter season in the northern hemisphere, although ongoing supply cuts and the weakening dollar offered broad support to the market.
- Gold prices edged up, after falling from 1-1/2-year highs in the previous session, as the dollar remained weak despite U.S. President Donald Trump backing a stronger currency.
- Base metal prices edged down from near multi-year peaks after U.S. President Donald Trump backed a stronger dollar, prompting the currency to trade above its recent lows.
- Chicago soybean futures gained ground, rising for nine out of 10 sessions and poised for a second week of gains on the back of dryness in Argentina, the world's third largest supplier.
- EUR/USD continues to trade higher on Friday, up 0.7% on the day at 1.2488, after ECB President Mario Draghi didn't talk down the recent rise in the euro on Thursday. Comment by U.S. President Donald Trump that he wants to see a stronger dollar failed to give the dollar a sustained boost. "The inconsistency of the Trump and Mnuchin comments this week is likely to leave markets with the view there is no USD policy and looking back to data for direction," according to RBC. The first estimate of U.S. 4Q GDP is due at 1330 GMT.
- Twitter on Thursday explained in part why researchers estimate 10% to 15% of accounts on Twitter are spam, while Twitter itself says fewer than 5% of accounts on its platform are spam. In written answers to the Senate Intelligence Committee, Twitter said its internal company researchers have access to more data about the company's users, such as email addresses and phone numbers, that outside researchers don't get--and that this data helps it count the number of spam accounts. Twitter also said outside researchers sometimes count accounts as spam that Twitter removes.
- Canadian dollar erased gains against the USD on Thursday, retreating from new multi-month highs, after President Trump's comments during an interview where he indicated a preference for a stronger USD. The USD was recently at C$1.2367 from C$1.2346 late Wednesday, according to CQG. The greenback traded as low as C$1.2269 late Thursday, a level it hasn't traded at since September 2017. The Canadian dollar was poised for another day of advances until Trump said he wants the USD to get "stronger and stronger" during an interview with CNBC while in Davos. Friday's release of December inflation could put the loonie back on stable footing if the data meets expectations of 1.9% annualized gain.
- The benchmark IPC index closes up 0.1% at 50,778 points, while the Mexican peso weakens, after US President Donald Trump said at the World Economic Forum in Davos that he wants to see a strong dollar. The peso closed in Mexico City at 18.5890 to the dollar vs 18.5025 late Wednesday, and is now trading at levels not seen since November. Telecom giant America Movil closes up 0.8%, while bread-maker Bimbo loses 1.1%.
- Comptroller of the Currency Joseph Otting has completed most of his divestitures from financial holdings that could cause a conflict of interest, allowing him to engage fully as a member of the Federal Deposit Insurance Corp and Financial Stability Oversight Council, his agency announced. However, he will still have to recuse himself from matters involving certain firms he remains involved in. "The number of institutions for which he is observing a specific recusal has been reduced to a hand full," a spokesman said. "Those are expected to be updated in the near future." Otting has 90 days from the date of his confirmation, Nov 16, to divest from holdings in companies that could be affected by his decisions as a policymaker, including unvested restricted stocks at CIT, where he served as co-president.
- Caterpillar, which grappled with rising steel prices in the latter part of 2017, is worried President Donald Trump will impose tariffs that will increase its expenses and endanger its profits. "We are concerned that any action on steel imports could put US-based manufacturers at a competitive disadvantage, both here and abroad," CFO Brad Halverson said in an interview. "Our principal concern is with the price of domestic steel: It potentially could lead to a very significant price increase." Halverson added: "We continue to urge the White House to really look at how it's going to impact US-based companies."
- Any doubts about whether a weak dollar played a key role in crude oil's impressive gains this week are put to rest this afternoon when President Trump said on CNBC that weak-dollar comments by his Treasury Secretary Mnuchin were misinterpreted. After the comments, the dollar surged and oil -- which often but not always moves inversely to the greenback -- declined sharply. This morning, oil was $3/bbl higher for the week at a three-year high of $66.60/bbl, but the Nymex oil contract for March delivery closed today 0.2% lower at $65.51, and is falling further in after-hours trading.
- The Mexican peso reverses course against the US dollar after President Trump tells CNBC that his Treasury secretary's comments about a weaker dollar in the short term being good for trade were taken out of context. "The dollar is going to get stronger and stronger, and ultimately I want to see a strong dollar," Trump said. The peso was recently quoted in Mexico City at 18.5910 to the dollar after trading around 18.33 earlier in the session--its strongest level since early October. The peso's recent rally has been supported by optimism about prospects for agreements in talks between the US, Mexico and Canada to rewrite Nafta.

Jan 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters) 
- Brent oil prices hit $71 per barrel for the first time since 2014 as the dollar continued to weaken and crude inventories in the United States fell for a 10th straight week amid ongoing supply cutbacks by OPEC and top producer Russia.
- Gold prices edged to their highest since August, 2016, buoyed as the U.S. dollar hit three-year lows after comments by U.S. Treasury secretary Steven Mnuchin that he welcomed a weaker currency. 
- London metals largely advanced as zinc, nickel and lead hovered around multi-year highs after U.S. Treasury Secretary Steven Mnuchin backed a weak dollar, pushing the greenback to a three-year low.
- Chicago soybeans rose for a ninth consecutive session, the longest unbroken gaining run in nearly six years, as dry weather in Argentina hit crop yields and a weaker U.S. dollar made greenback-priced commodities cheaper.
- The eurozone growth story is priced into the euro and the next trigger for the common currency's rally is likely to come from politics, according to ING strategist Viraj Patel. Further hints on the progress of eurozone integration would likely give investors more confidence to buy the euro, since one of the reasons why they fled eurozone years ago was due to fears of eurozone disentegration. With Emmanuel Macron as the President of France, and German Chancellor Angela Merkel close to forming a coalition government with the SPD despite some hurdles, things could be going in the right direction.
- Not since a quarter-century ago when Lloyd Bentsen "so obviously abandoned any pretext to dollar strength" were comments from a US Treasury secretary made like Wednesday by Mnuchin, says Greg McKenna at AxiTrader. His timing "could not have been more perfect to coincide with the pressure the US dollar was under recently," McKenna added. He also noted Commerce Secretary Ross' follow-up that Mnuchin "wasn't advocating anything" with his dollar comments. "He was simply saying it's not the world's biggest concern to us right now," Ross added. To McKenna, it all means "the Administration has signaled "a policy of benign neglect of the financial-markets side of the question of dollar strength in favor of the trade side." The WSJ Dollar Index is up 0.1% after Wednesday's 0.9% drop to fresh 3-year lows.
- California's attorney general sues to stop the Trump Administration's rollback of proposed rules for hydraulic fracturing and other oil- and gas-drilling practices on government lands. Attorney General Xavier Becerra claims an arm of Trump's Interior Department failed to give a reasoned basis in its decision to rescind rules initially pushed by the Obama administration, violating the Administrative Procedure Act. The repeal also fails to ensure environmentally responsible development, violating environmental statutes, Becerra claims. The rules had already been blocked by a federal judge in Wyoming before they were to take effect in 2015, and the Trump administration said this year they duplicate the efforts of state regulators and private industry.
- Donald Trump's "America First"-policy is worrying German industrial firms, said Dieter Kempf, president of the BDI Association of German Industries, ahead of the President's speech at the World Economic Forum on Friday. "An escalating trade dispute between the US and China could hit world trade and Germany in particular," Kempf said. "World trade is not a zero-sum game, not even for the US," Kempf said. The BDI is calling upon the European Union to pursue new free trade deals with strategic partners. "Europe should continue to focus on Asia and other parts of the world," Kempf said.
- LG Electronics is raising prices on its laundry appliances in response to the Trump administration's decision to impose tariffs on large residential washing machines, as The Wall Street Journal reported Wednesday. Analysts have predicted overseas appliance makers would take such steps in response to new tariffs, where were announced this week. "They really don't have many options," Longbow Research analyst David MacGregor said of LG. He has predicted GE Appliances and Whirlpool would likely follow suit if LG and Samsung Electronics pass along the cost of tariffs to their customers. Whirlpool shares are up 3.6% ahead of its expected earnings report after the bell.
- Canadian PM Justin Trudeau pressed his case for preserving while updating Nafta to a group of US CEOs in Davos at the World Economic Forum. "We just had a great conversation about all the jobs in Canada and the US that rely on Nafta," Trudeau told reporters according to a transcript provided by his office. "We talked a lot about ensuring citizens and workers and families on both sides of the border understand that the integrated supply chains, the trade back and forth between Canada and the US and Mexico has been tremendously beneficial." The CEOs of Cargill, UPS and Tyson Foods were among those in attendance.
- Macmillan's Henry Holt & Co. says it has sold 1.7M copies of Michael Wolff's "Fire and Fury: Inside the Trump White House" in all formats. The book went on sale Jan. 5. Although President Trump has described the book as "a work of fiction," rights have been sold to 35 foreign territories, including Russia, Brazil and China.
- In the wake of the Trump administration announcing tariffs on imported solar products, the Department of Energy said it plans to offer a $3M prize meant to spur innovation that "will reassert American leadership in the solar market place." It is being called the "American-Made Solar Prize." Meanwhile, the solar industry is divided over whether Trump's trade protections will help or hurt. Domestic solar manufacturers who requested the tariffs say the protections will aid them in competing with foreign rivals producing cheap solar products. Solar installers fear the resulting rise in solar panel costs will cause demand for solar systems to fall, hurting business.
- The chairman of Italian energy company Eni says new U.S. sanctions on Russia are having an impact on business. Emma Marcegaglia said that drilling at one Black Sea well had been stopped while the company awaits clarification from the U.S. on how the legal measures would affect the project, and that uncertainty was creating difficulties. "We have to be absolutely compliant because we are listed in the U.S., but of course sanctions are creating problems."
- USDA Secretary Perdue kicked off his farm bill tour hearing from Pennsylvania researchers about a growing threat to the region's grape farmers: the spotted lanternfly. Academics at Pennsylvania State University, a standout in the nation's land grant system, gave Perdue an earful on the importance of federal funding for agricultural research, which got a boost in the last US farm bill. "I think it will be a priority going forward," Perdue said, after university members highlighted their work on improving water quality, disappearing bee colonies and emerging pest problems like the spotted lanternfly, which is devastating nearby crops. They pushed for ongoing funding for agricultural research, the scale of which is uncertain given steep cuts proposed by the Trump administration.
- Sterling jumps more than 1% to 1.4195, its highest since the Brexit vote in mid-2016, helped by better-than-expected U.K. wage-growth figures, but driven mostly by a broadly weak dollar. Some analysts say these gains leave the potential for a sudden reversal if U.K. or Brexit-related worries return. David Lamb, head of dealing at Fexco Corporate Payments, says the U.K. economy "remains acutely vulnerable to being blown off course." U.K. monetary policy is likely to remain more dovish than in the U.S., meaning the pound's "current purple patch cannot be counted on to endure." FXTM analyst Lukman Otunuganotes says wage inflation is well below headline inflation, and "sentiment could take another hit."

Jan 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, weighed down by data that showed an increase in U.S. crude oil and gasoline inventories.
- Gold held steady near a four-month high, as the U.S. dollar sank to a fresh three-year low, while worries of potential trade wars led to some risk-aversion trade as well.
- Shanghai copper prices fell, tracking a sharp decline in London on Tuesday after London Metal Exchange (LME)refined copper inventories surged and concerns grew over the strength of import demand in top copper consumer China.
- Chicago soybean futures slid from a six-week high, easing after seven consecutive sessions of gains, though concerns about dry weather hurting yields in Argentina provided some support.
- The dollar continuing to fall at a time it should be rising amid big tax cuts and protectionist rhetoric is a win-win for Trump, says Greg Gibbs, currency strategist at Amp GFX. Both sets of policy steps should add to inflation--all other things equal something that should boost the greenback. But "the genius of Trump is that he has been able to implement these policies and weaken the USD." The greenback is at 3-year lows.
- The Trump administration's protectionist policy will likely have no material impact on South Korea's economy and its rating, says S&P economist Kim Eng Tan. The Asian country has already let its big manufacturing exporters relocate production bases overseas to deflect such trade tensions with the US, he notes during a press briefing. That as Korea sees strong demand from the likes of Vietnam and China. The US early this week imposed stiff import tariffs on washing machines and solar panels; many of the former go to the US. Seoul is considering filing a complaint with the WTO.
- The Trump administration may take a more-aggressive stance on trade this year, with the greatest macro and market impact being responses to economic losses from China's intellectual-property policies, says Nomura. It expects the issue to show up in the coming State of the Union address. Trump is also expected to announce his intent to issue remedies that could range from the threat of tariffs to a set of escalating ones in addition to possible limits on Chinese investment in the US.
- Tech giants boosted their spending on political lobbying in 2017 as they tried to sway legislation on issues ranging from taxes to net neutrality. The five largest tech companies spent a combined $58 million on lobbying last year, up 19% from the previous year, according to Congressional filings this week. Alphabet Inc. still leads the pack, with $18 million in lobbying, but Apple Inc. boosted its lobbying expenditures 51% from the previous year, to $7 million -- a bigger increase than any of the top tech firms. The iPhone maker hired outside lobbyists to pressure lawmakers on issues including music copyright issues, health care and self-driving cars. Microsoft Corp.'s lobbying spending has changed little over the past three years.
- Mexico's peso weakens for a third consecutive session, after President Trump slapped tariffs on solar panels, including imports from Mexico, that triggered protectionist fears among investors. US, Mexico, and Canada officials are meeting this week in Montreal to advance the renegotiation of Nafta. The peso closed in Mexico City at 18.7175 to the dollar, compared with 18.6770 late Monday. The benchmark IPC index of stocks closes up 0.6% at 50,260 points.
- Facebook marketing chief is retiring to work with the Democratic Party. In a Facebook post, CMO Gary Briggs said he is stepping down from the company after four and a half years leading its marketing efforts. Briggs plans to help the Democratic Party win in the US midterms elections this year and the 2020 presidential race. He is the latest in a series of Facebook executives and employees who have left the company to pursue political projects. Briggs, who plans to stay at Facebook until his replacement his hired, was responsible for overseeing Facebook's efforts to promote its brand and products world-wide. He was previously a marketing executive at Alphabet's Google.
- With the Trump administration imposing tariffs on imported solar panels and washing machines, it signals the first real shift from protectionist rhetoric to actual action, says ANZ. The question now is how far the protectionist stance might start to be extended. The best near-term gauge will be the renegotiated outcome of Nafta. Asia regional effects could be substantial, ANZ warns. The Asian recovery in the past two years has been driven primarily by trade. And even China's ability to simultaneously undertake structural reform and record stable GDP growth has been due substantially to the stronger export cycle, ANZ adds.
- US railroads are major beneficiaries of the new Republican tax plan and at least one of them is giving the extra cash to shareholders. Norfolk Southern says it's boosting its quarterly dividend 18% to 72c a share. With so much of their business within the US borders, railroads are set to benefit handsomely from the drop in the corporate tax rate to 21%. Norfolk Southern reports 4Q earnings Wednesday morning. Shares rise 0.4% to $152.13.
- The federal government will release economic data--including the closely watched report on gross domestic product--as scheduled this week. Officials from statistical agencies conferred Tuesday to confirm the reports could still be produced as scheduled after the government was partially shutdown on Monday. The reports will be released at their previously scheduled times. The Labor Department will release jobless-claims data at 8:30am ET on Thursday and the Commerce Department will release its report on new home sales at 10am ET. The Commerce Department will release both GDP and durable goods reports at 8:30am ET on Friday.
- Duke Energy says President Trump's new solar import tariffs could impede the utility's growing use of solar as part of its energy mix. Duke already owns more than 800 megawatts of solar capacity and has plans to build or procure more than 3,000 megawatts over the next five years. The utility said it will continue to invest in solar, but expects the tariffs to increase the cost of delivering that power to customers - though it hadn't yet determined by how much. "We are carefully evaluating the economics of each of our solar projects with a focus on minimizing adverse impacts," the company said.
- GTM Research is predicting some of the worst fallout for the solar industry following President Trump's Monday announcement of new tariffs on solar imports. GTM forecasts that in its first year, the tariff will add 10 cents per watt on average to the cost of solar panels. Over the next five years, it expects an 11% decrease in solar power installations in the US. That translates to a 7.6 gigawatt reduction in installed solar capacity between 2018 and 2022 - with roughly 65% of that lost capacity coming out of utility-scale installations. New and emerging state solar markets in Texas, Florida, Georgia and South Carolina are likely to be most affected, GTM said.
- New US tariffs on imported solar panels and washing machines are stoking optimism in the steel industry that the Trump Administration will follow through with additional tariffs on foreign-made steel by this spring. "I wouldn't put on the table [but] I think it's going to be positive," Steel Dynamics CEO Mark Millett told analysts about the outcome of a Commerce Department investigation into effects of imports on the US steel industry. "President Trump needs to provide a meaningful remedy that helps maintain and revitalize the US steel industry." Millett blamed high volumes of imported structural steel, such as beams, for holding down Steel Dynamics' production of long-length steel. He says imports now account nearly half of the 5M tons of structural steel consumed in the US annually.

Jan 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters) 
- Oil prices rose, lifted by healthy economic growth as well as the ongoing supply restraint by a group of exporters around OPEC and Russia.
- Gold prices edged up as the dollar hovered around three-year lows, with a surge in global equities capping further gains after a U.S. government shutdown came to a halt.
- Copper prices were flat amid a persistent weak dollar, even as official data showed top producer China churned out a record volume of refined copper in December, suggesting the world's biggest copper consumer is well supplied.
- Chicago soybean futures were little changed as the market took a breather after gaining 3.6 percent in the last six sessions on concerns over dry weather in Argentina, the world's third largest supplier.
- The yen ticked up slightly after the Bank of Japan kept monetary policy unchanged as expected but made tweaks to its views on inflation that some trader say pointed to a slightly less pessimistic central bank outlook on consumer prices.
- The Kiwi had the upper hand against the greenback overnight, not to mention most other G10 currencies. Now, with a stop-gap solution to the US shutdown in the cards, analysts say focus will likely turn to corporate earnings. After a strong start to the year, there's already a lot of optimism priced in. "With the USD being somewhat unloved in buoyant times, maybe a softening in risk sentiment is required to turn its fortunes around," Australia and New Zealand Banking Group says.
- A member of Canadian government's advisory panel on Nafta said it's just "a matter of when" President Trump opts to begin US withdrawal from Nafta. "He sees triggering the six-month withdrawal process as the beginning of the negotiations," Rona Ambrose, former senior minister under Conservative PM Stephen Harper, said. In comments to Canada's CTV network, she said the consensus among members of the advisory panel -- made up of politicians from all parties, and business and labor leaders -- is not a matter of "if" Trump withdraws, but "when." She added in her view, US officials are becoming "increasingly inflexible" in order to set the stage for a Nafta withdrawal. She said reports Canada is inflexible on issues related to progressive trade issues like labor and aboriginal rights are "not true."
- The IMF sees Mexico as a beneficiary -- along with Canada -- of the US tax overhaul and fiscal stimulus, predicting that greater US growth will spur demand for Mexican exports. In its updated World Economic Outlook, the fund raised its 2018 GDP growth estimate for Mexico to 2.3% from 1.9% previously, and sees that accelerating to 3% in 2019.
- The funding bill to reopen the federal government includes another suspension of the medical-device tax. The bill would suspend the 2.3% excise tax on sales of medical devices such as pacemakers and artificial knees for 2018 and 2019, retroactive to Jan 1, according to spokesman for industry trade group Advamed. The tax was part of the 2010 Affordable Care Act, but had been suspended for 2016 and 2017. It came back into force Jan. 1, but device makers including Becton, Dickinson (BDX) and Stryker (SYK) lobbied Congress for another suspension or repeal before their first payments were due. "The concern that Congress would not get this done, thereby putting device company estimates at risk, will be lifted," JP Morgan tells clients. House and Senate votes to clinch the deal are expected later today.

Jan 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices climbed, pushed higher by comments from Saudi Arabia that cooperation between oil producers who are currently withholding supplies would continue beyond 2018.
- Gold prices held steady amid a softer dollar as the U.S. government shutdown due to a funding impasse unnerved investors.
- London copper edged higher from the $7,000 level that has marked support so far this year, as an upbeat mood among Japanese manufacturers added to a brightening picture for global metals demand.
- Chicago soybean futures gained more ground with the market climbing to its highest in almost six weeks on concerns over dry weather in Argentina and delays in Brazilian harvest.

- US stocks extend gains after Senator Chuck Schumer says the Senate has reached a deal to end the government shutdown. The S&P 500 rises 0.5% to 2823, hitting its session high, while the Nasdaq Composite adds 0.7%. The dollar is paring losses, with the WSJ Dollar Index--a measure of the dollar against a basket of 16 currencies--recently down less than 0.1%.
- Several soft commodities are rallying with energy products and metals Monday as the dollar falls following the IMF's upward revision to its global growth forecasts for 2018 and 2019. Although analysts say several soft commodity markets are well supplied, Adam Sarhan, chief executive of 50 Park Investments, says he expects demand to grow as the global economy strengthens, supporting prices. "The tax cuts have big implications," he says. "That helps demand, both domestic and international." Some analysts have said investors covering short positions has also led to sporadic gains in the sector this year. March cocoa adds 1% to $1,951 a ton, while March raw sugar adds 0.2% to 13.29 cents a pound. March arabica coffee is up 1.3% at $1.2285 a pound, March frozen concentrated orange juice advances 1% to $1.48 a pound and March cotton inches down 0.1% to 83.36 cents a pound.
- The government shutdown hasn't actually shut down work on advancing a series of Trump administration nominees to lead federal financial regulators. "Business as usual for us," says Mandi Critchfield, a spokeswoman for the Senate Banking Committee, which is still planning to hold a nomination hearing for three of President Donald Trump's picks on Tuesday. They include: Jelena McWilliams, tapped to head the Federal Deposit Insurance Corp; Marvin Goodfriend, nominated for a vacancy at the Federal Reserve; and Thomas E. Workman, tapped for a seat on the Financial Stability Oversight Council.
- The White House says that cabinet members who were set to leave on Monday for the World Economic Forum in Davos, Switzerland, have delayed their departure. "We'll determine what that looks like as the day goes on and as we see how the next several hours go," said White House Press Secretary Sarah Huckabee Sanders. The Senate is set to vote at noon ET on a possible plan to end the shutdown. Asked whether President Trump would attend the event if the government is still shut down, Sanders said: "I don't know that that is very likely. I wouldn't imagine that it is." Trump--the first US president to attend the event since Bill Clinton in 2000--was scheduled to leave later this week and was expected to address the forum on Friday.
- American Airlines assistant treasurer Amelia Anderson says the US tax overhaul makes fleet financing via sale-leaseback arrangements more attractive than debt. The airline is currently in talks to finance planes for delivery later this year. Overall, Anderson says the airline is "very pleased" with the US tax overhaul. Some of the net operating losses will carry forward for longer, she says. American isn't a cash taxpayer currently and won't be for a number of years, she says.
- The Labor Department will operate with 3,077 of its 14,825 employees, or about 20% of its staff, during the federal government shutdown, which began Saturday, according to the agency's contingency plan updated late last week and posted to the department's website. Many of the specific plans for individual Labor divisions were dated in 2015 and signed by officials in place during President Barack Obama's administration. The Bureau of Labor Statistics, which produces the jobs report and other closely watched economic data, will operate with just 2 employees. The bureau has 2,309 employees, making it Labor's largest division. It will not produce public reports during the shutdown. The Mine Safety and Health Administration will operate with about half its 2,054-person staff. Occupational Safety and Health Administration will have 372 employee working during the shutdown, less than a quarter of it's typical staff.
- The EU follows the US in sanctioning Venezuelan officials accused of human rights abuses, banning seven leaders including military honchos, as well as the heads of the national electoral council and Supreme Court from traveling to Europe and freezing assets. The measure is Europe's first targeted sanctions list of Venezuelan authorities after Brussels in November agreed to ban arms sales to Caracas. EU leaders say the sanctions are designed
to push Venezuela's government and the opposition into negotiations to ease the country's political and economic crisis. But those talks have shown little promise and many of the government's foes are boycotting further meetings. Past advocates for peace talks have also lost hope including former Spain President Felipe Gonzalez, who recently told local media that he sees no chance of the Venezuelan government holding clean presidential elections this year.

- Boeing is hopeful there will be progress this quarter to get the US Export-Import Bank back into the game of backing plane deliveries. Once the government shutdown is resolved, there are ExIm board members awaiting a Senate floor vote for approval to give the group the numbers it needs to back deals valued at more than $10M, says Boeing Capital Corp. Vice President for Regulatory Policy Daniel Da Silva. There's also legislation in Congress that could allow ExIm to approve sizeable deals with fewer board members than currently required.
- Canada's Foreign Minister Chrystia Freeland meets Mexico Economy Minister Ildefonso Guajardo Monday morning to discuss Nafta as the agreement's fate reaches a pivotal moment over the coming week as talks to amend the pact resume in Montreal. A Canadian official said the meeting in Toronto offers Canada's and Mexico's top Nafta ministers an opportunity to discuss trade, adding Freeland is scheduled to meet USTR Robert Lighthizer later this week while in Davos, Switzerland for the World Economic Forum. The three chief Nafta ministers gather in Montreal on Jan 29 as talks conclude. Canadian and Mexican officials have started gathering in Montreal armed with counterproposals to some of the US's most polarizing demands, in the hopes President Trump holds off on longstanding threat to begin the withdrawal process from Nafta.
- Spanish lender BBVA's management's focus on costs and increasing U.S. rates should help offset the effects of the Catalan crisis and other negatives, Kepler Cheuvreux says. Some negative factors include "deceleration in Mexico and a depreciating U.S. Dollar," Kepler says. Overall, the bank offers "balanced risks and opportunities," Kepler analysts say, raising EPS estimates for 2018 and 2019 by 3% and 4.5%, respectively. However, the target price increases by about 1% to EUR7.60. "The stock could underperform as it is one of the least rate-sensitive banks in Europe," say analysts. Shares in BBVA trade relatively flat at EUR7.39.
- The DXY dollar index may fall towards 90 as the U.S. government shut-down "will dominate the domestic narrative this week," ING says. The DXY trades flat at 90.56. ING says the U.S. Senate vote on the budget due at 1700 GMT "is largely expected to fail," and that the dollar "may be waiting a while for any political reprieve." USD/JPY trades flat at 110.77, while EUR/USD is up 0.2% at 1.2242.

Jan 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Canadian dollar weakens as investors are focusing on the risks surrounding upcoming talks between Canada, the US and Mexico about revamping the North American Free Trade Agreement. Consideration of those risks have taken over for the positive signal for the currency that might have been taken by the Bank of Canada's interest-rate increase earlier this month, analysts say. "There is just so much idiosyncratic event risk coming up over the next couple of months" that is crowds out factors, such as interest-rate expectations and the rising price of oil, said Mark McCormick, a currency strategist with TD Securities. The Canadian dollar fell 0.6% against its US counterpart, trading at a recent C$1.2495.
- The deadline for President Trump to decide whether to impose tariffs on solar imports is a week away, and people on both sides have been jockeying in recent days to sway him. The CEOs of Suniva and SolarWorld Americas, the embattled solar manufacturers who requested trade protections, lauded Trump's attention to the issue and said he "can save and rebuild this great American industry and create thousands of jobs by immediately imposing 50% tariffs." Meanwhile, the head of the Solar Energy Industries Association, which represents solar installers and others, wrote the president to argue high tariffs "will lead to the layoff of tens of thousands of workers ... and bring and American economic engine to a screeching halt."
- Gold gains again as fears reemerge of a U.S. government shutdown, causing the U.S. dollar to relinquish its mid-week rally. An extension bill was signed in December, and had not been a focus until recent days, says MUFG's Derek Halpenny. Now, though, "this issue will certainly dominate market focus today with an increasing prospect that the Senate will vote along party lines thus falling short of the 60 votes required to approve the bill passed in the House." The longer a shutdown were to go on, "the more likely it is that markets push back the potential for any near-term Fed rate hike," ING says. CME Group data show investor expect of 73.7% chance of a March U.S. rate increase. Gold is last up 0.8% at $1334.91 per troy ounce.
- The impact on the U.S. dollar in case of a U.S. government shut-down should be more pronounced this time compared with other times when the government stopped working, like in 2013 when the dollar's reaction was relatively muted, says RBC. The dollar is already falling on the uncertainty over whether the short-term funding bill to prevent a shut-down will be passed on Friday, with EUR/USD rising 0.3% to 1.2272 and USD/JPY falling 0.4% and 110.63. The bill still needs to go through the Senate and the Republicans need at least nine Democrats to back it up. So far "only one Democrat has said he will vote yes," and some Republicans may not support it, according to RBC.
- The dollar hits session lows as European trading begins as concerns about a potential partial US-government shutdown weighs. BK Asset Management thinks the GOP will secure enough votes to keep the government running, but says the dollar will bounce back only if the government reaches a deal "because right now investors still think that's unlikely." The dollar is down 0.3% versus both the euro and yen.
- German 10-year government bonds, or bunds, are vulnerable to a potential sell-off in U.S. Treasurys, which trade around a key yield level, Commerzbank rate strategist Christoph Rieger says. This level is 2.64%, which had been put to the test in 2016 and 2017 but U.S. yields failed to rise above it. U.S. 10-year yields trade at 2.6309%, according to Factset. And the big question is whether the U.S. will avoid a government shutdown. A sell-off in U.S. Treasurys could drag bunds lower.
- Coming up, the calendar for data in Asia is quiet. Globally, the key focus will remain on US shutdown risks. The government's funding expires Saturday. The economic calendar looks light with U.K. retail sales and US University of Michigan consumer sentiment report due out.
- Canada says there will be an extra day added to the sixth round of talks toward revamping Nafta. The Canadian government says US Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexico's Economy Minister, Ildefonso Guajardo, will gather in Montreal on Monday, Jan. 29 as part of the formal Nafta negotiations. The talks were supposed to go from next Tuesday, Jan. 23, to Sunday, Jan. 28. Canada's foreign department said an itinerary would be issued "in due course," and offered no further explanation. This round is viewed as crucial to Nafta's fate, given President Trump's rhetoric about threatening to withdraw from the deal if US demands can't be met. Inside US Trade had earlier reported news of an extended Nafta timeline.
- Frustrated with a lack of federal action on an increased salary threshold for overtime pay, Pennsylvania Governor Tom Wolf calls for a state overhaul of overtime rules. Wolf proposes raising the salary ceiling from the current federal threshold of $23,660 annually to almost $48,000 by 2022. Any worker earning less than that would receive time-and-a-half pay for hours worked over 40 hours per week. The proposal will go through a public comment
period and must be approved by a state board. If approved, 460,000 workers will likely see higher paychecks, he said. Currently, employees earning more than the federal threshold can be considered exempt from overtime pay based on their job title or duties. The Obama administration fought to raise the salary ceiling to around $47,500 but was blocked in court. Current Labor Sec Alexander Acosta has said he wants to raise the ceiling but by a lower amount.

Jan 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dropped more than 1 percent as a bounce-back in U.S. production outweighed ongoing declines in crude inventories.
- Gold prices edged up, supported by a weaker dollar amid worries about a possible U.S. government shutdown, but the precious metal was still on track for its first weekly drop in six weeks.
- Shanghai aluminium prices rose buoyed by the first acceleration in China's GDP growth in seven years and by a pollution alert in a major industrial province.
- Chicago soybean futures rose for a fifth consecutive session with the market poised for its biggest weekly gain in three months on support from dry weather hurting the crop in Argentina, the world's third largest supplier. 
- The dollar hits session lows as European trading begins as concerns about a potential partial US-government shutdown weighs. BK Asset Management thinks the GOP will secure enough votes to keep the government running, but says the dollar will bounce back only if the government reaches a deal "because right now investors still think that's unlikely." The dollar is down 0.3% versus both the euro and yen.
- German 10-year government bonds, or bunds, are vulnerable to a potential sell-off in U.S. Treasurys, which trade around a key yield level, Commerzbank rate strategist Christoph Rieger says. This level is 2.64%, which had been put to the test in 2016 and 2017 but U.S. yields failed to rise above it. U.S. 10-year yields trade at 2.6309%, according to Factset. And the big question is whether the U.S. will avoid a government shutdown. A sell-off in U.S.Treasurys could drag bunds lower.
- Coming up, the calendar for data in Asia is quiet. Globally, the key focus will remain on US shutdown risks. The government's funding expires Saturday. The economic calendar looks light with U.K. retail sales and US University of Michigan consumer sentiment report due out.
- Canada says there will be an extra day added to the sixth round of talks toward revamping Nafta. The Canadian government says US Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexico's Economy Minister, Ildefonso Guajardo, will gather in Montreal on Monday, Jan. 29 as part of the formal Nafta negotiations. The talks were supposed to go from next Tuesday, Jan. 23, to Sunday, Jan. 28. Canada's foreign department said an itinerary would be issued "in due course," and offered no further explanation. This round is viewed as crucial to Nafta's fate, given President Trump's rhetoric about threatening to withdraw from the deal if US demands can't be met. Inside US Trade had earlier reported news of an extended Nafta timeline.
- Frustrated with a lack of federal action on an increased salary threshold for overtime pay, Pennsylvania Governor Tom Wolf calls for a state overhaul of overtime rules. Wolf proposes raising the salary ceiling from the current federal threshold of $23,660 annually to almost $48,000 by 2022. Any worker earning less than that would receive time-and-a-half pay for hours worked over 40 hours per week. The proposal will go through a public comment
period and must be approved by a state board. If approved, 460,000 workers will likely see higher paychecks, he said. Currently, employees earning more than the federal threshold can be considered exempt from overtime pay based on their job title or duties. The Obama administration fought to raise the salary ceiling to around $47,500 but was blocked in court. Current Labor Sec Alexander Acosta has said he wants to raise the ceiling but by a lower amount.
- The pound has reacted only modestly to Brexit negotiations and U.K. domestic political uncertainties and "a glacially slow monetary policy tightening cycle," says BNY Mellon. GBP/USD has recently reached its highest level since Brexit. And while the European Central Bank "monetary policy settings would appear a good reason for avoiding exposure" on the euro, BNY Mellon says, the common currency has risen. EUR/USD reached three-year highs recently. The fact that central banks around the world are buying more pounds and euros, and fewer U.S. dollar, as part of their forex reserve diversification could be one of the reasons why this has happened, according to BNY Mellon.
- PPG Industries says it projects an adjusted effective tax rate of 23%-24% in 2018, a potential modest reduction from 24.4% in 2017 under the old US tax law. The Pittsburgh-based maker of paints and coatings noted that 38% of its revenue comes from the US, and that it had previously benefited from now-eliminated tax breaks such as one for domestic manufacturers. "While the tax law provides benefits, there are also provisions that benefited PPG in the past that are no longer available," a PPG spokesman says. PPG says it booked a $97M 4Q charge that the spokesman said was a one-time expense related to previous years' overseas earnings. PPG shares are up 3.2% to $118.11.
- Starbucks's global tax rate is expected to fall to around 25% from 33% as a result of the tax bill, Cowen writes, a decline that would translate to about $425M in annual savings. Cowen expects Starbucks to reinvest approximately $125M of the savings into technology and staffing. The coffee giant is expected to share details when it reports earnings on January 25. Shares rise 1% to $61.28.
- Apple's plan to pay $38B in US taxes won't reduce what it owes in Europe, an EU spokeswoman says. In a statement today, the spokeswoman says the EU Commission found that Apple paid less on profits recorded in Ireland over many years than other companies subject to the same taxation laws. As a result, Ireland must recover EUR13 billion. "Nothing has changed in that regard," the spokeswoman says.
- Mexico's peso is stronger against the US dollar in a muted market reaction to President Donald Trump's tweets about the planned border wall and Nafta negotiations. "If there is no Wall, there is no Deal!" Trump tweeted, insisting Mexico would pay "directly or indirectly." The peso was recently quoted in Mexico City at 18.6475 to the US dollar versus 18.7285 late Wednesday. The peso is stronger for a sixth straight session on optimism that progress will be made during Nafta talks slated for next week in Canada.
- If the government shuts down this weekend, regularly scheduled data releases from the Commerce and Labor Departments, such as jobless claims and housing starts, will not be published until the government is fully-funded again, Labor and Commerce Department officials said. Once all government agencies are open again, all of the reports that were not published during the shut down will be released. The government's funding expires at 12:01 a.m. Saturday, and Republicans and Democrats have laid the groundwork to blame each other for a potential government shutdown this weekend.
- A reason markets don't pay too much attention to the upcoming elections in Mexico just yet is uncertainty regarding the future of North America's trading bloc, Nafta, said Jan Dehn, head of research at Ashmore Group, in an interview with Dow Jones. And U.S. President Donald Trump didn't take long to prove Mr. Dehn right. A Thursday tweet by the president on who will pay for a wall at the U.S.-Mexican border ended with "NAFTA is a bad joke!" Mexico is due to hold general elections in July.

Jan 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose on a reported decline in U.S. crude inventories, and as rebels in Nigeria threatened to attack the country's petroleum infrastructure.
- Chicago wheat rose for a second consecutive session, with prices underpinned by short-covering and expectations of demand for U.S. shipments after prices dropped to a one-month low earlier this week.
- Gold slipped to its lowest in nearly a week, as the U.S. dollar edged further away from three-year lows propped up by stronger-than-expected economic data from the United States.
- Shanghai base metals futures were under pressure ahead of the release of data later that is expected to show China's economic growth slowed in the fourth quarter.
- The euro nursed losses, having retreated from a three-year high after comments from European Central Bank officials this week hinted at concerns over the currency's recent strength.
- The deadline to avoid a U.S. government shutdown is once again fast approaching on Jan. 19, and has perhaps been one factor, even if only at the margin, that has seen the market shun the USD of late, says ANZ. A full shutdown would have economic consequences. However, there are reports that plans to avoid this shutdown had gained a little momentum. But the success of the plan was still far from assured, as it would still need some Democrat support. Chances are a deal will be reached, but as it is just the case of kicking the can down the road, ANZ adds.
- The Mexican peso strengthened for a fifth consecutive session against the US dollar, quoted in Mexico City at 18.7285 compared with 18.7655 per dollar Tuesday as participants remained positive about prospects for next week's Nafta talks scheduled to be held in Canada. The benchmark IPC stock index closed up 0.5% at 49,732 points. America Movil shares gained 0.9%, and financial group Banorte shares closed up 1.6%.
- Alcoa reports a 4Q loss of $196M, or $1.06 a share, stemming from costs related to the shut down of aluminum smelters and the new federal tax legislation. The aluminum producer disclosed last month that it intends to permanently close an idle smelter in Rockdale, Texas, and divest a smelter in Portovesme, Italy, to an Italian government agency. Alcoa also reports a $22M charge in the quarter caused by the revaluing of its deferred income tax positions caused by a decrease in the company's federal income tax rate to 21% from 35%. Excluding the special items Alcoa's adjusted EPS was $1.04 from $3.17B of revenue. Analysts were expecting $1.22 and $3.28B. In after hours trading, Alcoa down 4.8% at $54.21.
- Cisco Systems stands to be one of the biggest beneficiaries of cash repatriation in the tech sector now that tax reform has passed, according to Barclays. Cisco's has about $71.1B in overseas cash and a tax estimate of $6.2B, according to Zion Research. CEO Chuck Robbins now has an opportunity to add more than a tuck-in acquisition -- something larger than $5B-$7B -- to meaningfully diversify beyond the networking business, according to the Barclays report.
- A tidbit in the Beige Book from the Federal Reserve touched on the recently enacted tax legislation and, specifically, its limitation of the individual deduction for state and local tax payments. That provision is expected to hurt some taxpayers in high-tax regions. The Boston Fed reported that one business contact "suggested that the reduced deductibility of state and local taxes would lead them to increase pay in high-tax states to compensate workers," the report said. The New York Fed also reported "some concern" that the new limits on the SALT and mortgage-interest deductions "will weaken the housing market, especially the high end," around New York City.
- A coalition of railroad shippers is calling on President Trump to fill the vacant roles on the Surface Transportation Board, which currently only has two of the five positions filled and no permanent chair. A letter sent to the White House says a fully-staffed board is needed to address some pending regulatory reform measures as well as address rate and service issues, such as the ones that affected the CSX rail network last summer. The signatories include 72 CEOs of major companies and trade associations. One other request: They're discouraging appointing railroad veterans to the board, especially to the chairman position.
- Goldman Sachs has been tightening its belt over the past few years, but let out a notch in 4Q. Non-compensation expenses rose 18% from 3Q and 10% from a year ago. Among the costs: a $127M gift to Goldman's philanthropic foundation, higher consulting fees, and the pull-forward of some stock-based compensation that would otherwise have been due this year. Other banks did the same in 4Q; JPMorgan gave $350M to its foundation, higher than usual. Expenses were more valuable (i.e. less detrimental to earnings) in 4Q than they will be in 2018, when the new, lower corporate tax rate takes.
- Goldman Sachs is cutting its buyback plans, citing the impact of the new tax law and a desire to plow profits back into the business. Regulators approved Goldman to repurchase up to $8.7B in the current annual capital-return cycle, but CFO Martin Chavez said to expect $5B-$6B. Last year Chavez had cautioned that the maximum figure was "a limit, not a requirement" and that the firm would remain opportunistic in deploying its cash. Buybacks now have to contend with other investments Goldman can make, including in initiatives to hit a $5B revenue growth marker. Plus, Goldman shares are trading above book value, meaning the stock is relatively expensive to repurchase. Shares down 2.7% during the conference call.
US Bancorp had a lot packed into its 4Q results: It got a benefit of $910M from the new tax law, and it set aside $608M in legal accruals related to its anti-money-laundering program. (The bank said it's expecting a settlement related to its relationship with Scott Tucker, a racecar driver convicted of fraud related to his payday lending business.) All in all, net income still rose 14% from a year ago.
- While the new tax law hurt Bank of America's results in the fourth quarter, due to a $2.9B charge, Chief Financial Officer Paul Donofrio said that the changes will soon turn to a net positive for the Charlotte, NC-based bank. In addition to a lower tax rate that will lead to "significant savings," Donofrio says the new law "will level the playing field" for the US versus other countries. "We benefit when US consumers and corporations can grow and when there is more economic activity in the US," he said.

Jan 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices gave away earlier gains as analysts warned of a downward correction after prices have gained more than 13 percent over the past month.
- Gold prices reversed early gains to trade slightly lower as the U.S. dollar recovered from a three-year low against a basket of currencies.
- Shanghai aluminium prices extended declines into a second session as improving weather conditions smoothed the flow of ingots from China's remote northwestern Xinjiang region to the east of the country.
- Chicago wheat futures were little changed, with the market trading near last session's one-month low as ample global supplies and higher than previously expected U.S. winter crop planting kept a lid on prices.
- Citigroup chief Michael Corbat said Tuesday that the Republican tax law, which slashes the tax rate for businesses, could encourage other high-tax countries to do the same. The new tax law is already starting to put pressure "on some of those higher tax economies" to compete for businesses, Corbat said. But he was less clear on whether he thinks anything will actually change. Corbat said that some countries don't actually have much leeway to change their tax structures. He didn't say which countries he meant.
- Defense Secretary-turned Delta Air Lines' director Ash Carter tops the line-up of aerospace and defense luminaries attending the upcoming Davos gabfest. It's a short list, if you exclude Elton "Rocket Man" John. We're excluding him. AirAsia chief Tony Fernandes and Washington state governor Jay Inslee -- not quite Boeing, but we'll take it -- complete the industry's showing. BAE Systems and Lockheed Martin have in the past sent representatives to the conclave at the Swiss alpine resort.
- President Trump appears to be laying the groundwork for upcoming trade actions against China, using a Monday call with his Chinese counterpart, Xi Jinping, to express "disappointment that the United States' trade deficit with China has continued to grow," according to a White House press release. Trump also "made clear that the situation is not sustainable," the statement said. The White House readout contrasts with the official summaries of recent previous calls between the two leaders, which concentrated on the North Korea crisis, and did not mention trade. The Trump administration is weighing a number of possible trade actions that could affect Chinese imports, with decisions expected soon.
- Political risks both in the EU and the U.S. are likely to balance each other out in EUR/USD trading during this quarter, leaving EUR/USD poised to benefit from an improving eurozone economy, say consultants FX Knowledge. "We see more macro driven EUR/USD upside considering the much more advanced stage of the U.S. cycle vs. its EUR counterpart." EUR/USD trades 0.3% lower at 1.2220 on Tuesday, having reached a three-year high of 1.2298 on Monday, according to Factset.
- In its 4Q earnings, Comerica reported a charge of $107M because of a deferred tax adjustment stemming from the new tax reform law. The adjustment amounted to 61 cents a share. Tax reform is expected to help banks, but some have had to take charges as a result of these deferred tax assets. Citigroup on Tuesday said it lost $18.3B in 4Q after its results were hurt by a charge on those same kinds of assets because of tax reform. Comerica's net income attributable to common shares fell 31% to $112M, or 63 cents a share. On an adjusted basis, Comerica's earnings attributable to common shares were $226M, up 28% from a year ago. Shares of Comerica rose 2.2% Tuesday morning.
- UnitedHealth Group gives an estimate of the tax overhaul on its 2018 results saying earnings and cash flow will rise by about $1.7B. That's after an estimated $200-$300M worth of investment in technology efforts and other areas. UnitedHealth also projected a trim in revenue of around $400-$500M due to the effects of minimum-loss ratio requirements and interactions with how it deals with the Affordable Care Act's health-insurance tax. As for how much of the tax overhaul windfall earnings will retain in future years, CEO David Wichmann says, "we believe it to be sustainable," due partly to UnitedHealth's insurance arm already having to revert a share of it into premiums.
- So far, investors appear unconcerned about Boeing being punished for its aggressive stance on international trade rules or perceived closeness to the Trump administration. The overt criticism from Airbus' Tom Enders in a speech on Monday swept aside by investors who had already driven up Boeing shares by 14% this year. Boeing added another 2% in brisk early volume Tuesday, with the latest in a series of analysts upgrades -- largely underpinned by new tax provisions -- the only catalyst.
- Citigroup's regulatory capital was dinged by the impact of the new tax law, though by much less than the $22B charge the bank took against its earnings. Tax reform reduced the bank's Tier 1 common equity by about $6B, or 40 basis points on its common equity Tier 1 capital ratio. That lowered the ratio to 12.3% for the fourth quarter, down from 13% in the third quarter. The return of capital to common shareholders accounted for the rest of the reduction. Citi's book value also took a hit -- both book value and tangible book value dropped by about $8 a share compared with the third quarter, to $70.85 and $60.40 respectively at year's end. Shares rise 1.6% to $78.07.
- General Motors says it should maintain its "low cash-paying position" in coming years on taxes in the wake of US tax reform, despite having to take a $7B write down in 4Q to reflect devalued tax-deferred assets on its books. CFO Chuck Stevens says the biggest impact of tax reform should come from GDP growth & other economic activity that should bolster vehicle sales. He also said more money in consumers pockets should help offset higher interest rates. Stevens doesn't expect incentives included in tax reform to influence the auto maker's capital spending.
- Citigroup's trading weakness didn't hurt its stock price much in premarket trading. In its financial supplement, Citigroup notes that total fixed-income revenue dropped 18% from a year ago and 16% from the third quarter, due to low volatility and a year-ago period that included trading around the US presidential election. Investors took the numbers in stride, sending shares up 2.7% in premarket trading. Citi says the trading decline was sharper in "spread products" which includes corporate credit, and less in trading around interest rates and currencies.
- The tax law put a damper on JPMorgan's fourth-quarter earnings - but they put a gaping hole through Citigroup's. Why? The answer goes back to the financial crisis, when banks stacked up big losses that they then got to hold onto as "deferred-tax assets" -- basically, past losses to defray their future tax bills. Now that the corporate tax rate has been slashed, these assets are worth less than they once were, and the banks have to write down their value. And while many banks still have a pile of these assets to work through, Citigroup has a mountain.
- Politics will determine EUR/USD this week, says BK Asset Management. In Germany, political uncertainty has resumed after some SPD party members voiced concern for the draft agreement with Chancellor Angela Merkel's CDU/CSU. "If the coalition talks fail, EUR/USD will no doubt see a gap down open on Sunday," BK says. In addition, U.S. lawmakers need to approve the country's budget before the end of the week to avoid a government shutdown, which would hurt the dollar. Rumors that "U.S. lawmakers may extend the continuing resolution into February," says BK, have helped lift USD/JPY, last trading up 0.1% at 110.66.

Jan 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters) 

- Brent crude prices consolidated recent gains at around $70 a barrel, a level not seen since 2014's dramatic oil market slump.
- Gold prices edged higher to hold just below a four-month high touched in the previous session, supported by a weaker U.S. dollar languishing near three-year lows.
- Copper prices edged up in London and Shanghai markets, helped by a weaker U.S. dollar.
- Chicago wheat futures slid for a third consecutive session to their lowest in nearly a month, pressured by stronger-than-expected U.S. winter planting.
- The euro inched lower, taking a breather after having rallied on the back of optimism about the euro zone's economic outlook and expectations for the European Central Bank to wind down its massive monetary stimulus.
- Australian stocks ultimately gave up a midday rebound, resulting in the market notably lagging fresh gains elsewhere in Asia Pacific. As overnight weakness in iron-ore prices sent high mining stocks lower, the S&P/ASX 200 fell 0.5% to 6048.60 after having risen in 7 of the past 9 days. Energy and bank stocks also were weak and utilities skidded 1.3% to 3-month lows. Consumer sectors were the sole gainers as a survey showed consumer confidence is 4-year highs. Also, infant-formula maker Bellamy's soared 25% after lifting guidance.
- China steel-rebar and iron-ore prices stabilize after skidding to their lowest levels in nearly a month yesterday. But the outlook for both remains bearish amid high ore stockpiles and weak demand. Shanghai steel rebar is up 0.9% and Dalian iron ore gains 0.3%.
- London spot-gold prices are little changed in Asia as they sit just below September's 1-year high. The dollar, steady today, has been instrumental in gold's rally the past month amid its slide to 3-year lows. Meanwhile, there's been some physical demand in Asia ahead of the Chinese New Year in February and purchases in India amid speculation that import duties may be raised in the upcoming federal budget. Spot gold is up 55 cents at $1,340/troy ounce.
- Milk production in New Zealand, the world's largest dairy exporter, is expected to grow by only 1% in the current farming year as dry conditions curb production with December output expected to be significantly lower on year, ASB Bank says. The bank previously forecast production to increase by 3%. Still, ASB's forecast remains more optimistic than Fonterra, the country's largest manufacturer, which is forecasting production to fall 3%.
- Near-incessant rains in Singapore and Malaysia recently have reduced the supplies of fresh food. That's generally not good for retailers, but it could help Sheng Siong improve its margins a bit. With supplies down nearly 20% by 1 estimate, Sheng Siong's deeper relationships with its suppliers may give it an edge over smaller players in possibly negotiating smaller price increases than peers.
- Tokyo natural rubber prices are down slightly in early trading likely due to some profit-taking after the commodity broke out of a recent range to reach its highest level since September 2016. Still, a fall in the yen against the dollar in early Asian trading may provide some support for the yen-denominated futures contract. The Tocom benchmark natural rubber contract is trading down Y0.8/kg at Y214.00/kg.
- Monday's rebound in Asian palm-oil prices came as the market continues to be underpinned by expectations that output will falls into the weeks ahead, says OCBC. The onset of La Nina, and with it wetter conditions, is likely to dampen conditions and reduce production. The Bursa Malaysia benchmark contract rose 0.7% yesterday to MYR2,554/ton.
- Brent oil futures are holding on to Monday's fresh 3-year high and staying above $70/barrel. The global crude benchmark has risen 16 of the past 19 days and the past 6--up 3.9% since the start of last week. Meanwhile, WTI is looking to notch its 6th-straight gain Tuesday. February futures are up 0.7% from Friday's settlement at $64.73; there was a holiday on Monday in the US. Through last week it was up 16 of the past 20 days and at its own 3-year highs. March Brent is down 4 cents at $70.22.
- Though it's debatable whether BHP Billiton would be willing, spinning off its petroleum division would surely be welcomed with open arms by investors seeking a new, large-cap Aussie energy stock, Credit Suisse argues. The debate over whether BHP should sell the assets isn't new, but Credit Suisse says there's a perfect storm in commodity prices, a new BHP chairman and speculation that Santos could be acquired that makes the argument worth revisiting. Activist investors are also calling on the chairman for a review of the petroleum holdings. The company is, after all, already seeking to exit its onshore US shale business.
- Deutsche Bank doesn't still see iron-ore prices hitting 2017's high because of a lack of steel-demand growth and higher supply. But it's not as bearish as it was, boosting its benchmark forecast 8% to $66/ton. Last year's average was a better-than-expected $71. Deutsche's prediction is based on flat Chinese and global steel demand and a 1% reduction in seaborne iron-ore demand while seaborne supply is seen rising 2% to 1.52 billion tons amid further increases from major miners like Vale. "This will increase the market surplus to 65 million tons even with further reductions in Chinese domestic iron-ore production (from 250 million tons to 220 million) and shipments from non-majors such as India and the Middle East (Iran)," says Deutsche.
- While management of Australian mining stocks will remain disciplined, 2018 could be the year that M&A in the sector accelerates again, Deutsche Bank says. After a 2-year recovery in commodity prices, many miners are now awash with cash. BHP is likely to say in August that it will begin buying back shares, joining Rio Tinto and South32. Alumina, South32 and Whitehaven Coal could top up returns with special dividends. Still, miners had a spotty M&A record during the last cycle of higher commodity prices. Deutsche thinks deals in gold, coal, lithium, and among mid- and large-cap base metals companies are likeliest.
- Packaging company Amcor shares drift to a 10-month low Tuesday, but Morgans highlights technical charts showing relief for beleaguered investors may be in sight. "The current short-term down swing is approaching its channel line crossing at A$14.30 where dynamic support is likely to hold," Morgans says. A relative strength index indicator is also approaching oversold territory, it adds. Amcor shares currently languish around A$14.76, but Morgans thinks they could recover soon to A$15.40.
- Australian LNG exports jumped 26% last year to 56.8 million metric tons, with EnergyQuest estimating export revenue surged 44% to A$25.8 billion ($20 billion). That made LNG the country's 3rd-largest export, versus 5th in 2016 in overtaking gold and education. Strong demand from China means it is now Australia's largest LNG market after Japan, while Korea sits third, the consultancy notes. Australia is China's biggest LNG supplier, with volumes increasing 41% last year to 17.5 million tons, EnergyQuest says.

Jan 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters) 
- Brent crude oil prices rose to $70 a barrel, supported by ongoing output cuts led by OPEC and Russia, and ignoring a rise in U.S. and Canadian drilling activity that points to higher future output in North America.
- Gold prices hit their highest since September, buoyed by a weaker U.S. dollar, which slumped to three-year lows against a basket of currencies.
- Base metals on the London Metal Exchange climbed, buoyed as the U.S. dollar came under pressure from expectations the European Central Bank may soon start trimming monetary stimulus.
- U.S. soybean futures dropped to four-month lows, on pace for the fourth consecutive session of declines ahead of U.S. government crop data due at midday that was expected to show bigger global soy supplies.
- The current U.S. administration may be helping the U.S. stock market to strengthen, but it is not positive for the U.S. dollar "as it is not seen as fundamentally strengthening the U.S. economy," says Commerzbank. S&P 500 hit a fresh all-time high of 2787.85 on Friday, but the dollar DXY index fell to a three-year low of 90.28, while EUR/USD reached a three-year high. Commerzbank compares President Donald Trump's economic policies with the time when Ronald Reagan was in the office--1981 to 1989. Mr. Reagan also led the U.S. in "a pretty unconventional manner," but unlike Mr. Trump, Mr. Reagan's economic policy approach was "stringent and  theoretically well-founded," Commerzbank says.
- Broad-based dollar weakness is the result of domestic factors as well as a "global feel-good story," says BK Asset Management. The reason for the dollar's falls "is political, as well as economic, as global investors grow increasingly concerned about the chaos in Washington DC," it says. As well as negative media headlines regarding U.S. President Donald Trump, the U.S. government faces increased risk of a shut down ahead of an end-of-week deadline for Congress to pass a continuing budget resolution. "Most markets participants believed that Congress would reach a compromise and pass the legislation," BK says. The DXY dollar index trades down 0.7% at 90.33, having hit a three-year low 90.28.
- As the dollar falls to a three-year low against the euro and against a basket of currencies, ING warns of "a risk of under-estimating the powerful dollar bear trend." EUR/USD reaches a high of 1.2297, and ING sees 1.2360 as the next significant chart resistance. However, it is questionable whether the euro will keep rising or consolidate for a while. ING has "a slight preference that EUR/USD consolidates, rather than immediately pushes to new highs." It expects a rally in March, "once the Italian political scene becomes clearer" and when the European Central Bank "considers withdrawing the threat of further QE."
- Friday's U.S inflation data will raise confidence that it will gradually return to target, which would argue in favor of further yield curve steepening, says ANZ. Tighter labor markets, anecdotal evidence of growing wage pressures, above-trend growth, fiscal expansion and still negative real policy rates all point to intensifying U.S. inflation pressures, the bank says. The economy is certainly entering 2018 with very strong momentum, which is consistent with the Fed gradually but consistently raising the fed funds target. High confidence, a strong equity market, a strong jobs market and expected tax cuts are all helping, ANZ adds.
- Auto makers and tech firms must persuade consumers that driverless-car systems are safe, said U.S. Transportation Secretary Elaine Chao. "Consumer acceptance will be the constraint to their growth," she said Sunday at the Detroit auto show, adding she'd met with Silicon Valley firms and traditional manufacturers. "It is incumbent on these manufacturers and high-tech companies to share their enthusiasm and their confidence in this new technology, because unless they do so, the consumers will not accept it and this will not be a success. So it's to their own self interest." She added regulators maintain role with safety oversight, but has said the Trump administration is "not going to be top down, we are not going to be command and control, we're tech neutral."
- Regulators want "more time" to scrutinize emerging technology that would let cars talk to one another in an effort to avoid crashes, what's often called "V2V," said U.S. Transportation Secretary Elaine Chao, noting transition could be difficult. "What happens when you have a less integrated world in which some vehicles have that technology and others do not?" she said Sunday at Detroit auto show. "We would like to have more time to understand and evaluate what that transition is going to be like." The Obama administration in December 2016 proposed rules requiring vehicles be equipped with the technology and Chao said the effort hasn't received lower priority during Trump administration.
- U.S. Transportation Secretary Elaine Chao, nodding to safety advocates, notes that General Motors published voluntary safety assessment letter encouraged under regulators' autonomous-vehicle guidance that outlines plan to deploy robot Chevy Bolt electric cars without steering wheels or brake pedals. Chao insists regulators won't pick winners or losers and wants to take a hands-off approach in effort to encourage innovation, emphasizing such letters voluntary. But she notes AAA survey finding significant portion of Americans afraid to ride in driverless car. "So there are legitimate public concerns that must be addressed before this technology can reach its full potential in our society," she said Sunday at Detroit auto show, adding that GM letter "helps increase public awareness about how these vehicles are designed to operate safely."
- U.S. Transportation Secretary Elaine Chao lauds Fiat Chrysler Automobiles' decision to shift heavy-duty Ram pickup truck production to Michigan from Mexico and pay $2,000 bonuses to 60K workers, citing moves as ramifications of corporate savings from GOP's tax reform measure. "This is just one example of the positive impact that [tax cuts] will have on workers, job creators, employers and our country," she said in remarks Sunday at North American International Auto Show in Detroit.
- U.S Transportation Secretary Elaine Chao declined to address President Donald Trump's vulgar remarks describing African nations while she fielded questions from reporters at the Detroit auto show. "I'm here to talk about transportation and the technology that would transform our world," she said Sunday when asked about the president referring to "shithole" countries during a White House immigration meeting with lawmakers last week. "This is an ideal place to do so because Detroit is always a place for mobility and for innovation so that is what I'm talking about today, " said Chao, an immigrant who traveled by cargo ship to the U.S. with her family as young child. Two Republican senators who attended the Thursday White House meeting questioned on Sunday whether Trump used the vulgar term.

Jan 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slipped away from December-2014 highs reached the previous day.
- Gold prices rose for a third straight session to their highest since September as the slumping dollar drew investors to buy the yellow metal.
- Copper prices eased in early Asian trading, hurt by a shift to stocks due to U.S. earnings optimism and a rise in oil prices.
- Chicago soybean futures were little changed with the market set for its biggest weekly decline since mid-December on pressure from large U.S. supplies and forecasts of a near-record Brazilian crop.
- Henry Holt & Co., publisher of Michael Wolff's hot seller "Fire and Fury: Inside the Trump White House," said late Thursday that it has shipped 700,000 hardcover books and has another 700,000 on order. The account of the Trump administration is now in its 11th printing. Holt, an imprint of Macmillan, published the book on Friday, Jan. 5, four days earlier than planned.
- New Jersey Governor Chris Christie signs off on $5B worth of state incentives aimed at luring Amazon to locate its second headquarters in the state's biggest city, Newark. With just days left in his eight-year run in Trenton, Christie signed the bipartisan legislation that is a piece of the overall $7B package the state hopes will lure the retail giant and as much as 50,000 new jobs to the state. The city of Newark has also offered $1B worth of property tax abatements and $1B of city wage tax waivers for the employees over 20 years. Amazon, which is currently evaluating proposals from municipalities around the country, employs about 13,000 people in New Jersey, according to the governor's press release.
- If GBP/USD were to fall towards 1.20, though there is only a 5% chance of it, it would be due to "a stronger dollar rather than a weaker sterling alone," according to Societe Generale. With Brexit trade negotiations due to begin soon, investors view the current political environment in the UK as relatively OK, though uncertainty is still looming. Also, there's a chance the UK could agree on a transition period with the EU. Monica Defend, head of strategy and deputy head of group research at asset manager Amundi, says the longer the transition, the smoother Brexit can be.
- Canada Foreign Minister Chrystia Freeland says her negotiating team is preparing "creative ideas" for the Montreal round of Nafta talks in an effort to address Trump administration concerns. Canadian officials have warned some US demands, such as on autos and dispute resolution, were unconventional and potentially unworkable. She told reporters at a cabinet retreat in London, Ontario, she believes the US, Canada and Mexico can reach agreements on a number of chapters in Montreal later this month. "We think it is absolutely possible... to have a positive outcome." She added Canada is prepared for "any eventuality" when it comes to Nafta, including President Trump withdrawing from Nafta, which she added he's done repeatedly.   "We need to take our neighbors at their word."
- Even the strictest of sanctions against Russia are unlikely to reduce the allure of the country's government bonds, according to Moscow-based asset manager Univer. All that potential U.S. sanctions can do is just complicate the process of buying them, it argues. Therefore, any slump in Russia's ruble-denominated 8.5% 2031, 8.15% 2027 and 7.7% 2033 issues in the event of strict sanctions would be an opportunity to buy.
- Professional forecasters think President Donald Trump deserves at least some credit for the US economy's recent strong performance. The Wall Street Journal this month surveyed 68 academic, business and financial economists. Asked to rate Trump's policies and actions to date, a majority of economists said he had been somewhat or strongly positive on net for job creation, gross domestic product growth and the stock market. Most also said he had been either neutral or positive for the country's long-term growth trajectory, while his influence on financial stability was seen as largely neutral.
- The Securities and Exchange Commission has a full complement of five members for the first time since 2015. SEC Commissioners Robert Jackson, a Democrat, and Hester Peirce, a Republican, were sworn in Thursday, agency officials said. Both appeared Thursday morning at the first meeting of the SEC's fixed income advisory committee. Jackson, a former law professor, has advocated for more executive-compensation disclosures and was the author of a petition asking the SEC to require public companies to disclose their political spending. Peirce, a lawyer and researcher at George Mason University, is an outspoken critic of the 2010 Dodd-Frank regulatory overhaul law.
- Restaurant companies that are largely run by franchisees are likely to funnel savings from the tax overhaul to the bottom line and eventually return more cash to shareholders, while companies that operate their own restaurants are more likely to reinvest in their business, according to Cowen's take on the restaurant companies that presented at a Florida investor conference this week. Franchisors, Cowen added, aren't likely to give their franchisees a break on royalty fees despite the greater savings. Companies that operate their own restaurants are planning to plow savings into labor investments, restaurant remodeling and digital ordering.
- The Canadian dollar falls versus the U.S. dollar, with USD/CAD up 0.3% at 1.2589, on reports Canada believes U.S. President Trump will announce the U.S. is pulling out of NAFTA. RBC says this has caused markets to trim expectations of a rate increase next week, with the implied probability falling to 73% from 88%, although it doesn't think this will be enough to "derail a hike." The Bank of Canada increased rates twice last year and another three increases are expected in 2018. So far, rate rises of more than 80 basis points for 2018 are priced into the Canadian dollar, RBC says.
- U.S. investment-grade corporate bonds show better prospects for income return than European counterparts thanks to the recent U.S. tax reform, according to Chris Iggo, fixed income chief investment officer at AXA Investment Managers. That doesn't mean European credit will lose traction, as fundamentals and technical conditions remain positive. But European returns are likely to be lower, Mr. Iggo adds. Corporate spreads both in the U.S. and in Europe already trade at their lowest level since before the 2008 financial crisis, according to ICE BofAML indexes.

Jan 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil inched away from three-year highs on signs that a 13-percent rally since early December may have run its course, although a surprise drop in U.S. production and lower crude inventories offered prices some support.
- Gold prices rose for a second day, extending the gains in the previous session when prices climbed to the highest since September, as dollar weakness and a flagging rally in equities enticed investors to buy the yellow metal.
- Nickel prices on the Shanghai Futures Exchange (ShFE) climbed as much as 1 percent to their highest in two months, tracking a rise in London a day earlier, as concerns over low stock levels and production outages lent support to the market.
- Chicago soybean futures edged higher as the market took a breather following three sessions of declines, with the focus on a U.S. government report expected to show higher inventories.  
- The Canadian dollar falls versus the U.S. dollar, with USD/CAD up 0.3% at 1.2589, on reports Canada believes U.S. President Trump will announce the U.S. is pulling out of NAFTA. RBC says this has caused markets to trim expectations of a rate increase next week, with the implied probability falling to 73% from 88%, although it doesn't think this will be enough to "derail a hike." The Bank of Canada increased rates twice last year and another three increases are expected in 2018. So far, rate rises of more than 80 basis points for 2018 are priced into the Canadian dollar, RBC says.
- U.S. investment-grade corporate bonds show better prospects for income return than European counterparts thanks to the recent U.S. tax reform, according to Chris Iggo, fixed income chief investment officer at AXA Investment Managers. That doesn't mean European credit will lose traction, as fundamentals and technical conditions remain positive. But European returns are likely to be lower, Mr. Iggo adds. Corporate spreads both in the U.S. and in Europe already trade at their lowest level since before the 2008 financial crisis, according to ICE BofAML indexes.
- USD/CNY has declined toward lows around 6.5070 after Bloomberg reported Chinese officials reviewing China's foreign exchange holdings have recommended "slowing down or halting purchases of US Treasuries" without naming sources or giving reasons. CBA's head of currency strategy, Richard Grace, says the authenticity of the report is somewhat questionable given the nature of such information getting into the public domain would not be in the interest of either SAFE or the PBoC given their large foreign exchange reserves and their large stock of U.S. treasury assets. China has the world's largest holdings of U.S. treasuries, accounting for just under 19%.
- Mexican markets were rocked by a report that Canada increasingly thinks the US will announce it's pulling out of Nafta. The peso fell as far as 19.4160 to the US dollar from 19.1680 early in the session, then recovered to 19.3265 in Mexico City after a White House official said the US position on Nafta hasn't changed. President Trump said this week he's "working very hard to get a better deal for our country and for our farmers and for our manufacturers." The IPC stock index extended its losses and closed down 1.8% at 48,785 points, its sharpest one-day decline since October.
- Canadian stocks fell after news reports signalling the US will formally withdraw from Nafta led to a broad sell-off throughout the Canadian market, with industrials and auto parts firms leading declines. The S&P/TSX Composite Index was down 71.29 points, or 0.4%, to 16,247.95. The blue-chip S&P/TSX 60 Index was down 5.09 points. or 0.5%, to 968.79. Trading volumes were 392.7 million, down from 423.7 million on Tuesday. Stocks were hit hard immediately after a Reuters report that said President Trump will soon withdraw from Nafta following months of negotiations between US, Canada and Mexico. Industrials and consumer discretionary sectors both reported heavy losses as they are among the industries considered to be most sensitive to US trade.
- Canadian dollar tumbled against the US dollar late in the session after unconfirmed reports emerged that the US could formally pull out of the Nafta following months of negotiations. USD was recently at C$1.2541 from C$1.2463 late Tuesday, according to CQG. The USD suddenly jumped, erasing the day's earlier losses after initial reports hit news wires. That pushed US-Canada rate spreads to narrow, weighing on the Canadian dollar as the currency's correlation with interest rate spreads has become stronger than with WTI oil. A withdrawal from the free trade agreement is likely to see the Bank of Canada pause for longer than the market expects after a January hike with CIBC now expecting any further monetary policy moves past next week to happen in the latter part of the year.
- A senior Canadian official told WSJ that Ottawa has no information to suggest President Donald Trump is close to following through on his oft-repeated threat to withdraw from Nafta. The official said the withdrawal threat is well know, and Canada is prepared for whatever unfolds. The official said Canada is hoping to find common ground at the next round of Nafta talks, in Montreal later this month, and remains hopeful meaningful progress can be made. The official spoke to WSJ after a Reuters report said Canadian government aides are "increasingly convinced" Trump will withdraw from Nafta, possibly after the round in Montreal is over. The report caused the Canadian and Mexican currencies to decline in value, and shares of automobile companies also fell.
- General Motors and Fiat-Chrysler shares fall after a Reuters report said Canadian officials believe President Trump could soon announce a withdrawal from NAFTA. GM and other auto makers have said NAFTA could be improved but are lobbying to keep it intact. The industry warns that a proposal from Trump negotiators that would require minimum levels of US content to avoid tariffs would raise costs and vehicle prices. Both GM and FCA import from Mexico some full-size pickup trucks, among their most profitable products. GM shares fell 3.1% in afternoon trading; FCA shares were down 1.3%. Shares of Ford, which makes all of its F-Series pickups in the US, are down 0.7%.
- Mexico's peso took a sharp downturn after Reuters cited sources saying the Canadian government increasingly fears the Trump administration will announce it's pulling out of Nafta. The peso was recently quoted in Mexico City at 19.4070 to the US dollar versus 19.1680 earlier in the session and 19.2445 Tuesday. The currency is highly sensitive to possible outcomes for Nafta, with a sixth round of talks set for later this month in Canada. "While the news flow around the renewal of Nafta remains predominantly negative, our base case remains for a modernized agreement," UBS said in an earlier note. "This said, rhetoric may harden, resulting in bouts of pressure on MXN." The US dollar also strengthened sharply against its Canadian counterpart on the news.
- There's a lot for American companies to like in the new corporate tax code, but firms operating in certain high-tax states may face challenges keeping some employees happy because tax hikes could gobble more of their pay. Dexcom, a maker of blood-sugar monitoring devices for people with diabetes, employs about 2,000 workers in San Diego, and some could take a hit from new limits on deductions for state and local taxes. "I worry about our mid-level people saying, 'You know what, we'd be better off moving to Texas," Dexcom CEO Kevin Sayer tells the WSJ on the sidelines of the JP Morgan healthcare conference in San Francisco. He says Dexcom may have to compensate for higher taxes paid by its employees. He said the company itself is unlikely to see a big near-term direct benefit from the tax overhaul because it hasn't yet turned a profit, has accumulated loss carryforwards, and has very little cash overseas.
- A US House committee is calling for more oversight of a Medicare subsidy at the heart of a legal fight between the Trump administration and American Hospital Association. The House Energy and Commerce Committee, in a report expected to be released today, said Congress should expand federal authority to regulate the so-called 340B program, which for more than two decades has required drug companies to sell certain drugs to some hospitals at a discount and allows hospitals to profit from what Medicare pays for those drugs. Medicare has paid slightly more than the average sales price for the drugs. This month, Medicare slashed what it pays for those drugs under rules released by the Trump administration last year. A lawsuit by the AHA and two trade groups to halt the cuts was dismissed by a federal judge in late December. The hospital groups told the court Tuesday they will appeal.
- WellCare Health Plans CEO Ken Burdick says of the tax overhaul that "there is no question it will have a benefit," but warns that over time some of the dollars might be chipped away, including through provisions in state Medicaid contracts and the Medicare Advantage bidding process, where insurers compete. Even in 2018, "we can't commit to shareholders that all of those dollars flow to the bottom line," he says in an interview, partly due to existing contract provisions and law such as requirements that insurers achieve a certain minimum medical-loss ratio. In future negotiations with states over Medicaid contracts, he suggests, the new tax situation likely "will somehow get factored into that overall analysis, but it's not necessarily a line item."

Jan 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices hit their highest levels since 2014 due to ongoing production cuts led by OPEC as well as healthy demand, although analysts cautioned that markets may be overheating.
- Gold prices slipped as a surge in U.S. treasury yields and an ongoing rally in equities dented the precious metal's safe-haven appeal. 
- London copper moved away from a two-week low struck in the previous session, buoyed as the dollar softened and the World Bank issued a solid view of global economic growth.
- Chicago soybean futures slid for a third consecutive session, with the market pressured by expectations of higher stocks in the United States following slower exports and a forecast of increased production Brazil.
- Lennar shares initially stumbled around 5% premarket after the homebuilder's 4Q results come in widely short of expectations, but an analyst says the early sell-off may be misguided. Lennar reports profit below its own guidance after deciding to push back a large land sale into the next quarter in order to benefit from a lower corporate tax rate. MKM Partners notes that all other core homebuilding metrics exceeded their expectations. New orders were up 12% during the quarter and sales of $3.79B came in well above consensus of $3.57B. The decline has already begun to moderate. Shares recently traded down 1.2% at $65.90. The stock has run up 55% over the past 12 months.
- One of the biggest benefits of the new tax law is that it doesn't penalize companies based in low-tax countries, such as by taxing inter-company loans and transaction, as Congress had proposed at one point, Horizon Pharma CEO Tim Walbert tells WSJ in an interview. Otherwise, the lower US corporate is "marginally positive" for the company's "base business," and will encourage Horizon to consider acquisition targets with drug patents domiciled in the US, Walbert says. "As a company that does a lot of acquisitions, it gives us more flexibility," Walbert says. "You might be more accepting of US-based [intellectual property] than in the past."
- The US Farm Belt could see a new generation of agricultural cooperatives created thanks to a change in deductions allowed for farmers who sell crops and other goods to co-ops. The new tax law provides a big deduction linked to farmers' sales to co-ops, raising objections from independent grain companies who fear an uneven playing field. In response, some accountants think that privately held and investor-owned grain companies are likely to set up their own cooperative structures, extending membership to established farmer clientele, who would agree to sell crops to the companies' grain facilities.
- Independent grain companies are raising alarms after the new US tax law provides substantial deductions to farmers who sell crops and other goods to cooperatives. But the shift could also impact meat processors, which have increasingly been buying crops directly from farmers to supply animal feed mills. Some food ingredient makers also purchase directly from farmers. If farmers instead sell more crops to cooperatives to reduce their tax obligations, companies could wind up sourcing more of their grain from cooperatives, potentially adding another layer of costs, agriculture industry officials say.
- Molina Healthcare CEO Joe Zubretsky says the tax overhaul could boost earnings for this year, but the margin impact will probably tail off in future years as states incorporate the updated tax situation into their contracts with the Medicaid insurer. "There's potential in the short run... that there would be some benefit to the income statement," he said in an interview, because the rates that Molina will be paid by states are already set for 2018. But in the future, "that will be part of the negotiation," with states, and "the tax rate will end up in rates," paid by states, though he said he wasn't sure how quickly that will play out. Over the long term, "I don't think there's a sea-change in our after-tax margin outlook," he said.
- Sens. Pat Roberts (R, Kansas) and Debbie Stabenow (D, Mich) said they supported CFTC Chairman J.Christopher Giancarlo's position that a hard-fought agreement with the European Union on clearinghouse supervision should not be reopened. European Commission has made moves over the past year to enhance its role in overseeing London-based clearinghouses in the wake of Brexit, which US regulators deem an unacceptable intrusion on their jurisdiction. The two senators, who are the chairman and ranking member, respectively, of the Senate Agriculture Committee, said in their letter that "failure to abide by the terms of the 2016 CFTC-EC agreement would call into question the credibility of the process that has been undertaken cooperatively by the CFTC and the EC in recent years."
- The US is looking more likely to make a dramatic withdrawal from Nafta, says David McKay, CEO of Royal Bank of Canada. "Probabilities are increasing where you some type of dynamic where there is some type of announcement of a scrapping of Nafta," he says. But he notes that even after such an announcements, parties will have 6 months to negotiate details, which could open room for a new deal. He notes that Canada's economy could take a 0.10-0.15 hit to annual GDP if Nafta tariffs are replaced by higher WTO duties. "It's disruptive, but not cataclysmic," he says.
- Royal Bank of Canada will take a one-time charge of roughly $150M in its fiscal 1Q, says CEO David McKay. The bank will have to write down the value of some deferred tax assets, but will make up that charge by paying less in taxes overall, he says. The bank expects to save between $150M and $200M a year from the lower corporate rate. The bank will have "nominal" risk from a "base erosion and anti-abuse tax," which will potentially add a charge to foreign banks' transfers between subsidiaries. "We don't see it as a major issue," says McKay, speaking at a conference in Toronto.

Jan 10 - China PPI Should Lose Steam in 2018 (Dow Jones)
Chinese PPI, rising for the first year in a half-decade in 2017 amid increases to industrial prices, slowed as 2018 arrived. Bank of Communications thinks support from commodity prices won't last, but that the government's tightened environmental-protection efforts should help offset. It sees PPI rising about 3.5% this year from 2017's average 6.3% increase.

Jan 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices hit their highest since 2015 again as speculators bet on further price rises amid OPEC-led production cuts and a dip in American drilling activity, though some warned the rally could run out of steam.
- Gold prices inched down amid expectations for more U.S. interest rate hikes this year.
- London copper inched up in early trade as an advancing U.S. dollar lost steam, while Shanghai copper recovered from a drop in the previous session to trade marginally higher.
- Chicago wheat fell for a fourth consecutive session with prices pressured by improved weather conditions in the U.S. southern Plains although a lack of protective snow cover kept a floor under the market.
- The yen jumped after the Bank of Japan trimmed its buying of long-dated Japanese government bonds in market operations, helping to stoke speculation about a future exit from its massive stimulus policy.  
- As a result of tax reform, Visa is improving 401(k) benefits for its U.S.-based employees, according to a company spokeswoman. Visa will increase its 401(k) match beginning in February. Currently Visa contributes $2 for every $1 an employee contributes, up to 3% of base pay. Visa will raise that to 5% of base pay. The company is also "exploring other global employee benefits and investments...which [it] hope[s] to unveil in the near future," says a spokeswoman.
- Former lawmakers urged President Donald Trump to preserve Nafta, citing withdrawal from the trade agreement as the fastest way to undermine any tax benefits or regulatory relief farmers might otherwise see from his administration. As Mr. Trump addressed farmers at an annual meeting in Tennessee, former Senators Max Baucus (D., Mont.) and Richard Lugar (R., Ind.), now co-chairs of a non-profit organization advocating for free trade for farmers, warned that withdrawing from Nafta would be akin to levying a new tax on farmers. They cautioned that U.S. farmers would suffer retaliatory action if the U.S. imposes tariffs on its trading partners and said American growers already are disadvantaged since Trump pulled the U.S. from a key Pacific trade agreement.
- President Trump used a speech to farmers to highlight benefits of the GOP's tax overhaul, tout his deregulatory agenda and sign executive orders aimed at improving broadband access across rural America. Addressing farmers at an annual convention of the American Farm Bureau Federation, Trump called the recently-passed tax cut "historic relief for farmers," saying family farms would be spared from a "deeply unfair estate tax," and told a welcoming crowd that he was "putting an end to the regulatory assault on your way of life." Signing two orders to expand internet connectivity in rural areas, he said: "You are going to have great, great broadband."
- United Natural Foods CFO Mike Zechmeister says the tax policy changes are impacting how it assesses returns on potential investments. The natural foods distributor saw a four percentage point difference in returns on a recent investment before and after the tax bill, for example. "The tax savings are real," Zechmeister tells investors gathered at the annual ICR Conference. "You could take a project that may be unattractive in the past or one you would have passed on, and it becomes a project you could go forward with."
- US auto industry stands to benefit from the recently passed tax legislation, which will likely boost earnings per share by an average of 5%-6%, Barclays estimates. The tax reforms are expected to cut nominal tax rates for most US auto manufacturers and parts suppliers, even though the reduction in actual taxes paid will be "slightly less impacted" due to widespread use of losses carried forward, Barclays says. Auto parts suppliers domiciled overseas for tax purposes, such as Adient, Aptiv and Delphi Technologies, won't gain much from lower US corporate tax rates, but also may face lower risk from another part of the tax legislation--a hike in levies targeting unremitted foreign earnings, it says.
- United Natural Foods, up more than 5% as its CFO outlines "significant" financial benefits from the tax bill. The Providence-based natural food distributor expects the taxes it pays overall to fall to around 28% in its 2019 fiscal year from 40% currently. CFO Mike Zechmeister tells investors gathered at the annual ICR Conference that the reduced corporate tax will result in around $17M in savings during its current fiscal year, and it will also benefit from a one-time boost on deferred liabilities. The company expects an aggregate rate reduction of as much as 17 percentage points this year, and 13 percentage points in 2019. "That is a meaningful increase to our free cash flow," Zechmeister says.
- Changes to the US tax code could help push Caterpillar's stock price to $200 by the end of the year, JPMorgan analyst Ann Duignan says. The recently passed federal tax law's provision allowing 100% depreciation on new and used equipment will likely prolong the replacement cycle in US construction, she says. That's in addition to a lower corporate tax rate that will boost free cash flow. "As a result of our analysis, we believe that the stock remains undervalued, despite the significant outperformance last year," she said in a note. Caterpillar stock was up about 70% in 2017. Caterpillar shares were up 2.6% to $166.13.
- USDA Secretary Sonny Perdue touted accomplishments of the Trump administration and his own agency ahead of a planned presidential address to farmers at an annual trade convention. Perdue listed what he sees as trade victories, including opening China to American beef and rice, for farmers worried about the fate of Nafta. Speaking at a meeting of the American Farm Bureau Federation, he said USDA has begun rolling back burdensome regulations, targeting 27 rules that will save $56M annually, and urged farmers to flag the "silliest, most onerous rules" they think should be ditched. As for farmers' tax burden, Perdue tells the crowd that thanks to Trump's recent tax overhaul, "Help is not only on the way. It's already here."
- The parent of Alaska Airlines, like Southwest Airlines, American Airline and JetBlue Airways before it, said it plans to award $1,000 bonuses later this month to 23,000 employees, in celebration of the new federal tax bill. The corporate tax-cut windfall will reduce the tax rate to 21% from 35%, effective this year, which should save millions in tax liabilities and allow airlines to invest more in planes, products and their employees, although some of the savings may also go toward share buybacks. Alaska Air shares are down 1% to $72.97.
- Former Navy acquisition chief and acting Navy secretary Sean Stackley joins L3 Technologies, complementing the deal-hungry defense company's M&A team and continuing the run of Obama-era Pentagon officials who've popped up on corporate boards and management teams. Former defense secretary Ash Carter joined the Delta Air Lines' board while his deputy, Bob Work, is now a Raytheon director. Ex-Air Force secretary Deborah Lee James is now on the Textron board while Leidos added former Pentagon acquisition chief Frank Kendall to its director roster, with his deputy Katharina McFarland joining Engility.
- Eli Lilly (LLY) CEO David Ricks said the U.S. tax overhaul will cause American companies to make investments based more on business factors than taxes. "On the next decision you face it really re-balances the calculus on where to build a plant or make hires," he tells the WSJ on sidelines of JP Morgan healthcare conference in San Francisco. He expects Lilly to have "more infrastructure" in the US within the next 7 years as a result of the overhaul. In September the drug maker announced plans to cut 8% of its work force including many jobs in its home state of Indiana. Ricks also sees the mix of Lilly acquisition targets shifting to more US companies than foreign firms. Though Lilly already had a lower tax rate than the former top US corporate rate due to operations abroad, he sees Lilly's total tax bill coming down.
- J.P. Morgan says the introduction of the U.S. tax reform has done very little to lift the market's downbeat view of potential U.S. growth," which is expected to be smaller compared with other countries or areas around the world. This explains why the U.S. dollar hasn't benefited much from either the introduction of the tax reform or from good economic data, it says. "The global economic activity surprise index is at a post-GFC high," J.P. Morgan says, highlighting eurozone, as well as German growth, which for the first time ever "outpaced the U.S. for four consecutive years." J.P. Morgan adds: "This lack of economic exceptionalism ... is turning out to be more of a drag on the currency."

Jan 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices firmed on the back of a slight decline in the number of U.S. rigs drilling for new production, with crude holding just below near three-year highs reached last week.
- Gold prices held firm, below a 3-1/2-month peak hit last week, amid expectations of further U.S. interest rate hikes to come this year.
- London copper edged away from its lowest in a fortnight and was not far from a four-year high, with traders filtering back from holidays and adjusting to a softer dollar and resilient Chinese demand.
- Chicago wheat slid, on track for its biggest three-day fall since mid-December, although worry over lack of protective snow cover in the United States and Russia limited decline.
- The dollar inched higher against a basket of major peers as data showing slower U.S. jobs growth did little to dent expectations for further Federal Reserve interest rate increases this year.
- Constellation Brands CEO Rob Sands says on an earnings call the new tax law will help the drinks industry, saying it is "all good news, no bad news on that front." CFO David Klein says the Corona distributor expects the new tax law to reduce its deferred tax liabilities by $300M to $400M in its F4Q, which ends in February. The company plans to provide more details about the impact of the law on the business, including its long-term effective tax rate, next month. Excluding impacts from the new law, it expects an effective FY2018 rate of 20%.
- Constellation Brands isn't worried beer sales will slow down in California now that recreational cannabis is legal, even as the Corona distributor develops weed-infused drinks that could launch in Canada by 2019. Constellation Chief Executive Rob Sands argued both sides of the debate on an earnings call. He says the law change in California, Constellation's biggest beer market, is a "non-event" since it's already been widely available there for medical use. But he said the cannabis market will be big worldwide. Constellation is working on non-alcoholic weed-laced drinks with Canopy Growth, which they took a 9.9% stake in last year. Constellation shares are down 2.4% after the company missed revenue estimates but beat earnings estimates.
- With the U.S. tax-reform bill out of the way, the next focus for President Trump "could well be a more aggressive foreign-policy approach and increased protectionism actions," which would add to dollar weakness, says MUFG. Mr. Trump could announce an exit from the Nafta agreement, since he can do that without Congress's approval, according to Derek Halpenny, European head of market research at MUFG. Mr. Trump may not succeed, as he may face sufficient opposition, but the announcement would cause political uncertainty for months to come, Mr. Halpenny says.
- Europe's economic and fiscal crisis was much on the minds of Federal Reserve policy makers meeting in June 2012, according to transcripts released Friday. While the statement following the meeting only mentioned "strains in global financial markets," officials behind closed doors raised the possibility that a meltdown in Europe could lead the Fed to intervene to calm financial markets. "I cannot overemphasize how dangerous the situation is," said New York Fed President William Dudley, urging his colleagues to think about "how we would intervene to support financial market functioning." Boston Fed President Eric Rosengren raised the possibility that the Fed might have to once again act as a lender of last resort to help US institutions survive a crisis in Europe.
- Over two weeks before the next round of Nafta talks in Montreal, Canada's Public Safety Minister Ralph Goodale addressed Kentucky's chamber of commerce in Lexington to urge local entrepreneurs to speak out on behalf of maintaining close trade ties. "The Canada-US relationship needs engaged, informed, influential advocates like you-to defend, promote and strengthen it," Goodale said. "I urge you to renew and amplify your message... and avoid a trade disruption or rollback that would hurt Kentucky's economy and cost middle-class jobs." Goodale is among a series of Canadian officials making rounds with local lawmakers and businesses on behalf of Nafta, which faces an uncertain future. While in Kentucky, Goodale noted that the University of Kentucky Wildcats have regularly gone up north to recruit--most recently Jamal Murray, now of the NBA's Denver Nuggets.
- Bank of America Merrill Lynch no longer has any credit trades due to its belief that there is limited further upside to this asset class. The bank's strategists say that credit spreads could tighten a little more, thanks to U.S. tax reform and ongoing purchases by the European Central Bank, "but we would rather own our risk elsewhere." BAML, however, doesn't bet on shorts either, adding that "we suspect it may be too early for that given the lack of defaults."
- US Interior Secretary Ryan Zinke announces the next step in "unleashing" offshore oil drilling, saying that while current programs keep virtually all federal offshore waters off-limits to drilling, he aims to make the large majority ripe for drilling. Environmentalists slammed the proposal, with Defenders of Wildlife President Jamie Rappaport Clark saying polar bears would be in danger, and calling it "wildly reckless, irresponsible and a sellout to billion-dollar corporations." Zinke sought to allay such concerns, adding that some areas won't be appropriate and may be excluded. "The important thing is we strike the right balance to protect our coasts and people while still powering America and achieving American Energy Dominance."
- FDA won't enforce certain provisions of a sweeping food-safety law as it mulls changes to a system designed to protect consumers from foodborne illness outbreaks. The agency's "enforcement discretion" targets provisions laid out in four rules related to food production and imports, and is intended to address challenges faced by farmers and others tasked with implementing those rules, FDA says. Another aim: to reduce "burdens on both industry and government" as the agency considers adjustments to the biggest overhaul to US food safety law in decades. The action comes in the wake of a December report by HHS' Office of Inspector General which roundly criticized FDA's food-recall process, saying it did not always ensure the safety of the US food supply.
- Oil prices have been buoyed this week by anti-government protests in Iran, even though the country's oil infrastructure has not been threatened by the demonstrations. "The price reaction has been overdone," analysts at JBC Energy argued in a note. But they cautioned that Iran's oil output could, indeed, come under pressure and disrupt the global supply if the US were to reinstate sanctions on the Islamic Republic. "The middle of this month will bring a new deadline for the US administration to extend waivers from sanctions [that] had previously led to significant curtailments," in Iranian crude flows to Asian countries, including Japan, said JBC.

Jan 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, dropping away from highs last seen in 2015, as soaring production in the United States undermined the 10 percent rally from lows hit in December that was driven by tightening supply and political tensions in OPEC member Iran.
- Gold prices held near 3-1/2 month highs hit the session before to remain on track for their fourth-straight weekly gain, with attention turning to U.S. payroll data due later in the day.
- London zinc eased as some investors took profits after overnight prices touched their highest in over a decade due to supply concerns, while the Shanghai market firmed.
- Chicago wheat futures eased, taking a breather following strong gains earlier this week, but were still set for a third positive week with cold weather threatening the U.S. crop.
- The euro hovered near a three-year high against the sagging dollar, while improving investor risk appetite weighed on the yen.
- Oil prices have been buoyed this week by anti-government protests in Iran, even though the country's oil infrastructure has not been threatened by the demonstrations. "The price reaction has been overdone," analysts at JBC Energy argued in a note. But they cautioned that Iran's oil output could, indeed, come under pressure and disrupt the global supply if the US were to reinstate sanctions on the Islamic Republic. "The middle of this month will bring a new deadline for the US administration to extend waivers from sanctions [that] had previously led to significant curtailments," in Iranian crude flows to Asian countries, including Japan, said JBC.
- US railroads look to be among the biggest winners in the transportation sector in the wake of Trump administration's tax overhaul, according to Citi, though the benefits will be widespread. The firm says that trucking companies may get the biggest benefit from lower tax rate, and other domestic transportation companies will also thrive amid better economic growth from corporate tax cuts. But US rails look to be in the best position, the firm says, as pricing will remain "rational" thus "preventing any of the benefit from being competed away in the coming quarters/years." Citi expects railroads to pass the windfall along to shareholders through share buybacks and higher dividends, and highlights CSX and Union Pacific as preferred stocks for the tax play.
- Crop seed maker Monsanto expects to benefit from last month's US tax overhaul, though the company's fiscal-year timing is likely to delay that somewhat, the company says. Monsanto expects the tax revamp will "have a positive impact on the company's effective tax rate, beginning in fiscal year 2019." The company on Thursday reported fiscal first-quarter 2018 earnings, and for the current year, Monsanto expects its effective tax rate "should not exceed 30 percent, and has the potential to be materially lower." Monsanto is in the process of selling itself to Germany's Bayer AG.
- The biggest risks for emerging markets in the coming year are domestic politics, rather than the U.S. interest rate outlook or the Chinese financial sector, says NN Investment Partners's senior emerging markets strategist Maarten-Jan Bakkum. Emerging market investors should pay attention to elections in Mexico in July and in Brazil in October, he says. The political struggle in South Africa and the first signs of stress in Turkey's overheated economy will also be key factors to watch, Bakkum says. "The biggest challenge for investors in emerging markets in 2018 will be to manage the risks and opportunities in these four countries," he says.
- Stocks add to gains for the second straight session to start the new year with all three major indexes posting fresh highs. The Dow climbs 98 points to 24922 helped by a 2.7% gain in IBM following an upgrade from RBC, while Exxon Mobil rises 2% with oil prices topping $61 a barrel. S&P 500 gains 17 to 2713, and the Nasdaq adds 58 to 7065.  US factory sector posted one of its best months of the economic expansion in December as sales hit a 14-year high, the latest sign economic growth is picking up, as investors await Friday's employment data.
- American Express estimates "significant impacts" to its 4Q and full year 2017 earnings and to future periods due to the new tax law. The card company expects the tax law to reduce 4Q17 earnings by approximately $2.4B and that it expects to report a net loss for that quarter. AmEx also said it expects full year 2017 earnings per share to fall below its $5.80 to $5.90 guidance range. The company said it will "assess any potential suspension, reductions or timing modifications" to its share repurchases during the first half of 2018. It added: "While the Tax Act will negatively impact earnings in the fourth quarter of 2017, the lower corporate rate is expected to be a significant ongoing benefit to us." Shares rise 0.6%.

Jan 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices hit fresh two-and-a-half year highs and were at levels last seen at the start of the commodity slump in 2014/2015, with markets tightening amid tensions in Iran and due to ongoing OPEC-led production cuts.
- Gold prices fell after hitting a 3-1/2-month high the session before, pulled down as investors took profits and as the U.S. dollar firmed.
- Forecasts for more frigid weather in the United States this week supported Chinese lead futures amid expectations of seasonally strong demand and likely winter shortages.  
- Chicago wheat futures edged lower, easing from a one-month high touched in the previous session, with focus on adverse weather across a key U.S. producing region which could reduce yields.
- Turkey's state lender Halkbank shares rose after a U.S. jury found the lender's former deputy manager, Mehmet Hakan Atilla, guilty of helping Iran evade U.S. sanctions. "The legal process has not yet been concluded and Mr. Mehmet Hakan Atilla has right to appeal against this decision. As a matter of fact, neither has our Bank been a party to the case nor is there administrative or financial decision taken against our Bank by the Court," Halkbank said in a statement. Halkbank shares are up 1%.
- Stocks add to gains for the second straight session to start the new year with all three major indexes posting fresh highs. The Dow climbs 98 points to 24922 helped by a 2.7% gain in IBM following an upgrade from RBC, while Exxon Mobil rises 2% with oil prices topping $61 a barrel. S&P 500 gains 17 to 2713, and the Nasdaq adds 58 to 7065.  US factory sector posted one of its best months of the economic expansion in December as sales hit a 14-year high, the latest sign economic growth is picking up, as investors await Friday's employment data.
- American Express estimates "significant impacts" to its 4Q and full year 2017 earnings and to future periods due to the new tax law. The card company expects the tax law to reduce 4Q17 earnings by approximately $2.4B and that it expects to report a net loss for that quarter. AmEx also said it expects full year 2017 earnings per share to fall below its $5.80 to $5.90 guidance range. The company said it will "assess any potential suspension, reductions or timing modifications" to its share repurchases during the first half of 2018. It added: "While the Tax Act will negatively impact earnings in the fourth quarter of 2017, the lower corporate rate is expected to be a significant ongoing benefit to us." Shares rise 0.6%.
- Federal Reserve officials raised the possibility at their December meeting that tax cuts could lead to faster rate increases in the future, according to meeting minutes. Officials met as lawmakers were debating the tax package that President Donald Trump signed last month. Fiscal stimulus or accommodative market conditions "could necessitate a steeper path of increases" if they lead to stronger-than-expected inflation, the minutes said. On the other hand, officials also discussed the possibility that continued weak inflation "could lead to a flatter trajectory for the federal funds rate."
- Despite Trump administration pledges to step up US human exploration programs and refocus attention on the moon, people familiar with the details don't expect any meaningful budget boosts for NASA in 2019. There is strong sentiment inside the White House for putting public-private partnerships in the forefront of the agency's priorities, and administration officials quietly have talked to prospective partners. Both proponents and opponents of such initiatives, however, anticipate a largely status quo budget proposal for 2019, at most featuring a few hundreds of million dollars for new moon-exploration efforts. NASA may get the green light to transfer additional dollars from existing accounts, but lawmakers also don't anticipate major funding increases.
- EUR/USD will be dominated by dollar strength in 1H, as investors realize the positive impact the tax reform bill could have on the U.S. economy, says Bank of America Merrill Lynch. "The U.S. tax reform will support the USD through fiscal stimulus and profit repatriation." But in 2H, the euro is likely to take lead, BAML says. "We expect EUR to strengthen later in the year, as the ECB ends QE...and the market starts expecting hikes to follow in 2019." EUR/USD falls 0.4% to 1.2006 on Wednesday, after rising for several days on dollar weakness. "Market expectations remain too pessimistic in our view," says BAML.
- EUR/USD will "weaken significantly" in 1Q, dropping to 1.10, Bank of America Merrill Lynch says, as the market is "under-pricing Federal Reserve hikes and U.S. tax reform impact." EUR/USD is last down by 0.4% at 1.2008 on Wednesday after rising for days mainly due to dollar weakness. Analysts have pointed to investor doubts that the newly passed U.S. tax reform bill will improve economic growth. EUR/USD is likely to gradually rise back to 1.19 by the end of 2018 and finish 2019 at 1.25, BAML predicts.
- Cargill is still assessing the impact of last month's US tax overhaul on one of the biggest U.S. food companies, but a spokeswoman says the company "may incur material costs due to mandatory repatriation of accumulated foreign earnings." At the same time, Cargill's likely to see a "modest" domestic tax benefit in future years, largely through the lower corporate tax rate, she says. Cargill needs cash overseas to run operations ranging from chicken farms to financial trading, and most of its cash flow continues to be reinvested in the business, with more than $1B in acquisitions, joint ventures and new investments made over the company's most recent quarter.
- The rand is rising in anticipation that South Africa President Jacob Zuma will be forced to step down due to a scandal regarding the alleged use of public money for personal purposes, and that Cyril Ramaphosa--the new leader of the governing ANC party--will take his place. Mr. Ramaphosa is expected to implement reforms that should boost the South African economy as well as the rand. USD/ZAR falls 0.9% to 12.3494, but a Commerzbank analyst says that they "don't totally trust the rand euphoria," adding that "prices in the area of 12.30/35 in USD/ZAR seem slightly excessive."

Jan 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices were stable, not far off mid-2015 highs reached the previous session, as strong demand and ongoing efforts led by OPEC and Russia to curb production tightened the market.
- Gold prices edged down after hitting a 3-1/2-month high, as the dollar recovered from its lows and technical indicators pointed to a short-term correction.
- Chinese base metals were mixed in early trade on Wednesday, as the most active copper contract slipped, while lead gained the sharpest as parts of the United States braced for more frigid weather.
- U.S. wheat futures rose for a second day, lingering near a one-month high touched in the previous session, as sub-zero temperatures across a key North American producing region underpinned gains.
- The euro eased to take a breather from a rally prompted by optimism over the euro zone's economy and expectations the European Central Bank will wind down its bond-buying stimulus in 2018.
- Canadian stocks were up Tuesday in the first trading day of the year as blue-chip gold miners and oil-and-gas producers led the market's rally. The S&P/TSX Composite Index was up 100.86 points, or 0.6%, to 16,309.99. The blue-chip S&P/TSX 60 Index was up 5.58 points, or 0.6%, to 965.28. Gold miners broadly advanced thanks to higher precious metal prices amid a slumping greenback and geopolitical tensions, while energy firms took direction from a recent crude rally that has seen oil climb above $60 a barrel. Canadian cannabis companies also outperformed the market following the first day of legalized recreational marijuana in California.
- The retirement of Orrin Hatch, the Republican chairman of the Senate Finance Committee, could ease US demands on pharmaceutical intellectual property that have frequently complicated trade negotiations. Hatch staunchly defended the market exclusivity of biologic drugs created by the big pharmaceutical companies during negotiations toward the Trans-Pacific Partnership, the 12-nation Pacific deal that Trump exited a year ago. The position of Hatch and like-minded lawmakers arguably delayed the Obama's administration's efforts to strike a TPP deal, as well as GOP lawmakers' acceptance of the deal. Hatch's retirement "might soften U.S. position on biologics," said Tom Bollyky, a senior fellow at the Council on Foreign Relations, in a tweet Tuesday. Poorer countries and nations with large government-run health programs worry about the cost of strong intellectual-property protection for drugs.
- Remittances to Mexico fell 4.7% in November from the year-earlier month to $2.26B as Mexicans living abroad made fewer transfers and sent home less money on average per transfer, the central bank reports. The drop followed a 19% increase in October and a 25% jump in November of 2016 when the election of US President Donald Trump prompted Mexicans in the US to send more money home. November's remittances brought the total for the first 11 months of 2017 to $26.17B, up 6.2% from the first 11 months of 2016 and on track to set a record for the full year.
- BP PLC shares fall 1.2% after the oil giant said that it expects to take a one-time accounting change of $1.5 billion due to the U.S. tax reform, but CMC Markets says investors could see the drop as a buying opportunity. Although the U.S. tax law changes will impact BP's deferred tax and liabilities, the reduction in U.S. corporate tax to 21% from 35% "will benefit BP in the long-run," says CMC analyst David Madden. "The share price has been pushing higher since August, and the upward trend is still in place, so this pullback could entice new buyers into the fold."
- Although Zions Bancorp says it is still evaluating how the new tax law will impact its finances, the Salt Lake City-based regional bank becomes the latest company to provide a $1,000 bonus to employees and boost wages for a portion of its workforce. Zions also plans a $12M donation to the Zions Bancorporation Foundation. Wells Fargo and Fifth Third are among the banks that have planned to raise workers' minimum hourly wage to $15 an hour while Western Alliance is raising its 401(k) match and improving maternity leave benefits. One of the biggest benefits for banks from the new tax law is the lowering of the corporate tax rate to 21%. Zion's effective corporate tax rate in the 3Q was 34.2%.
- While many expect the dollar to weaken in 2018, BK Asset Management forecasts a 5% rise, as the Federal Reserve is likely to raise interest rates further by 50 to 100 basis points. Though Treasuries ended 2017 slightly lower, despite the fact three rate rises last year, low unemployment, tax cuts, consumer and business confidence "should drive inflation and growth higher, leading to a recovery for the greenback in 2018," BK says. Still, the DXY dollar index isn't likely to rise above 100 and USD/JPY isn't expected to break above 120. DXY trades around 91.85 and USD/JPY falls 0.4% to 112.17.
- Increasing costs for Daimler and BMW related to growth in electric cars and autonomous driving might more than offset the slightly positive impact on free cash flows from lower U.S. tax payments, UniCredit analyst Sven Kreitmair says in a note. The two German carmakers look poised to benefit from recent U.S. tax reform, even though the main beneficiaries should be firms with higher sales concentration in the U.S, such as Fiat Chrysler Automobiles, General Motors, Ford, Honda and Toyota. UniCredit has a marketweight recommendation on BMW and Daimler bonds.
- Oil giant BP PLC Tuesday joined a parade of companies warning that the tax overhaul in the U.S. will dent profits in the fourth quarter. The company says it expects to take a one-time accounting charge of roughly $1.5 billion as a result of changes to U.S. tax law. Last week, rival Royal Dutch Shell PLC said it will likely take a non-cash hit of between $2 billion and $2.5 billion in the fourth quarter. The companies' profits are expected to suffer because of changes in the value of deferred tax assets--essentially tax credits--as a result of the new tax rules. The legislation, which sharply reduces the corporate tax rate in the U.S. to 21% from 35%, is expected to help the companies in the long run.
- A major test for government bonds in the eurozone, the U.S. and Japan is the fact that QE won't increase relative to net bond issuance, Deutsche Bank strategists say. In fact, this is the first time in around seven to eight years that this is happening, they add. All else being equal, this will mark the first time this decade that technical conditions for government bonds will deteriorate.
- The dollar is likely to retrace back the gains seen since September, since "the USD positive arguments are not that strong," says Commerzbank, as EUR/USD rises to a near four-month high of 1.2053. The tax reform isn't likely to boost the U.S. economy and the dollar as much as the market previously expected. And "rate expectations for this year are still no reason for the market to believe in a sustainable normalization of U.S. monetary policy." Analysts also attribute a rise in GBP/USD to a three-month high of 1.3563 to dollar weakness rather than sterling strength. "USD weakness might well continue a little longer," Commerzbank says. USD/JPY falls to its lowest since mid-December at 112.36.

Jan 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices posted their strongest opening to a year since 2014, with crude rising to mid-2015 highs amid  large anti-government rallies in Iran and ongoing supply cuts led by OPEC and Russia.  
- Gold began 2018 on a firm note after prices hit their highest in more than three months, supported by  technical factors after breaking above $1,300 an ounce last week.  
- London copper was pushed higher on bets that demand in top consumer China will improve in 2018, keeping  prices near four-year highs at the start of trading in the new year.  
- Chicago soybean futures firmed on Friday as rising crude oil futures helped lift soyoil, but soybeans still  recorded a yearly loss of about 4 percent, reflecting big 2017 harvests in South America and the United States.
- The dollar languished near a three-month low versus a basket of major currencies as markets reopened at the  start of 2018, while Asian currencies such as the Chinese yuan began the year on a high note.

- A major test for government bonds in the eurozone, the U.S. and Japan is the fact that QE won't increase relative to net bond issuance, Deutsche Bank strategists say. In fact, this is the first time in around seven to eight years that this is happening, they add. All else being equal, this will mark the first time this decade that technical conditions for government bonds will deteriorate.
- The dollar is likely to retrace back the gains seen since September, since "the USD positive arguments are not that strong," says Commerzbank, as EUR/USD rises to a near four-month high of 1.2053. The tax reform isn't likely to boost the U.S. economy and the dollar as much as the market previously expected. And "rate expectations for this year are still no reason for the market to believe in a sustainable normalization of U.S. monetary policy." Analysts also attribute a rise in GBP/USD to a three-month high of 1.3563 to dollar weakness rather than sterling strength. "USD weakness might well continue a little longer," Commerzbank says. USD/JPY falls to its lowest since mid-December at 112.36.

Dec 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)
- Canada said Tuesday it took yet another step in its legal fight against US duties on Canadian softwood lumber by filing a request for consultations with World Trade Organization. This marks the first step in launching a formal complaint against Trump administration with WTO. If Canada and US can't resolve the matter in next 60 days, a WTO-appointed panel will be asked to rule on Canada's case. In statement, Canada reiterated that the US decision to slap tariffs of roughly 20% or more on Canadian lumber imports was "unfair, unwarranted and deeply troubling." Going to the WTO follows on Canada's request for dispute-resolution panel under Nafta to rule on US softwood duties, and indicates Ottawa and Washington are digging in for long fight on lumber--against the backdrop of contention Nafta negotiations.
- The Australian and New Zealand dollars continue to rally, with AUD/USD reaching a more than nine-week high of 0.7811 and NZD/USD rising to an 11-week high of 0.7100, buoyed by higher copper and gold prices, as well as a broadly weaker U.S. dollar. Copper prices climb to their highest level in almost four years and gold hits a one-month high. "Considering that no Tier One economic reports will be released ... [the Australian and New Zealand dollars] will continue to follow commodity prices' direction," says FXTM.

Dec 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)

- Sterling trades 0.1% higher versus the U.S. dollar at 1.3390 on Wednesday as political tension in the U.K. quiets down and U.S. 10-year yields fall to 2.47%. "For the next week and possibly two, we do not expect new Brexit developments, as the U.K. Parliament isn't expected to debate on the issue until mid-January," says BK Asset Management. "There are no major U.K. economic reports scheduled for release until next week, at which point the pace of growth--and more specifically the PMI reports--will be in focus," BK Asset Management adds. EUR/GBP is flat at 0.8869.
- The U.S. dollar trades lower versus the euro on Wednesday, with EUR/USD up 0.1% at 1.1873, as U.S. 10-year yields fall to 2.47%--though with thin trading volumes--and some investors' worries about Catalan elections disperse. "Despite the passing of a sweeping tax reform bill and a temporary funding bill to avoid a government shutdown, the dollar has struggled," BK Asset Management says. USD/JPY is flat at 113.20. BK Asset Management says that "while a test of 113 appears likely for USD/JPY on a technical basis, losses should be limited to 112.00/111.85 as 2018 should be a good year for USD/JPY."
- Capital One says it is reducing the share repurchases it authorized earlier this year to up to $1B from $1.85B due to additional tax expenses caused by the recently passed tax bill. The bank says it expects the Tax Act to dent profit by roughly $1.9B in charges mostly from the write-down of deferred tax assets. Shares, inactive premarket, have risen about 15% so far this year.

Dec 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)
- German chemicals company BASF says it's currently evaluating the implications of the US corporate tax overhaul. "We welcome the US tax reform which lowers the headline corporate tax rate and accelerates the depreciation of capital spending," a spokeswoman says. The overhaul will make the US a more attractive place to do business, she adds. BASF didn't quantify the estimated effect on its US tax bill.
- Mallinckrodt PLC is among the first drugmakers to quantify the expected impact of the US tax overhaul, and it's "neutral to slightly positive," the company says in a filing to the US Securities and Exchange Commission Friday. Mallinckrodt, which sells the multipurpose drug Acthar, says it expects to record a deferred tax benefit of $450M-$500M for a reduction in its interest-bearing US deferred tax liabilities, resulting from the cut in the corporate income tax rate to 21% from 35%. This will help its balance sheet, but will be mostly offset in the company's income statement because of the tax bill's tighter limitations on interest expense deductions, the company said.
- Unemployment in Mexico rose to a seasonally adjusted 3.5% in November from 3.4% the previous month, and was down from 3.6% a year earlier. The job market is still strong, "but could be undermined by the weakening growth ... and rising uncertainty with regards to the outcome of the mid-2018 presidential election and the outcome of the ongoing Nafta talks," Goldman Sachs says. Urban unemployment in the 32 biggest cities was unchanged last month at 4%, and down from 4.4% in November 2016, the National Statistics Institute reports.
- Broadcast TV giant Sinclair Broadcast Group said it will pay a special $1,000 bonus to some 9,000 employees at its stations and subsidiaries, as a result of the recently passed tax reform legislation. The company, one of the largest TV station owners, follows other firms that have made similar announcements including AT&T and Comcast. "We are grateful to our President and legislature for passing the landmark Tax Cuts and Jobs Act and are excited about the benefits it will provide for our country's economy, our company, and our employees," Chris Ripley, Sinclair's president and chief executive, said in a statement.
- The University of Michigan's index of US consumer sentiment fell in December for the second straight month. One factor at work: the GOP tax plan that Congress passed this week, according to Richard Curtin, the Michigan survey's chief economist. "Tax reform was spontaneously mentioned by 29% of all respondents, with nearly an equal split between positive and negative impacts on economic prospects," he said. "Party affiliation was the dominant correlate of people's assessments of the tax legislation, with the long term economic outlook the most negatively affected." Curtin said the picture could firm up in the new year. "Most consumers will know more about the revised tax code when the new paycheck withholding amounts take effect in early 2018," he said.
- For investors hoping a repatriation of Apple's overseas cash will trigger M&A, Loup Ventures says: Don't hold your breath. The firm expects Apple to bring back $214B in overseas cash using the one-time repatriation tax rate of 15.5% following the recent tax bill. It expects Apple to funnel most of that cash to an increased share buyback program and a larger increase to its annual dividend, which it predicts will rise by 15% annually rather than 10% as it has in year's past. Meanwhile, it expects the company's M&A philosophy to stay the same. That means more acquihires, technology acquisitions and investments valued at $1B or less.
- US stock futures are higher and on track to continue Thursday's modest rebound after passage of a stopgap spending bill by lawmakers to keep the US government funded through mid-January. Overseas, the Stoxx Europe 600 is down 0.1%, pressured by Spanish stocks. Catalonia's separatist parties won a majority in a vote Thursday for a new regional assembly, keeping alive the threat of secession from Spain. Elsewhere in markets, bitcoin slumped to $13,200 from $15,800 in roughly three hours during Asian trading, and was last at $13,866, according to CoinDesk. Bitcoin has wiped out 25% of its market value in the past 24 hours. S&P futures rise 1.25 points. The US bond market closes early at 2 pm ET as traders head home to start their Christmas holiday.
- The U.S. personal consumption expenditures index for November is due at 1330 GMT and the dollar may get some boost from it into the year-end given that liquidity is thin, according to Commerzbank. The dollar is already enjoying some gains on Friday, with EUR/USD down 0.18% at 1.1853, after the Senate managed to approve a spending bill till mid-January. Also, President Donald Trump is expected to sign the tax reform bill on Friday. According to a WSJ poll, the PCE index is likely to come in up 0.1% month-on-month, slightly lower than in the previous month. Persistent dollar strength is unlikely though, until inflation reaches and exceeds the Federal Reserve target.
- Around 30% of the $37 billion in non-resident funds could exit the Russian government bond market in terms of sanctions restricting purchases of new issues, Gazprombank analysts say in a note. Still, restrictions on foreign investment in Russian state debt is not their base-case scenario. A U.S. bill to impose sanctions on Russia passed in the summer but full implementation is still pending.

Dec 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped away from some of its highest levels since 2015, weighed down by rising U.S. output and the expected January re-opening of the Forties pipeline in the North Sea.
- Gold prices held below a two-week high in thin pre-holiday trade amid a firmer dollar, but were on track to log a second consecutive week of gains.
- London copper prices edged lower to reverse gains made the session before, as the dollar strengthened slightly and wage agreements at mines in Chile eased concerns about disruptions to supply from the world's top producer of the metal.
- Chicago soybean futures fell for a seventh session, hitting a three-month low as improved weather across Brazil and Argentina boosted expectations for another bumper harvest in South America.  
- Around 30% of the $37 billion in non-resident funds could exit the Russian government bond market in terms of sanctions restricting purchases of new issues, Gazprombank analysts say in a note. Still, restrictions on foreign investment in Russian state debt is not their base-case scenario. A U.S. bill to impose sanctions on Russia passed in the summer but full implementation is still pending.
- The Catalonia vote opens "the way for yet-more political uncertainty," says RBC, hence the euro's decline in Asian trading as results came in. But it adds the dollar could face some political pressure even as Trump is said to likely sign the tax-reform bill on Friday and a 4-week spending stop-gap passed Congress. "A divided Congress has much work to do after Christmas and New Year to resolve fiscal spending issues for the coming year," says RBC.
- The euro slid in Asian trading this morning as Catalonia's separatist parties won a majority in a new regional assembly, which keeps the threat of secession alive. The currency got as low as $1.1815 but has since rebounded to $1.1840. Oanda's Stephen Innes thinks further buying will be capped as not many in the market have the inclination to carry an open position into the holidays given the risk of the Catalonian election result blowing up into a crisis.
- With its projected savings from the tax-overhaul bill Paychex tells analysts it wants to invest in the business to support long-term growth. "We expect that a portion of the benefits will be used to be reinvested in the business to drive future growth," CFO Efrain Rivera told analysts on its earnings call. Rivera said the concept isn't just about increasing expenses but to put money into the company "over the next couple of years." The professional-services firm guided a 10%-12% benefit on its annual effective income tax rate in the current fiscal year. Paychex's effective tax rate through six months of fiscal 2018 was 34.7%.
- The American Chamber of Commerce in Germany, or AmCham, says recently passed US tax changes made the US a more competitive place to do business. AmCham president Bernhard Mattes says the reduction in the headline rate to 21% and measures such as the immediate write off of capital investments "raise the attraction of the US as an investment location." The group says, however, that it was questionable whether elements of the tax package, such as the "Base Erosion and Anti-Abuse Tax," were in line with international norms.
- Copper prices tick down 0.1% to $7,040 a metric ton amid profit-taking following a buoyant streak. "We're seeing a bit of profit-taking after a blistering rally in the last couple of days," says Robin Bhar, head of metals research at Societe Generale. The rise came after "the passing of Trump's tax plan and some good economic data all round" boosting demand for industrial metals, Mr. Bhar says, referring to U.S. home-building data among other resilient global releases this week. The metal is now back trading close to a four-and-a-half-year high at the end of a year in which "metals prices have been firing on all cylinders, especially since midyear," Commerzbank analysts said in a note.
- Sterling will be driven in the coming months by the tone of the forthcoming U.K.-EU trade talks, Rabobank says. If the U.K. manages to secure a free trade pact with the EU in the end, EUR/GBP is likely to fall to 0.80, according to the bank. But that's an 18-month view. Before it falls, EUR/GBP will likely rise towards 0.91 in six months and then towards 0.95 during the rest of the year, says Rabobank. Euro strength has kept the pound subdued this year, while against the dollar, sterling performed relatively well. "The USD is still the worst performing G10 currency in the year to date and this explains the relative buoyancy of GBP/USD."
- Asset swap spreads on Bombardier's 6.125% 2021 euro-denominated bond take off to 400 basis points from 378.5 bps Tuesday as the U.S. Department of Commerce confirmed tariffs on the Canadian group's C-Series jets. But the move is tiny when compared to the surge from 344 bps to 513.36 bps when news of the tariffs first emerged in late September. That move was reversed shortly afterward, when Airbus took a major stake in the C-Series business.

Dec 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable, supported by falling crude inventories in the United States but capped by output that is fast approaching 10 million barrels per day, a level only surpassed by Saudi Arabia and Russia.
- Gold prices edged up to touch a two-week high amid firm underlying support and expectations of year-end purchases, with the dollar and stocks little changed in Asian trade.
- London copper slipped from a near two-month high hit the session before on year-end profit-taking, with prices supported by a softer dollar and a sturdy demand outlook from China.
- Chicago wheat edged higher to its highest in two weeks as concerns above-normal temperatures across the U.S. grain belt underpinned the market.    
- Congress gave final approval Wednesday to a $1.5 trillion tax cut, delivering a major victory for President Donald Trump and GOP leaders after nearly a year in political control of the capital. At the heart of the plan -- the most sweeping since 1986 -- is a cut in the corporate tax rate to 21% from 35% that is expected to provide a stimulus to the U.S. economy as soon as next year. The tax plan also cuts individual tax rates and aims to simplify the tax code by eliminating some deductions, trimming others, and jettisoning a personal exemption. Individuals could see the impact as soon as February, White House officials said. In 2019, about 48% of households will receive a tax cut of greater than $500, according to the nonpartisan Joint Committee on Taxation, though the tax cuts will peter out over time and the plan's longer-term implications for growth remain unclear.
- The tax overhaul slashes US corporate tax rates, but one industry isn't celebrating: medical-device makers. A 2.3% excise tax on device sales--originally part of the 2010 Affordable Care Act--is due to be reinstated on Jan 1, after a two-year moratorium that began at the end of 2015. The industry trade group AdvaMed, whose members include Johnson & Johnson, Medtronic and Abbott Labs, sent a letter today to President Trump asking that his administration take steps to waive collection of the tax as the president and Congress pursue a legislative repeal. "It is vital that you work with Congress to ensure they do not take a step backward and allow this devastating tax to be reinstituted on the industry," AdvaMed CEO Scott Whitaker said. "Retroactive action by Congress next year cannot fully undo the impact of allowing this tax to be triggered on January 1."
- The US commerce department leaves proposed tariffs against Bombardier CSeries imports little changed from its preliminary finding, and says it would slap a hefty 292% levy on top of the sale price. That's moot for now, until the International Trade Commission rules in January or February whether complainant Boeing has suffered any harm from Bombardier's actions. Delta, the sole US buyer of the CSeries, has said it won't pay any tariff, opting instead to buy planes built at a proposed plant in Alabama that proponents said would be exempt from tariffs, a stance Boeing says is plain wrong.
- The persistent threat of a sanctions snapback from the Trump administration coupled with a more confrontational approach are putting Iran's oil prospects at risk in 2018, says Helima Croft, head of commodity strategy at RBC Capital Markets. "Even if Trump renews the waivers in January, the issue will continuously come up every quarter and serve as something of a Damocles Sword over the nuclear deal," she says, potentially curtailing "foreign investment in the Iranian energy sector and imperil output expansion plans." A snapback could also "force foreign refineries to source less crude from Iran, especially if the threat of being locked out of US capital markets were revived," Ms Croft says. In addition, "Saudi Arabia's powerful Crown Prince Mohammad bin Salman is also adopting a much more confrontational approach towards Iran, upping the risk of a serious escalation in this regional rivalry next year," she adds.
- With a sweeping tax bill now en route to President Trump's desk for signature, one farm group fears spending cuts hurtful to the nation's farmers are next. Plenty of farm groups supported the Republican tax overhaul, passed now by both the House and Senate. But the National Farmers Union, which advocates for small farmers, predicts danger for programs that support farmers and help low-income families buy food. "This tax bill leaves a $1.5 trillion hole in the budget - a hole that some members of Congress will want to fill with farm program and entitlement spending cuts," said Roger Johnson, the group's president, who vowed to fight cuts during a slump in the farm economy.
- Boeing says it will use part of the windfall from corporate tax reform to inject $300M into employee-related activities, split equally between training, workforce facilities upgrades and supporting charitable gift-match programs. Boeing is expected to be one of the largest beneficiaries of the reforms, with analysts forecasting its effective tax rate will drop 10 percentage points to the upper teens. Analysts expect the company to pay around $2.8B in taxes this year. Its shares touched another record earlier Wednesday, edging closer to the $300 mark and recently up 0.5% at $298.67.
- Chief executives are rethinking their office interactions as the national conversation on sexual harassment continues. Some are cutting down on hugs with business associates and adjusting their body language; others are more forcefully speaking up on the issue. Christa Quarles, the CEO of restaurant-booking site OpenTable, owned by Priceline, says she's quick to say something when she thinks men might be perceiving injustice in the headlines. For example, some male colleagues have commented to her on the pace of the firings, taken aback by how fast male leaders are falling. She's pointed out to them that the news reports don't contain all the details and there may have been past allegations they don't know about. "There must be reason. Companies aren't foolish," she says she's told them.
- As jockeying over the next US farm bill gets into gear, a longtime food-industry lobbyist is joining the staff of Sen. Pat Roberts (R., Kan.), chairman of the Senate's agriculture committee. Roberts hires Robert Rosado, who joins from the Food Marketing Institute, where he advocated for grocery stores and distributors for seven years. Prior to that, Rosado worked for the Biotechnology Industry Organization, which represents makers of genetically engineered seeds, and the American Meat Institute, a group for meatpackers. Roberts says Rosado's "experience and perspective on nutrition issues will be key in the upcoming Farm Bill reauthorization," which will shape US farmer-support programs as well as the food-stamp program.
- Canada's largest province, Ontario, issued data suggesting the number of real-estate transactions led by foreigners continue to decline, months after it introduced a tax on house purchases by nonresidents. It said provincial data says foreigners, either individuals or corporations, accounted for 1.9% of home sales in the greater Toronto region for a three-month period ended mid-November. Ontario said this was down from 3.2% in the period from late May to mid-August. Ontario implemented a tax in April to contain elevated house-price gains in Toronto and curb speculative behavior. Comprehensive data this week from Statistics Canada indicated foreign ownership of residential real estate is relatively limited -- less than 5% of the real-estate stock in Toronto and Vancouver -- and thereby casting doubt on the influence of nonresidents on housing prices.
- Lower corporate taxes in the U.S. could drive a healthcare takeover spree and potentially another bid for Shire PLC, a brokerage says. Shire rises as much as 2% to 4000 pence Wednesday following gains Tuesday on reported rumors about a possible takeover of the drug group. Jefferies notes that U.S. rival AbbVie nearly bought Shire in 2014, but the deal failed after U.S. tax rule changes. Still, it says latest U.S. tax reform legislation, which includes lower U.S. corporate tax rates and access to ex-U.S. cash via repatriation, could kick-start M&A in broader healthcare. "And this dynamic could potentially result in another bid for [Shire]," Jefferies analysts say. "Of note, we have long had [Shire] on our 'takeout' list. That said, we think the potential group of buyers to be very limited." Shire stock gains 0.04% to 3922 pence.
- The Republican tax overall makes the U.S. a more attractive place to do business, according to Joachim Lang, managing director of the German industry association BDI. "The U.S. legislative package, with improved depreciation and tightening regulations, provides significant incentives for international companies to relocate corporate functions and investments to the U.S.," Mr. Lang says in a statement. A lowered corporate tax rate of 21% is "well below" the 25% that companies on average pay in other developed countries, Mr. Lang says. The drop in the corporate tax rate heightens international tax competition, he adds.
- The FTSE 100 index is expected to open flat at 7,544, according to CMC Markets. As it is increasingly likely that the U.S. tax reform bill will be signed into law by President Donald Trump in the coming days, the question is whether stocks will experience a case of "buy the rumor, sell the fact," says CMC analyst Michael Hewson. In the U.K. the Confederation of British Industry's December trades survey is due at 1100 GMT, while Bank of England Governor Mark Carney will appear in front of the Treasury Select Committee at 1315 GMT.
- US stocks take a breather after setting record highs Monday. The Dow's off 0.2% to 24754, the S&P falls 0.3% to 2681 and the Nasdaq declines 0.4% to 6963. Despite the House voting to advance the Republican tax overhaul, only three sectors are higher Tuesday afternoon. Real-estate companies like Welltower, down 4.3%, and utilities like PPL, 4.6% lower, are the worst performers. Ten-year Treasury yields jump to 2.455% from 2.439% as investors sell off on economic data and the expected passage of the tax bill. Oil prices gain 0.6% to $57.57. The Senate is expected to vote on the tax overhaul later Tuesday.

Dec 20 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched up, supported by expectations of a fall in U.S. crude inventories and by the ongoing outage of the North Sea Forties pipeline system.
- Gold prices inched higher in quiet trade as the dollar held steady on expectations the U.S. government would pass the country's biggest tax overhaul in 30 years.
- Shanghai aluminium prices rose over 1 percent, bouncing back from a slight dip in the previous session, as rising raw material prices and production cuts in China provided end-of-year support to the market.
- Chicago soybean futures ticked higher after declining for the last four sessions to their lowest since early October on pressure from crop-boosting rains across Argentina's drought-hit farm belt.
- While final version of the US tax bill preserves credits for wind and solar, renewable-energy projects likely won't escape changes to tax policy completely unscathed. Fitch says a lowered corporate tax rate will reduce the value of tax credits available to wind and solar projects, which often rely on tax-equity financing and could see that financing take a hit. The availability of tax equity could also drop, Fitch says, as a result of a base erosion anti-abuse tax that "complicates how tax equity investors can determine whether they will receive renewable tax credits."
- With the U.S. tax reform bill in focus, the Republicans haven't focused on the spending bill, which is likely to be postponed until January. This "will raise uncertainty and provide little support for the dollar," says MUFG. The dollar hasn't rallied despite the fact that it is almost certain tax reform will soon be passed, according to most market participants. "This is fully expected and is unlikely to impact FX and rates markets," MUFG says. The dollar's weak reaction to tax reform "is surely an indication of worse still to come for the dollar over the coming months," MUFG says. EUR/USD rises 0.38% to 1.1825.
- The 2017 trend of investors shifting to the euro from the dollar should continue in 2018, "as an overall accommodative monetary policy stance should keep investors' risk appetites upbeat and favor the continuation of flows into European equities," according to Bastien Drut, fixed income and forex strategist at Amundi. However, EUR/USD gains are likely to be limited since the European Central Bank plans to deliver dovish quantitative easing and the U.S. is expected to benefit from planned tax cuts next year. In the second half of the year, EUR/USD is likely to be at 1.22, Mr. Drut says.
- RBC says the House vote on the U.S. tax-reform bill could be delayed until Wednesday, but nonetheless the bill is expected to pass. The U.S. dollar has been trading down versus the euro this week, with EUR/USD 0.25% up at 1.1810 on Tuesday, as investors await the result of the debate in the House, and later on in the Senate. U.S. housing starts and building permits are due at 1330 GMT, as well as the U.S. current-account balance. The White House released a speech overnight, marking the Trump administration's first official national security strategy.
- The German IFO business climate index for December, due at 0900 GMT, should come out broadly unchanged from the previous month. The business expectations index is seen at 110.8, down from 111 in November, and the business sentiment index is expected at 117.5, unchanged from November, according to a WSJ poll. Current conditions are expected at 124.7 from 124.4 in November. Commerzbank says "it looks as if the index may have risen even further in December," after reaching the highest level in almost 60 years in November. EUR/USD is up by 0.2% at 1.1805.

Dec 19 - FTSE 100 Boosted by South African Political Shake-Up (Dow Jones)
London shares climb as stocks exposed to South Africa rise following the election of a new leader of the ruling African National Congress. The FTSE 100 Index rises 0.25%, or 18.6 points, to 7555.6 as financial services group Old Mutual PLC gains 2.9% to 219 pence and miner Anglo American PLC advances 1.45% to 1502 pence. Cyril Ramaphosa, presently deputy to President Jacob Zuma, is widely tipped to succeed Zuma if the ANC wins the general election in 2019. At the other end of the spectrum, Associated British Foods PLC is 2.1% down at 2802 pence after a downgrade by RBC Capital Markets.

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

- Oil markets edged up as the Forties pipeline outage in the North Sea and voluntary production restraint led by OPEC supported prices, although soaring output in the United States put a cap on gains.
- Gold was little changed amid a steady dollar, with investors considering the potential impact of a sweeping tax legislation in the United States that Congress appeared all but certain to pass this week.
- London metal prices eased, with traders booking profits on recent gains that were fuelled by a rosier demand outlook after data for last month showed resilience in global manufacturing.
- Chicago soybean futures edged lower, with the market trading near its lowest in almost 11 weeks as forecasts of rain in Argentina's drought-hit oilseed growing areas weighed on prices.
- The German IFO business climate index for December, due at 0900 GMT, should come out broadly unchanged from the previous month. The business expectations index is seen at 110.8, down from 111 in November, and the business sentiment index is expected at 117.5, unchanged from November, according to a WSJ poll. Current conditions are expected at 124.7 from 124.4 in November. Commerzbank says "it looks as if the index may have risen even further in December," after reaching the highest level in almost 60 years in November. EUR/USD is up by 0.2% at 1.1805.
- After falling off a cliff last month, ANZ's New Zealand business survey rebounded some for December. But fellow bank BNZ notes the headline-figure imporovement was held back by a still-weakening view among agriculture respondents. Still, the December survey remained decidedly weak. "We still believe this reflects an overreaction on the part of the NZ business sector to the new government."
- Hopes for a tax overhaul continue to push US stocks further into record territory. The Dow gains 0.6% to 24792 the S&P rises 0.5% to 2690 and the Nasdaq climbs 0.8% to 6994. Materials lead the way as eight of the S&P's 11 sectors rise, with chemicals company LyondellBasell up 3.3% after Citi upgraded it to buy. Akamai is the best performing stock in the index, soaring 14% on news Elliott Management has taken a 6.5% stake in the content-delivery company. Gold rises 0.6% to $1264.40 as the WSJ Dollar Index, hurt by worries the Fed won't raise interest rates at a faster pace in 2018, falls 0.2%.
- Facebook removed significantly more content for violating local laws during the first six months of 2017 than the year before, due largely to requests from the Mexican government, the company says. Facebook disclosed the data in a biannual report on government requests, which outlines how Facebook responds to government data and censorship requests around the world and sheds light on how the company navigates its role on the global stage. Between January and June of 2017, Facebook restricted 28,036 pieces of content, almost triple the 9,666 posts removed in the first half of 2016. Law-enforcement officials in Mexico asked FB to remove all videos of a school shooting in January, when a 15-year-old student opened fire on his classmates in Monterrey, Mexico. FB says it restricted access to 20,506 "instances" of the video during the first half of the year.
- JP Morgan thinks the dollar won't be benefiting much from the US corporates' earnings repatriation as part of the tax bill, since there are only $460 billion of potential flows out there, joining Deutsche Bank and others on the view. JP Morgan says that meetings with corporates in the past weeks "have largely reinforced these assumptions about the modest expected FX conversion from repatriation." Some corporates, apparently, "have already pre-emptively repatriated offshore cash, ahead of the tax bill, utilizing tax credits and other offsets."
- J.P. Morgan is changing its stance on the dollar--going from long dollar to short dollar against the euro. Explaining this move it says: "The market can't shake its view that the [Federal Reserve] terminal funds rate is no more than 2%," while in Europe "growth is booming." "Our conviction of broad USD strength through 1Q has faded," J.P. Morgan says. The Fed raised the rate by 25 bps last week and the tax reform is expected to be passed by the end of the year. EUR/USD trades up 0.6% at 1.1823.
- The U.S. tax reform bill will likely be passed in the House on Tuesday and in the Senate on Wednesday, which would send the dollar rising in an immediate reaction, says MUFG. But "the details of the tax plan are well known, which should dampen any initial market reaction from passing the legislation," MUFG says. That is unless "evidence of a larger than expected boost to growth and inflation" emerges from the bill, which would then send the dollar on "a more sustained rally in 2018," according to the Japanese bank. EUR/USD is up 0.4% at 1.1792, while USD/JPY is down 0.1% at 112.46.
- Global defense spending is set to reach $1.67 trillion next year, topping the previous post-Cold War record of $1.63, says IHS Markit in its latest Jane's Defence Budgets report. The 3.3% growth rate forecast for next year is the fastest in a decade, largely driven by the Pentagon. Nine NATO members are set to reach the target of allocating at least 2% of GDP to military spending.

Dec 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose amid an ongoing North Sea pipeline outage and signs that booming U.S. crude output growth may be slowing, although the 2018 outlook points to ample supply despite production cuts led by OPEC.
- Gold prices edged lower, pressured by firmer equities and a buoyant dollar after a bill to overhaul the tax system in the United States moved a step closer to ratification.
- Shanghai nickel jumped 4 percent, tracking a move in London after China said it would cut duties on some steel exports, which raised expectations for demand.
- Chicago wheat futures rose to a one-week high, heading for a third session of gains in four, with prices underpinned by concerns over dry weather hurting the U.S. winter crop.
- With counting done in the 132 out of 182 seats in the western Indian state of Gujarat, the website of India election agency has the Bharatiya Janata Party leading in 73 of them, versus 56 for the main opposition party. That's still a comfortable lead for Modi's party, though there is still a risk of him not dominating as the market believed was the case Friday, leading to stock and currency gains then. The rupee rebounds further from this morning brief, sharp selloff to trading around INR64.32/dollar, close to Thursday's closing levels. The Sensex stock index is now flat. Meanwhile, the website says counting for 52 of 68 seats in the northern state of Himachal Pradesh is done, with the BJP holding a 30-seat lead.
- Among emerging-market currencies, India's rupee will be in focus after Friday's election-related gains. Exit polls then indicated a stronger victory for Modi's Bharatiya Janata Party than previously anticipated in the state of Gujarat. Results are due today. The dollar fell 0.4% Friday to INR64.07, putting the year's drop at 5.7%. The pair is flat this morning in early Asian trading.
- Rabobank expects the Federal Reserve to raise rates twice in 2018, and not three times, as the Fed's dot plot suggests, because two Fed members voted against an interest rate increase this month. Lower-than-expected November inflation "sapped the strength of the USD," and is the reason why the Fed's policy is likely to be more "moderate." It's also worth noting, Rabobank says, that the Fed's "guidance was not revised higher in December despite the higher probably of tax reform being signed into law." The Fed forecasts three rate rises next year and two in 2019. Still, it is now penciling in one rate increase in 2020 when previously it hadn't.
- Not everyone will benefit from the proposed U.S. tax reform. Corporate tax rate cuts and the ability to fully expense capital spending under the tax plans should outweigh a loss of full interest deductibility for almost all investment-grade rated companies, Moody's chief economist John Lonski says. But at least a quarter of U.S. junk bond issuers will be worse off under proposed tax changes, he says.
- Indian shares and the rupee are higher Friday as exit polls show Modi's Bharatiya Janata Party is set to sweep elections in two states, including his home of Gujarat. The Sensex rose 1% in early trading amid broad stock declines elsewhere in Asia while the dollar is down 0.2% at INR64.15. Several private surveys of voters carried out after polling showed the BJP is set to win a comfortable majority in Gujarat, where the party has been in power for more than 2 decades--mostly with Modi at the helm. Officials results are due Monday, and they could suggest his popularity remains intact despite the federal government's disruptive demonetization and sales-tax rollouts of the past year.
- Oracle cautions the tax bill could affect guidance in the current quarter. The pending tax overhaul in Washington left Oracle to caution analysts its guidance for the current quarter might be off. During a conference call with analysts discussing the company's fiscal second-quarter results, co-CEO Safra Catz says the business-software maker expects an adjusted tax rate "somewhere around 24%" in the fiscal third quarter. But then she offers the caveat that "with the current and very real possibility of tax reform, the Q3 tax rate could easily end up being very different, especially to the extent that there is repatriation." That's because Oracle could pay taxes on cash it brings to the US from overseas stashes, something Catz says the company would need to include in the quarter that the tax law changes. "I'm not sure that the final rate has been set and whether it will actually even stay in the bill."

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 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
- 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 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.

Jan 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- U.S. oil prices hit their highest since 2015 again as speculators bet on further price rises amid OPEC-led production cuts and a dip in American drilling activity, though some warned the rally could run out of steam.
- Gold prices inched down amid expectations for more U.S. interest rate hikes this year.
- London copper inched up in early trade as an advancing U.S. dollar lost steam, while Shanghai copper recovered from a drop in the previous session to trade marginally higher.
- Chicago wheat fell for a fourth consecutive session with prices pressured by improved weather conditions in the U.S. southern Plains although a lack of protective snow cover kept a floor under the market.
- The yen jumped after the Bank of Japan trimmed its buying of long-dated Japanese government bonds in market operations, helping to stoke speculation about a future exit from its massive stimulus policy.   
- As a result of tax reform, Visa is improving 401(k) benefits for its U.S.-based employees, according to a company spokeswoman. Visa will increase its 401(k) match beginning in February. Currently Visa contributes $2 for every $1 an employee contributes, up to 3% of base pay. Visa will raise that to 5% of base pay. The company is also "exploring other global employee benefits and investments...which [it] hope[s] to unveil in the near future," says a spokeswoman.
- Former lawmakers urged President Donald Trump to preserve Nafta, citing withdrawal from the trade agreement as the fastest way to undermine any tax benefits or regulatory relief farmers might otherwise see from his administration. As Mr. Trump addressed farmers at an annual meeting in Tennessee, former Senators Max Baucus (D., Mont.) and Richard Lugar (R., Ind.), now co-chairs of a non-profit organization advocating for free trade for farmers, warned that withdrawing from Nafta would be akin to levying a new tax on farmers. They cautioned that U.S. farmers would suffer retaliatory action if the U.S. imposes tariffs on its trading
partners and said American growers already are disadvantaged since Trump pulled the U.S. from a key Pacific trade agreement.
- President Trump used a speech to farmers to highlight benefits of the GOP's tax overhaul, tout his deregulatory agenda and sign executive orders aimed at improving broadband access across rural America. Addressing farmers at an annual convention of the American Farm Bureau Federation, Trump called the recently-passed tax cut "historic relief for farmers," saying family farms would be spared from a "deeply unfair estate tax," and told a welcoming crowd that he was "putting an end to the regulatory assault on your way of life." Signing two orders to expand internet connectivity in rural areas, he said: "You are going to have great, great broadband."
- United Natural Foods CFO Mike Zechmeister says the tax policy changes are impacting how it assesses returns on potential investments. The natural foods distributor saw a four percentage point difference in returns on a recent investment before and after the tax bill, for example. "The tax savings are real," Zechmeister tells investors gathered at the annual ICR Conference. "You could take a project that may be unattractive in the past or one you would have passed on, and it becomes a project you could go forward with."
- US auto industry stands to benefit from the recently passed tax legislation, which will likely boost earnings per share by an average of 5%-6%, Barclays estimates. The tax reforms are expected to cut nominal tax rates for most US auto manufacturers and parts suppliers, even though the reduction in actual taxes paid will be "slightly less impacted" due to widespread use of losses carried forward, Barclays says. Auto parts suppliers domiciled overseas for tax purposes, such as Adient, Aptiv and Delphi Technologies, won't gain much from lower US corporate tax rates, but also may face lower risk from another part of the tax legislation--a hike in levies targeting unremitted foreign earnings, it says.
- United Natural Foods, up more than 5% as its CFO outlines "significant" financial benefits from the tax bill. The Providence-based natural food distributor expects the taxes it pays overall to fall to around 28% in its 2019 fiscal year from 40% currently. CFO Mike Zechmeister tells investors gathered at the annual ICR Conference that the reduced corporate tax will result in around $17M in savings during its current fiscal year, and it will also benefit from a one-time boost on deferred liabilities. The company expects an aggregate rate reduction of as much as 17 percentage points this year, and 13 percentage points in 2019. "That is a meaningful increase to our free cash flow," Zechmeister says.
- Changes to the US tax code could help push Caterpillar's stock price to $200 by the end of the year, JPMorgan analyst Ann Duignan says. The recently passed federal tax law's provision allowing 100% depreciation on new and used equipment will likely prolong the replacement cycle in US construction, she says. That's in addition to a lower corporate tax rate that will boost free cash flow. "As a result of our analysis, we believe that the stock remains undervalued, despite the significant outperformance last year," she said in a note. Caterpillar stock was up about 70% in 2017. Caterpillar shares were up 2.6% to $166.13.
- USDA Secretary Sonny Perdue touted accomplishments of the Trump administration and his own agency ahead of a planned presidential address to farmers at an annual trade convention. Perdue listed what he sees as trade victories, including opening China to American beef and rice, for farmers worried about the fate of Nafta. Speaking at a meeting of the American Farm Bureau Federation, he said USDA has begun rolling back burdensome regulations, targeting 27 rules that will save $56M annually, and urged farmers to flag the "silliest, most onerous rules" they think should be ditched. As for farmers' tax burden, Perdue tells the crowd that thanks to Trump's recent tax overhaul, "Help is not only on the way. It's already here."
- The parent of Alaska Airlines, like Southwest Airlines, American Airline and JetBlue Airways before it, said it plans to award $1,000 bonuses later this month to 23,000 employees, in celebration of the new federal tax bill. The corporate tax-cut windfall will reduce the tax rate to 21% from 35%, effective this year, which should save millions in tax liabilities and allow airlines to invest more in planes, products and their employees, although some of the savings may also go toward share buybacks. Alaska Air shares are down 1% to $72.97.
- Former Navy acquisition chief and acting Navy secretary Sean Stackley joins L3 Technologies, complementing the deal-hungry defense company's M&A team and continuing the run of Obama-era Pentagon officials who've popped up on corporate boards and management teams. Former defense secretary Ash Carter joined the Delta Air Lines' board while his deputy, Bob Work, is now a Raytheon director. Ex-Air Force secretary Deborah Lee James is now on the Textron board while Leidos added former Pentagon acquisition chief Frank Kendall to its director roster, with his deputy Katharina McFarland joining Engility.
- Eli Lilly (LLY) CEO David Ricks said the U.S. tax overhaul will cause American companies to make investments based more on business factors than taxes. "On the next decision you face it really re-balances the calculus on where to build a plant or make hires," he tells the WSJ on sidelines of JP Morgan healthcare conference in San Francisco. He expects Lilly to have "more infrastructure" in the US within the next 7 years as a result of the overhaul. In September the drug maker announced plans to cut 8% of its work force including many jobs in its home state of Indiana. Ricks also sees the mix of Lilly acquisition targets shifting to more US companies than foreign firms. Though Lilly already had a lower tax rate than the former top US corporate rate due to operations abroad, he sees Lilly's total tax bill coming down.
- J.P. Morgan says the introduction of the U.S. tax reform has done very little to lift the market's downbeat view of potential U.S. growth," which is expected to be smaller compared with other countries or areas around the world. This explains why the U.S. dollar hasn't benefited much from either the introduction of the tax reform or from good economic data, it says. "The global economic activity surprise index is at a post-GFC high," J.P. Morgan says, highlighting eurozone, as well as German growth, which for the first time ever "outpaced the U.S. for four consecutive years." J.P. Morgan adds: "This lack of economic exceptionalism ... is turning out to be more of a drag on the currency."