Forex & Commo Market News

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

- Oil prices dipped amid concerns over slowing economic growth in China and as investors cashed in on gains of over 2 percent from the previous session, although supply cuts agreed last week by major crude producers offered some support.
- Gold prices were steady supported by the uncertainty around the Federal Reserve's policy outlook for next year but the metal was on track to mark its biggest weekly decline in five weeks, as a firmer dollar weighed on the sentiment.
- London copper turned south and was on course for a third straight weekly drop after data showed China's industrial production slowed last month, denting demand prospects for the metal that is facing a 15 percent decline this year.
- Chicago soybean futures slid for a second straight session, dropping to their weakest in more than one week as lower-than-expected Chinese buying weighed on the market.

- The FTSE 100 Index falls more than 1%, shedding 78.13 points to 6799.37 after downbeat Chinese economic data hit stocks in Asia. Most of the region's major indexes closed in the red after Chinese industrial production in November fell short of expectations and retail sales rose at their weakest rate in 15 years. In London, miners fell as base metal prices dropped while homebuilders reacted negatively to continuing uncertainty after EU leaders rebuffed UK PM Theresa May's pleas for help over Brexit. Sterling falls 0.6% against the dollar to 1.2576.
- When is 1.13 million metric tons of soybeans not enough? That's how much the USDA estimates were sold to Chinese buyers as of 3:00pm ET Wednesday, part of an effort to warm trade relations between the country. The USDA figures it's the ninth-largest daily soybean sale ever, but soybean futures decline. One reason: Accumulated soybean exports to China since Sept 1 up until this week had totaled 340K metric tons, compared to about 17M metric tons over the same period last year. Another reason has to do with US soybean stockpiles, which are running above 400M bushels this year and are estimated to soar to a record 900M-plus next year, according to the USDA. Traders guess there are more Chinese soybean orders in the works, but for now January soybean contracts fall 1.1% to $9.20 a bushel.
- The anticipated next chairman of the House Armed Services Committee has ratcheted up his opposition to White House proposals to create a standalone Space Force for the US military, dealing a potentially fatal blow to the controversial concept. Rep. Adam Smith has told reporters he sees growing bipartisan opposition to the idea, suggesting even Pentagon brass are worried about the cost, disruption and time it would take to set up an entirely new civilian bureaucracy and military chain of command. Previously, the lawmaker said such efforts weren't "the best way to advance U.S. national security." Influential Senate Democrats already have come out against the White House proposal, so Pentagon officials have been drafting a compromise legislative package to establish revamped space acquisition and operating commands inside the Air Force.
- Agriculture analysts expressed disappointment this morning following reports that state-owned Chinese companies agreed to purchase roughly up to 2 million tonnes of soybeans for delivery between January and March, as analysts expected the figure to come in as high as 10 million tonnes. "There is some disappointment that the announced Chinese purchases were not larger and that is depressing prices a bit, but there is also hope that yesterday's announcement was just the beginning and that more sales will be forthcoming," says Tomm Pfitzenmaier of Summit Commodity Brokerage.

Dec 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, buoyed by a drawdown in U.S. crude stockpiles and indications that China is taking concrete steps to put a trade war truce with Washington into action.
- Gold prices slipped as the dollar steadied and equities climbed on signs of easing trade tensions between the United States and China, while palladium rose to a record high, trading at a premium to the bullion.
- London copper prices touched their highest in more than a week amid signs China is keeping promises made to the United States as part of a deal to resolve a trade row between the world's top two economies.
- Chicago soybean futures inched down to ease from a six-month high reached in the previous session, although losses were limited as China made its first major purchases of U.S. beans since a truce was struck in the Sino-U.S. trade war.
- China's exports could decelerate further, especially in early 2019, following its commitment to increase purchases from the US, leading to a rebound in US imports, says Pictet Wealth Management. It expects net exports to be a drag on Chinese growth this year and next. It notes China's exports held up 'remarkably well' in January-October despite trade tensions with the US, growing at an average 12.6% on year vs. 7.9% in full-year 2017. However, November exports growth decelerated sharply to 5.4% from 15.5% in October, likely due to slowing global growth and tapering of the front-loading of exports to the US.
- OPEC's monthly oil market report showed a surge in Saudi Arabia's November production, despite a slight decline in the group's overall output. That was mainly a result of declines in Iran, Venezuela and Nigeria, offsetting Saudi gains. The report comes days after OPEC and its allies--led by Russia--agreed to begin cutting production by a collective 1.2 million barrels a day starting next month. The report notes that the decision "should contribute to sustainability of market stability." Brent crude was last up 1.3% at $60.96 a barrel, and West Texas Intermediate was up 1.2%, at $52.26 a barrel.
- Statements from President Trump that China is "buying tremendous amounts of soybeans" appear to be instilling optimism into the grains markets this morning -- this despite yesterday's USDA report that kept its figures for soybeans largely unchanged. Analysts say that Trump's comments lend credence to the widespread rumors that state-owned Chinese companies are buying 5-8 million tonnes of soybeans out of the Pacific Northwest for state reserves. "Is that a good faith measure? Probably so," says Dan Hueber of the Hueber Report. "Would Trump have that info? Sure."
- Lead prices have dropped 20% since mid-year amid US-China trade tensions. Fitch Solutions has lowered its price forecast for the base metal by 4% to an average of $2,350/ton for next year. Prices of the metal, used in automobile batteries are currently below $2,000/ton. However, a pick up in seasonal demand for vehicle batteries during cold weather could see prices heading higher through the remainder of this year as well as into next year, says Fitch. As such, LME lead stocks currently stand at their lowest levels in over 5 years and a supply deficit of 36,000 tons is expected next year, Fitch adds.
- Last year, Daiwa saw the chance of a US-China trade deal at close to zero for 2018. Going into 2019, it sees a 1/3 probability of a "grand bargain...as Trump badly needs to bolster his home appeal ahead of a re-election campaign and the US economy begins to slow into 2020." A breakthrough "could come at the end of the 90-day cease fire" which started 11 days ago, Daiwa thinks. "Trump could then declare victory and rally his campaign with a list of concessions extracted from China." Still, the bank's base case is for no deal, with tariffs likely "one of many tools used by the US to 'contain' China." It sees the administration targeting the "Made in China 2025" ambitions, helping result in Xi likely facing "enormous political pressure externally and internally."

Dec 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices climbed by around 1 percent amid a stock market rebound and on expectations that an OPEC-led output cut for 2019 would stabilise the supply-demand balance.
- Gold prices were firm, supported by expectations of fewer rate hikes by the U.S. Federal Reserve next year, while palladium traded at a premium to the yellow metal.
- Most base metals traded in a tight range early as U.S. President Donald Trump sounded optimistic about a trade deal with China, while the dollar held near a one-month peak against its peers.
- Chicago soybeans rose for a second consecutive session after President Donald Trump said China was back in the market buying U.S. beans.

- Last year, Daiwa saw the chance of a US-China trade deal at close to zero for 2018. Going into 2019, it sees a 1/3 probability of a "grand bargain...as Trump badly needs to bolster his home appeal ahead of a re-election campaign and the US economy begins to slow into 2020." A breakthrough "could come at the end of the 90-day cease fire" which started 11 days ago, Daiwa thinks. "Trump could then declare victory and rally his campaign with a list of concessions extracted from China." Still, the bank's base case is for no deal, with tariffs likely "one of many tools used by the US to 'contain' China." It sees the administration targeting the "Made in China 2025" ambitions, helping result in Xi likely facing "enormous political pressure externally and internally."
- As there's some newfound optimism about US-China trade, there's multiple reasons why. Takashi Hiratsuka, trading-group leader at Resona Bank's asset-management division, notes Trump's Tuesday tweet about "important announcements," China Vice Premier Liu's possible visit in January and Huawei's CFO getting bail. Amid broad gains in Asian equities today despite a lack of general movement in the US, T&D Asset Management senior trader Yusuke Sakai also nods to this week's declines in Japanese stocks from fund-raising for SoftBank's mobile IPO helping that market lead the regional rebound.
- Stocks lost what was left of the day's early gains after President Trump said he would shut down the US government if Congress doesn't fund his proposed border wall in a public conversation with top Democratic leaders. "(Trump's comments) seem to have unwound the rally we saw at the beginning of the day," says Michael Pearce of Capital Economics. However, Pearce says that a partial government shutdown tends not to have a lasting effect on the stock market. "The damage is fairly limited," Pearce says. After a strong start to the day, the DJIA  is down 0.4%, the S&P 500 is little changed, while the Nasdaq composite is up 0.3%
- The chances of another tax bill becoming law this year are fading. Senate Majority Leader Mitch McConnell (R., Ky.) doesn't include it on his year-end priorities and several other GOP senators say prospects for a deal don't look good. House Republicans released a revised tax bill on Monday but the parties are still far apart on what should be included. At stake: expired tax breaks, retirement-policy changes, disaster relief and technical corrections to last year's tax code overhaul.
- The US and China have begun a new round of trade talks, with a phone call between U.S. Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He discussing the purchasing of US agricultural products by China. This is expected to particularly affect soybeans futures, according to analysts - although could result in movement for all grain futures, more so than the USDA's WASDE report this afternoon. "China promised on the fringes of the G20 summit to buy more US agricultural products," says Commerzbank Commodity Research. "Until there is tangible evidence of this, market participants will be closely watching for any progress in the upcoming trade talks between the U.S. and China."
- The pound strengthens on Tuesday, but fails to gain any additional boost from above-forecast U.K. wage-growth data. Market participants have barely reacted to U.K. economic data recently as they focus solely on Brexit-related news. U.K. wage growth in the three months to October excluding bonuses was 3.3%, above forecasts for 3.2%, official data showed. Typically strong wage growth would boost chances of the Bank of England raising interest rates, but uncertainty over Brexit and the possibility of the U.K. crashing out of the EU with no deal makes this unlikely. The unemployment rate remained at 4.1%. GBP/USD was last up 0.4% at 1.2621, EUR/GBP down 0.1% at 0.9018.
- The pound rebounds from Monday's sharp selloff as U.K. Prime Minister Theresa May heads to Europe to try and secure concessions on the Brexit withdrawal agreement. European Commission President Jean-Claude Juncker said there is no room for renegotiation but there is room to offer more clarity on the deal. GBP/USD rises 0.4% to 1.2613, well above Monday's 20-month intraday low of around 1.2507. EUR/GBP is down 0.1% at 0.9019. But analysts doubt sterling can sustain a rally. After Mrs. May cancelled a parliamentary vote on the deal, ING says "it would seem unlikely that whatever she secures [with the EU] is enough to win support in parliament for her withdrawal deal."
- The FTSE 100 is expected to open 55 points higher at 6776, London Capital Group says, tracking a recovery on Wall Street and in some Asian markets. However, uncertainty over Brexit and U.S.-China trade relations lingers, combining with concerns about protests in France and Italy's budget. "The upside reversal that we saw is a bullish sign, even in the short term and is boosting European futures. However, this is unlikely to be sufficient to breakout of any longer-term downward trend," says Jasper Lawler at LCG. Prime Minister Theresa May on Monday called off a vote on her Brexit deal, which she looked set to lose heavily, causing the pound to slide. She heads for talks with EU officials later in the day. On the corporate side, Ashtead and WPP will be watched after earnings updates.

Dec 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged up after Libya's National Oil Company declared force majeure on exports from the El Sharara oilfield, which was seized at the weekend by a local militia group.
- Gold prices edged higher, supported by hopes that the U.S. Federal Reserve could pause its rate hike cycle sooner than expected and as the dollar slipped after the previous session's rally.
- London base metals recouped some of previous session's losses, lifted by a weaker dollar, although ongoing Sino-U.S. trade friction kept gains below 1 percent.
- Chicago soybean futures slid for a second session with prices coming under pressure from lack of Chinese demand for U.S. supplies amid a trade war between the two countries.

- USDA Secretary Sonny Perdue urges swift passage of a compromise Farm Bill released Monday night despite the absence of key conservative priorities. In a statement, the agriculture chief lamented the lack of "progress" on work requirements for food stamp recipients, referring to the omission of controversial new requirements backed by House Republicans. Still, Mr. Perdue touted the bill's investments in agricultural research and trade programs as well as its preservation of the farm safety net, vowing to recommend it to President Trump if Congress passes the legislation. The bill comes at the end of a turbulent year for US farmers, following months of bitter partisan wrangling over food stamps and more.
- The U.S. formally signs on to an infrastructure fund set up by the Asian Development Bank to aid Pacific island nations, offering alternatives to concessional loans offered by China. It marks the latest sign of U.S. allies stepping up efforts to match Beijing's influence in the region. The ADB says the U.S. has joined Japan, Australia, New Zealand and the EU, as well as the ADB, European Investment Bank and World Bank in supporting the fund, which aims to improve infrastructure and services in the Pacific. The ADB estimates US$4.7 trillion in new investment is needed in the region over the next decade to sustain growth, with 2/3 required for infrastructure.
- US grain market experts do not believe that the USDA's latest World Agricultural Supply and Demand Estimate (WASDE) report tomorrow will contain much in the way of demand adjustments for grains, an indication that traders are exercising caution on reacting to the US-China trade truce, for which little clarity has been provided. "The trade is reluctant to react to the various reports about the US/Chinese 90 day cease-fire agreement and...traders are not looking for much change in the US balance sheet in tomorrow's WASDE report," says Tomm Pfitzenmaier of Summit Commodity Brokerage. According to Pfitzenmaier, the consensus for average corn 2018/19 carryout is 1.738 billion bushels, up slightly from November's 1.736 billion, and the average soybean carryout is expected to be 945 million bushels, down from 955 million bushels last month.
- US defense stocks set to bounce after latest twist in the fiscal 2020 budget saga. The White House reportedly accedes to a Pentagon request to avoid cuts from prior-year levels. The surprise is the administration now touting an increase in the top line to $750B, $50B more than its prior plan. Lawmakers still have to weigh in over the next several months, but the shift in sentiment boosts Lockheed Martin, Northrop Grumman and Raytheon by around 2% apiece in pre-open trade.
- The U.S. dollar falls on Monday in response to equity market declines and Friday's weak U.S. non-farm payrolls. This earlier lifted the euro to a three-week high of $1.1444 and it continues to trade close to that level, last up 0.4% at 1.1427. RBC says poor Chinese data and worries that the arrest of Huawei's CFO could sour U.S.-China relations are adding to dollar weakness, bringing "fears of tit for tat reprisals and what it means for trade talks." UniCredit says that EUR/USD "will probably remain more sensitive to both swings in the global risk picture."
- The decision by OPEC and other major oil producers to cut oil output by 1.2 million barrels/day represents a middle-of-the road approach that should support Brent in the low-$60s and WTI in the mid-$50s/barrel, says Pimco portfolio manager Greg Sharenow. At those levels, he expects US-driven output growth to slow and encourages America to more aggressively clamp down on Iranian crude exports by 2Q. Meanwhile, with the world economy slowing OPEC likely faces an uphill road to enable a sustained oil rally, posits Konstantinos Venetis, senior economist at TS Lombard. January WTI continues to trade slightly lower in Asia, changing hands at $52.50, while February Brent is up 0.4% at $61.92.

Dec 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude oil rose after producer club OPEC and some non-affiliated suppliers last Friday agreed to a supply cut from January.
- Gold prices held steady near a five-month peak hit early, supported by a disappointing U.S. jobs report that fuelled speculation that the Federal Reserve may stop raising interest rates sooner than expected.
- The dollar slid almost half a percent against the euro and the yen after soft U.S. payrolls data fuelled speculation that the Federal Reserve may stop raising interest rates after a highly likely move next week.
- Copper eased in London and Shanghai, as customs data released over the weekend showed a 3 percent year-on-year drop in unwrought copper imports by top consumer China, and Sino-U.S. trade tensions continued to weigh on prices.
- Chicago soybean futures lost ground with the market dropping for two out of three sessions on pressure from slowing demand in China, the world's top importer.

- The U.S. dollar falls on Monday in response to equity market declines and Friday's weak U.S. non-farm payrolls. This earlier lifted the euro to a three-week high of $1.1444 and it continues to trade close to that level, last up 0.4% at 1.1427. RBC says poor Chinese data and worries that the arrest of Huawei's CFO could sour U.S.-China relations are adding to dollar weakness, bringing "fears of tit for tat reprisals and what it means for trade talks." UniCredit says that EUR/USD "will probably remain more sensitive to both swings in the global risk picture."
- The decision by OPEC and other major oil producers to cut oil output by 1.2 million barrels/day represents a middle-of-the road approach that should support Brent in the low-$60s and WTI in the mid-$50s/barrel, says Pimco portfolio manager Greg Sharenow. At those levels, he expects US-driven output growth to slow and encourages America to more aggressively clamp down on Iranian crude exports by 2Q. Meanwhile, with the world economy slowing OPEC likely faces an uphill road to enable a sustained oil rally, posits Konstantinos Venetis, senior economist at TS Lombard. January WTI continues to trade slightly lower in Asia, changing hands at $52.50, while February Brent is up 0.4% at $61.92.
- Northern Trust is mirroring the thoughts of many others in saying, "The global economy looks set to move into a lower gear" in 2019. And while the US-based wealth-management firm doesn't see the slowdown "snowball[ing] into something more serious...there is a long list of downside risks." That includes ongoing economic softness in China which will likely prompt stimulus efforts. Northern Trust also expects the current trade truce to not ultimately prevent tariffs on an additional $200 billion of Chinese imports from going to 25%.
- A rise of nationalism following the arrest of Huawei's CFO could create hurdles for Beijing to make concessions in reaching a trade deal with the US, says OCBC. It contends the "market should not underestimate the nationalism hype" despite Trump saying the incident won't derail trade talks. The investment bank adds that although the arrest warrant was issued in August, the date of detention--the same day as Xi and Trump met at the G20--still prompted speculations in China that the trade war could be escalated to a tech war going into 2019.

Dec 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- President Trump tweeted "China talks are going very well" about 10 minutes ago with investors also keeping an eye on trade tensions between the world's two largest economies. S&P 500 and Dow futures are now down about 0.3% compared to down 0.5% earlier this morning.
- OPEC ministers remain holed up at the group's headquarters in Vienna, debating a potential oil production cut. The sticking point is Iran's refusal to agree to a symbolic output curb. OPEC's de-facto leader, Saudi Arabia, has insisted that Iran join the rest of the group in signing on to a shared cut, despite Iran having already reduced production in actuality due to U.S. sanctions. The standoff means a deal could fall apart, according to people familiar with the matter. However, Russia--OPEC's largest external partner--has after much wrangling agreed to join a cut by slashing output by 200,000 barrels a day. Brent crude was last up 1.5% at $60.96.
- Shares in British retailer Tesco jump 5%, topping the list of FTSE 100 risers as the U.K. bluechip index recovers from sharp losses the previous day. Traders say a broker upgrade is boosting Tesco, which may also be benefiting from news on Thursday that a trial against two former company executives has collapsed. The FTSE 100 is last up 1.6% at 6812.05. Mike van Dulken, head of research at Accendo Markets, sees 6875 as the next target for the index, but warns there may be too many "unknowns" related to U.S.-China tensions and Brexit to allow a sustained rebound. "This is a more meaningful bounce, but whether it's a full-on rebound remains to be seen."
- Ivanka Trump pushes back against the notion that the administration's immigration policies are limiting the pool of available workers while the unemployment rate is at a 49-year low. The US has a low-labor force participation rate relative to other developed nations, and businesses need to consider how they can draw workers back in, she says. "We have an existing population of workers we need to make sure are prepared, and we have to supplement that with thoughtful immigration reforms," Trump said at a Business Roundtable event in Washington. The Roundtable is an organization of CEOs that has been critical of the administration's immigration policies. In October, 62.9% of US adults worked or were looking for jobs. That's similar to rates in the 1970s when women were just beginning to enter the workforce in larger numbers.
- AT&T CEO Randall Stephenson says he supports efforts to get Huawei out of international networks, calling British Telecom's recent announcement it will take the Chinese equipment maker's gear out of its network "encouraging." Stephenson, speaking at a Business Roundtable panel in Washington, says the move is necessary because the US can keep Huawei out of domestic infrastructure but can't build a full electronics supply chain on its own. "The government needs to speak with our allies," he says. "Our allies need to be aligned on this."
- Cotton futures are off 2.8% at 78.94 cents a pound over concerns about global growth. The arrest of a top Chinese tech executive has jittery investors concerned that a trade truce between the US and China could be more complicated than anticipated. Any continuing trade tensions would fuel lower demand for US cotton in China, a crucial importer of fiber. Investors are pushing down cotton prices ahead of a Friday release of export sales figures for the fiber. Cotton sales are behind the pace needed to make USDA export targets.
- Grain futures fall -- with wheat contract logging the largest percentage drop at 1.2% as experts express impatience with the lack of confirmation that the Chinese market will begin to buy US exports again. "The agreement apparently included language that the Chinese would be immediate buyers of ag products, but in 4 days we haven't seen anything," says Mark Gold of Top Third Ag Marketing, calling a lack of agreement publicly among the US and China on the terms of a deal "disconcerting." The closure of the financial markets in observance of President George HW Bush's funeral Wednesday may have the effect of increased trading in commodities today, says Allendale.
- Live cattle futures for February started the morning down by 0.6%, while lean hog futures for February dropped 3.6%. The continued wait for China's re-entry into buying US agriculture products combined with President Trump's continued Twitter threats of tariffs is weighing on prices. However, some pork market experts are maintaining belief that China will ultimately drop their tariff on US pork, stimulating consumption. "I look for China to announce, with great fanfare soon, that they're dropping their tariff on US pork," says Dennis Smith of Archer Financials. "Need has already been established."

Dec 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, pulled down by OPEC's decision to delay a final decision on output cuts, awaiting support from non-OPEC heavyweight Russia. 
- Gold prices edged higher and were on track for their best week in 15, as the dollar weakened on renewed speculation of an imminent pause in the U.S. Federal Reserve's tightening cycle.
- London copper climbed 1 percent as reports that the U.S. Federal Reserve could pause from raising interest rates helped the metal recover from its steepest slide in five weeks in the prior session.
- Chicago soybean futures slid for a second session, giving up ground as the market is still awaiting promised Chinese buying following Sino-U.S. trade talks.
- AT&T CEO Randall Stephenson says he supports efforts to get Huawei out of international networks, calling British Telecom's recent announcement it will take the Chinese equipment maker's gear out of its network "encouraging." Stephenson, speaking at a Business Roundtable panel in Washington, says the move is necessary because the US can keep Huawei out of domestic infrastructure but can't build a full electronics supply chain on its own. "The government needs to speak with our allies," he says. "Our allies need to be aligned on this."
- Cotton futures are off 2.8% at 78.94 cents a pound over concerns about global growth. The arrest of a top Chinese tech executive has jittery investors concerned that a trade truce between the US and China could be more complicated than anticipated. Any continuing trade tensions would fuel lower demand for US cotton in China, a crucial importer of fiber. Investors are pushing down cotton prices ahead of a Friday release of export sales figures for the fiber. Cotton sales are behind the pace needed to make USDA export targets.
- Grain futures fall -- with wheat contract logging the largest percentage drop at 1.2% as experts express impatience with the lack of confirmation that the Chinese market will begin to buy US exports again. "The agreement apparently included language that the Chinese would be immediate buyers of ag products, but in 4 days we haven't seen anything," says Mark Gold of Top Third Ag Marketing, calling a lack of agreement publicly among the US and China on the terms of a deal "disconcerting." The closure of the financial markets in observance of President George HW Bush's funeral Wednesday may have the effect of increased trading in commodities today, says Allendale.
- Live cattle futures for February started the morning down by 0.6%, while lean hog futures for February dropped 3.6%. The continued wait for China's re-entry into buying US agriculture products combined with President Trump's continued Twitter threats of tariffs is weighing on prices. However, some pork market experts are maintaining belief that China will ultimately drop their tariff on US pork, stimulating consumption. "I look for China to announce, with great fanfare soon, that they're dropping their tariff on US pork," says Dennis Smith of Archer Financials. "Need has already been established."
- US stock futures point to sharp early losses as the arrest of Huawei Technologies's chief financial officer raises worries about another escalation in tensions between the US and China. A drop in oil prices adds to the negative sentiment as market awaits an agreement from Opec on whether or not to cut output. There is some positive news from China as its Commerce Ministry says that Beijing would "immediately implement" agreements involving purchase of US products. ADP releases its private payrolls report for November at 8:15am, while updates on the US trade balance, productivity and unit labor costs and weekly jobless claims arrive at 8:30am and the ISM services index at 10am. S&P futures slide 39.75 points.
- The Stoxx Europe 600 drops 2.3%, or 8.1 points to 346.13 amid concerns about U.S.-China relations following the arrest of a Chinese tech-industry executive in Canada. All major European indexes decline, with the DAX and CAC-40 both falling more than 2%. "Stocks have sold off severely this morning as traders worry that U.S.-China relations have deteriorated," David Madden at CMC Markets says. "The arrest of Huawei finance chief Meng Wanzhou has rattled investor confidence. There's talk that Huawei might have broken U.S. sanctions on Iran." Meanwhile oil stocks fall on concerns that any crude production cut by OPEC may be at the low end of market expectations.
- Although the number of countries with declining growth has risen, not a single economy's gross domestic product is shrinking, thus the risk of a recession in 2019 is very low, Heinz Bednar, chief executive of Erste Asset Management says. Possible disruptions--such as an escalation of the Italy-EU budget dispute, a hard Brexit or an end to the U.S.-China trade truce--could though lead to higher market volatility, though, he adds.
- More than half of the 12 Federal Reserve districts cited businesses for which labor shortages had helped constrain growth. The Chicago Fed District underscores the degree to which the labor market is tight: the district reported that "a number of contacts said that they had been 'ghosted,' a situation in which a worker stops coming to work without notice and then is impossible to contact." Elsewhere, output growth slowed in the Dallas Fed District's manufacturing sector, with labor constraints cited as a damping factor.
- Most Federal Reserve districts remained optimistic in the period through late November, but some businesses cited increased uncertainty regarding the impact of tariffs, according to Wednesday's beige book report. The report noted tariff-induced cost increases have spread from the manufacturing sector to other industries like retail and restaurants. In the Richmond Fed District, manufacturers cited tariffs as a concern for raising prices and lowering demand. Tariffs also have had the impact of moving up purchases. For instance, one cabinet manufacturer reported an uptick in business, "as customers rushed orders in anticipation of higher tariffs in the new year."

Dec 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as stock markets slid, but trading was tepid in the countdown to an OPEC-meeting expected to result in a supply cut aimed at draining a glut that has pulled down crude by 30 percent since October.
- Gold edged higher as growing risk aversion weighed on the dollar, while palladium held ground at a premium to the bullion. Prices of non-ferrous metals extended losses as worries over weak demand caused by Sino-U.S. trade tensions persisted.
- Chicago soybeans dropped declining for the first time in five sessions, on a lack of purchases of U.S. cargoes by China despite trade talks between the two nations.
- Most Federal Reserve districts remained optimistic in the period through late November, but some businesses cited increased uncertainty regarding the impact of tariffs, according to Wednesday's beige book report. The report noted tariff-induced cost increases have spread from the manufacturing sector to other industries like retail and restaurants. In the Richmond Fed District, manufacturers cited tariffs as a concern for raising prices and lowering demand. Tariffs also have had the impact of moving up purchases. For instance, one cabinet manufacturer reported an uptick in business, "as customers rushed orders in anticipation of higher tariffs in the new year."
- Roughly 15 minutes ahead of the release of the Bank of Canada's stand-pat rate decision, Gluskin Sheff's widely read chief economist, David Rosenberg, was warning about underlying weakness in the Canadian economy and the risk posed by more interest rates. Rosenberg cited a 35-year low in household credit growth; steep decline in November auto sales volume; and a significant jump, equivalent to 0.8% of after-tax income, in interest paid by households. Rosenberg says these developments--combined with the GM Oshawa plant closure, crude-production cuts in Alberta and continued uncertainty over USMCA in Congress--indicate Canada economy will have a difficult time hitting 2.1% growth in 2019 as BOC forecasts.
- Grain futures largely trade lower as some experts wonder whether 90 days is enough time to for the US to develop a new trade deal with China. "The reality is the only positive outcome from this truce is that we have eliminated the chance of more tariffs inside this window," Brock Beadle of MaxYield Cooperative says. Meanwhile, analysts are weighing the possibility of the US exporting a significant amount of soybeans to China before January, when harvest activity typically ramps up in Brazil. CBOT soybean futures waffle between small gains and losses as corn futures fall 0.3% and wheat futures drop 1.4%.
- Omani oil minister Mohammad bin Hamad al-Rumhy Wednesday afternoon joined a spate of officials arriving in Vienna for three days of OPEC-led meetings that will determine whether the cartel can reach a consensus to cut production and rein in a burgeoning global supply glut. Speaking ahead of the first gathering of ministers, Mr. al-Ruhmy said that OPEC and its partners outside the cartel, of which Oman is one, need to discuss exceptions for some OPEC+ members when it comes to production curbs. He said countries like Iran, Nigeria, Libya and Venezuela, which all face various political challenges that already limit their output, should be "treated differently." The minister noted that any production cut would only be "theoretical" for Iran, whose oil industry is under U.S. sanctions.
- The FTSE 100 falls 90 points to 6932 in early deals as U.S.-exposed shares and financial stocks drop after an 800-point fall in the Dow Jones Industrial Average late Tuesday. Scottish Mortgage Investment Trust is down 3.2% while plant-hire group Ashtead, which has a U.S. equipment-rental business, drops nearly 3%. Barclays, Standard Life Aberdeen, Standard Chartered and Prudential are also among the biggest fallers. Connor Campbell at Spreadex notes that London's top-flight index is under 6950 for the first time in two weeks. "Though it seemed naive at the time, Monday's rally now looks positively deluded, investors gullibly swallowing news of a truce between the U.S. and China, only to be bitten for the umpteenth time by Trump's trade boasts."
- London shares are set to open 62 points lower at 6960 as traders start to doubt whether the weekend's U.S.-China trade truce will result in any genuine moves to end the standoff. Skepticism about the temporary lull in tensions left the Dow Jones Industrial Average nearly 800 points adrift while all major Asian indexes are trading in the red. "Monday's stock market relief rally rather surprisingly ran out of legs fairly quickly yesterday, with some blaming the differences over the detail between the U.S. version of what transpired at the weekend and the lack of any detail from the Chinese side with which to confirm it," says Michael Hewson at CMC Markets.

Dec 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell pulled down by a U.S. supply glut and a drop in stock markets as China's government warned of increasing economic headwinds and as Japan was expected to report another quarter of GDP contraction.
- Gold prices dipped retreating from a more than five-week top hit in the previous session, as the dollar crawled higher.

- Industrial metals on the London Metal Exchange lost ground as Washington-Beijing trade tensions resurfaced, raising concerns over demand in the world's top metals consumer China.
- Chicago soybeans ticked higher with the market in positive territory for the fourth straight session, but trade tensions between Washington and Beijing capped the gains.
- The FTSE 100 falls 90 points to 6932 in early deals as U.S.-exposed shares and financial stocks drop after an 800-point fall in the Dow Jones Industrial Average late Tuesday. Scottish Mortgage Investment Trust is down 3.2% while plant-hire group Ashtead, which has a U.S. equipment-rental business, drops nearly 3%. Barclays, Standard Life Aberdeen, Standard Chartered and Prudential are also among the biggest fallers. Connor Campbell at Spreadex notes that London's top-flight index is under 6950 for the first time in two weeks. "Though it seemed naive at the time, Monday's rally now looks positively deluded, investors gullibly swallowing news of a truce between the U.S. and China, only to be bitten for the umpteenth time by Trump's trade boasts."
- London shares are set to open 62 points lower at 6960 as traders start to doubt whether the weekend's U.S.-China trade truce will result in any genuine moves to end the standoff. Skepticism about the temporary lull in tensions left the Dow Jones Industrial Average nearly 800 points adrift while all major Asian indexes are trading in the red. "Monday's stock market relief rally rather surprisingly ran out of legs fairly quickly yesterday, with some blaming the differences over the detail between the U.S. version of what transpired at the weekend and the lack of any detail from the Chinese side with which to confirm it," says Michael Hewson at CMC Markets.
- Roberto Azevedo, director-general at the World Trade Organization, says that even though the WTO is part of the trade conversation, it isn't a silver bullet. Despite findings of a large increase in the amount of trade that has been covered by global restrictive measures, due largely to ramped-up tariffs between China and the US, Azevedo indicates WTO rules aren't keeping pace. The WTO rules were negotiated in the 1980s, and the organization needs to reengineer its rules so that it can come to agreements faster and respond to new players in the market like China, Azevedo says. When asked about whether China has cheated in relaying its commitments to WTO, Azevedo says, "I suppose China would disagree."
- Immigration activists interrupt JPMorgan Chase CEO James Dimon several times during an investor conference, asking why the bank finances private prisons and immigrant-detention centers. "Anyone left here, come on out," Dimon says in response to the interruptions. "Get it out now." He adds the activists have "legitimate issues" but the centers are sanctioned and audited by government agencies. Dimon says the Business Roundtable, a trade association of CEOs of which he is chairman, and JPM support immigration reform. Over the past few years Dimon has increasingly been met by activists at public events.
- Rural America has made its voice heard in national politics recently--President Trump's 2016 election is exhibit A--but over time, as Americans migrate from rural areas to cities, agriculture industry officials worry they and farmers will lose stature in Washington. Jeff Rowe, head of crop seeds for Syngenta, says at an industry event in Chicago that only 34 of 435 current members of Congress have more than half of their constituents involved in farming. An increasing urban tilt could have an effect on lawmaking that affects the farm belt, such as regulation of genetically engineered crops, he says.
- US stocks extended declines, falling to session lows, as tensions ratcheted higher over the UK's Brexit deal. UK Prime Minister Theresa May's government was just dealt a fresh blow after it was found to be in contempt of Parliament. The S&P 500 and Dow Jones Industrial Average lost 1.6% apiece, while the Nasdaq Composite declined 1.8%. Stocks in Europe were already closed for the trading day. The Brexit deal, while considered by many analysts to have a limited impact on the US economy, nevertheless adds to the list of geopolitical worries that investors have been grappling with as of late. The British pound lost ground, slipping 0.4% against the dollar.
- AutoZone CEO William Rhodes tells analysts on a call about the company's 1Q earnings that tariffs implemented by the Trump administration didn't materially raise its costs in the quarter. He downplays any future tariff effect, saying auto-parts retailers typically are able to lift prices because consumers depend so much on their vehicles. "If your car won't start and you have to go to work, you or someone else has to fix it. This phenomenon has historically allowed our industry to pass on product inflation," Rhodes says. AutoZone imported 13% of its purchases in its last fiscal year, but many of its domestic vendors also import products, the company says in its latest annual report.
- There are signs that populism is losing stream but Rabobank's analysts warn of calling it a day just yet. The U.K. withdrawal agreement from the EU promises a "soft" Brexit as opposed to the "hard" one Brexiteers were seeking, while in Italy, politicians are signalling to the EU the forecast 2019 budget deficit could be moved a bit lower, Rabobank says. "Even if the current generation of populists in the U.K., Brazil, USA, Italy, etc. is set to somehow fail spectacularly at delivering what they promised the 'ordinary people', we are unlikely to see a return to power of centrist politicians. Instead, populists with more extreme views may be called upon," Rabobank analysts say.
- Grain markets are mixed as traders monitor the news for developments between President Trump and Chinese President Xi after the two leaders agreed on a 90-day truce on tariffs during G-20. "Traders will continue to watch for any signs of tariff relief and/or export sales from China in the next few days," Allendale analysts say. US Agriculture Secretary Sonny Perdue said Monday that China will likely start buying US soybeans again but it is still unclear whether China will remove tariffs on imports of US soybeans as part of the truce. Soybean futures are up 0.6%, corn futures are up 0.3% and wheat futures are down 0.3%.
- Larry Kudlow, director of the White House National Economic Council, says at the WSJ CEO Council that US executives should be realistic about China's desire to open its economy, noting Beijing halted the free-market advances of the Deng Xiaoping era. "Much as I would like them to adopt a Kudlowian supply-side free market model... I'm not sure we'd get there in 90 days with China," Kudlow says, referring to the period of talks aimed at striking a trade deal. "But I think on specific matters we can move the ball."
- European political distress is likely to cause headaches for euro investors next year, says Jane Foley, senior forex strategist at Rabobank. "While we expect a worsening outlook for the dollar in 2019 to allow EUR/USD to end 2019 moderately higher than current levels, the eurozone could throw up downside risks to this view." French President Emmanuel Macron, whose victory last year wiped out most worries surrounding eurozone populism, is facing a backlash at home. His intentions to add environmental taxes has sparked protests. "A risk for the market is that resentment for the status quo could be reflected in voting in the European parliamentary elections in the spring," Ms. Foley says. Polls show far-right parties with 30% support, up from 25% in August.

Dec 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, extending bigger gains from the previous day amid expected OPEC-led supply cuts and a mandated reduction in Canadian output. 
- Gold prices rose, after hitting a more than one-month high earlier in the session, as the dollar stumbled after the United States and China agreed to a temporary truce in their trade conflict that rattled global markets. 
- Copper and most other base metals gave up some of Monday's gains in early Asian trade, as doubts over whether China and the United States will be able to resolve their trade row within a 90-day timeframe came into focus.
- Chicago soybean futures lost ground after two sessions of gains, pressured by doubts over China's demand for U.S. cargoes as long as trade war tariffs remain in place.
- Australia's Labor opposition has reached an agreement in principle with the government on bills which would allow for the cracking of encrypted-messaging platforms, clearing the way for Parliament approvals. Labor negotiators hail concessions including limiting powers to just serious offenses. Also, worries that tech companies may be forced to introduce a back door--or "systemic weakness"--into their platforms will be addressed in the legislation with clear definitions of what steps could mean. Additional safeguards include a "double-lock" mechanism where both the attorney-general and minister for communications must authorize a request for assistance from companies like Apple or Facebook.
- The top US envoy to Australia says Huawei has security implications for digital communications and that Papua New Guinea's government has "effectively decided that those risks are worth it" in deciding to complete undersea cables with the Chinese telecom-equipment maker. PNG state investments minister William Duma last week said that Huawei would finish construction of an internet network there despite opposition from Australia, Japan and the US. The South Pacific country dismissed concerns about cyberspying. The American ambassador, James Carouso, notes a new infrastructure fund set up by the 3 countries aims to give Pacific islands and investors clearer options to fund major projects.
- As Australia's government and the Labor opposition wrangle over a sweeping bill aiming to tackle encrypted-message platforms that's opposed by US tech giants, a former American security czar says companies including Apple and Facebook have been cooperative on secrecy concerns. But Elaine Duke, who for more than 4 months last year was acting secretary of homeland security, also tells a Canberra security conference that new powers are necessary to fight terrorist offenses and child sex crimes. Meanwhile, Duke says that despite tech-company complaints her dealings with the firms have been very cooperative. Australia's government plans to introduce a bill to Parliament tomorrow that would help crack encrypted messaging, with agreement sought on Thursday. Labor, whose support is necessary for the bill to pass, wants extra safeguards including oversight by a judge.
- The EIA's closely-watched weekly reports on US oil inventories and natural gas storage will each be released a day later than normal as many financial markets close Wednesday in honor of a national day of mourning for President George H.W. Bush. The EIA says its Weekly Petroleum Status Report for the week ending Nov. 30 will now be released Thursday at 11 a.m. ET, while the Natural Gas Storage Report will be released Friday at 10:30 a.m. ET. As for oil-trading, Chicago-based CME Group says the CME Globex trading session for all NYMEX products will have normal trading hours Wednesday.
- USDA Secretary Sonny Perdue says he is heartened by the trade truce between the US and China, but has few details yet on how it will impact farmers. Speaking at an agricultural conference in Chicago, Perdue says it's unclear yet which--or how many--farm goods China will purchase as part of the recent deal. "We're waiting to flesh that out and determine the numbers and see the ships loading," Perdue said, adding that the ball is in China's court now to prove it's willing to make structural changes to rebalance the US-China trade relationship. "If they do want access to the highest quality products they know where they are and we're willing to sell them as long as we can get progress on other issues," he said.
- Commenting on Alberta's extraordinary decision to cut crude-oil production, Canadian Finance Minister Bill Morneau said Monday "the biggest, most important," way the federal government can contribute to bolster the struggling domestic energy sector is by getting the Trans Mountain pipeline expansion built. At a New York event hosted by Politico, Morneau acknowledged western Canada faces challenges because of depressed price for Alberta crude. Ottawa's goal is to work with Alberta "to deal with the acute problems of getting access to markets." The Liberal government acquired control of the Trans Mountain after Kinder Morgan threatened to walk away due to political uncertainty. Now, the project faces new delays due to a recent court ruling, which the Liberal government has vowed to address.
- The US-China truce on further escalation in the countries' trade dispute hasn't lit a fire under hog futures, at least not yet. Despite China's growing need for imported pork, and low prices in the US, traders anticipated late last week some ceasefire at the G20 in the months-long trade spat between the countries, and there remains much uncertainty as to whether China will change its practices on intellectual property and other policies the Trump administration wants. February-dated contracts recently down 0.2% at 67.4 cents a pound, more lightly traded December contracts down 0.4%.
- Signs of reapproachment between China and the U.S. is certainly good news and "certainly a big step in the right direction," says Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers. However, it doesn't reflect a definitive shift in the relationship between the two countries. While Lombard Odier IM expects the trade conflict issue to resume as both sides seem far from a fully settled position, for now it expects the market to reject some of the most extreme scenarios which have been weighing on sentiment and this will be reflected in asset prices.
- The Institute for Supply Management says its nonmanufacturing index for November will be released on Thursday instead of Wednesday this week. The index-tracking a wide range of US industries such as health care, finance, construction and agriculture, will come out at 10am ET on Thursday, December 6 after President Donald Trump declared Wednesday to be a National Day of Mourning to pay tribute to former President George H.W. Bush. The New York Stock Exchange and the Nasdaq will close in his honor, and Fed Chairman Jerome Powell's testimony before Congress on Wednesday was also canceled.
- The US-China trade spat has rocked soybeans prices this year and Chicago futures are still down 11% over the past six months. It will take more than vague agreements to spark a sustainable soy rally, investors say, and soybeans' global trade flow has also irreparably shifted, with China having upped its imports from Brazil and Argentina in anticipation of US tariffs. "Even if China came back to the US market in a huge way... they would have to buy record amounts every week from now until the end of the marketing year in August," says Zaner Group's Brian Grossman. Soybeans are up 1.8% at $9.11 a bushel.
- A major seafood group says it's pleased by the US-China tariff truce, but warns American jobs are still at stake. Both US importers and exporters of seafood have been caught in the trade dispute: China in July slapped 25% duties on a range of imported American fish, in response to tariffs imposed by Washington. Dozens of varieties of fish imported to the US from China -- including some caught in America and processed in China -- were then hit by 10% tariffs from the Trump administration. The National Fisheries Institute says it's pleased the US will not boost those tariffs but that more progress is needed. "Whether it's imports or exports the jobs impacted are here in the U.S.," the group's spokesman said.
- BMO Capital Markets has revised downward its economic growth forecast for Canada in 2019 after Alberta ordered crude-production cuts, equal to 325,000 barrels a day or nearly 9% of output. BMO now anticipates 2019 growth in Canada of 1.8%, versus earlier estimate of 2%. In particular, growth in 1Q next year is now expected to slow significantly to 0.7% annualized. "This is a modest downgrade to the growth call but there's plenty of uncertainty heading into next year," BMO told clients. Firm doesn't expect Alberta cut to affect Bank of Canada rate-policy plans, although cautioning BoC's tone may change about outlook when central bank issues latest rate decision Wednesday and Gov Stephen Poloz delivers speech Thursday.

Dec 03 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices soared by around 5 percent after the United States and China agreed to a 90-day truce in their trade war, and ahead of a meeting this week by producer club OPEC that is expected to result in a supply cut.
- Gold prices gained early on a weaker dollar as a trade ceasefire between the United States and China revived investor demand for riskier assets.
- Industrial metals jumped across the board with benchmark London copper hitting a near two-month high, after the United States and China agreed to a ceasefire in their trade dispute that has shaken global markets.
- Chicago soybeans jumped to their highest in almost six months, rising 1.9 percent after Washington and Beijing agreed a 90-day truce that will permit talks to end a festering trade war that has roiled commodities markets.
- The U.S. dollar falls on Monday following the breakthrough in trade talks between the U.S. and China over the weekend as investors opt to take on more risk. But one "caveat" that could limit any potential dollar drop is that, if sustained, a breakthrough in trade tensions could encourage the U.S. Federal Reserve could "deliver more monetary tightening next year," says MUFG. "It should be no surprise that the U.S. dollar strength is now reversing as global trade tensions ease in the near-term after it climbed on month-end re-balancing flows last week Friday," MUFG says. EUR/USD is last up 0.4% at 1.1364.
- The threat of U.S. tariffs on European car imports is still alive and markets could continue to express unease towards European car makers, says Commerzbank's Marco Stoeckle. "Their senior spreads, which were still aligned with single As early in the year, have moved out to BBB-territory [the weakest investment grade level] over the last two months," he says. The spread widening has been driven not only by new efficiency and environmental regulation, known as the Worldwide Harmonised Light Vehicle Test Procedure protocol, but also falling Chinese car sales and the threat of U.S. levies on European car imports. Car sales data in the U.S. due on Monday could also add to market worries if it underscores the notion that demand is beyond its peak.
- There are risks to Monday's rally in the euro versus the dollar, says ING. "[The] return of Italian risk factors ahead of the EU Parliamentary elections in May next year makes us cautious on EUR/USD in coming months," ING says. Moreover, "to the extent to which oil prices bottom and rise meaningfully from here, this should be marginally more beneficial for the dollar versus the euro, given the growing U.S. shale oil production as well as its implication for headline inflation outlooks." EUR/USD is last up 0.4% at 1.1361 on the back of rising risk appetite after the weekend's G20 summit.
- Miners and oil majors rise after easing trade tensions between the U.S. and China sent Asian markets higher and caused a spike in crude and metal prices. Antofagasta and Anglo American are among the top risers in the FTSE 100, rising as base and precious metals prices advance across the board. BP is among the biggest beneficiaries in the oil sector, 2.3% ahead as the price of a barrel of Brent crude increases 4.5% to $62.14. Marshall Gittler at ACLS Global notes that the deal between the U.S. and China is a 90-day truce rather than a solution, though it does show a willingness on both sides to avoid confrontation.
- Shares in European car maker's trade higher after President Trump said on Twitter that China agreed to cut tariffs on American cars. Daimler and BMW, which are among the biggest exporters of U.S. made cars to China, trade 5.2% and 5.4% higher, respectively. German competitor Volkswagen is up 4.9%. Fiat Chrysler shares trade 4.4% higher, while French manufacturers Renault and Peugeot are up 2% and 3.4%, respectively.
- The dollar falls versus the Chinese yuan after a temporary trade truce between the U.S. and China, driving the euro and sterling up against the dollar as a result. The euro and pound each rise 0.5%, to $1.1378 and $1.2821, respectively. The dollar fell early this morning to a one-month low of CNY6.8843. Though the trade war is far from over, the U.S. will hold off on the planned increase of tariffs that was scheduled to come into effect on Jan. 1. In exchange, China promised to increase imports of U.S. goods. "The truce provides a framework for negotiations over the next 90 days rather than acting as a resolution to the current conflict," says SEB.
- Nordic markets are set to open higher Monday with IG calling the OMXS30 up 1.5% at around 1537. Markets in Asia were buoyed by the trade agreement between the U.S. and China at this weekend's G20 meeting, says Danske Bank. Asia stocks made healthy gains, notably Chinese equities, and both the Chinese yuan and Australian dollar strengthened, it adds. "The U.S.-China agreement provided a 90-day truce allowing for negotiations on a permanent trade deal." The truce prevented a further increase in tariffs or new tariffs imposed from the U.S. side. "We have a number of important events ahead of us this week, but first, markets will heave a sigh of relief after the 90-day ceasefire." OMXS30 closed at 1514.63, OMXN40 at 1462.32 and OBX at 790.91.
- The "truce" agreed by the US and China on trade tariff issues at the G-20 meeting over the weekend helps boost risk appetite a bit, Societe Generale rates strategists say, but they doubt this will have a lasting effect on yields. "It should not have any lasting impact on yields," they say. German Bund yields start the week on the rise, indicating an increase in risk appetite. The 10-year Bund yield is trading almost four basis points higher at 0.34%, according to Tradeweb. Bond yields move inversely to prices.
- Despite temporarily de-escalating hostilities, Moody's--like others--expects "US-China relations to remain contentious. Narrow agreements and modest concessions in their ongoing trade dispute will not bridge the wide gulf between their respective economic, political and strategic interests." Saying the countries "are too strong to cede their respective national interests in negotiations with each other," the ratings firms predicts that "relations between the two powers will swing between conflict and compromise." However, "an economic cold war that leads to decoupling would be costly for both countries, owing to their deep links with each other."
- Shares of Chinese auto makers skidded in the afternoon after President Trump tweeted that "China has agreed to reduce and remove tariffs" on U.S. vehicles. Already beaten down this year--which is set to be the first decline in nearly 30 years for new-vehicle sales--BYD and BAIC turned lower following morning gains that came in the wake of cooling U.S.-China trade tensions. Both stocks are down at least 1% in Hong Kong, while Geely's gain has been slashed to 1.3%.
- Qualcomm ruled out a revival of its takeover effort of fellow chip firm a day after the White House said China would reconsider the deal. In a statement, a Qualcomm spokeswoman said, "While we were grateful to learn of President Trump and President Xi's comments about Qualcomm's previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal. Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G roadmap."
- Australia's attorney-general says the government is talking with Labor opponents on a compromise which would allow a bill regarding the cracking of encrypted-message platforms to be agreed to by Thursday. The legislation is the toughest yet among Western countries, and tech giants say they could be forced to assist authorities and develop custom software to bypass encryption. Christian Porter says he isn't swayed by arguments the bill would threaten communications privacy and potentially dent tech-sector profits. "Our job as a government is to produce a bill to protect all Australians." Labor lawmakers, whose support is crucial for the bill to pass, have called for a more-limited measure which could be used only by national intelligence agencies investigating terrorism.

Nov 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices firmed on expectations that OPEC and Russia will agree some form of production cuts next week, although swelling U.S. supplies kept markets in check.
- Gold prices held range-bound as the dollar trod water after U.S. President Donald Trump sent mixed signals about the prospects for a trade deal with Beijing, while palladium notched a record high.
- Chinese aluminium prices fell to their lowest in more than two years and were on course for a third successive monthly drop, as stalling manufacturing growth compounded plentiful supply amid relatively lenient winter output curbs.
- Chicago soybeans ticked higher with the market poised to end November with the biggest monthly gain since July amid caution ahead of U.S.-China trade talks at the G20 meeting.

- If OPEC and other major producers don't cut production, crude futures could easily drop into the $40s, says Energy Aspects. While acknowledging the difficulty posed by Trump's call for lower oil prices, the firm thinks that Saudi Arabia needs to reach an understanding with him at the G-20 summit--wherein Russia might also act as a broker. The broad contours of an agreement could easily be ratified at the OPEC meeting in a week, adds Energy Aspects. RBC estimates daily global production would outpace demand by an average 1.4 million barrels next year if OPEC doesn't cut. Oil futures have turned higher by midday in Asia, with January WTI up 0.4% at $51.65 and February Brent 0.6% higher at $60.25.
- Markets have their sights fixed on Buenos Aires, where Trump and Xi plan to meet at the G20 meeting over the weekend, and rightly so, ANZ says. A more conciliatory tone on trade would see risk assets respond rather positively. Indeed, markets have already been whipped around by news headlines, with equities lifting overnight on the US president's comments that he is very close to doing something on China trade. However, gains were short lived as news that presidential adviser Peter Navarro--a known China hawk--will be at the meetings provided a dampener.
- The NZD/USD ticked up a little on minutes from the Federal Reserve's latest meeting, which showed officials appeared more tentative about their path in raising interest rates. This weekend's G20 meeting looms as the next big event, as it will determine whether President Trump and Chinese counterpart Xi can find enough common ground to avert US tariffs planned to take effect in January. Australia & New Zealand Banking Group says the whipsaw action of the NZD/USD overnight in response to any trade-related headline "implies that the G20 meeting is going to be key in determining direction into year end." The NZD/USD trades at 0.6857.
- Marijuana businesses lost a much-awaited Tax Court case. The ruling said a California medical-marijuana dispensary must comply with the tax code's restrictive rules on businesses trafficking in drugs that are illegal under federal law, even if they're legal in the state. It continues a string of cases in which courts have sided with the IRS on these issues.
- Chances of a no-deal Brexit are slim but uncertainty looms for the pound because the U.K. parliament looks unlikely to approve PM Theresa May's Brexit deal, Investec says. Sterling would "trade very nervously were there not a clear timetable to get the vote back to Westminster," the brokerage says, adding it is uncertain what will happen if the deal is rejected. "The problem is not so much that there is no Plan B, more that there are too many," Investec says. Assuming a Brexit transition is secured, Investec forecasts the pound to recover to $1.40, helped by a weaker dollar, and EUR/GBP to hold steady at 0.89 by the end of 2019. GBP/USD was last at 1.2779 and EUR/GBP at 0.8904.
- There is a 50% chance that no trade deal between the US and China will emerge out of the G-20 Trump-Xi meeting this week, says Bank of Singapore. It adds that there is a 45% likelihood of ceasefire on the trade fight between the two nations, while the chance of a broad trade resolution is the smallest at 5%. A no-deal outcome would cause a negative knee-jerk reaction for risk assets, exacerbate growth concerns and drive further de-rating particularly in Asian equities as their earnings could fall, BoS says.

Nov 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices ticked higher on optimism that trade talks at the G20 meeting could aid the global economy and improve the demand outlook, while an increase in U.S. crude inventories to their highest in a year curbed gains.
- Gold prices firmed as the dollar faltered following dovish comments from U.S. Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes.
- Most Shanghai base metals rose, tracking equities after investors saw comments from the U.S. Federal Reserve chair as a sign the central bank's interest rate hike cycle is drawing to a close.
- Chicago soybean futures were largely unchanged, as the market took a breather after strong gains in the last two sessions, ahead of trade talks between Washington and Beijing at the G20 meeting this week.
- The Turkish lira continues to rise on Wednesday, with USD/TRY last down 0.2% at 5.2638 and close to its lowest in 16 weeks. The rise comes as investors remove their hedges, says Esther Law, fund manager for emerging market debt at Amundi. When positions are removed, investors sell the currency they bought when they hedged against unexpected lira moves, like the dollar, and buy back the lira. Oil prices falls, higher interest rates, easing political tensions between the U.S. and Turkey and a stagnating dollar, have all contributed to ease investors' concerns about Turkey. "The stability we've seen in the currency is explained by high monetary policy rates, making it hard to short Turkey," Ms. Law says.
- An escalation of U.S. trade tariffs on Chinese goods would have an "outsize impact" on Apple, as it would hit its supply chain as well as sales, says CreditSights. China accounts for roughly one-fifth of Apple's annual revenue. CreditSights has downgraded Apple's bonds to market underperform from markets perform. Contrary to President Donald Trump's views, CreditSights says the market "won't bear a 10% hike across Apple products since they are already considerably expensive" amid reports of already weaker demand. U.S. President Donald Trump told the WSJ that trade deal with China at this weekend's G20 meeting would he "highly unlikely" and that people could stand a 10% tariff on Iphones "very easily".
- The US trade deficit in goods widened again in October, marking the fifth consecutive monthly increase, according to preliminary data from the Commerce Department. In October, exports of goods declined slightly, while imports continued to climb. The trade deficit widened to $77.2B, up from $76.3B last month, and up from $64.7B in May when the widening of the deficit began. The advance data are not the nation's primary tally of the trade balance, and do not include trade in services, in which the US runs a surplus. But all else being equal, a rising deficit in goods reduces calculations of gross domestic product, and President Trump has made it a goal of his administration to lower the deficit. The report is a very preliminary indication that 4Q growth will not enjoy a lift from trade.
- European shares make modest gains amid positive sentiment about a potential U.S.-China trade agreement, though uncertainty about Italy's budget plan weighs. The Stoxx Europe 600 rises 0.09%, or 0.3 points, to 357.71, while the DAX gains 0.04% and the CAC 40 advances 0.2%, though Milan's FTSE MIB retreats 0.3%. "Wall Street managed to close with modest gains on Tuesday as investors began to look forward to a confirmed dinner meeting this coming Saturday in Buenos Aires between President Trump and President Xi," says Chris Scicluna at Daiwa Capital Markets. "Italy's government continues to prevaricate about fiscal policy, but shows no sign whatsoever of coming up with a budget plan that doesn't represent a non-negligible structural deterioration in the public finances."
- The dollar rises broadly ahead of a speech by Federal Reserve Chairman Jerome Powell at 1630 GMT and U.S. third-quarter GDP data at 1330 GMT which are expected to continue showing that the American economy is growing strongly. Meanwhile, reports Tuesday that President Trump may impose tariffs on imported vehicles combined with continued concerns over Italy's budget to weigh on the euro. EUR/USD falls to a near two-week low of 1.1279. RBC analysts say a drop below 1.1276 could see it break lower and target the 2018 low of around 1.1216. If EUR/USD holds above this level, however, it could rebound and rise back toward 1.1400.
- While many risk assets have done well this week after some extended selling in much of 4Q, BlackRock Investment Institute remains wary of chasing any near-term bounce as the China-US tussle extends well beyond trade issues and is likely to endure. It posits any temporary truce won't ultimately matter much as "the real issue for both sides is the competition to dominate the technologies and industries of the future."
- There may not be any easy solutions for Saudi Arabia and OPEC to balance oil markets following 4Q's price plunge, says Andrew Stanley of the Center For Strategic and International Studies. That's because of what he calls unpredictable US dynamics, a factor Stanley contends is unlikely to fade away just yet. America has become the world's biggest oil producer in recent months, with last year's 6% output increase poised to be followed by 8% growth for 2018 despite expectations that infrastructure bottlenecks would impede US producers. Stanley flags Trump and the Iranian oil-export waivers, citing the President's reluctance to push oil prices higher, and US-China trade tensions. Futures remain up about 1% in early-afternoon Asian trading, maintaining the afternoon rebound seen in the US.
- Canada PM Justin Trudeau spoke with President Trump over the phone Tuesday, at which time both leaders expressed disappointment with GM's decision to shut down plants in their countries, according to a summary of the conversation released by Trudeau's office. The readout indicates Trudeau and Trump "underscored their concerns for the workers, families, and communities affected." Canadian labor leader Jerry Dias, from Unifor, revealed earlier Tuesday the two leaders spoke about GM. Dias, whose union represents Canadian auto workers, urged Trudeau to work with President Trump on a coordinated effort to persuade GM to change course.
- Rep. Kevin Brady (R., Texas) isn't planning to attach his year-end tax bill to the year-end spending bill, he tells reporters. That removes a potential complication but it creates another one. As a stand-alone measure, the tax bill on expired breaks, retirement savings and technical corrections would still require 60 Senate votes and floor time in the Senate. Brady says he's open to working with Senate Democrats constructively.
- House Republicans are preparing to pass their year-end tax bill as soon as this week, but getting it to President Trump's desk will require support from Senate Democrats that they don't yet have. Most items in the bill--encouraging retirement savings, extending lapsed tax breaks and assisting disaster victims--have bipartisan support. Democrats are wary, however, of passing technical corrections to last year's tax law and they're miffed about not being part of horse-trading negotiations so far. Any year-end tax deal needs to come together soon to get added to a must-pass bill.
- European car makers' and suppliers' shares trade lower, weighed down by trade worries. "President Trump warned that levy on Chinese imports might be increased, and further tariffs could be announced. This dampened investors' hopes about a deal being struck at the G20 summit," says David Madden of CMC Markets. Italy's budget and Brexit also fuel investors' fears, he says. The Stoxx Europe 600 Autos & Parts trades 2.5% lower. Volkswagen shares trade 4.2% lower, while Daimler and BMW are down 2.4% and 1.3% respectively. Renault trades 1.0% lower, while Peugeot is down 0.9%. French supplier Valeo is down 5.2%, while German competitors Continental and Schaeffler are down 3.6% and 3.3% respectively.

Nov 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose by more than 1 percent ahead of an OPEC meeting next week at which the producer club is expected to decide some form of supply cut to counter an emerging glut.
- Gold prices were tepid pressured by a robust dollar after a senior U.S. Federal Reserve official reaffirmed the need for a further increase in interest rates, making bullion more expensive for holders of other currencies.
- Copper edged higher after three days of losses while other industrial metals moved in narrow ranges amid uncertainty over the direction of the U.S.-China trade war.
- Chicago wheat futures edged down after declining 1.5 percent in the last session, with plentiful world supplies and higher exports from Russia dragging on the market.

- The dollar rises broadly ahead of a speech by Federal Reserve Chairman Jerome Powell at 1630 GMT and U.S. third-quarter GDP data at 1330 GMT which are expected to continue showing that the American economy is growing strongly. Meanwhile, reports Tuesday that President Trump may impose tariffs on imported vehicles combined with continued concerns over Italy's budget to weigh on the euro. EUR/USD falls to a near two-week low of 1.1279. RBC analysts say a drop below 1.1276 could see it break lower and target the 2018 low of around 1.1216. If EUR/USD holds above this level, however, it could rebound and rise back toward 1.1400.
- While many risk assets have done well this week after some extended selling in much of 4Q, BlackRock Investment Institute remains wary of chasing any near-term bounce as the China-US tussle extends well beyond trade issues and is likely to endure. It posits any temporary truce won't ultimately matter much as "the real issue for both sides is the competition to dominate the technologies and industries of the future."
- There may not be any easy solutions for Saudi Arabia and OPEC to balance oil markets following 4Q's price plunge, says Andrew Stanley of the Center For Strategic and International Studies. That's because of what he calls unpredictable US dynamics, a factor Stanley contends is unlikely to fade away just yet. America has become the world's biggest oil producer in recent months, with last year's 6% output increase poised to be followed by 8% growth for 2018 despite expectations that infrastructure bottlenecks would impede US producers. Stanley flags Trump and the Iranian oil-export waivers, citing the President's reluctance to push oil prices higher, and US-China trade tensions. Futures remain up about 1% in early-afternoon Asian trading, maintaining the afternoon rebound seen in the US.
- Canada PM Justin Trudeau spoke with President Trump over the phone Tuesday, at which time both leaders expressed disappointment with GM's decision to shut down plants in their countries, according to a summary of the conversation released by Trudeau's office. The readout indicates Trudeau and Trump "underscored their concerns for the workers, families, and communities affected." Canadian labor leader Jerry Dias, from Unifor, revealed earlier Tuesday the two leaders spoke about GM. Dias, whose union represents Canadian auto workers, urged Trudeau to work with President Trump on a coordinated effort to persuade GM to change course.
- Rep. Kevin Brady (R., Texas) isn't planning to attach his year-end tax bill to the year-end spending bill, he tells reporters. That removes a potential complication but it creates another one. As a stand-alone measure, the tax bill on expired breaks, retirement savings and technical corrections would still require 60 Senate votes and floor time in the Senate. Brady says he's open to working with Senate Democrats constructively.
- House Republicans are preparing to pass their year-end tax bill as soon as this week, but getting it to President Trump's desk will require support from Senate Democrats that they don't yet have. Most items in the bill--encouraging retirement savings, extending lapsed tax breaks and assisting disaster victims--have bipartisan support. Democrats are wary, however, of passing technical corrections to last year's tax law and they're miffed about not being part of horse-trading negotiations so far. Any year-end tax deal needs to come together soon to get added to a must-pass bill.
- European car makers' and suppliers' shares trade lower, weighed down by trade worries. "President Trump warned that levy on Chinese imports might be increased, and further tariffs could be announced. This dampened investors' hopes about a deal being struck at the G20 summit," says David Madden of CMC Markets. Italy's budget and Brexit also fuel investors' fears, he says. The Stoxx Europe 600 Autos & Parts trades 2.5% lower. Volkswagen shares trade 4.2% lower, while Daimler and BMW are down 2.4% and 1.3% respectively. Renault trades 1.0% lower, while Peugeot is down 0.9%. French supplier Valeo is down 5.2%, while German competitors Continental and Schaeffler are down 3.6% and 3.3% respectively.
- The head of the Canadian union representing General Motors workers in Canada raised stakes in a fight against plans to close the Oshawa plant. In an interview broadcast Tuesday on Canada's BNN Bloomberg network, Unifor president Jerry Dias said he's scheduled to meet the head of the UAW next week, and if it was up to him, "we'd shut down every GM manufacturing plant in Canada and the US until [GM] got the message. That's how I would deal with it." He also said--repeating comments from Monday--that Canada should consider slapping tariffs on imported Mexican-made vehicles, given how GM is not targeting Mexican plants for closing. Dias is scheduled to meet Canada PM Justin Trudeau Tuesday in Ottawa.
- Adding to the ferrous pressure on London base metals are remarks from President Trump in an interview with The Wall Street Journal that it was "highly unlikely" that he would accept Beijing's request to hold off on increasing tariff rates on Chinese goods from the beginning of January 2019. Speaking ahead of his scheduled meeting with Chinese counterpart Xi Jinping on the sidelines of this week's Group of 20 nations summit in Buenos Aires, Mr. Trump said that while he would only accept a deal that opened China's markets to competition from U.S. companies, he also expected to "make a great deal with China." The prospective meeting between the U.S. and Chinese leaders will be in investors' sights, as will any communication between Russian and Saudi leaders regarding oil production.
- The ruble has clawed back much of the ground it lost after Russia seized three Ukrainian naval ships on Sunday, raising the threat of hostilities between the neighbors and the possibility of another round of Western sanctions on Moscow. But Piotr Matys, an FX strategist at Rabobank, says the currency remains vulnerable despite Tuesday's rally, particularly since Russia's economy faces another headwind in the form of falling oil prices. "This incident raises the chances of sanctions being imposed on Russia at a time when economic growth already seems to be weakening," he said. The ruble slumped in 2014 when Russia was hit with Western sanctions after annexing Crimea. It last trades 0.5% higher against the dollar; the MOEX Russia stock index is up 0.6%.
- US stock futures weaker after Monday's 354 point Dow rally as investors react to comments from President Trump that the US could put tariffs on Apple iPhones and laptop computers imported from China. The remarks came in a WSJ interview ahead of Trump's meeting with China's President Xi Jinping later this week at the Group of 20 summit in Buenos Aires. Apple shares off 2% in premarket trading. In corporate news, United Technologies will spin off its Otis division and Carrier building systems businesses, leaving UTC a pure-play aerospace company. Salesforce is expected to report 3Q results after the bell. Investors will look for signs of whether strong corporate-tech buying has eased amid the US-China trade dispute and slowing global growth. S&P futures are down 8.50 points.
- Russia has unveiled plans to issue euro-denominated government debt, according to media reports citing officials at Russia's finance ministry. Russia would be issuing a bond with a seven-year maturity and 3% yield in a benchamark-size transaction, the reports say. The move could be an effort to reduce exposure to debt issued in U.S. dollars in light of a possible new wave of U.S. sanctions as tensions between Washington and Moscow escalate. On Monday, U.S. United Nations Ambassador Nikki Haley criticized Russia at an Emergency Security Council and called for the release of Ukrainian ships and crew seized by Russia over the weekend. Mrs Haley didn't elaborate on whether the U.S was considering ramping up sanctions against Moscow.

Nov 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil slipped, pulled down by record Saudi Arabian production even as OPEC's top producer pushes for supply cuts ahead of the group's meeting in Austria next week.
- Gold prices inched lower as the dollar held firm, while investors awaited clues on the pace of future U.S. interest rate hikes and as the U.S.-China trade spat sours ahead of a G20 summit.
- London copper prices extended losses into a third straight session following a report that U.S. President Donald Trump expects to move ahead with raising tariffs on $200 billion of Chinese imports.
- Chicago soybeans were largely unchanged, with the market trading near previous session's lowest in more than three weeks, on pressure from concerns over lack of demand for U.S. supplies amid Washington-Beijing trade tensions.

- UBS says don't read too much into Trump's remarks to WSJ that iPhones could face 10% tariffs starting in January, saying they're likely a negotiating tactic ahead of the G-20 summit later this week. The interview, published following the end of regular stock-market trading, sent shares of Apple down 2.1% after-hours. The investment bank estimates that 10% tariffs would lower its current FY EPS view for Apple ($13.06) by 33 cents.
- The ongoing trade dispute between China and the US--which has led to the imposition of tariffs on grain imports-- combined with excellent growing weather will keep US milk prices anchored below recent peaks, says Fitch Solutions in a note; "Strong US production owing to good producer margins will prevent another significant rally in milk prices over the coming months." It, however, maintains its CME milk price forecasts and continues to expect them to average marginally higher over the coming years with prices averaging US$14.50/Cwt in 2018 and US$15.00/Cwt in 2019, rising modestly to US$15.75/Cwt in 2021 and 2022. CME November Class III Milk Futures settled at $14.48/Cwt.
- The Trump administration's latest plan to tackle drug prices doesn't appear to include imminent changes to how Medicare treats rebates, providing relief to insurers and pharmacy benefit managers. The government is seeking, however, to use other discounts--those provided by pharmacies to health-insurers--to lower patients' out-of-pocket costs by as much as $9.2B over a decade. The initiative would also save drugmakers as much as $5.8B over 10 years by reducing the discounts they provide to certain high-cost beneficiaries. CVS gains 0.2% after-hours while UnitedHealth is flat.
- New proposed regulations from the Internal Revenue Service and Treasury Department will help companies calculate whether they face limits on deducting their business interest costs. The rules will have their biggest effect on highly leveraged companies. They include provisions that attempt to define interest in ways that companies can't work around by creating economically similar arrangements.
- The Financial Stability Board made it official Monday, appointing Federal Reserve Vice Chairman for Supervision Randal Quarles as its new chair for a three-year term starting Dec. 2. The US push to make him head of the global group of financial regulators had been in danger due to concerns about President Trump's posture toward international institutions. Now the US will be engaged at the highest levels of the FSB. Dutch central bank chief Klaas Knot will serve as FSB vice chair alongside Quarles and then serve a three-year term as chair starting Dec. 2, 2021, the FSB said.
- The G20 summit on Friday and Saturday will set the tone for the U.S. dollar against the Chinese yuan, but also the euro, says Kit Juckes, macro strategist at Societe Generale. "The nature and tone of talks between president Xi ad president Trump in Buenos Aires may play a significant role in the mood in the forex market for the rest of 2018," he says. Expectations are that the talks won't result "in a meaningful thawing in trade relations" between the U.S. and China, says Mr. Juckes. If it does, the dollar will fall versus the yuan, he says. "If there's downside potential in USD/CNH, then there's less downside room in the near term for EUR/USD," he says.
- Trump's agenda could switch toward supporting US economic growth ahead of its own re-election campaign in 2020, says UOB Kay Hian, saying that may include easing tension with China. Pursuing "a win-win trade deal with China" is a key as the investment bank is "cautiously optimistic" about progress after the week-end scheduled meeting between the countries' presidents at the G-20 summit. Trade-related uncertainty has been a global economic and market pressure point. 

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

- Oil prices clawed back some losses from a nearly 8 percent plunge the previous session, with Brent jumping back above $60 per barrel, but sentiment remained weak amid a broad sell-off in financial markets in past weeks.
- Gold prices were steady, capped by headwinds from a firm dollar, while investors looked to the G20 meeting this week for signs of a thaw in the Sino-U.S. trade conflict.
- Steel-linked metals nickel and zinc lost ground as expectations of weaker demand from Chinese mills dented prices.
- Chicago wheat futures rose for a second session as Egypt's purchase of U.S. cargoes in a tender boosted expectations of higher demand for North American supplies.

- The Financial Stability Board made it official Monday, appointing Federal Reserve Vice Chairman for Supervision Randal Quarles as its new chair for a three-year term starting Dec. 2. The US push to make him head of the global group of financial regulators had been in danger due to concerns about President Trump's posture toward international institutions. Now the US will be engaged at the highest levels of the FSB. Dutch central bank chief Klaas Knot will serve as FSB vice chair alongside Quarles and then serve a three-year term as chair starting Dec. 2, 2021, the FSB said.
- The G20 summit on Friday and Saturday will set the tone for the U.S. dollar against the Chinese yuan, but also the euro, says Kit Juckes, macro strategist at Societe Generale. "The nature and tone of talks between president Xi ad president Trump in Buenos Aires may play a significant role in the mood in the forex market for the rest of 2018," he says. Expectations are that the talks won't result "in a meaningful thawing in trade relations" between the U.S. and China, says Mr. Juckes. If it does, the dollar will fall versus the yuan, he says. "If there's downside potential in USD/CNH, then there's less downside room in the near term for EUR/USD," he says.
- Trump's agenda could switch toward supporting US economic growth ahead of its own re-election campaign in 2020, says UOB Kay Hian, saying that may include easing tension with China. Pursuing "a win-win trade deal with China" is a key as the investment bank is "cautiously optimistic" about progress after the week-end scheduled meeting between the countries' presidents at the G-20 summit. Trade-related uncertainty has been a global economic and market pressure point.
- If Trump agrees to a temporary cease fire with Xi this weekend, the Aussie dollar's rally can extend to around US$0.74, posits NAB. That as the bank's US$0.71 year-end forecast, set at the beginning of 4Q, was predicated on Trump more likely than not proceeding to ratchet up, to 25%, tariffs on $200 billion of Chinese imports currently taxed at 10%. NAB has also anticipated the US giving the requisite 60 days' notice of Trump's intension to extend tariffs to all Chinese imports come February. But developments this quarter, including a global stock slide, now has NAB believing that some form of agreement could be reached in Buenos Aires.

Nov 26 - Top banks' commodities revenue up 32 pct in first three quarters - report 

Commodities-related revenue at the 12 biggest investment banks was 32 percent higher in the first nine months of this year than in the same period in 2017, pulled up by volatile power, gas and base metals prices, consultancy Coalition said on Monday. Revenue from commodity trading, selling derivatives to investors and other activities in the sector climbed to $2.9 billion, the financial industry analytics firm said in a report. Click here to read full stories.    

Nov 26 - Noble Group extends deadline for $3.5 bln restructuring amid regulatory probe 

Noble Group Ltd is pushing back this month's deadline to complete its make-or-break $3.5 billion debt restructuring deal to Dec. 11, amid a probe by Singapore authorities into suspected false and misleading statements issued by the company. Noble, once Asia's top commodity trader, has seen its market value all but wiped out from $6 billion in February 2015 after its accounting was questioned by Iceberg Research. To save itself, Noble has shrunk its business by selling billions of dollars of assets, taking hefty writedowns and cutting hundreds of jobs, while defending its accounting. Click here to read full stories.

Nov 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slumped to 2018 lows in choppy trading, pulled down an emerging crude supply overhang amid a bleak economic outlook.
- Gold prices inched up set to rise for the second straight week, on safe-haven demand for the metal ahead of the G20 summit next week where the leaders of the United States and China are set to discuss their trade dispute.
- London and Shanghai nickel fell further with the market on track for its fifth day of declines on concerns about a supply surplus in 2019 and slowing demand in top consumer China.
- The euro and sterling edged higher against the dollar after Britain and the European Union agreed a draft text setting out their future relationship before a summit on Sunday.
- The latest Market Talks covering President Donald Trump and U.S. politics. There are likely to be many competing media stories trying to predict what Chinese president Xi and US president Trump will agree to or not at the G20 meeting which begins in Argentina on Nov. 30.
- The wildcard for FX in the week ahead is the US-China trade spat, says Westpac. There are likely to be many competing media stories trying to predict what Chinese president Xi and US president Trump will agree to or not at the G20 meeting which begins in Argentina on Nov. 30. The Aussie dollar would be one of the key beneficiaries of any major improvement in US-China relations, the bank adds.
- Long-term investors see value in buying sterling at levels below $1.30, says Neil Mellor, currency strategist at Bank of New York Mellon. "Long-term investors, especially in the U.S., have seen value in cable [sterling/dollar] below 1.30," he says, adding that such levels therefore prompt demand to buy the pound. This may partly explain sterling's strong rise following the U.K.-EU draft agreement on Brexit on Thursday, despite many doubts about whether Prime Minister Theresa May can secure enough votes in parliament for the deal. GBP/USD trades at 1.2864, up 0.7% on the day, off an earlier one-week high of 1.2929, according to FactSet.
- It seems the only punishment Italy has received so far for disrespecting EU fiscal rules in its budget plans has come from market participants, instead of the bloc, says MUFG, pointing to a rise in Italian government bond yields compared with German ones. This undermines "the outlook for growth if sustained," the bank says. According to Tradeweb, the BTP-Bund yield spread has widened to around 321 basis points from around 113 bps before Italy's populist government laid out its budgetary and fiscal aims. EU finance ministers are due to meet in December and January to discuss the EC's decision Wednesday to again reject the budget plans as well as possible financial sanctions.
- Nordic markets are expected to open slightly lower Thursday with IG calling the OMXS30 down 0.2% at around 1475. "After a lacklustre start of the week for equity markets, shares rebounded yesterday," says SEB. "The positive mood started in Europe after reports that Deputy PM Salvini may allow some adjustments to the rejected Italian budget." In the U.S., the S&P 500 index rose modestly by 0.3%, supported by relief among tech and energy stocks, with the energy sector lifted by a small rally in oil prices, SEB adds. "U.S. markets are closed today due to the Thanksgiving holiday, which is also expected to reduce activity in Europe." OMXS30 closed at 1478.44, OMXN40 at 1432.71 and OBX at 791.23.

Nov 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slipped after U.S. crude inventories swelled to their highest level since December 2017 amid concerns of an emerging global glut, although the potential for a supply cut by OPEC prevented further drops.
- Gold prices held firm after hitting the highest in two weeks in the previous session, with improved risk appetite weighing on the U.S. dollar.
- Copper prices slid and other base metals traded in narrow ranges with festering Sino-U.S. trade tensions stoking worries over the outlook for global economic growth.
- U.S. soybean futures turned higher on optimism that Washington and Beijing will make progress at the upcoming G20 leaders summit toward resolving the trade dispute that has disrupted American exports of the oilseed.
- Nordic markets are expected to open slightly lower Thursday with IG calling the OMXS30 down 0.2% at around 1475. "After a lacklustre start of the week for equity markets, shares rebounded yesterday," says SEB. "The positive mood started in Europe after reports that Deputy PM Salvini may allow some adjustments to the rejected Italian budget." In the U.S., the S&P 500 index rose modestly by 0.3%, supported by relief among tech and energy stocks, with the energy sector lifted by a small rally in oil prices, SEB adds. "U.S. markets are closed today due to the Thanksgiving holiday, which is also expected to reduce activity in Europe." OMXS30 closed at 1478.44, OMXN40 at 1432.71 and OBX at 791.23.
- Trump calling for still-lower oil prices may be aimed at stimulating the economy, says RBC, but it adds that further declines could could end up doing more harm than good--particularly for US oil producers. Meanwhie, US Bank Wealth Management's Rob Haworth says prices could remain under pressure unless expectations of an OPEC-led prodution look more probable. Futures remain lower at midday in Asia, reversing the afternoon uptick seen in the US. They're currently down 0.4%.
- Canadian government signaled it is ready to introduce legislation to bring a month-old labor disruption at Canada's postal-mail carrier to an end, following pressure from companies such as eBay and Etsy worried about lost sales in the holiday period. Canadian Labor Minister Patty Hajdu said she's appointed a special mediator to work with state-owned Canada Post and the Canadian Union of Postal Workers to reach an agreement over the next few days. The government is "prepared to [introduce] legislation if we do not see a resolution," Hajdu said. The postal union has run a series of rotating strikes for the past month, targeting certain regions for specific timeframes. eBay and Etsy, among others, have written to PM Justin Trudeau to bring labor dispute to an end.
- The American manufacturing sector won't benefit from more U.S. tariffs on Chinese products, says George Saravelos, global co-head of forex research at Deutsche Bank. Assembly would "simply shift to other Asian countries instead of the U.S., most likely Vietnam," Mr. Saravelos says. This shift "is likely to be economically disruptive and costly to the U.S. consumer," he says. Moreover, "potential gains for a country that replaces China as the assembler and distributor of tech products are more limited than they first might appear."
- The euro's reaction to the European Commission decision to recommend an excessive deficit procedure for Italy is fairly muted, given that most in the market had expected that outcome. The euro is last up 0.2% at $1.1396, only slightly below a level of around $1.1409 before the announcement. ING said previously it expected the common currency to fluctuate between $1.1350 and $1.1450 on Wednesday given the uncertainty, adding that the procedure would last for months and that this should weigh on the euro. The EC says Italy's draft budget plan is not in compliance with the eurozone debt criteria. The country's public debt of 131% of gross domestic product exceeds the 60% cap under European rules, the EC says.
- The euro may fall during the day as the European Commission is due to publish its report on the Italian budget and this may widen the spread between the yields on Italian and German government bonds, "thus putting pressure on the euro," says Commerzbank. Still, the common currency is unlikely to fall by much against the dollar because "by now" investors realise that the U.S. increasing interest rates "no longer constitutes a positive argument for the greenback." Secondary data in the U.S. may "give the dollar a quick slap around the ears ahead of the weekend," Commerzbank adds. For now, the euro trades higher, last up 0.3% at $1.1402 due to broad dollar weakness.

Nov 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil bounced by around $1 a barrel to claw back some of the previous day's 6 percent plunge, lifted by a report of an unexpected decline in U.S. commercial crude inventories and record Indian crude imports.
- Gold prices eased slightly as the U.S. dollar was boosted by safe-haven demand as investors eyed U.S.-China tensions amid heightened risk aversion.
- Copper prices fell for a second session as trade tensions between the United States and China escalated ahead of an expected high-stakes meeting between the two nations next week.
- Chicago soybean futures dipped with the market struggling in the face of Washington-Beijing trade war, which curbed U.S. bean exports to top buyer China.
- The US-China trade dispute is boosting costs for medical-device maker Medtronic. The tariffs each country has imposed on imports from the other have caused "some pressure on costs," Medtronic CEO Omar Ishrak tells the WSJ after company reports fiscal 2Q earnings. The Ireland-based company manufactures products in both the US and China. The hit from the tariffs combined with costs from Medtronic's pending acquisition of Mazor Robotics are equivalent to about 5 cents a share for its fiscal year ending in April 2019. Still, the company reiterated its forecast of adjusted earnings of $5.10 to $5.15 a share for the year. "We're here to manage what comes at us," Ishrak said. "We know that China's an important market for us. We'll have to offset headwinds that come along." Shares rise 2.9% to $93.02.
- The FTSE 100 falls 0.6%, or 39.61 points, to 6961.28 as multiple concerns drive European investors to sit on the sidelines. "Equities have moved lower once again this morning, as a cocktail of worries militates against any urge to 'buy the dip,'" says Chris Beauchamp at IG. "The selling continues across markets, driven by trade wars, tech-sector concerns and the ongoing impasse with the Italian budget. Oh, and Brexit, where the U.K. government's now likely to lose the DUP's support." Catering contractor Compass Group and safety-technology group Halma are the top risers after earnings. Chilean copper miner Antofagasta is the biggest faller, down 3.9%, as the copper price drops.
- Eurozone government bond yields are unattractive relative to global peers and are vulnerable to the potential of an improving growth outlook, says BlackRock. The asset manager says it sees core eurozone sovereigns as ballast against ongoing political risks, while spreads of peripheral sovereigns reflect "quite a bit of risk." BlackRock says rising rate differentials have made high-quality European sovereigns more appealing for global investors with currency hedges.
- The euro is likely to be stagnant "because investors will probably be reluctant to take action ahead of the EU Commission's expected response to the Italian budget draft tomorrow," says UniCredit. Euro is last trading slightly higher at $1.1464 and it is likely to consolidate around 1.14 "as market caution and softer U.S. data are raising doubts about more Federal Reserve rate hikes," UniCredit says. This favors "some spread tightening against Europe, which is also helping to reduce selling pressure on the common currency."
- Uncertainty is likely to loom over sterling Tuesday, given that no date has been set for the U.K. Parliament to vote on the Brexit deal and Prime Minister Theresa May could face a no-confidence vote, says UniCredit. The pound is flat at $1.2865 and EUR/GBP is slightly lower at 0.8907. "Today's trading session is likely to prove directionless," UniCredit says.
- Navigating the oil market has become a tall order due to rising geopolitical uncertainties and US foreign policies concerning OPEC and other top producers, says JPMorgan. Oil-demand growth over the next couple of quarters will help balance rising supplies, but it says demand could structurally slow further into 2019-2020. As such, "OPEC-plus will need to act decisively and rapidly with a combined supply cut of over 1.2mbd on average for the whole of 2019 (and over 1.5mbd in 1Q19) if they want to avoid a further drop in oil prices. We believe they are likely to announce a further extension to the existing accord at the next Annual OPEC conference on 06 Dec."

Nov 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets lost steam as a deteriorating economic outlook and a surge in U.S. production outweighed expected supply cuts by the Organization of the Petroleum Exporting Countries (OPEC).
- Gold inched lower trading in a tight range ahead of a U.S. holiday, but the metal held above the 1,220 level as the dollar was pressured by weak U.S. economic data and a clouded interest rate outlook.
- London copper prices broke a five-session winning streak as conflicting signals over the trade dispute between the United States and China weighed on investor sentiment.
- U.S. soybean futures edged higher rebounding from a near two-week low touched in the previous session, though gains were checked amid fears of a prolonged U.S.-China trade war.
- Uncertainty is likely to loom over sterling Tuesday, given that no date has been set for the U.K. Parliament to vote on the Brexit deal and Prime Minister Theresa May could face a no-confidence vote, says UniCredit. The pound is flat at $1.2865 and EUR/GBP is slightly lower at 0.8907. "Today's trading session is likely to prove directionless," UniCredit says.
- Navigating the oil market has become a tall order due to rising geopolitical uncertainties and US foreign policies concerning OPEC and other top producers, says JPMorgan. Oil-demand growth over the next couple of quarters will help balance rising supplies, but it says demand could structurally slow further into 2019-2020. As such, "OPEC-plus will need to act decisively and rapidly with a combined supply cut of over 1.2mbd on average for the whole of 2019 (and over 1.5mbd in 1Q19) if they want to avoid a further drop in oil prices. We believe they are likely to announce a further extension to the existing accord at the next Annual OPEC conference on 06 Dec."
- The emerging market selling bonanza shouldn't end in 2018, but extend into 2019, says Societe Generale. "Bond yields should rise in more countries than they fall in," SocGen analysts say. However, improved Chinese economic growth, ease in U.S.-China trade disputes and a slower pace of Federal Reserve monetary policy could help emerging markets and their currencies, "at least temporarily." Moreover, if oil prices were to fall further, currencies of oil-importing countries, such as Turkey, South Africa and India, would rise against the dollar, SocGen says.
- Canadians' opinions about the US have reached their lowest level in more than 30 years, a poll by Environics Institute found. General views of the US declined sharply in 2018, the poll found, with fewer than four in 10 Canadians now holding a favorable opinion. That's down from around five in 10 Canadians last year and is now at its lowest point since the polling company began asking the question in 1982. Relations between the Trump administration and Canadian Prime Minister Justin Trudeau's government have been fraught over the past year, in part because of contentious negotiations to rewrite the North American Free Trade Agreement. The Environics survey was based on phone interviews with 2,000 Canadians during the first two weeks of October.
- The euro is unlikely to rise, but it also unlikely to fall, says Commerzbank, as long as the spread between Italian and German government bonds remains around the same levels. "With risk premiums in the area of 305 to 315 basis points for 10-year [Italian] government bonds versus Bunds, the bond market still sees an increased risk in the Italian government's fiscal policy. However, what is relevant for the foreign exchange market is that this risk premium has not widened recently, but is moving sideways in the above range," the bank says. The spread was last at 312 bps, according to Tradeweb. The euro is last up 0.1% at $1.1433.
- Sterling slides in midday trading, with traders citing reports that there may be enough support among Conservative lawmakers to call a vote of no confidence in U.K. Prime Minister Theresa May. The pound's fall followed a speech by the PM in which she called for businesses to back her draft Brexit agreement. "We're seeing investors getting really scared about what's going on with the Brexit story," says Carlo Alberto de Casa, strategist at online broker ActivTrades. "There's no clarity about what will happen, and whether Theresa May could stay." GBP/USD is last down 0.1% at 1.2816. It earlier dropped from around 1.2875 to around 1.2800 within several minutes.
- The Stoxx Europe 600 rises 0.1%, or 0.45 points, to 358.12 as an upbeat Asia session helps traders shrug off continued European political jitters. The DAX falls 0.1% and the CAC 40 is broadly flat. "U.K. and Italian politics are still unsettled and U.S.-China trade tensions rumble on," says David Madden at CMC Markets. "Theresa May's still hanging on as British Prime Minister even though she's on shaky ground and dealers await the EU's response to Italy's budget plans." Shares in Renault fall 13% after reports that Chief Executive Carlos Ghosn is facing arrest in Japan on suspicion of violating financial trading rules by under-reporting his salary.
- Even though some Federal Reserve members have signalled that the central bank is approaching a neutral interest rate, any rise in EUR/USD is likely to be limited because of concerns over the Italian budget, says MUFG. "In these circumstances, it is difficult to see the euro building much on gains from late last week against the U.S. dollar," the bank says. The European Commission is expected to respond on Wednesday to Italy's budget re-submission and the answer is likely to be negative, says MUFG. Moreover, there is "potential volatility from co-movement with the pound from Brexit developments as well." EUR/USD is last flat at 1.1420.

Nov 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as traders expected top exporter Saudi Arabia to push producer club OPEC to cut supply towards year-end.
- Gold prices were steady with the dollar subdued after comments from Federal Reserve officials showing caution over the global economy, prompting traders to reassess the pace of future U.S. interest rate hikes.
- London copper was almost unchanged as tensions between Washington and Beijing at a regional summit renewed concerns over a prolonged trade war, weighing on prices although the market was supported by tightening supplies.
- Chicago soybean futures lost ground easing for the first time in four sessions as renewed concerns over the prolonged U.S.-China trade war weighed on the market.
- EUR/USD is slightly lower at 1.1408 and chances are it will remain subdued in the short term, analysts say. One main risk for the common currency is Italy's budget and fiscal-deficit projections, which are higher than the European Commission deems acceptable. Last week, Italy had the chance to resubmit its budget proposal, but made no major changes. "Three unnamed sources said the EC will take the first step to discipline Italy over its 2019 budget in the excessive deficit procedure on Wednesday," says RBC. Indicators point to a further deterioration in manufacturing PMIs," the bank adds.
- UBS has turned cautious on the European Central Bank's policy normalization plans, says Reinhard Cluse, chief European economist. He says Europe "looks weaker" than it actually is, however. Political risks, such as Brexit, the Italian budget and U.S. protectionism likely "won't materialize" in 2019, he says. "We don't see financial escalation in Italy and we haven't factored 25% on European autos in our base case scenarios," he says. ECB President Mario Draghi opened the door for a long period of low  interest rates in the eurozone during his speech on Friday.
- Some economists have said that the only way China could retaliate against U.S. tariffs is through weakening its currency, which would make Chinese exports more attractive. But Tao Wang, chief China economist at UBS, says the country is unlikely to do so because it wants to "minimalize hostility" and fears "losing control on its currency's foreign exchange." China is unlikely to be confrontational as it wants to embrace globalization, Ms. Wang says. Moreover, there are some many "unknown risks from overshooting" foreign-exchange levels, she says. The central bank recently bought foreign currencies when the dollar was approaching CNY7. The USD/CNY is flat at 6.9373.
- President Nicolas Maduro says his country will increase gold exports, defying recent US sanctions that barred American participation in the trade. Washington has charged that Venezuelan officials are using the sales to loot the remaining riches of the embattled nation. Maduro says Venezuela aims to export $5B of gold annually to help offset falling oil production and finance the leftist government's social programs. Trade figures from Turkey and the United Arab Emirates show that the two countries received nearly $2B in Venezuelan gold since December. "Are we going to obey the U.S.'s orders? Never!" Maduro says. "This is for the happiness of our people. I'm not producing gold to enrich magnates."
- If U.S. President Trump and China President Xi Jinping indicate at the G20 summit that there will be a ceasefire in their trade spat, the dollar's upward trend will pause, but risky currencies such as the Australian dollar and New Zealand dollar will rise, MUFG says. Negotiators have reportedly stepped up efforts after President Trump and Xi spoke on the phone on Nov. 1 to discuss trade. "However, it is still seen as too late to reach a broad-based deal with more substance," Lee Hardman, currency analyst at MUFG, says. "Some kind of handshake deal like the one agreed when EU Commission President Jean-Claude Juncker met with President Trump in July is seen as more likely," Mr. Hardman says.
- Dozens of hunger, environmental and other advocacy groups send a letter to top agricultural lawmakers urging them to pass a farm bill as the clock runs out on Congress's lame-duck session. Groups ranging from the Sierra Club to Hunger Free America to the Pesticide Action Network pushed for a final bill similar to Senate's version, which passed that chamber with broad bipartisan support, and leaves out controversial food-stamp work requirements at the core of the House's version. Work requirements are one area of disagreement that has held up progress on the bill, more than a month after the previous legislation expired.
- Governments in small open economies can take steps to help central banks maintain the independence of their monetary policy, Bank of Canada Governor Stephen Poloz told participants at a recent conference in Denmark. A paper reflecting Poloz's remarks notes that global financial integration has made it harder for central banks to pursue independent policy. The paper outlines three options that governments could take to help with this: ramping up fiscal spending at times when monetary policy is near its limits, macro prudential policies such as tightening - or loosening - mortgage-lending rules to blunt the impacts of foreign rate shocks, and stepping in during a credit crunch. All three options require up front investment and a willingness to adjust in both directions, an abstract of the paper says.

Nov 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose amid expectations of supply cuts from OPEC, although record U.S. production dragged.
- Gold prices rose, having hit a one-week high earlier in the session, as investors sought safe-haven assets amid fears of a chaotic departure for Britain from the European Union. 
- Shanghai zinc jumped more than 3 percent to its strongest in more than two weeks as LME stockpiles fell to a decade-low, with signs that China may be moving to calm its trade dispute with the United States also boosting prices.
- U.S. soybean futures edged up for a third session, supported by expectations that the United States and top soybean buyer China, now tied in a tit-for-tat tariff war, will resume trade talks.
- The British pound struggled to stay afloat in Asian trade having suffered a tumultuous slide overnight, as investors feared political turmoil in the country could see it crash out of the European Union without a divorce deal.
- Dozens of hunger, environmental and other advocacy groups send a letter to top agricultural lawmakers urging them to pass a farm bill as the clock runs out on Congress's lame-duck session. Groups ranging from the Sierra Club to Hunger Free America to the Pesticide Action Network pushed for a final bill similar to Senate's version, which passed that chamber with broad bipartisan support, and leaves out controversial food-stamp work requirements at the core of the House's version. Work requirements are one area of disagreement that has held up progress on the bill, more than a month after the previous legislation expired.
- Governments in small open economies can take steps to help central banks maintain the independence of their monetary policy, Bank of Canada Governor Stephen Poloz told participants at a recent conference in Denmark. A paper reflecting Poloz's remarks notes that global financial integration has made it harder for central banks to pursue independent policy. The paper outlines three options that governments could take to help with this: ramping up fiscal spending at times when monetary policy is near its limits, macro prudential policies such as tightening - or loosening - mortgage-lending rules to blunt the impacts of foreign rate shocks, and stepping in during a credit crunch. All three options require up front investment and a willingness to adjust in both directions, an abstract of the paper says.
- Europe will suffer if the U.K. exits from the European Union, and more so if the U.K. doesn't agree on a trade deal before its departure, says Reinhard Cluse, chief European economist at UBS. Corporate fixed investment and trade could slow down, he says. However, a number of corporates would likely want to relocate to Europe, having a positive impact on the economy, Mr. Cluse says. Moreover, European household spending will likely remain robust, easing the impact on the economy. "We don't expect household spending to be affected," he adds. EUR/GBP last up 1.5% at 0.8840, after having risen to a two-week high of 0.8847.
- The U.K. cabinet's non-unanimous approval of the draft Brexit agreement points to several hurdles ahead, says Danske Bank. "Markets are still not getting overexcited just yet," it says. The bank notes that the cabinet approval was expected but that investors are watching to see if Brexit hardliners in the Conservative Party will challenge PM Theresa May as party leader and if the deal can be passed through parliament. "We expect to see bigger movements in GBP and until then GBP will stay volatile," the bank says. GBP/EUR down 0.87% at 1.1388, following the resignation of U.K. Brexit Secretary Dominic Raab.
- There is still a high risk that some U.K. ministers may resign and that Prime Minister Theresa May could face a no-confidence vote, says ING, after the Cabinet on Wednesday agreed on the text of a U.K.-EU trade deal after Brexit. Moreover, "the main hurdle of the deal being voted through parliament remains," it says. Therefore, the price action in sterling "remains tricky." Such an environment, "characterized by the material division on the U.K. political scene, suggests caution toward the pound ahead of the eventual parliament vote on the Brexit deal," which will likely be next month. Sterling is flat against the dollar at 1.2986 and EUR/GBP is up 0.3% at 0.8735.
- Though Trump's tweets have sparked fears that OPEC may buckle and not cut oil production at a time of record output globally, RBC's Helima Croft says the cartel will likely move ahead. "We do not believe that the leadership will sacrifice their country's economic and social welfare to please" Trump. She thinks Riyadh will likely anchor a substantial production cut next month, with Russia likely joining again with OPEC. Meanwhile, yesterday's lowered 2019 demand projections from the IEA leaves little recourse for the market beyond OPEC lowering production, says Rob Haworth at U.S. Bank Wealth Management. Oil futures remain modestly lower in midday Asian trading after late Wednesday's downbeat inventory data from a US industry group.
- While the US and allies prepare to step up engagement with Pacific island countries at the APEC leaders' meeting, a new report says infrastructure pledges are unlikely to match China's growing trade clout in the region. The US, Japan and Australia are expected to fund an internet cable network connecting cities in Papua New Guinea. But development experts at Australian National University say the Pacific is moving closer to China through trade, with a 12-fold increase in the value of exports over a decade. "While current media and policy interest has focused primarily on aid and loans, arguably trade will be more important in the long run, both for Pacific economies and Australia's relationships in the region," ANU says.
- A lobbying group for major auto makers came out swinging today against proposed US tariffs on imported cars and auto parts. The Alliance of Automobile Manufacturers urged the administration to halt its investigation of auto imports, saying tariffs would "seriously jeopardize the vitality of the automotive sector" by raising costs and slowing production. "We strongly encourage the administration to lift the threat of increased auto tariffs." The industry group represents 12 of the largest domestic and foreign auto makers with operations in the US. The comments were in a statement prepared for a US International Trade Commission hearing scheduled for Thursday.
- The RBA is more focused on issues around wage growth than falling house prices, says Morgan Stanley: The US bank continues to see wage growth, and future expectations for the labor market as the most important signal for an RBA tightening cycle. This is despite the sharp correction in house prices that it expects to track to a real 10-15% decline from the peak. What would derail this would be a large second-round effect from the house price declines, with wealth effects severely dampening consumer spending and affecting jobs.

Nov 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slipped, weighed down by rising supply going into a market in which consumption is expected to slow down amid a glum economic outlook. 
- Gold prices held steady, after rising nearly 1 percent in the previous session, as the dollar slipped further from a 16-month peak hit earlier in the week.
- London copper inched higher along with other metals, supported by expectations of potential stimulus measures in China to boost the world's No. 2 economy after recent data pointed to cooling growth.
- U.S. soybean futures rose for a second session, supported by fresh export sales and slower-than-anticipated harvesting, with wheat prices recovering after a two-day slide.
- There is still a high risk that some U.K. ministers may resign and that Prime Minister Theresa May could face a no-confidence vote, says ING, after the Cabinet on Wednesday agreed on the text of a U.K.-EU trade deal after Brexit. Moreover, "the main hurdle of the deal being voted through parliament remains," it says. Therefore, the price action in sterling "remains tricky." Such an environment, "characterized by the material division on the U.K. political scene, suggests caution toward the pound ahead of the eventual parliament vote on the Brexit deal," which will likely be next month. Sterling is flat against the dollar at 1.2986 and EUR/GBP is up 0.3% at 0.8735.
- Though Trump's tweets have sparked fears that OPEC may buckle and not cut oil production at a time of record output globally, RBC's Helima Croft says the cartel will likely move ahead. "We do not believe that the leadership will sacrifice their country's economic and social welfare to please" Trump. She thinks Riyadh will likely anchor a substantial production cut next month, with Russia likely joining again with OPEC. Meanwhile, yesterday's lowered 2019 demand projections from the IEA leaves little recourse for the market beyond OPEC lowering production, says Rob Haworth at U.S. Bank Wealth Management. Oil futures remain modestly lower in midday Asian trading after late Wednesday's downbeat inventory data from a US industry group.
- While the US and allies prepare to step up engagement with Pacific island countries at the APEC leaders' meeting, a new report says infrastructure pledges are unlikely to match China's growing trade clout in the region. The US, Japan and Australia are expected to fund an internet cable network connecting cities in Papua New Guinea. But development experts at Australian National University say the Pacific is moving closer to China through trade, with a 12-fold increase in the value of exports over a decade. "While current media and policy interest has focused primarily on aid and loans, arguably trade will be more important in the long run, both for Pacific economies and Australia's relationships in the region," ANU says.
- A lobbying group for major auto makers came out swinging today against proposed US tariffs on imported cars and auto parts. The Alliance of Automobile Manufacturers urged the administration to halt its investigation of auto imports, saying tariffs would "seriously jeopardize the vitality of the automotive sector" by raising costs and slowing production. "We strongly encourage the administration to lift the threat of increased auto tariffs." The industry group represents 12 of the largest domestic and foreign auto makers with operations in the US. The comments were in a statement prepared for a US International Trade Commission hearing scheduled for Thursday.
- The RBA is more focused on issues around wage growth than falling house prices, says Morgan Stanley: The US bank continues to see wage growth, and future expectations for the labor market as the most important signal for an RBA tightening cycle. This is despite the sharp correction in house prices that it expects to track to a real 10-15% decline from the peak. What would derail this would be a large second-round effect from the house price declines, with wealth effects severely dampening consumer spending and affecting jobs.
- A top Federal Reserve expressed skepticism about the value of cryptocurrencies as a medium of exchange. "They really aren't money yet," said Randal Quarles, the Fed's regulatory czar, speaking before the House Financial Services Committee. "They're an asset that has been highly volatile in price."
- The Federal Deposit Insurance Corp. signals its intention to ease restrictions on high-interest personal loans, a move that could encourage more banks to enter the market dominated by payday lenders charging triple-digit interest. Banks had largely withdrawn from the small-dollar market since 2013 when the FDIC and the Office of the Comptroller of the Currency started discouraging them from offering popular high-interest products known as "deposit insurance" loans. As the Trump administration began encouraging banks to offer loans that serve as alternatives to costly payday loans, the OCC rescinded its limit last year and issued a policy to promote affordable bank loans. Meanwhile, the Consumer Financial Protection Bureau recently announced its intention to review the core part of its payday rule, a move that could also affect banks' stance in the market. The FDIC is seeking public comments regarding market conditions for small-dollar loans, as well as what the agency can do to help banks offer "responsible, prudently underwritten" loans to meet consumer demand.
- Democrats on the House Financial Services Committee question the Fed's regulatory czar about the central bank's recent deregulatory moves. "Make no mistake," said Rep. Maxine Waters (D, Calif), who is slated to take over the panel in January, "The days of this committee weakening regulations and putting our economy once again at risk of another financial crisis will come to an end." Waters asks Randal Quarles to address concerns that the Fed's recent moves to ease capital, liquidity and stress test restrictions on large banks could make the financial system more vulnerable. "Will you commit to this committee here today that you will not be reducing capital levels at the global systemically important banks in any significant way?" said Ms. Waters. "It is the opposite of our intention." answered Quarles.

Nov 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets slipped again, extending losses from a 7 percent plunge the previous session as surging supply and the spectre of faltering demand scared off investors. 
- Gold prices inched up as the U.S. dollar retreated from a 16-month high touched earlier in the week, easing amid a surge in the euro and sterling on a draft Brexit agreement.
- London three-month copper prices edged down as disappointing Chinese credit growth capped gains on optimism over U.S.-China trade talks and Chinese investment growth.
- U.S. soybean futures edged higher after the U.S. Department of Agriculture pegged the pace of the harvest behind market forecasts.
- Modern-day cyberwarfare, where nations deploy technology to disrupt other countries from afar, isn't just a technical problem--it also requires diplomatic solutions, says Shane Huntley, director of Google's threat-analysis group. "I'm a computer scientist. I'm a security engineer. I have all these amazing technical people working for me," said Huntley. "But some of this isn't a technical problem. It's a diplomatic problem." There aren't yet even unwritten rules on the boundaries of so-called information operations, including what is "normal espionage" and what should constitute a serious attack, he said. "Without consequences, without agreements, without all these sort of things--this legitimate government function--then we're really not going to be make a dent in the problem," he said. "All us technical people can really do is fight off and respond to the attacks."
- President Donald Trump takes aim at French wine in a tweet. "The problem is that France makes it very hard for the U.S. to sell its wines into France, and charges big Tariffs, whereas the U.S. makes it easy for French wines, and charges very small Tariffs. Not fair, must change!" he wrote. According to the US trade body, the Wine Institute, EU import tariffs on a bottle of wine run between 11 cents and 29 cents depending on alcohol content while US import tariffs are 5 cents for still wine and 14 cents for sparkling.
- Canada's broadcast regulator rejected BCE's request the watchdog abandon its Super Bowl broadcasting policy given terms agreed to in the revised Nafta. As part of USMCA pact, Canada agreed to rescind a policy that allowed US ads to air in the Canadian broadcast of the Super Bowl. NFL rights owner BCE, which operates CTV network, opposed the policy, as did the NFL. BCE asked the Canadian Radio-television and Telecommunications Commission to suspend the policy until after the Super Bowl, on Feb 3, citing USMCA. In a letter published Nov 8, the regulator noted USMCA had "not yet been formally ratified" by Canadian legislature, adding Canada's Supreme Court will hear the case in December. Heeding BCE's request "would be disrespectful of the process," CRTC said.
- German Finance Minister Olaf Scholz warns investors the Trump administration's recent tax cuts will have to be funded with tax increases at a later stage, just as the Reagan administration had to do in the past. "All those making a long-term investment in the US should bear in mind the next tax increase, which will inevitably result from the current tax reduction measures," he says. "Because even the US--despite the dollar's great importance--can't cope with a national debt of more than 100% to which it will come." He also downplays hope for a big German tax cut saying he doesn't trust tax cuts financed with debt.
- The U.S. is currently paying $1.43 billion a day to service its public debt. Moreover, total annual costs of net interest payments on the U.S. debt are expected to be $318 billion for 2018, and to reach a "worrisome" $1 trillion by 2028, Audrey Childe-Freeman, chief strategist at FX Knowledge, says. This should be bad for the U.S. dollar because it raises questions over the country's debt sustainability, Ms. Childe-Freeman says. If forecasts materialize, the interest payment on servicing the U.S. debt "would become the third largest on the U.S. budget, overtaking military spending," which is high.
- China's GDP would shed 1.03% if Washington were to levy a 25% tax on all Chinese exports to the U.S., Pictet Asset Management estimates, as the two countries' leaders prepare to meet at this month's G20 summit. The tariffs the U.S. has already imposed on Chinese goods have lowered China's GDP--which came to $12.24 trillion in 2017--by 0.27% so far. However some observers hold out hope that President Trump and Chinese counterpart President Xi Jinping will strike a deal to resolve the trade disputes that have strained relations between the world's two largest economies.
- Monday's decline in US oil prices marked the 11th straight session prices have fallen, and sets an all-time record going back to the first day crude oil futures starting trading in New York, in 1983. What's more, the losing streak may not be over, as prices are down another 1.3% today at $59.13/bbl. Rising production from major producers, a softening of US sanctions against Iran and worries over future demand are key factors in oil's plunge, while this week's extended drop comes after President Trump tweeted Monday that based on supply "oil prices should be much lower."
- China's net capital flows have stabilized in 2018, with only $82 billion in outflows seen so far, according to Pictet Asset Management. This is one of the reasons why the Chinese yuan isn't falling further, the brokerage notes, though it did hit a 10-year low earlier, with USD/CNY reaching a more than 10-year high of 6.9771 at the end of October, approaching the key 7-dollar level. This level is only important because beyond it, the yuan could plunge massively short-term. The People's Bank of China has been buying yuan at close to 7 dollars to prevent such a scenario, but was only doing this to stabilize the currency, says Patrick Zweifel, Pictet AM's chief economist. The dollar is last flat at CNY6.9581.
- A rise in USD/CNY is the reason why the ECB's trade-weighted euro is stronger than the euro's foreign-exchange level against the dollar, Societe Generale says. "The move in USD/CNY from 6.4 at the end of May to 6.96 today...has pushed the trade-weighted index up by over 1% on its own," says Kit Juckes, macro strategist at SocGen. The dollar has been rising in the past months, hitting new highs lately, including against the yuan, as the U.S.-China trade spat simmers. In the long run, however, the discrepancy between the trade-weighted euro and the forex rate of EUR/USD "may come out in the wash," Mr. Juckes says.
- Shares in oil stocks fall as crude prices drop after President Trump criticized top OPEC-producer Saudi Arabia's plan to cut output. In response to comments by Saudi Energy Minister Khalid Al-Falih that producers need to cut about a million barrels a day from October production levels, President Trump said prices should be much lower. BP drops 2.3% and Royal Dutch Shell A-shares backtrack 1.9%. The price of a barrel of Brent crude declines 2.2% to $68.65 and a barrel of U.S. light crude falls 2.3% to $58.60.
- The deadline for the Italian government to resubmit its budget proposals to the European Commission presents a headache for the euro, although the common currency is last up 0.2% at $1.1237. Kit Juckes, a macro strategist at Societe Generale, says legacy debts and weak growth are "a permanent source of vulnerability" in the euro area, but "not an immediate threat to the single currency's survival." Italy is forecasting a budget deficit higher than the threshold given by the EC as the new populist government aims to enforce the promises made before the elections. The euro is lower against the pound, last down 0.2% at GBP0.8713.

Nov 13 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by around 1 percent, with Brent crude sliding below $70 per barrel and WTI below $60, after U.S. President Donald Trump put pressure on OPEC not to cut supply to prop up the market. 
- Gold prices edged higher as investors resorted to bargain-hunting after the precious metal fell to over one-month lows, weighed down by a stronger dollar .
- London copper edged higher after slipping to a 1-1/2-week low earlier in the session, but aluminium and nickel stayed close to multi-month lows as investors worried over slower global demand.
- U.S. wheat futures edged lower retreating from a three-week high touched in the previous session, but concerns over global production amid adverse weather in several major exporting countries capped the losses.
- Aside from being dragged down by the strong U.S. dollar, the pound is also under pressure from the fact that "the Irish backstop issue is still hotly contested" and that divisions within the U.K. parliament remain deep, MUFG says. Sterling is last down by 0.9% at $1.2860 after having dropped to an 11-day low of $1.2827 earlier. The EUR/GBP is up 0.2% at 0.8753, having earlier risen to a one-week high of 0.8778. What adds to the pound's falls is that a cabinet meeting scheduled today, at which it had been thought there might be a sign-off on a deal, has been cancelled, MUFG says.
- London shares rise as the pound plunges against the dollar on reports that the U.K. government's plan to leave the EU is close to collapsing. The FTSE 100 Index edges up 0.1%, or 9.83 points, to 7115.17 as GBP/USD falls 1.1% to 1.2834. "We expect the pound to be in for a rough ride, especially if [PM] Theresa May attempts to force her Brexit plan through because there's growing opposition in her own government," says Jasper Lawler at London Capital Group. "There's a good chance she may not come out the other side." In equities, oil stocks are up as Brent crude rises 1.3% to $71.11 a barrel following Saudi Arabia's pledge to cut production in December.
- Sterling is being pushed lower by a stronger dollar on Monday. The pound hits an 11-day low of $1.2841 and EUR/GBP rises to a one-week high of 0.8775. The Federal Reserve rate announcement refueled market participants' expectations of more interest-rate increases in the near future. Moreover, in a speech in Dallas on Thursday, "Fed Chair Jerome Powell is likely to reiterate that more tightening will be needed," UniCredit says. The pound will be driven to "some extent" by a stronger dollar. However, "sterling's dynamics will probably once again depend more on the latest Brexit developments," says UniCredit.

Nov 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude oil prices jumped by 2 percent after top exporter Saudi Arabia announced a supply cut in December, a measure likely aimed at halting a market slump that has seen crude decline by 20 percent since early October.
- Gold prices steadied after touching a one-month low in the previous session, but the metal remains under pressure from a firmer U.S. dollar and expectations the Federal Reserve is on track to tighten borrowing costs.
- Nickel on both the London and Shanghai exchanges fell to its lowest in around 11 months as rebar steel prices tumbled on concerns over slowing demand in top consumer China.
- Chicago wheat futures edged higher snapping three sessions of losses, on expectations of higher demand for U.S. supplies although a stronger dollar kept a lid on the market.

- Sterling drops in late Friday trade after U.K. transport minister Jo Johnson--brother of arch pro-Brexit proponent Boris Johnson--quit the government over the lack of progress in Brexit talks, calling for the public to have another say. GBP/USD drops below 1.30, losing 0.6% to 1.2973. EUR/GBP rises 0.3% to 0.8729. Chris Beauchamp, analyst at IG, says the pound is lower on the news. "Even if some sort of deal emerges soon, it will still have to clear Parliament, and it is by no means certain that such an outcome will transpire," he says. The U.K. is scheduled to leave the EU on March 29.
- One of the biggest questions facing financial markets is whether the strong pace of growth seen recently can be sustained. The sugar high of tax cuts and trade-related issues tied to Trump administration tariffs have suggested to many that activity will in fact slow. But Goldman Sachs says "we see little obvious evidence of an impact on growth because the increase in imports from China was limited and more than matched by increases in inventories of the same goods." The bank adds "this suggests that the strong growth pace over the last two quarters is genuine, not a distortion."
- Futures tracking Wall Street's so-called fear gauge are flashing a bullish signal, analysts say. Futures on the Cboe Volatility Index have returned to their normal, upward-sloping curve, an indication that anxiety has left markets once again. When the VIX curve is inverted--as it had been ahead of midterm elections--it means investors are girding for extreme volatility in the near-term, driving up the cost of futures contracts on the VIX that expire in the next month or two. The normalization suggests that "markets may continue to rally, and sentiment is no longer bearish," write Cantor Fitzgerald strategists. "Greed appears to have replaced panic."
- Inflation in Turkey is still an issue and the lira rebound is therefore unsustainable, says HSBC. "The reality is that the inflation outlook is not improving, even if the government campaign to cut retail prices by 10% by year-end and the recently announced tax cuts provide short-term relief," says the bank. The Turkish lira has risen by 30% against the dollar since its last record low in August in a reflection of "external macro-rebalancing, a successful rollover of banking sector debt and the positive consequences of improving relations between Turkey and the U.S." But real interest rates are negative and producer price inflation is at 45%.
- Emerging market currencies have rebounded in the past couple of months and market participants are wondering whether this rebound will last till the end of this year. "On the one hand, risk sentiment towards Asian forex carry could stay strong if investors think U.S. yields are peaking, since a divided Congress after mid-term elections suggests a second round of fiscal stimulus in 2019 is unlikely," says HSBC. However, equity market volatility could return if investors focus more on the prospect of U.S. growth re-synchronising with the rest of the world on the downtrend, the bank says. "Moreover, current optimism over U.S.-China trade talks may potentially turn into disappointment [for EM] later."
- Boats trump planes when it comes to investor sentiment toward Inmarsat, Jefferies says. The satellite company's aviation division beat expectations in the third quarter, leaving scope to an increase in 2018 consensus Ebitda estimates, but shares have taken a hit because of a miss in Inmarsat's maritime division, the bank says. Low-cost offerings from competitors contributed to a 5.7% fall in Inmarsat's maritime revenue in the third quarter, although the company has launched a similar service to stem customer losses, Jefferies says. "Execution and expediency will be key," the bank says. Shares trade 2.2% lower at 415 pence.
- North Carolina Rep. Patrick McHenry will almost certainly become the top GOP member of the House Financial Services Committee, after announcing Thursday he plans to run for the role, according to Capitol Hill aides. The influential lawmaker, who currently serves as a deputy GOP whip, holds significant sway among House Republicans. His legislative work includes efforts to encourage the growth of financial-technology firms as well as to boost federal oversight of credit-reporting companies in the wake of the 2017 hack of Equifax. If approved by GOP leadership as expected,  McHenry would serve alongside California Rep. Maxine Waters, who is expected to chair the financial services panel in the new, Democrat-led House.

Nov 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets stabilised but remained weak as rising supply and concerns of an economic slowdown pressured prices, with U.S. crude down by around 20 percent since early October.
- Gold prices fell to their lowest in a week and were set for their biggest weekly fall since August, on a firmer dollar as the U.S. Federal Reserve indicated they will continue to raise interest rates, lowering demand for bullion.
- Benchmark London copper fell and was on track for its biggest weekly drop since mid-August, pressured as the U.S. dollar strengthened after the Federal Reserve kept intact its plans to continue raising interest rates.
- Chicago soybean futures slid for a fifth consecutive session poised to finish the week in a negative territory as the market is facing renewed pressure after the U.S. government raised its outlook for stocks.
- Potential U.S. sanctions against Russian government bonds would ultimately hurt Russian citizens, not just investors, says Konstantin Vyshkovsky, head of public debt at the Russian Ministry of Finance. Speaking to investors at the Moscow Exchange Forum in London, Mr. Vyshkovsky says that if the U.S. bans investment in Russian sovereign bonds, that would hamper social expenditures in the Russian budget, which would, in turn, hurt the population. It would also be harmful for foreign investors who hold around a quarter of Russian sovereign bonds, he says.
- AstraZeneca Chief Executive Pascal Soriot would welcome drug price reform in the U.S. as increased transparency would show the company's prices are not as high as they seem. In the U.S., drug companies publish a "list price" for their products, but insurers and other payers tend to pay less thanks to behind-the-scenes discounts. Dr. Soriot, in a quarterly results call, said that for drugs sold to plans covering Medicare Part D beneficiaries, the price after discounts is similar to that charged in Europe. Drug pricing reform--one of the few bipartisan issues in Washington--is likely to be high on the agenda after mid-term electionshanded control of the House to the Democrats.
- Fellow BRICS countries are benefiting from the China-US trade battle, today's trade data shows. While China's imports from the US dropped last month, its imports from Russia, Brazil and India jumped on year by 91%, 94% and 32%, respectively, CICC notes.Meanwhile, China's exports to these three emerging markets also grew by double digits, customs data show.
- Germany's economy will grow slower than previously thought because the external environment is becoming less supportive for exporters, the European Commission says. The Commission cuts its growth forecast for Europe's economic powerhouse to 1.7% growth for 2018 and to 1.8% for 2019 compared with a previous forecast of1.9% for both years. "The escalation of protectionism and rising financing costs in a number of countries could affect German exports by constraining investment demand," the Commission's autumn outlook report says. "Domestic investment is expected to weaken due to uncertainty about global trade and the future of key industries linked to the automotive sector," it adds. Slower export growth means Germany's current-account surplus will weaken to 7.8% of GDP this year from 8.2% in 2017, and to 7.3% in 2019. The country's strong labor market will however continue to support consumption.
- In the run-up to 2016's Brexit vote, there was a lot of chatter about increased trade with the US offsetting reduced access to Europe, noted Labour Party parliamentarian Chi Onwurah. However, "we have supply-chain integration across the EU and much less" with the US, she noted on the sidelines of the Web Summit conference in Lisbon. Onwurah--Labour's shadow minister for business, energy and industrial strategy--adds that Britain leaving the EU could make it difficult for UK-based companies to access their supply chains on the continent. Meanwhile, "we are 5 months away from Brexit and we have very little idea what a deal will look like." She represents a manufacturing region from which more than half of its production is exported to the EU. "If we have a no deal exit it means we can't access those markets."
- Nordic markets are set to open slightly higher Thursday with IG calling the OMXS30 up 0.3% at around 1543. "Optimism has returned to global stock markets after October's sharp sell-off, when concerns about the durability of economic growth escalated," says SEB. U.S. stocks have risen throughout the week and recovered further yesterday, while in Asia, major indices are following suit, though China bourses fell despite Chinese export data beating expectations, SEB adds. "Persistently strong export data is likely due to front-loading before all of China's exports could face higher tariffs." Today, focus shifts from the mid-term elections and the departure of U.S. Attorney-General Jeff Sessions, to the Fed's rate decision. OMXS30 closed at 1538.69, OMXN40 at 1483.79 and OBX at 827.05.
- London shares are set to open 24 points higher at 7141 after Wall Street surged in response to gains by Democrats in the U.S. midterm elections. The Dow Jones Industrial Average rose 545 points. "Wall Street experienced a phenomenal session on Wednesday, jumping over 2%, in its best post-midterm-election session since 1982," Jasper Lawler at London Capital Group says. "Democrats flipping the house was the outcome the markets had been expecting." Asia stocks also rose, though the China Shenzhen A-share index was down.
- Chi Onwurah, a Labour member of the UK parliament, says while her party has "been dismayed by some of the policies and the rhetoric coming out of" the White House, "it's hard to say whether" the midterm election was a referendum on Trump. She added while at a tech conference in Lisbon that "what excites me is that you see more women" taking office. Onwurah went on to say that there's few diverse voices in both the US and the UK. "We need a representative democracy that's representative."
- Rep. Maxine Waters (D. Calif.), likely the next leader of the House Financial Services Committee, defends Federal Reserve Chairman Jerome Powell in her first postelection interview. Asked about the president's criticism of the Fed, she tells Bloomberg TV "the president should not interfere with the Federal Reserve" and "should not try and dictate to them how they make decisions about interest rates." She says the president's comments could roil financial markets and adds, "He appointed Powell, and Powell came with a pretty good reputation about being fair. He should leave them alone and let them do their work." The comments are an early sign Powell may have sympathy from the next Congress as he tries to make policy decisions amid criticism from the Oval Office.

Nov 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose after record Chinese crude imports eased concerns that a slowdown in the world's No.2 economy could stoke an emerging fuel glut.
- Gold prices inched lower on the back of a stronger dollar as investors digested the U.S. midterm election results and turned their focus to the Federal Reserve's monetary policy decision due later in the day.
- Copper and aluminium prices were mixed along with other base metals, after results of the U.S. midterm elections came in as expected and ahead of the Federal Reserve's policy statement.
- U.S. soybeans futures edged lower as the market nervously awaited the latest U.S. Department of Agriculture supply and demand forecast due later in the session.
- In the run-up to 2016's Brexit vote, there was a lot of chatter about increased trade with the US offsetting reduced access to Europe, noted Labour Party parliamentarian Chi Onwurah. However, "we have supply-chain integration across the EU and much less" with the US, she noted on the sidelines of the Web Summit conference in Lisbon. Onwurah--Labour's shadow minister for business, energy and industrial strategy--adds that Britain leaving the EU could make it difficult for UK-based companies to access their supply chains on the continent. Meanwhile, "we are 5 months away from Brexit and we have very little idea what a deal will look like." She represents a manufacturing region from which more than half of its production is exported to the EU. "If we have a no deal exit it means we can't access those markets."
- Nordic markets are set to open slightly higher Thursday with IG calling the OMXS30 up 0.3% at around 1543. "Optimism has returned to global stock markets after October's sharp sell-off, when concerns about the durability of economic growth escalated," says SEB. U.S. stocks have risen throughout the week and recovered further yesterday, while in Asia, major indices are following suit, though China bourses fell despite Chinese export data beating expectations, SEB adds. "Persistently strong export data is likely due to front-loading before all of China's exports could face higher tariffs." Today, focus shifts from the mid-term elections and the departure of U.S. Attorney-General Jeff Sessions, to the Fed's rate decision. OMXS30 closed at 1538.69, OMXN40 at 1483.79 and OBX at 827.05.
- London shares are set to open 24 points higher at 7141 after Wall Street surged in response to gains by Democrats in the U.S. midterm elections. The Dow Jones Industrial Average rose 545 points. "Wall Street experienced a phenomenal session on Wednesday, jumping over 2%, in its best post-midterm-election session since 1982," Jasper Lawler at London Capital Group says. "Democrats flipping the house was the outcome the markets had been expecting." Asia stocks also rose, though the China Shenzhen A-share index was down.
- Chi Onwurah, a Labour member of the UK parliament, says while her party has "been dismayed by some of the policies and the rhetoric coming out of" the White House, "it's hard to say whether" the midterm election was a referendum on Trump. She added while at a tech conference in Lisbon that "what excites me is that you see more women" taking office. Onwurah went on to say that there's few diverse voices in both the US and the UK. "We need a representative democracy that's representative."
- Rep. Maxine Waters (D. Calif.), likely the next leader of the House Financial Services Committee, defends Federal Reserve Chairman Jerome Powell in her first postelection interview. Asked about the president's criticism of the Fed, she tells Bloomberg TV "the president should not interfere with the Federal Reserve" and "should not try and dictate to them how they make decisions about interest rates." She says the president's comments could roil financial markets and adds, "He appointed Powell, and Powell came with a pretty good reputation about being fair. He should leave them alone and let them do their work." The comments are an early sign Powell may have sympathy from the next Congress as he tries to make policy decisions amid criticism from the Oval Office.
- If Wells Fargo or Deutsche Bank needed further evidence they would be target of Rep. Maxine Waters (D. Calif.) if she ascends to lead the House Financial Services Committee next Congress, they got it in her first postelection interview on Bloomberg. Waters calls Deutsche Bank "one of the biggest money laundering banks in the world perhaps" and suggests she would be investigating the bank's financial relationship with President Trump. She decries "fraudulent activities" at Wells Fargo, and said she has told the bank's CEO she would be happy to meet with him. Representatives of both firms had no immediate comment.
- Greg Kahn, who runs the Internet of Things Consortium which promotes tech innovations, says the US election shows a polarized nation where voter concerns about job security need to be taken seriously. "I think that we are a split society in the US ...and as it relates to my industry there is a bifurcation that's taking place there as well," he says from a tech summit in Lisbon. "What this tells me is that we need to understand what that means for the folk that are reticent," about future technologies. "There is a real discussion around smart cities but what about rural areas, agra tech and manufacturing? How do we help Americans around the country to create sustainable jobs that provides for their families?" he says.
- Chief Executive Greg Kahn of the of Internet of Things Consortium sees some challenges ahead following the election results that yielded a divided US Congress. The IOTC promotes smart devices and connected spaces such as smart cities. "To one side there will be a balance of power and checks and balances in the system but to the other degree it's going to be very challenging in the next two years to have any consensus to push forward technology," he says at the Web Summit in Lisbon. "When we start to think about 5G and where we are going from a spectrum standpoint and you think about the development of roads for autonomous vehicles it's going to be real challenge to get a consensus."
- President Trump says at a press conference he decided to soften the US oil sanctions on Iran to control oil prices. "I'm driving them down," he says. "If you look at oil prices they've come down very substantially over the last couple months. That's because of me." Regarding the sanctions waivers he gave to eight countries, Trump says: "We're gonna let some of the oil go out to these countries that really do need it because I don't want to drive the oil prices up to $100 or $150 a barrel," he says, adding the sanctions "will get tougher as time goes by, maybe." US oil prices hit a four-year high of $76/barrel Oct. 3, but have since fallen nearly 19% to $62.
- The FTSE 100 closes up 1.1%, tracking rises in U.S. and European stocks after U.S. midterm elections provided no significant shocks, with Democrats gaining control of the House and Republicans holding the Senate. "With elections out of the way, we can get back to the story of earnings season, and here the picture still looks strong," says Chris Beauchamp, analyst at IG. Miners are among the biggest gainers as metals prices rise, with silver miner Fresnillo up 3.6% and Anglo American up 1.9%. But broadcaster ITV falls 2.8% after it warned advertising was likely to fall in 4Q and retailer Marks & Spencer falls 0.5% after results showed profit rose but food sales dropped.
- The American Farm Bureau Association, like many Washington trade groups, says it's looking forward to working with the new Congress--and lists off several agricultural issues that have typically gotten a friendly reception on the Democratic side of the aisle. Farm Bureau President Zippy Duvall mentions ethanol, infrastructure and funding for agricultural research as ways that newly elected legislators can serve farmers. The Farm Bureau also hopes the new Congress can address "the ag labor problems we face"--one way would be through immigration reform, where signs of a compromise between President Trump and Democrats periodically appeared over the last two years, but didn't lead to any agreement.
- That Democrats have a problem in rural America isn't lost on the next presumptive head of the House Agriculture committee. Democrat Collin Peterson, who won a close race in Minnesota Tuesday, tells reporters on a call that he's concerned about his party's losses in rural areas, and that he'll need to spend time next year bringing new urban and suburban members of the committee up to speed on issues important to farmers and other rural Americans. "I'm assuming most new folks will have no real background in agriculture or understanding of rural areas so it's going to take work," Peterson says.

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

- Oil prices dipped as rising output and U.S. sanction waivers that allow Iran's biggest buyers to keep taking its crude reinforced the outlook for a well-supplied market.
- Gold came off a one-week low to trade higher as investors sought cover from market volatility and uncertainty surrounding the fallout of U.S. mid-term elections results.
- London copper rose after a two-day slide as Democrats captured control of the U.S. House of Representatives at the midterm elections, which could weaken President Donald Trump's agenda.
- U.S. wheat futures edged lower retreating from a more than one-week high touched in the previous session, though fears about the condition of the North American crop provided a floor to losses.
- The dollar weakened versus the euro and sterling as traders reacted to the Democratic Party winning control of the U.S. House of Representatives, empowering it to block President Donald Trump's agenda and scrutinise his administration.
- Amid thin trading volumes, Japanese stocks have been yo-yoing this morning along with a number of asset classes as US election results arrive. With the Nikkei up 0.7% after briefly turning lower a half-hour ago when the dollar slid to Y112.95 (it's now above Y113.50 as chances appear to have dimmed some for the Democrats taking over the House), JGB yields have turned higher. The 10-, 20- and 40-years are all up a half-basis point.
- Democratic freshman Rep. Stephanie Murphy will hold onto her seat in Florida, per the AP race call, beating Republican challenger Mike Miller. Murphy's win in 2016 was a surprise and the race was seen as competitive this year, though Murphy was favored to win. The re-election win will likely solidify Murphy's hold on a district that Republicans had held for 24 years. In Congress, Murphy has cut a path as a centrist, though she has criticized President Trump's foreign policy.
- Pollster Jeff Horwitt pored through data from AP VoteCast and contrasted President Trump's 44% approval rating, which would suggest a tough night for the party in the White House, against the 66% who rated the economy as excellent or good, which normally would portend well for the party in power. One clue that the economy story may not be as rosy as the national result suggests is that voters are divided about how their family is doing: 20% say they are getting ahead, 17% say they are falling behind and 63%, the majority, say they are holding steady.
- It's too early to know if a "blue wave" developed or if the GOP held it off, but enthusiasm on both sides propelled a new midterm election spending record: $5.2B. That's up from the $4.2B spent in 2014, adjusted for inflation, according to the Center for Responsive Politics, and represents the largest percentage increase in at least two decades. Spending is heavy on both sides, but Democratic candidates have attracted unprecedented sums. Democratic candidates are expected to spend more than $2.5B, compared with $2.2B for Republicans. Anticipating a potential shift in power in Washington, Wall Street and the business community broke from the trend and gave more money to Democrats than Republicans. Retirees are also breaking toward Democrats and have set a record for midterm election spending.
- Exchange-traded fund volumes were relatively subdued on Tuesday as voters cast their ballots. Volume in State Street's $255B SPDR S&P 500 ETF Trust, one of the most-traded securities in the world, was just 58.9M shares, less than half of its moving average volume, according to FactSet. ETF volumes surge during times of turbulence. They were the investment vehicle of choice after President Trump's surprise victory in November 2016 as traders placed bets on which industries would benefit from his policies. His pledge to repeal financial regulation boosted interest in the Financial Select Sector SPDR ETF while his vow to limit immigration and trade with Mexico spurred then-record volume in the iShares MSCI Mexico ETF.
- Voters this year are pretty divided on the Affordable Care Act, otherwise known as Obamacare, but few think it should disappear entirely or remain intact as is. About 35% of voters want the law expanded, according to AP VoteCast, a pre-election and Election Day survey of about 90,000 people who said they voted in the midterms or intended to do so. Another 26% say it should be repealed in part, 24% say it should be repealed entirely and 14% say leave it as is. And on the GOP-led effort to rewrite the tax code in 2017: 47% of voters approve of the measure; 49% disapprove.
- San Franciscans casting their vote at a downtown firehouse Tuesday all agreed that the city has a big homeless problem. But they disagreed over whether a measure on the ballot to tax big tech companies to help the homeless was the way to solve it. Rose Larsen, a 31-year-old San Francisco native who works for a non-profit, said the homeless problem has gotten worse as the rents in the city have soared with the latest tech boom. "Taxing big companies, especially tech companies that have a lot of money and are bringing people here and causing rent to go up, it makes sense to me," said Larsen, a Democrat. Homelessness has gotten "worse and worse every year I've been here," said Sam Nazari, a 32-year-old who works at an artificial-intelligence startup. Nazari said he voted against the measure because he says he wants the Bay Area to continue to be the tech capital and singling out big companies could hurt that.
- US stock futures are edging lower as trading of e-mini futures resumes and the first polls in Kentucky and Indiana close. S&P 500 futures and Dow Jones Industrial Average futures are both down 0.2% apiece. Last election night, the futures market captured the bulk of the market's swings: S&P 500 futures shed as much as 5%, hitting a limit set by exchanges to prevent steeper losses, before paring losses heading into sunrise. Traders have said they don't anticipate as much volatility this time around, although many say they will be in their offices Tuesday evening in case of a shock outcome.
- The new class of lawmakers will have a few months to settle in before turning to one of Washington's thorniest tasks: raising the federal borrowing limit. Congress voted in February to suspend the limit until March 1 after which the Treasury Department will have to use extraordinary measures to keep paying the government's bills on time. Those measures will last at least until midsummer, according to an estimate from the Bipartisan Policy Center. An influx of tax payments in March and April should provide enough cash to allow Treasury to keep making on-time payments for several months after the debt-limit suspension expires. After that, Congress must suspend the limit again or risk defaulting on the government's debt. The decision could be especially fraught in 2019 as deficits are projected to hit $1T, thanks in part to the tax cut enacted last year and a two-year agreement to boost government spending.
- Emerson Electric CEO David Farr dares to say what most US executives with plants in China haven't wanted to publicly acknowledge: China's government could make life miserable for US companies if trade tensions between the US and China continue to escalate. "This is our 40th year doing business in China," Farr told analysts on conference call. "They could decide to say 'OK, Emerson yes you are a local company in China [but] we're going to block you a little bit.' The consequences of that would slow down China growth." Emerson opts for a cautious sales growth outlook in key businesses for 2019 until it sees improving trade relations with China.
- New Zealand's NZX-50 index opens 0.1% higher at 8821.76, as investors await results of midterm elections that could change control of the US Congress and put a brake on much of the White House's agenda for the next 2 years. NZ corporate news was led by earnings from Goodman Property Trust and Pushpay. Goodman rose by 0.3% to NZ$1.505, after reporting a 47% rise in 1H profit to NZ$66.4M that was driven by fair-value gains on some investment properties. Pushpay fell 0.5% to NZ$3.70 despite its 1H net loss improving and management hopeful of achieving a goal of breaking even on a monthly cash-flow basis by the year end. Elsewhere, Ryman Healthcare advanced 1.5% to NZ$12.38 and Sky Network TV fell 1.7% to NZ$2.26.
- Canada is pushing to have US steel and aluminum tariffs lifted but won't refuse to sign the new Nafta deal if they remain in place, Prime Minister Justin Trudeau says. In an interview with CNN, Trudeau calls the US tariffs a "continued frustration" that is harmful to Canadians and Americans. Both US steel and aluminum tariffs and Canada's retaliatory tariffs remain in place, despite a late September agreement on a new US, Mexico and Canada trade pact, and leaders of the three countries are expected to hold a signing ceremony in late November. "We're not at the point of saying that we wouldn't sign if it wasn't lifted--although we're trying to make that case," Trudeau says in the CNN interview. Asked whether he might be losing an opportunity for leverage, Trudeau responds that he doesn't negotiate in public. "We have strong conversations in private and we get to the right outcome for everyone."

Nov 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell weighed down by sanction exemptions from Washington that will allow Iran's biggest oil customers to keep importing from Tehran, as well as by concerns that an economic slowdown may curb fuel demand growth.
- Gold prices edged lower in early Asian trade as the dollar strengthened, while investors awaited U.S. midterm election results for market direction.
- Copper prices edged lower in a mild session with investors on the sidelines ahead of the U.S. mid-term elections and uncertainty over the Washington-Beijing trade deal.
- Chicago soybeans ticked higher as the latest comments from Chinese authorities raised hopes Beijing is committed to resolve its trade dispute with Washington.
- While the stock market could experience volatility depending on the outcome of the US midterm elections Tuesday, some experts say grain markets might not change much if Democrats win control of Congress. "The trade spat will continue regardless, (the election results) will not change the imminent outlook on anything price-wise," Terry Reilly of Futures International says. Reilly says any developments regarding the dispute between the US and China or change in the strength of the dollar will have more of an effect on grain prices. CBOT soybean futures fall 0.5%, corn futures rise 0.6% and wheat futures are down 0.5%.
- Investors on Tuesday will look to Archer Daniels Midland, whose corporate logo recalls a soybean leaf, to tell the fortunes of US-produced oilseeds as a damaging trade dispute with China drags on. Chicago-based ADM is among the biggest processors and exporters of soybeans, but shipments inspected for export from Pacific Northwest ports--the main corridor to China--have plummeted from year-ago levels this fall, due to China's tariffs. JPMorgan analysts say 4Q is "the crucial quarter for US soybean exports before Brazil's new crop comes online in January." Analysts expect ADM to deliver $3.47 in adjusted EPS, far above last year's 45c, thanks to more favorable profit margins on crop processing.
- Capital Economics seeks to make sense of populist governments' impact on their respective economies in a new research note. The firm says that in many cases these sorts of governments lead to fiscal stimulus policies which at least for now are boosting growth. But any debt incurred now must eventually be settled. "Unless a country is facing acute challenges, the election of a populist government is unlikely to trigger an immediate economic collapse and the short-term risks are often overstated - indeed, in most cases growth is likely to accelerate initially as the purse strings are loosened," Capital Economics writes. "However, the effects over the longer term are likely to be far more malign."
- Any signal showing President Donald Trump's grip on the country is starting to crack as a result of the U.S. midterm-election results could be bearish for the U.S. dollar in the long term, say Arif Husain, portfolio manager at the T. Rowe Price Dynamic Global Bond Fund. "Should we get a sense the Trump premium may disappear, it will be negative for the dollar," he says. This, he notes, is likely to serve as a bellwether for the U.S. presidential election in two years. In addition, Mr. Husain sees the dollar likely to be also constrained by a slowdown in U.S. economic growth and its fast-growing budget deficit. A weakening dollar should support emerging-market currencies and their performance, which could lead to EM equities and debt to perform too, he adds.
- The most pro-growth scenario for the market in the U.S. midterm elections, according to Tom Fitzgerald, co-manager of the Amity International Fund at EdenTree Investment Management, would see Republicans maintaining both the House and Senate. "In such a scenario, President Trump would have broader policy options, including on the fiscal front and the ability to carry on with his deregulation agenda," he says. This increases the chances of larger tax cuts. The opposite outcome, he warns, could force President Trump to focus on policy efforts on the trade war against China or implement trade threats against the EU, negatively affecting car tariffs on Germany and Europe.
- Grain markets are expected to be volatile this week, as traders watch the results of the US midterm elections and the latest supply and demand report. CBOT soybean futures rise 0.2%, corn futures rise 0.5% and wheat futures fall 0.4%. Analysts are watching for any additional news on trade after President Trump's recent comments regarding negotiations with China, once the largest buyer of US soybeans, lifted soybean prices last week. "Some feel it is a last-ditch effort to affect the US election tomorrow," says Charlie Sernatinger of ED&F Man Capital Markets. The US Department of Agriculture will also release its monthly supply and demand report on Thursday.
- Oil prices make a rare upward move, rising 1% mid-morning in NY after trading lower in the overnight session and declining on a weekly basis for the past four weeks straight. A slight weakening in the dollar, which oil trades in and often moves inversely to, was giving oil some of its support, while higher equities were also adding risk appetite. Investors are keeping an eye US sanctions against Iran that started today for more clues on its impact on global supply, while also gazing at US midterm elections Tuesday that could impact broader financial markets. The Nymex oil contract for December was recently up 1.1% to $63.78/bbl.
- Cowen thinks the best scenario for the health care sector from a midterm election standpoint is a flip in control of the House with the GOP keeping the Senate with a final outcome: gridlock. Analysts see Democratic control of the House bringing "hearings... lots of hearings." But while Democrats have vowed scrutiny of the Trump administration's handling of Obamacare, Cowen says it's unlikely to lead to any substantive changes. With subpoena power, Democrats are expected to target drug pricing as they seek information on R&D spending, marketing and sales from big pharma. While it will be "good theater," the investment bank sees very little effect from drug pricing hearings.
- U.S. corporate-credit spreads are likely to tighten soon after the midterms if the Republicans retain control of both the House of Representatives and the Senate, says MacKay Shields, which manages the Nordea 1 - U.S. Corporate Bond Fund. "The administration will be emboldened to continue down the path of additional tax reform, further deregulation, infrastructure spending and other forms of deficit spending," the fund manager says. However, a Democratic victory in both chambers could reverse President Trump's regulatory reforms, which would probably be negative for credit spreads, it adds. MacKay Shields expects spreads to remain firm if the Democrats win the House but fail to secure the Senate. The fund manager hasn't positioned the portfolio for any particular result from the midterm elections.
- Foreign investors have reduced their holdings of Russian government bonds and there is scope for them "to further prune their OFZ holdings," says Societe Generale. As of September, non-Russians held RUB1.853 trillion in OFZs, or 26% of total outstanding Russian government debt, down from 34.5% in March. The three-month deadline since the first set of U.S. sanctions in relation to the Skripal case comes to an end on Tuesday, and if the U.S. Department of State doesn't certify to Congress that Russia has met all the conditions in the Chemical and Biological Weapons Act, "a second round of new sanctions may follow." These could take the form of banking sanctions and a broader ban on Russian procurement of defense equipment.
- Foreign investors took out $17.1 billion from emerging market equities in October, "the worst month" since June 2013, just after the taper tantrum, and "the fourth worst month overall since we started tracking this data in 2005," says the Institute of International Finance. ING says "we expect investors to be cautious about a substantial re-allocation away from the U.S." despite "low" equity valuations in EM. The dollar may rise due to U.S. midterm elections and U.S. interest rates could still move higher, ING says. Moreover, "the chances of a meaningful U.S.-China trade deal at the end of November are highly uncertain," the bank says.
- Several events are set to affect the dollar this week. U.S. midterm elections are to take place Tuesday. If Republicans win both the House and the Senate, expect the dollar to rise, says UniCredit. But the dollar could weaken if the Democrats win the House, albeit slightly, as this outcome is to an extent priced in. The Federal Reserve interest-rate decision is due Wednesday, but the outcome isn't "expected to represent a major driver for the USD, as interest rates are expected to remain unchanged at this round.," UniCredit notes. EUR/USD is slightly lower at 1.1379 Monday morning, despite Friday's U.S. payroll data coming in strong.

Nov 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices slipped as the start of U.S. sanctions against Iran's fuel exports was softened by waivers allowing major buyers to still import Iranian crude, while Tehran said it would ignore Washington and continue to sell.
- Gold prices held steady as investors were cautious ahead of the U.S. congressional elections due on Tuesday which will determine whether the Republican or Democratic Party controls Congress.
- London copper prices fell easing from last session's two-week high on concerns a trade deal between the United States and China may not be done soon, while Shanghai copper rose amid trade promises by President Xi Jinping.

- Chicago soybeans ticked higher, rising for a fifth consecutive session as easing trade tensions between Washington and Beijing underpinned the market. 
- Raw sugar and arabica coffee futures on ICE settled higher on Friday as a more upbeat mood in commodity markets inspired fresh fund buying, and a weaker dollar supported for much of the session. New York cocoa prices gained.
- Malaysian palm oil futures fell over 1 percent in early trade, on expectation of higher inventories in October and tracking weakness in crude oil prices.

 - President Trump continues to see cracking down on prescription drug prices as a winning campaign issue, telling supporters late Thursday that drug prices are maybe even more important than healthcare overall. Speaking at a Missouri rally, Trump took credit for Pfizer and Novartis agreeing in July to halt or delay further price increases in 2018. After hearing that drug-makers were planning mid-year price hikes, Trump said he called Pfizer's CEO and others. "That's when I realized this is a very powerful office," Trump recounted. "They said, 'Sir, we will immediately drop the price down to where it was.'" It's unclear, however, how much longer pharma's deference will last. Pfizer CEO Ian Read told analysts recently that its pricing practices will return to "business as normal" next year, interpreted by some observers to mean new price increases are on deck.
- The Stoxx Europe 600 closes 0.3%, or 1 point higher, at 364.08 as gains for luxury-goods groups offset caution about the chances of a U.S.-China trade deal. The DAX ends the session 0.4% higher and the CAC 40 advances 0.3%. Shares in Gucci owner Kering rise 5.5% after an upgrade from RBC Capital Markets. Rivals' stock followed suit, with Moncler shares up 5.2% and LVMH Moet Hennessy Louis Vuitton gaining 3.4%. Meanwhile the Dow Jones Industrial Average drops 201 points after a U.S. government official said there is still a "long way to go" in trade talks with Beijing.
- Oil markets begin a sort of guessing game following reports from Bloomberg, citing a US official that the US could grant up to 8 waivers on its oil sanctions against Iran that take effect Sunday. "Known countries to receive the waiver include India, South Korea and Japan while talks with China continue," says Tudor Pickering in a morning note. "Chatter indicates that Turkey is also among the 8. While the other three (or four) countries have not been disclosed, an educated guess would point towards the European countries." Tudor adds that while the indications point to a temporary nature of the waiver, "the timeline would extend the current oversupply of the market (100-200mbpd as of August)."
- Emerging-market currencies are on the rise on Friday despite the fact that U.S. payrolls came in strong and above expectations. In October, 250,000 non-farm U.S. payrolls were added, compared with 118,000 in September, and below expectations of a WSJ poll of 188,000. The unemployment rate stayed the same at 3.7%, but average hourly earnings rose 0.18% month-on-month compared with a 0.29% rise in September and below the guidance of a 0.2% increase. The Turkish lira and the Indonesian rupiah rise the most, with USD/TRY down 1.2% at 5.4467 and USD/IDR down 1% at 14,922. USD/MXN also falls 0.8% at 19.99.
- A strong US jobs report hasn't been enough to lift the dollar, which is being pressured by hopes of progress in trades talks between the US and China. Fears of an intensifying trade war have driven funds out of riskier assets and into the buck, as many investors believe the US economy will be less damaged than others if the trade conflict heats up further. Investors partially reversed that move Thursday, after President Trump said he had a "long and very good conversation," with his Chinese counterpart Xi Jinping and signaled progress on the trade dispute between the nations. The ICE Dollar Index was recently unchanged at 96.23, after creeping up earlier this morning.
- The US imported $50B of Chinese goods in September, the largest dollar-value of inbound shipments on record, the Commerce Department said on Friday. The high level of imports pushed the US trade deficit with China to $40.2B during the month, the largest gap on record. Exports to China also grew during the month, the value of imports is five-times larger than exports. Rising Chinese imports could reflect businesses purchasing products in an attempt to get in front of steeper tariffs.
- American consumers are spending and they have a thirst for foreign goods. Imports of foreign goods reached a record high of $217.6B in September, the Commerce Department said Friday. That contributed to the overall trade deficit widening for the fourth straight month. It underscores the challenge the Trump administration faces in its goal to narrow the trade gap. A strong US economy and growing wages gives consumers the power to buy more, and a large share of consumer products are made abroad.
- U.S. President Donald Trump said he is close to an agreement over a trade deal with China's President Xi Jinping as the G20 summit approaches, when both heads of state will meet. However, Rabobank says "we should take the constructive tweet from the U.S. president with a hefty dose of scepticism." The stock markets have had "one of their worst months in October since the global financial crisis" and given that the U.S. mid-term elections are near, "the timing of Trump's tweet [..] is perhaps not coincidental," says Rabobank, adding that it is too early to expect an improvement in sentiment from October.
- U.S. midterm elections on Tuesday could weaken the dollar further and push speculators to trim their long-dollar positions, Commerzbank says. Democrats could win a substantial number of seats and influence key economic decisions going forward. "In a first reaction to such an election result, I would therefore expect to see dollar losses--even if nothing is initially going to change about the general economic situation in the U.S. and the Fed's stance," says a Commerzbank analyst. "As a result, I would not be surprised if [...] larger numbers of dollar traders were to square their dollar long positions," the analyst says. In the week to Oct. 23, long-dollar positions stayed steady, close to a one-year high.
- The FTSE 100 Index gains 0.7%, or 51.54 points, to 7166.2 in morning trade amid positive sentiment about easing trade tensions between the U.S. and China. The Dow Jones Industrial Average ended Thursday's session nearly 265 points ahead. "U.S. markets posted their fourth successive daily gain helped by optimism that for all the bombast of recent weeks, President Trump appears open to sealing some form of trade deal with China by the end of the year," says Michael Hewson at CMC Markets. In equities, Antofagasta leads miners higher, up 4.5% as base metal prices rise.
- The Swedish krona falls Friday following the release of Riksbank minutes that gave no indications of an interest rate increase in December rather than in February, as some were expecting. Moreover, central bankers said during the latest meeting that "the steps toward higher rate-levels must be taken with caution so inflation can continue to remain stable around the target in the years ahead," raising concerns a rate increase may be postponed again. EUR/SEK rises to 10.3154 from 10.2912 beforehand. The minutes show "several members emphasized the uncertainty factors around developments abroad and these can also have significant negative consequence for the Swedish economy in a bad scenario." The guidance is for the rate to be raised "either in December or February."
- European markets benefited from renewed optimism over trade, posting solid gains in morning trade. "US markets closed higher again yesterday, posting their fourth successive daily gain, helped by optimism that for all the bombast of recent weeks President Trump does appear open to sealing some form of trade deal with China by the end of the year," Michael Hewson of CMC Markets UK says. "Markets in Asia have seen decent gains on the back of the trade story, and this has seen European markets post a similarly positive open," he adds. Italy's FTSE MIB, Spain IBEX 35, France's CAC 40 and Germany's DAX rise between 0.9% and 1.3%.

Nov 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices reversed earlier losses as hopes rose that the United States and China may resolve their trade disputes soon, easing concerns that an economic slowdown may weigh on fuel demand.
- Gold prices held on to gains from the previous session as investors remained cautious ahead of a U.S. jobs report, which could provide clues on the pace of further interest rate hikes.
- London copper prices rose sharply, extending a rally from the previous session after the presidents of the United States and China both expressed optimism about resolving a trade row between the two countries.
- Chicago soybean futures rose for a fourth consecutive session, with the market set for its biggest weekly gain in 16 months on signs of easing trade tensions between Washington and Beijing.
- The safe haven yen slipped and the Australian dollar extended its rally as an apparent de-escalation in the U.S.-China trade war gave market confidence a significant boost in Asian trade.
- European car shares trade higher after a meeting between U.S. President Trump and Chinese President Xi Jinping lifted some of the trade concerns between the two countries. Many of the large European manufacturers run factories in the U.S., making them an unintended victim of Chinese import tariffs. In the wake of trade tensions with the U.S., consumer sentiment in China had also declined, contributing to slowing demand in the world's most important market for cars. The Stoxx Europe 600 Autos and Parts trades 3.6% higher. Among the biggest gainers are Volkswagen, up 4.1%, and Fiat Chrysler, which trades 4.0% higher. Renault and Peugeot are up 3.0% and 3.2% respectively, while Daimler trades 3.3% higher. BMW is up 1.9%.
- Major European bourses gain ground in early trading, with Italy's FTSE MIB, Spain IBEX 35, France's CAC 40 and Germany's DAX opening at least 1% higher. "Asian stocks markets had a stellar session overnight, as the comments from Mr. Trump in relation to China boosted sentiment in the Far East," David Madden of CMC Markets UK says. "It was reported that President Trump asked his cabinet to draft a trade deal, and this has lifted sentiment," he says.
- South Korean stocks finished up Friday on President Trump's positive comments about US-China trade talks, snapping a 4-weekly losing streak in the benchmark index. The Kospi rose 3.53% to close at 2,095.99, logging a 3.4% weekly gain. Eased worries about global trade war also sent the won higher. The local currency was trading at 1,121.60 per dollar versus the previous day's Seoul market close of 1,138.10. Tech giant Samsung Electronics was up 4.7%. Carmaker Hyundai Motor was 1.4% higher.
- Despite US President Trump's positive remarks about trade with China, oil markets are likely to remain volatile as any trade deal will likely be reached only after the US midterm elections, says Michael McCarthy, chief market strategist at CMC Markets. Investors' worries about slowing economic growth affecting demand are, therefore, unlikely to fade away, he says. Technical factors are also aiding oil's downslide and WTI could test $60/barrel, while Brent could slide to $71 and possibly further to $67 over the next few days, McCarthy says. December WTI is down 0.5% at $63.40 and January Brent is 0.4% lower to $72.60 in midday Asian trading.
- US stocks post their third consecutive day of gains lead by materials triggered by a surge in DowDuPont. The bellwether climbs 8% on stronger-than-expected 3Q earnings. Hope for a trade deal also helps lift sentiment after a tweet from President Trump suggests progress is being made in talks with China. Eyes now turn to tomorrow morning's October payrolls numbers where economists surveyed by WSJ estimate employers added 188,000 jobs and that unemployment held steady at 3.7%. DJIA jumps 264 points to 25380, the S&P 500 gains 28 to 2740 and the Nasdaq climbs 128 to 7434.
- Sturm Ruger says that it is largely shielded from direct impacts from tariffs because it sources a vast majority of its raw materials domestically. Yet CEO Chris Killoy says isn't completely unscathed because of indirect effects. Ruger sources most of its steel domestically, he says. "The tariffs have made domestic steel more attractive, so demand has risen as manufacturers who have been getting their steel from overseas look to find domestic sources," Killoy says. This has also brought up the price of steel and led to some other raw material shortages. Shares fall 4.8% to $56.54.
- Soybean prices rise 3% after President Trump signals progressing trade talks with China. "Just had a long and very good conversation with President Xi Jinping of China," Trump said in his statement on Twitter. "We talked about many subjects, with a heavy emphasis on Trade." China, once the largest buyer of US soybeans, has been filling its needs for the oilseed elsewhere since the countries enacted tariffs on each other's goods earlier this year. The two presidents are slated to meet during the G-20 summit in late November. Analysts say the strength in soybean prices could stay up the remainder of the session. Corn prices are up 1.2% and wheat prices are up 0.8%
- Illinois-based fertilizer maker CF Industries isn't likely to build any new US plants any time soon. Among the reasons: the scarcity of skilled labor and high steel costs compliments of America's ongoing disputes with key trading partners. "We think it's a little bit of a fool's game," to build in North America, said CF chief executive Tony Will on a call with investors, noting that "the war for skilled labor is getting increasingly more challenging." Beyond that, aluminum tariffs imposed by the Trump administration have made imports of certain "exotic steels" expensive, he said, adding that there are other parts of the world where building makes more sense. CF shares up 3% to $49.40.
- Despite a 2014 ban against entering the US, the Trump administration has decided to permit Dmitry Rogozin, Moscow's top space official, to come to Washington early next year for a meeting with NASA administrator James Bridenstine. Confirming the upcoming visit, a NASA spokeswoman said the aim is to continue to engage with the head of Roscosmos, who previously oversaw Russia's arms industry but faces sanctions stemming from his role in Russia's seizure of the Crimean peninsula. The meeting will be "in support of US civil space objectives," according to NASA. Through much of 2019--and perhaps longer--the agency is expected to remain dependent on Russian rockets and capsules to carry American astronauts into orbit. The US also seeks Kremlin support for proposed lunar exploration efforts, and eventually manned mission Mars.
- A break below the 1.13 level for EUR/USD would likely trigger a fresh wave of selling and the euro versus the dollar could see 1.10 by year end if the situation in EU does not improve. "Euro Up on Flows, Not Fundamentals, BK AM Says -- Market Talk", at 1137 GMT, misstated that the expected 1.10 level referred to the pound against the dollar, instead of the euro against the dollar.
- DowDuPont's agricultural boss James Collins says it's still too early to say with certainty how many acres US farmers will switch from soybeans to corn. He expects to see some, and figures it'll be positive for DowDuPont's business in multiple hemispheres. In the US, DowDuPont tends to make more money from corn than soybeans, and its wheat and cotton business stands to benefit. In Brazil, where farmers have been prioritizing soybeans, Collins says DowDuPont can capture some of that by virtue of its soybean-centric pesticide sprays, in addition to seeds. "We'd expect a benefit on this soy shift in Latin America," he says.
- Brazil's rightward swing, with the rise and recent presidential election of Jair Bolsonaro, has strengthened Brazil's real -- and bit into profits for DowDuPont, one of the biggest suppliers of pesticides and crop seeds to Latin America. James Collins, who heads DowDuPont's agricultural business, said the real's rise versus the US dollar is likely to translate to a $100M "headwind" to the division's earnings in the second half of this year, hitting its seed sales more than chemicals. The Brazilian currency's rise took hold just around the time that DowDuPont began marketing its seeds to farmers there, Collins says. Shares rise 5.3% premarket.

Nov 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell extending losses in previous sessions, amid signs of rising supply and growing concerns that demand might weaken on the prospect of a global economic slowdown.
- Gold recovered from a three-week low hit in the previous session as the recent fall in the metal prices and an easing dollar from multi-month highs induced some bids.
- Most Shanghai base metals fell with aluminium hitting a fresh two-year low, on concerns that an escalating Sino-U.S. trade row will hurt demand, while another batch of weak data from top metals consumer China added to the negative tone.
- Chicago wheat futures rose for a second straight session with prices underpinned by lower output in key exporting countries, which is expected to boost demand for U.S. supplies.
- The British pound jumped on a report that Prime Minister Theresa May has struck a deal with Brussels that would give UK financial services companies continued access to European markets after Brexit.

Oct 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices climbed for the first time in three days but rising supply and fears over the outlook for demand amid the U.S.-China trade war kept pressure on the market.
- Gold prices fell to a more than two-week low as Asian stocks gained and the dollar touched multi-month highs on upbeat U.S. economic data.
- Aluminium fell to its weakest in two years in Shanghai and hit a nearly 15-month low in London after China's manufacturing sector grew at its slowest pace since July 2016, dampening the demand outlook in the world's top metals consumer.
- U.S. corn futures edged lower as friendly weather was expected to see farmers advance harvesting, pushing prices to a five-day low.
- The entry into force of an 11-nation Trans-Pacific Partnership trade deal will provide a boost for global trade momentum to counter trade tensions between the U.S. and China, trade experts say. New Zealand's Chief Trade Negotiator Vangelis Vitalis says the ratification by Australia on Wednesday will formally bring "this mega deal into force" at the end of the year, with a 60-day countdown to the first round of tariff cuts. The remaining countries yet to ratify the deal, which Donald Trump backed out of in one of his first acts as U.S. president, are Brunei, Chile, Malaysia, Peru and Vietnam. New Zealand's Trade Minister David Parker says he expects other countries to sign the deal soon, but Australia's ratification has provided the necessary sixth country trigger.
- JPMorgan Chase & Co. Chief James Dimon said he dropped out of a Saudi Arabia business conference because he "couldn't be seen in any way condoning" the country's involvement in the murder of journalist Jamal Khashoggi, according to Axios. Dimon, speaking at an Axios event where JPM is a sponsor, said Tuesday that JPM's work in Saudi Arabia is weighted on "what the American government decides, not what JPMorgan decides," according to Axios. Dimon added: "Being engaged is not a bad thing, it does not mean you condone everything."
- Brazilian aircraft maker Embraer SA expects its deal to sell 80% of its commercial jetliner business to US aerospace giant Boeing to be completed by the end of this year, according to Embraer CEO Paulo Cesar de Souza e Silva. The company would like the details of the transaction to be shared with the incoming government of President-Elect Jair Bolsonaro, who won Sunday's presidential election and will be sworn in on Jan. 1, Silva said during a conference call. Once Brazil's government approves the sale, Embraer shareholders will vote on it, and Silva said he expects them to approve it as well. Embraer shares were up 3% in early trading Tuesday.
- Coach parent Tapestry says it has no plans to raise prices due to tariffs that have been imposed by the US on handbags and leather goods made in China. The company said less than 5% of its handbags and small leather good production is in China. It added that while the tariffs have been a "little bit" of a headwind," at this moment it has no plans to raise prices. Shares rise 1.4% to $41.38.
- As the Chinese yuan falls further and USD/CNY approaches 7, stay short AUD/JPY, says Societe Generale. The Australian dollar would be hurt more than the safe-haven Japanese yen if USD/CNY breaks the key level. A break above 7 could spark more intense trade disputes between the U.S and China, with the U.S. possibly introducing import tariffs on all Chinese products. Trade spats would hurt Australia, which is an open economy and relies heavily on trade, especially with neighbour China. USD/CNY hit a new 10-year high of 6.9711 on Tuesday. AUD/JPY is last up by 1% at 80.10 on Tuesday, after rising to an eight-day high of 80.23.
- The volatility in USD/SGD pair is expected to continue as US/China trade spat returns to the fore. Reports that Washington may announce additional import tariffs on Chinese goods by the year-end if trade talks fail are supportive of the greenback's ascend, Maybank says, noting the overnight rise in the US dollar. But there is still a lot of uncertainty on which way Trump may turn on a deal with China. Maybank sees immediate resistance for the pair at S$1.3850 while support is pencilled around S$1.3800. US dollar is broadly unchanged from yesterday afternoon's level.

- Markets in Europe should open higher, London Capital Group says. "Wall Street extended last week's selloff and Asian traders were edgy overnight following speculation of further trade-tariff threats from Trump," it says. "European markets are pointing to a broadly stronger start on the open," it says. A number of economic announcements are expected today, including Italian and eurozone GDP, it says.

Oct 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent oil prices dipped weighed down by ongoing weakness in global stock markets and by signs of rising global supply despite looming sanctions on Iran's crude exports.
- Gold prices edged lower as the U.S. dollar firmed on renewed fears of an intensification in the Sino-U.S. trade war and worries over slowing global economic growth.
- Shanghai base metal prices fell after a report that the United States is planning potential tariffs on an additional $257 billion of Chinese goods. 
- U.S. soybean futures fell to hit a six-week low, as a USDA report putting harvesting ahead of market expectations added to pressures from abundant supplies and the U.S.-China trade dispute.
- US stocks fall to session lows after a Bloomberg report says the US is planning its next wave of tariffs on Chinese goods should talks between President Trump and Xi Jinping fall apart. The S&P 500 was recently up 0.1%, while the DJIA erased its gains for the day and traded down 60 points, or 0.2%, and the Nasdaq Composite lost 0.8%. Worries about trade have kept stocks under pressure for much of the year and added to pessimism over the global economy.
- U.K. Treasury chief Philip Hammond says Britain will go it alone in introducing a new digital services tax aimed at raising more revenue from tech giants such as Google parent Alphabet Inc. and Facebook Inc. In his annual budget address to Parliament, Mr. Hammond says the new levy will be introduced from April 2020 and is expected to raise GBP400 million ($513 million) a year. "It is only right that these global giants, with profitable businesses in the U.K., pay their fair share towards supporting our public services," he says. The move reflects public anger at perceived tax avoidance by tech firms and comes as governments elsewhere consider similar measures.
- Less than three weeks after Trump told reporters Oct. 9, "I don't like $74" oil prices, the president has gotten his way, and just in time for mid-term elections. Oil prices have fallen by 10% since then, to around $67/bbl, while stubbornly-high gasoline prices -- always a hot-button election issue -- are now sliding, too. They're near a six-month low at $2.81/gallon, though still 35 cents higher than last year. Whether Trump played a role in oil's downward move is debatable. The Saudis said last week they plan to pump a lot more oil, spurring the sharpest price fall in months last Tuesday.
- Angela Merkel saying she will step down as leader of Germany's center-right CDU party "almost certainly" means that she will not run for a fifth term as Chancellor in the next national election in three years' time, says Jane Foley, senior forex strategist at Rabobank. "Not only does this signal an era of change for Europe, but her weakened position suggests greater uncertainty in European politics and potentially a lessened mood for reform," she says. Mrs. Merkel is seen as one of the few leaders who can help keep Europe together and the common currency alive as populism grows on the continent and far-right parties--usually against the euro and further European integration--gain more support. EUR/USD is down 0.1% at 1.1395.
- Since the 2008 crisis, inflation in developed countries has soared in the areas that matter most to consumers; areas such as energy, housing, transport, healthcare and education that are often not reflected in official inflation data, says Daniel Moreno. "Ask anyone in U.S. or Europe and they will definitely tell you the cost of living is higher every year, but on the government calculation levels they are lower," says Mr. Moreno, head of emerging-markets debt at Mirabaud Asset Management. Employment data can also give a skewed picture, he says. The quality of economic development has worsensed, which partly explains the rise of populism, he says. Such governments would be unlikely to form in countries with "genuine productivity" and "strong consumer-led growth," he told Dow Jones Newswires.
- Angela Merkel's announcement that she won't run for re-election of her party's leadership pushed the euro briefly to a low for the day of 1.1361 against the dollar. But falls were limited and the euro has recovered most of the losses since, with EUR/USD last trading at 1.1386, down 0.15% on the day. Mrs. Merkel is facing further leadership problems after her centre-right CDU party and her coalition party centre-left SPD were each 10% down on the previous election in Hesse, one of the biggest states in Germany. Still, CDU won the majority in the elections held in the state home to the financial capital, Frankfurt. The coalition leader Andrea Nahles of the SPD threatened to end the alliance if Mrs. Merkel didn't implement policies to bring back voters.

Oct 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped amid cautious sentiment as a plunge in financial markets last week and dollar strength early this week underscored concerns that growth may be slowing, especially in Asia's emerging economies.
- Gold prices held steady in a narrow range as worries over U.S. corporate earnings and a slowdown in global economic growth weighed on Asian shares.
- London copper trimmed gains after slowing industrial profits signalled that China's economy was losing steam, which clouded the outlook for metals demand.
- Chicago wheat rose for a second consecutive session climbing to its highest level in 10 days as Egypt's rare purchase of a U.S. cargo boosted hopes of strong demand for North American supplies.
- The dollar edged higher against a basket of its key rivals not far off a 10-week high hit after data showed U.S. economic growth slowed less than expected and as global risk sentiment remained fragile.

- Since the 2008 crisis, inflation in developed countries has soared in the areas that matter most to consumers; areas such as energy, housing, transport, healthcare and education that are often not reflected in official inflation data, says Daniel Moreno. "Ask anyone in U.S. or Europe and they will definitely tell you the cost of living is higher every year, but on the government calculation levels they are lower," says Mr. Moreno, head of emerging-markets debt at Mirabaud Asset Management. Employment data can also give a skewed picture, he says. The quality of economic development has worsensed, which partly explains the rise of populism, he says. Such governments would be unlikely to form in countries with "genuine productivity" and "strong consumer-led growth," he told Dow Jones
Newswires.
- Angela Merkel's announcement that she won't run for re-election of her party's leadership pushed the euro briefly to a low for the day of 1.1361 against the dollar. But falls were limited and the euro has recovered most of the losses since, with EUR/USD last trading at 1.1386, down 0.15% on the day. Mrs. Merkel is facing further leadership problems after her centre-right CDU party and her coalition party centre-left SPD were each 10% down on the previous election in Hesse, one of the biggest states in Germany. Still, CDU won the majority in the elections held in the state home to the financial capital, Frankfurt. The coalition leader Andrea Nahles of the SPD threatened to end the alliance if Mrs. Merkel didn't implement policies to bring back voters.
- There's an expectation in the market that the Democrats could win a small majority in the House in the forthcoming midterm elections in the US. Standard Chartered surveyed clients and the research suggests this could generate a small drop in equity prices, bonds yields and DXY and a small gain in yuan. A larger Democratic win would extend downward pressure on yields, equities and bond yields, and lead to further yuan appreciation. Were the Republicans to surprise and squeak through with a narrow win, equities, DXY and yields are expected to rise and the yuan is expected to fall.
- A test plan from the Trump administration to lower the price that the U.S. Medicare program pays for drugs could be negative for CSL, says JPMorgan. The investment bank sees a 5% earnings downside spread over the next 5 years as a worst-case scenario. Still, JPMorgan says the plan is "likely to be aggressively opposed" by the pharma industry and notes that less-ambitious efforts by the Obama administration to lower drug prices did not proceed.

Oct 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices clawed back some of their hefty losses from the day before as the looming U.S. sanctions against Iran came back into focus.
- Gold prices nudged higher after hitting their highest in over three months in the previous session as global political and economic uncertainties bolstered safe-haven demand for the metal.
- Copper prices were flat to lower, reflecting concerns over slower demand in top consumer China for the rest of this year as Beijing's plans to reinvigorate the world's second-largest economy may only kick in by 2019.
- Chicago soybean futures slid for a second session and corn lost ground, with prices for both crops weighed down as harvesting gathers pace in the United States.
- The yen relinquished early gains and weakened as risk appetites returned with Asian equity indices rising, despite trade tensions and weak U.S. corporate earnings.
- The euro remains stable, despite the European Commission rejecting Italy's budget proposal, because Italian government debt absolute yields at about 3.6% "remain more than 2 percentage points below the level seen" in 2011, Commerzbank says. Another factor is that investors still believe the European Central Bank won't renege on its plan of raising interest rates next year, the bank adds. The overnight indexed swap "still prices in higher ECB interest rates for year-end 2019." EUR/USD is down slightly at 1.1463 and EUR/CHF is flat at 1.1408. The euro's neutrality "constitutes a considerable downside risk," says Commerzbank, "should doubt in the sustainability of the ECB's approach arise."
- The dollar's ongoing pause versus other currencies despite advantages from ongoing US interest-rate increases suggests there is a sizable risk premium built into the greenback, says Amp GFX currency strategist Greg Gibbs. He notes that premium may reflect the high-risk domestic and foreign policies adopted by the Trump administration, the polarization of the US electorate and likelihood of a split Congress after the midterm elections.
- A federal tax credit that incentivizes renewable-power projects and is scheduled to expire next year is spurring wind-power developments, Armando Pimentel, CEO at NextEra Energy's subsidiary that develops renewables, tells analysts on the company's 3Q investor call. The current version of the Production Tax Credit, or PTC, began in 2015 and ramps down 20% annually, meaning 2019 is the last year a project can qualify, according to the Energy Department. "I think customers understand that the PTC is slated to ramp down so they're anxious on the wind side to get in the queue," Pimentel says.
- Morgan Stanley upgrades Brazil's state-run oil company Petrobras to overweight from equal-weight five days before the country's presidential election that far-right candidate Jair Bolsonaro is expected to win handily. The research note doesn't mention Bolsonaro specifically, but points to potential management changes in 2019, something the candidate has said he'll do if he wins, in an effort to remove political appointees. Morgan Stanley notes PBR has already rallied 35% in the past month, but sees another 39% upside to its new price target of $21.50/ADR. "We believe the current 22% discount to Big Oil is unwarranted," it says.
- The Japanese yen is strengthening as global stocks fall, with USD/JPY falling to 112.04--it's lowest point since Thursday. If equity markets continue to fall and risk sentiment worsens, the yen "will likely be better supported," says Rabobank. But if "U.S. stocks bounce higher USD/JPY will follow."
- Aerospace specialist Allegheny Technologies warns domestic stainless steel customers could desert it unless it secures a tariff exemption from the commerce department by mid-November to import metal from New Zealand. The company imports the metal through a JV with a Chinese company, finishing it at a mill in Pennsylvania. Outgoing CEO Richard Harshman says on 3Q call that a decision is expected in the 4Q. Shares down 10% before the open after 4Q guidance fell short of expectations.
- New polling suggests Canadians are lukewarm about the revised Nafta, indicating the Liberal government has much work ahead to persuade voters otherwise with an election in less than a year. Overall, 30% of respondents to a survey by Angus Reid Institute said they were "pleased" with new Nafta, whereas 32% suggested they were "disappointed." Further, half of Canadians indicated the country's negotiators were "too soft" in dealing with the Trump administration. Angus Reid did note support and opposition is largely influenced by partisan affiliation. Just over 50% of Liberal Party supporters said they were "pleased" with new Nafta, while 54% of Conservatives indicated they were "disappointed."

Oct 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped after Saudi Arabia pledged to play a "responsible role" in energy markets, although sentiment remained nervous in the run-up to U.S. sanctions against Iran's crude exports that start next month.
- Gold prices edged higher as Asian stocks faltered, weighed down by political tensions between Saudi Arabia and Western powers, uncertainties around Brexit and Italy's budgetary woes.
- Copper prices ticked down, dropping from the previous session's one-week high and snapping two days of gains which were sparked by expectations of strong demand in China, the world's biggest consumer of industrial metals.
- Chicago soybean futures looked set to fall for a third session out of four, trading close to their lowest in nearly two weeks after a U.S. government report pegged the harvest there above market expectations.
- The Japanese yen, a safe haven in uncertain times, firmed against the dollar, as the euro and sterling suffered due to doubts over Italy's budget spending and over British Prime Minister Theresa May's future with Brexit talks stalled.
- The Canadian government on Monday appeared to shift its tone on a longstanding deal allowing a General Dynamics subsidiary to sell light armored vehicles to Saudi Arabia. Canada's governing Liberals are under pressure to revisit the contract, which was approved by the previous Conservative government, after the killing of journalist and Saudi government critic Jamal Khashoggi. Last week, Canadian Foreign Affairs Minister Chrystia Freeland said her Liberal government plans to toughen rules for future arms sales, but said "Canada's word has to matter," when it comes to existing contracts. Freeland did not repeat that language when asked about it at a press conference. Instead, she said officials discussed the investigation into Khashoggi's death earlier Monday, adding, "we are also talking about a just reaction," that Canada can take.
- Polaris Industries affirms its earlier forecast of a $40M cost impact from US tariffs this year, but CEO Scott Wine warns of "more severe" costs on the horizon as the Trump administration moves forward with duties on another tranche Chinese-made items. The boat and motorcycle maker declined to provide specific cost figures for 2019 until it assesses the effectiveness of its efforts to offset the tariffs by sharing the cost with its suppliers and lobbying the administration for tariff exemptions. Polaris says about 15% of its cost goods sold are linked to components made in China. "Polaris will not bear the full burden of these tariffs," Wine told analysts during a conference call. Shares up 3.8% at $93.78
- The safe-haven dollar will rise if trade disputes between the U.S. and China escalate, if there is a fiscal crisis in Italy or if the U.K. doesn't reach a deal with the European Union on Brexit, says Athanasios Vamvakidis, a forex strategist at Bank of America Merrill Lynch, in a note. However "the worst will have to happen in these cases for the dollar to rally," he says. The bank's base case is that a Brexit deal will eventually be reached, that there will be a compromise on the Italian budget and that the U.S. and China will at least come to an agreement before the end of the year. BAML has turned short the dollar from being long and says the currency is over-valued.
- The Italian government is due to re-submit on Monday its budget proposal to the European Commission after the initial proposal was rejected last week. Italy will likely "respond to the EC today in a letter confirming the 2.4% deficit target," says Jim Reid, research strategist at Deutsche Bank, in his Monday morning note. Though Italian media reports said the government could lower the fiscal deficit target to 2.1%, Mr. Reid says. If this does happen, it "would be a substantial de-escalation." However "the weekend mood music from the government doesn't suggest this is about to happen," he says, and the euro trades down 0.1% against the dollar at 1.1508.
- Credit rating agency S&P is due to give its credit assessment on Italian debt on Friday and Italian government bond yields will move depending on whether the agency decides to follow Moody's one-notch downgrade or not. If the ratings agency just switches the outlook to negative, the 10-year government Italian and German bond spread could fall back to 250 basis points, ING says. "If S&P mimics Moody's decision, though, and the stand-off between Rome and Brussels is unresolved spreads could struggle to fall much below 300 bps." The spread was last around 297.90 bps, according to Tradeweb. ING says "it's not a done deal that S&P on Friday will follow the Moody's example."
- Moody's leaving Italy's credit rating at stable on Friday as it downgraded it just by one-notch to Baa3 speaks of the fact that "agencies are unlikely to want to create a vicious circle," says Jim Reid, research strategist at Deutsche Bank, in his Monday morning note. It's not because the outlook for Italy at the moment is stable, he says. With the S&P rating due on Friday "it's possible we'll see a similar response for a similar reason," Mr. Reid adds.
- The euro remains at around 1.15 against the dollar as the week begins under the shadow of political risks and potentially weak incoming economic data. The implications of Italy's "downgrade by Moody's ahead of the review by S&P on Friday remain the major driver for the euro this week," says UniCredit. Eurozone purchasing managers survey data for October "are likely to fall again," but stay "consistent with firm eurozone growth." It sees the dollar as unlikely to be moving in any direction given that U.S. third-quarter GDP "will likely show solid expansion, albeit at a slower pace than in" 2Q, consistent with market views. EUR/USD is last up 0.3% at 1.1548.

Oct 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as markets were expected to tighten once U.S. sanctions against Iran's crude exports are implemented next month.
- Gold prices edged higher towards a 2-1/2-month peak hit last week as the dollar eased and worries over rising political tensions slowing global economic growth lent support to the metal.
- London copper prices rose for a second session, extending a rally fuelled by a pledge from China's central bank that it would support firms with liquidity problems.
- The euro and the British pound managed to hold steady against the dollar as investors cautiously awaited developments around Brexit as well as Italy's budget plan which drew heavy criticism from the European Union.
- Chicago corn futures slid for a fifth consecutive session as the harvest of a bumper U.S. crop gathered pace after being slowed down by rains, while soybeans ticked higher after two days of falls.
- Credit rating agency S&P is due to give its credit assessment on Italian debt on Friday and Italian government bond yields will move depending on whether the agency decides to follow Moody's one-notch downgrade or not. If the ratings agency just switches the outlook to negative, the 10-year government Italian and German bond spread could fall back to 250 basis points, ING says. "If S&P mimics Moody's decision, though, and the stand-off between Rome and Brussels is unresolved spreads could struggle to fall much below 300 bps." The spread was last around 297.90 bps, according to Tradeweb. ING says "it's not a done deal that S&P on Friday will follow the Moody's example."
- Moody's leaving Italy's credit rating at stable on Friday as it downgraded it just by one-notch to Baa3 speaks of the fact that "agencies are unlikely to want to create a vicious circle," says Jim Reid, research strategist at Deutsche Bank, in his Monday morning note. It's not because the outlook for Italy at the moment is stable, he says. With the S&P rating due on Friday "it's possible we'll see a similar response for a similar reason," Mr. Reid adds.
- The euro remains at around 1.15 against the dollar as the week begins under the shadow of political risks and potentially weak incoming economic data. The implications of Italy's "downgrade by Moody's ahead of the review by S&P on Friday remain the major driver for the euro this week," says UniCredit. Eurozone purchasing managers survey data for October "are likely to fall again," but stay "consistent with firm eurozone growth." It sees the dollar as unlikely to be moving in any direction given that U.S. third-quarter GDP "will likely show solid expansion, albeit at a slower pace than in" 2Q, consistent with market views. EUR/USD is last up 0.3% at 1.1548.

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

- Oil prices nudged higher on signs of surging demand in China, the world's second-biggest oil user, though prices are set to fall for a second week amid concerns of the ongoing Sino-U.S. trade war is limiting overall economic activity.
- Gold prices nudged higher as Asian shares fell on renewed political and economic concerns including China's weak growth, with the metal on track for a third straight weekly gain.
- London copper steadied as markets took heart from China's pledge to support its economy after growth slowed the most in the third quarter since 2009, but prices for the metal were still facing their deepest weekly decline since mid-August.
- Chicago soybean futures slid with the marker on track for their second week of declines on pressure from disappointing U.S. weekly exports and improved harvest weather.
- The euro hovered near a one-week low against the dollar as the European Commission's criticism of Italy's populist budget sparked fresh concerns about political tensions in the common currency zone.

- The multi-year high in the Italian and German 10-year government yield spread sent the euro to a ten-day low of 1.1433 on Friday. But since then it has recovered slightly and is last flat at 1.1450 versus the dollar. "A fair degree of negative news relating to Italy seems to be in the price, hence the relatively mild pace of euro decline," ING says. The disagreement between the European Commission and Italy on the path of the Italian budget have "been widely expected" as well as a downgrade by credit rating agency Moody's latter this year month. says ING.
- With Turnbull ousted as PM several months ago, his seat in parliament will be contested on Saturday. The election could have consequences for the Aussie dollar as the conservative coalition is expected to lose, costing the group its 1-seat majority in the House and making the government more reliant on independents for now to pass legislation. Thankfully, Aussie markets are used to this kind of upheaval, with PMs coming and going at regular intervals the last decade. Still, there is some market risk for next week.
- European and South American pork purveyors are enjoying a bump in sales to China, lifted by China's tariffs on US-produced pork, and they're working to build on those gains. But some say they have no illusions about their Chinese clients' most important priority--price--which could give the advantage back to US producers if the trade dispute is resolved, and US pork gets cheaper. "Who knows how long the problems between China and America remain?" said Hendrik Voigt, of German meat-trading firm Vimex GmbH. "This can end very quick, if the midterm elections don't go Mr. Trump's way."
- Nucor CEO John Ferriola says the recently completed trade deals with Canada, Mexico and South Korea are proof that the US tariffs on imported steel and aluminum are beneficial and demonstrate the "Trump administration's approach to trade is working." "The tariffs are providing leverage to get other countries to the table to negotiate fairer trade agreements for the US," Ferriola told analysts during a conference call. The Nucor boss has been one of the steel industry's biggest backers on the 25% duty for imported steel.
- A year from now, the Chinese yuan will likely be weaker, with USD/CNY at 7.3, says Rob Drijkoningen, co-head of the emerging-markets debt team at Neuberger Berman. China will likely want to have a weaker currency "to accommodate some of the [U.S import] tariffs," he says. USD/CNY was last up 0.2% at 6.9391. In January, the U.S. is expected to up its current 10% tariff on $200 billion of Chinese imports to 25%, adding to other previously implemented tariffs. China has imposed tariffs on American products too, but because U.S. imports into China are smaller than Chinese imports into U.S., it cannot match the same amount going further. Having a weaker currency to support its trade could be one indirect way of retaliation.
- The word tariff may not have appeared in Nucor's earnings report, but the US trade action helped fatten the steelmaker's 3Q bottom line. Average sales price per ton rose 7% from 2Q and 23% from a year earlier. Shipments, which slipped from 2Q, were still up 6% from the comparable 2017 quarter. Nucor also guided that 4Q profits will be "noticeably higher" than a year ago, on "sustainable strength" in end markets. However, Nucor shares slip 3% in morning trading, as other major US steel producers are also trading lower.
- As Thursday proceeds, the pound could fall further and below 1.31 against the dollar, says BK Asset Management. GBP/USD is last down 0.1% at 1.3105, having fallen in the morning to a nine-day low of 1.3076. U.K. retail sales fell by 0.8% in September, compared with a rise of 0.3% in August, worse than the 0.3% fall forecast by a WSJ poll, but this hasn't moved the pound by much. In fact, it rose slightly versus the dollar in the aftermath. The Bank of England is probably focusing more on Brexit negotiations than on economic data for its policy assessment, analysts say. Still, BK AM says "unless we get positive noises from Brussels, the impasse on Brexit and softer [economic] data suggest that GBP/USD could underperform for the rest of the day."

Oct 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil inched up amid ongoing tensions over the death of a prominent Saudi journalist, with prices steadying after a big drop overnight due to a jump in U.S. crude stockpiles.
- Gold prices held steady in a narrow range as Asian shares eased, while the dollar firmed after minutes of the Federal Reserve's September meeting reinforced expectations of a tighter U.S. monetary policy.
- London copper edged lower as the U.S. dollar strengthened after minutes from the Federal Reserve's meeting last month showed more interest rate increases are likely for the rest of the year.
- Chicago soybean futures slid, falling for two out of three sessions, as the harvest of a record U.S. crop picked up steam this week.
- A year from now, the Chinese yuan will likely be weaker, with USD/CNY at 7.3, says Rob Drijkoningen, co-head of the emerging-markets debt team at Neuberger Berman. China will likely want to have a weaker currency "to accommodate some of the [U.S import] tariffs," he says. USD/CNY was last up 0.2% at 6.9391. In January, the U.S. is expected to up its current 10% tariff on $200 billion of Chinese imports to 25%, adding to other previously implemented tariffs. China has imposed tariffs on American products too, but because U.S. imports into China are smaller than Chinese imports into U.S., it cannot match the same amount going further. Having a weaker currency to support its trade could be one indirect way of retaliation.
- The word tariff may not have appeared in Nucor's earnings report, but the US trade action helped fatten the steelmaker's 3Q bottom line. Average sales price per ton rose 7% from 2Q and 23% from a year earlier. Shipments, which slipped from 2Q, were still up 6% from the comparable 2017 quarter. Nucor also guided that 4Q profits will be "noticeably higher" than a year ago, on "sustainable strength" in end markets. However, Nucor shares slip 3% in morning trading, as other major US steel producers are also trading lower.
- As Thursday proceeds, the pound could fall further and below 1.31 against the dollar, says BK Asset Management. GBP/USD is last down 0.1% at 1.3105, having fallen in the morning to a nine-day low of 1.3076. U.K. retail sales fell by 0.8% in September, compared with a rise of 0.3% in August, worse than the 0.3% fall forecast by a WSJ poll, but this hasn't moved the pound by much. In fact, it rose slightly versus the dollar in the aftermath. The Bank of England is probably focusing more on Brexit negotiations than on economic data for its policy assessment, analysts say. Still, BK AM says "unless we get positive noises from Brussels, the impasse on Brexit and softer [economic] data suggest that GBP/USD could underperform for the rest of the day."
- Fed officials expected that the impact of Hurricane Florence on national economic activity would be modest, according to September meeting minutes released Wednesday. This is in line with the impact of several previous storms. Still, officials said that "a number of communities suffered devastating losses associated with Hurricane Florence," the minutes showed.
- Many Fed officials noted in their September meeting that the Commerce Department had revised up the household saving rate by a large margin. Some saw this as evidence of household strength that could underpin growth in consumer spending. A couple others, though, said this could indicate some greater caution on the part of consumers or shifting behavior in a low-interest rate environment.
- Fed officials at their September meeting expressed concern regarding risks stemming from the Trump administration's trade policy, minutes released Wednesday show. Officials referenced reports from business contacts across Fed districts, noting that a number of businesses had cited uncertainty over trade policy as a reason holding down their production, the September meeting minutes showed. The Trump administration has imposed tariffs on billions of dollars worth of imports, and it has threatened more, leading to retaliatory tariffs on US goods.
- White House economic adviser Lawrence Kudlow said he believes Fed Chairman Jerome Powell is less wedded to the central bank's traditional economic models that suggest an inverse relationship between inflation and unemployment, which suggests less urgency to raise short-term interest rates than might have previously been the case with the unemployment rate falling below 4%. "Powell is having a bit of a revolution at the Fed," Kudlow says on Fox Business Network. "He's throwing out the Fed models." Kudlow's comments follow continued criticism of the Fed by President Trump, and Kudlow is pushing back on the idea that Trump should have reason to fear the Fed.

Oct 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices extended gains into a fourth session, buoyed as industry data showed a surprise decline in U.S. crude inventories and as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked supply worries.
- Gold prices edged lower as equities gained and the dollar firmed amid waning risk-averse sentiment, with the market awaiting minutes from the U.S. Federal Reserve's latest policy meeting for fresh clues on the pace of interest rate hikes.
- Shanghai copper extended losses into a second session, curbed by tepid spot trading amid increasing stockpiles at the futures exchange.
- Chicago soybean futures slid for a second session as a bumper U.S. crop harvest is expected to gather pace after forecasts of dry weather in parts of the U.S. Midwest.
- Germany's export growth will slow this year due to global trade disputes and slowing demand from emerging economies, says the BGA group of wholesalers and exporters. After a solid first half year, growth will slow in the remainder of this next year, it says, with exports rising by only 3.5% in 2018 after 4.6% last year. U.S. trade disputes have already eaten into German trade, with German exports to the U.S. only rising by 1% during the first six months, while exports to the U.K. amid ongoing Brexit uncertainties fell by 2.7% during the same period. "A whole bunch more or less major risks face only a few impulses for new growth," says BGA President Holger Bingmann.
- Morgan Stanley just had its best day since Donald Trump won the presidency. Shares of the Wall Street firm rose 5.7% on strong across-the-board quarterly earnings, the biggest single-day gain since Nov. 9, 2016. Trump's election sent all bank stocks soaring on expectations--some realized, some not--of regulatory rollback, infrastructure investments and higher interest rates. MS reported a 20% rise in quarterly profits, extending a run of strong performance under CEO James Gorman.
- The Trump Administration unveiled its plan for drug companies to provide list prices for medicines in television ads, saying it was a step toward reining in high drug prices. But Wells Fargo casts doubt on such an impact. Wells Fargo says it is unlikely drug companies will feel pressure to choose the lowest list price, because health insurers are the payors and lowest list price doesn't necessarily mean the lowest out of pocket cost for a patient.
- The fall in U.S. Treasury yields from recent multi-year high is keeping the dollar subdued and making emerging market currencies stronger, as investors' attention goes back to higher yielding assets in the EM. EUR/USD up slightly at 1.1589, whilst USD/TRY is down by 0.1% at 5.7796, having fallen to a two-month low on Monday, and USD/ZAR is down by 0.5% at 14.29. "The Turkish lira is the standout performer in EM, having strengthened for nine straight sessions," says Societe Generale, adding that "the court ruling last Friday to release U.S. Pastor Brunson has nudged USD/TRY closer to 5.70."
- Major currencies are little changed on Tuesday, and ING expects this could remain the case as traders look ahead to the U.S. Treasury forex report, which is likely to be released this week and where the U.S. could name China a currency manipulator. "We don't look for material direction in the foreign exchange markets today given the lack of meaningful data points and the market's focus on the anticipated U.S. Treasury forex report," says ING. The U.S. naming China a currency manipulator would further pressure China on trade and add to U.S.-Chinese trade tensions. EUR/USD is flat at 1.1579 on Tuesday and other major currencies aren't moving by much either. GBP/USD is up slightly at 1.3163 and USD/JPY is up 0.3% at 112.07.

Oct 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose on signs Iranian oil exports this month have fallen from September ahead of U.S. sanctions against Tehran that are set to start in November.
- Gold prices held steady near last session's 2-1/2-month high as risk-averse investors sought refuge in the metal amid rising political tensions and economic uncertainty.
- London copper prices slid more than 1 percent as the market faced its biggest one-day loss in more than a week with pressure from a trade war between the United States and the world's top industrial metals consumer China.
- Chicago soybean prices slid, taking a breather after three sessions of gains to an eight-week high as rains in parts of the U.S. Midwest slowed the pace of harvest and raised concerns over crop quality.
- The U.S. dollar edged up after it was dented by weak U.S. retail sales data overnight, while New Zealand's currency gained on the back of stronger than expected inflation data.
- Major currencies are little changed on Tuesday, and ING expects this could remain the case as traders look ahead to the U.S. Treasury forex report, which is likely to be released this week and where the U.S. could name China a currency manipulator. "We don't look for material direction in the foreign exchange markets today given the lack of meaningful data points and the market's focus on the anticipated U.S. Treasury forex report," says ING. The U.S. naming China a currency manipulator would further pressure China on trade and add to U.S.-Chinese trade tensions. EUR/USD is flat at 1.1579 on Tuesday and other major currencies aren't moving by much either. GBP/USD is up slightly at 1.3163 and USD/JPY is up 0.3% at 112.07.
- The USDA will pay out more than $4.8B this year to farmers enrolled in its federal safety-net and conservation programs, offering some respite to growers facing a multiyear slump in the agricultural economy. Huge corn and soybean harvests are weighing on crop prices this year, while retaliatory tariffs from major US trading partners have slowed the flow of key farm goods into international markets. The annual payments come as food producers also confront "more hurricanes, wildfires, droughts, floods, and even lava flows," according to USDA Secretary Sonny Perdue. They are in addition to the nearly $5B the USDA has already pledged to pay farmers to compensate them for damage tariffs are doing to their businesses.
- Fitch Ratings says it does not expect Venezuela's government to implement or even propose an economic stabilization program in the near term as President Maduro's focus remains fixed on maintaining control over his troubled leftist political movement. Since declaring victory in May elections, Maduro has so far held out thanks to loyalty among the armed forces and divisions between his political rivals, Fitch notes. Thus Maduro is unlikely to take drastic economic measures that may upset his base. Since the end of last year, Venezuela's government has defaulted on $3.8B in bonds, while national oil company PdVSA has also missed debt payments totaling $1.7B. "Even if the government chooses to try to resolve the default, Fitch believes a resolution will be protracted..."
- Oil prices edged up Monday amid mounting U.S.-Saudi Arabia tensions following the disappearance of a dissident Saudi journalist two weeks ago. Some investors are speculating the Saudis could use oil as a weapon if the U.S. were to impose sanctions on the Kingdom over the journalist's alleged murder. But Caroline Bain, chief commodities economist at Capital Economics, does not expect Saudi Arabia to cut oil output, "not least because it will want to preserve the 'anti-Iran axis' with the U.S." However, she writes in a note that "if Saudi Arabia were to cut output by 25% (as it did in the 1970s, the only other time it has cut production for political rather than economic reasons), the market would fall into a significant deficit and prices would soar." She predicted crude prices could climb to $150 a barrel. Brent crude was trading up 0.11%, at $80.52 a barrel in afternoon trade.
- Former Fed Chairwoman Janet Yellen says President Trump's criticism of the Fed's moves to raise short-term interest rates are counterproductive during an appearance at an industry convention in Washington. "I don't believe that President Trump's comments will change what the Fed is doing," she tells mortgage bankers. Yellen ticks off a list of reasons why such comments can rattle markets' confidence in the Fed's commitment to keeping inflation contained. "Obviously presidents can speak out if they choose to and give their opinion about policy. There's no law against that. But I don't think it's wise," she says.
- Bank of America's CFO said on a call with journalists that the bank is "still evaluating" its role in the kingdom's premier business conference. Senior finance figures including JPMorgan Chase CEO James Dimon, Laurence Fink, chief executive of the world's largest asset manager, BlackRock; and Stephen Schwarzman, CEO of private-equity giant Blackstone Group have all pulled out of the event, the Wall Street Journal has reported.
- The dollar falls on Monday as investors taking profit on U.S. assets outweighs concerns about Italy and Brexit, says BK Asset Management. "The vast profits built up in dollar-denominated assets--primarily stocks--are now coming under stress and foreign investors may simply be looking to lock in their gains, precipitating much of the outflows." This explains "why despite failing Brexit talks, persistent disagreements between EU and Italy and falling equity prices, the buck can't find a bid." Moreover, twin U.S. deficits and prospects of "a halt in Fed's relentless rate hiking cycle," also weigh on the dollar. EUR/USD rises 0.2% to 1.1587, USD/JPY falls 0.3% to 111.85, though GBP/USD edges down 0.1% to 1.3142. The DXY dollar index is down 0.25%.
- The Turkish lira extends its gains against the dollar, hitting a two-month high, after a Turkish court Friday released U.S. pastor Andrew Brunson following two-years of his detention on terrorism charges, which strained relations between Turkey and the U.S. "The lira is likely to benefit at least modestly during the period between now and the CBT meeting of 25 October where we anticipate the next 300bps rate hike," says Commerzbank. USD/TRY is last 1.7% lower at 5.7740, having dropped to a low of 5.7480, according to FactSet.
- BlackRock's view is that the U.S. and China will continue to threaten further import tariffs and implement new ones, says Michael Fredericks, head of income investing for multi-asset strategies. "Our base case calls for prolonged trade tensions between the two countries that will weigh on investor sentiment," he says. Even though the broad consensus is that a trade war will prove economically detrimental to all parties involved, "the resilience of U.S. equity markets and economic activity may only further encourage the US to increase pressure on China."
- The Chinese yuan will continue to weaken against the U.S. dollar, pushing USD/CNY toward 7, if trade disputes between the two countries continue to escalate, says Societe Generale. The yuan is likely to fall even if the U.S. doesn't name China a currency manipulator in its semiannual report on international economic and exchange rate policies, due this week. USD/CNY is last flat at 6.9194.
- The euro faces headwinds this week as Italy is due to submit its budget draft to the European Commission today and the CSU, Angela Merkel's ally party, takes a beating in a regional election. The Italian budget will aim for a higher fiscal deficit than the EC would be comfortable with, sparking worries of how sustainable Italian debt could be. And Bavarian elections raise questions about how long the German chancellor can keep control of her coalition government. Meanwhile, the U.K. and EU haven't agreed on measures to prevent a hard border in Ireland, keeping Brexit uncertainty high. "The latest tea leaves for the euro don't make for pretty reading," ING says. The EUR/USD is up 0.3% at 1.1592.
- The Monday after a volatile week of trading, oil prices edged up on the back escalating tensions between the U.S. and Saudi Arabia over the suspected killing of a dissident Saudi journalist. The U.S. has warned of consequences for the Saudi government if it is implicated in the case of the journalist, while the Saudis have vowed to retaliate against any punitive measures. "This has raised concerns that the Saudis may use oil as a tool for retaliation if any sanctions or other action is taken against it as a result of the disappearance of the journalist, according to Warren Patterson, commodities strategist at ING Bank. Brent crude is last up 1.2% at $81.36 a barrel, in mid-morning trade.

Oct 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Crude oil futures rose as geopolitical tensions over the disappearance of a prominent Saudi journalist stoked worries about supply, although concerns about the long-term outlook for demand dragged on prices.
- Gold prices rose as Asian shares resumed their fall and investors grappled with the impact of the ongoing Sino-U.S. trade war and higher U.S. interest rates.
- London metal prices eased alongside an uptick in the U.S. dollar and as ongoing global trade tensions cloud the outlook for demand. 
- Chicago corn futures lost ground as the market took a breather following two sessions of strong gains that were triggered by a forecast of lower U.S. production.
- Citigroup Chief Executive Michael Corbat said that drawn-out negotiations between the US, Canada and Mexico over a new trade agreement aren't impacting consumers in the bank's Mexican retail unit, but are impacting corporate flows. "You've seen FDI [foreign direct investment] go down, you've seen more volatility in the currency," he told analysts on Friday on a conference call. "You've seen U.S. inbound to Mexico more conservative, and you've seen Mexican businesses more conservative." Of the new, but not yet finalized United States-Mexico-Canada Agreement deal, he said: "We like the fact there's a deal on the table," but didn't comment on its specific terms.
- Canadian Finance Minister Bill Morneau tells reporters he spoke with US Treasury Secretary Steven Mnuchin on the sidelines of the IMF meeting about lifting US tariffs on Canadian-made steel and aluminum. He says he explained to Mnuchin the safeguard measures Canada unveiled this week to thwart dumping of cheap foreign steel into Canada, and prevent foreign firms from using Canada as a backdoor to get steel into the US. "That was part of the discussion," Morneau says. He adds he's hopeful this would help the US reconsider national-security tariffs on Canada.
- The reaction in the Turkish lira is muted after Turkey announced it would release U.S. pastor Andrew Brunson, though trading in the currency has been volatile on Friday, with the currency earlier rising in anticipation of the decision. USD/TRY is last flat at 5.9281. Mr. Brunson's release "could spark further volatility in the lira," says Lukman Otunuga, research analyst at FXTM in an email. The fact that Turkey had been keeping Mr. Brunson in captivity on terrorism charges had sparked political tensions between the U.S. and Turkey, causing a fall in the lira. The news is one reason to be less negative on the lira, although uncertainty surrounding Turkey's economy and politics remains. This could make predicting its direction difficult.
- Mexico says Canada's decision to apply steel tariffs to keep low-cost producers from using the country as a backdoor into the US will have an impact on Mexican exports such as steel rod and drill pipe, and could violate Canada's obligations under Nafta as well as put the competitiveness and integration of regional industry at risk. The Mexican government will take necessary actions to protect Mexican exporters and seek exclusion from the Canadian safeguards through Nafta and the WTO, the Economy Ministry says.
- The big banks' 3Q earnings once again reflected how much of their earnings growth is still coming from the sharply lower tax rates resulting from last December's tax overhaul. Citigroup derived most of its year-over-year earnings growth from its lower tax rate, which declined to an effective 24.1% from the year-ago 31.1%. If Citi's current-quarter results had been subject to the same effective tax rate the bank had a year ago, before the tax overhaul, its earnings would have risen less than 2%, instead of 12%. At Wells Fargo, where the effective tax rate plunged to 19.9% from the year-ago 32.2%, the bank's year-over-year earnings growth would have been about 9% without the lower rate, instead of the 32% growth it posted. JPMorgan's earnings growth if its old tax rate had persisted would have been about 12% instead of 24%. Together, the three banks saved about $2.2B in the quarter because their tax rates were lower than they were a year ago.
- President Trump has once again come out swinging against the Federal Reserve, claiming the Fed's policy stance is to blame for the recent plunge in markets, saying the Fed is going "loco." Despite his obvious displeasure, both Trump and White House officials have recently made it clear that the Fed's independence is respected, ANZ says. Fed-blaming appears to be more political strategy than challenge to the institutional arrangements underpinning monetary policy, adds ANZ.
- For the third straight day, President Trump expressed his unhappiness with the Fed's long-running campaign to slowly raise interest rates as the economy's expansion continues. But in remarks to reporters at the White House, he says he wasn't considering firing Fed Chairman Jerome Powell. "No, I'm not going to fire him. I'm just disappointed," he says. It isn't clear whether the president can fire the Fed chairman because the law is vague--it says Fed governors can be removed "for cause." After a fight with Fed Chairman William McChesney Martin in 1965, President Lyndon Johnson asked the Justice Department if he could legally remove a Fed board member. His lawyers advised him that disagreeing with Fed policy didn't meet the "for cause" standard.

Oct 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Crude prices jumped 1 percent, rebounding after two days of heavy declines with support from robust Chinese crude imports, but oil was still headed for its first weekly decline in five weeks.
- Gold prices edged lower, but held near a more than 10-week high hit in the previous session when the metal breached a key resistance level, stoking optimism about an uptick in prices.
- London aluminium steadied after metals were caught in a widespread market sell-off this week and ahead of Chinese trade data later in the session, but it was set for its biggest weekly drop since June as concerns over raw material costs eased.
- Chicago corn futures rose further with the market on track for its second week of gains as a surprise cut in U.S. output forecast underpinned the market.
- The U.S. dollar traded at its lowest level this month against its major peers as declining U.S. treasury yields and further losses on Wall Street soured sentiment.
- U.S. tax cuts have prompted companies to repatriate $1 trillion dollars, which benefited the stock market as corporates used the money for share buy backs. As stocks outperformed, pension funds which were overweight equities then sold equities and deployed the money into long-dated U.S. bonds. The tax reform "resulted in an unprecedented risk transfer of short-term dollar liquidity to equities and ultimately long-dated bonds this year," says George Saravelos, global co-head of forex research at Deutsche Bank. "This buying has been price-insensitive and is thus very similar to central bank quantitative easing," he says. As a result, U.S. financial conditions have been kept "extremely easy" and "encouraged the Fed to sound hawkish."
- President Trump's renewed and more strident criticism of the Fed stands at odds with his past take on monetary policy. While the president now reacts to the central bank's rate rises and plans for more increases by saying the Fed "is making a mistake," and "has gone crazy," Trump once blasted easy money policies. In a 2011 tweet, Trump said "the Fed's reckless policies of low interest and flooding the market with dollars needs to be stopped or we will face record inflation." Trump appears to have undergone a complete swing from hawk to dove, while having offered a warning on inflation that didn't come to pass.
- European shares fall 1.8%, or 6.59 points, to 360.34 as worries about the U.S. economy and Italian political wrangling with the EU hit sentiment. After Wall Street and Asia fell as U.S. government bond yields gained, all major European indices are in the red, with the DAX down 1.5%, the CAC 40 off 1.7% and the FTSE MIB retreating 1.3%. "The FTSE MIB plunged on the open into bear market territory with markets still concerned about the continually fractious relationship between the Italian government and EU authorities," says CMC Markets analyst Michael Hewson.
- For EUR/USD  to rise back to 1.18, US Treasury yields would need to "top out or the fiscal debate in Italy would need to calm significantly," say UniCredit analysts. EUR/USD is last up 0.1% at 1.1539, though overnight it rose to an eight-day high of 1.1574. The reason for that was the 10-year U.S. government bond yields falling from recent highs to 3.15% as U.S. stocks sold off, followed by those in Asia. "The focus today will likely be on the implications of the U.S. equity plunge for stock markets worldwide and on U.S. consumer price data," UniCredit analysts say.
- London shares are tipped to tumble in opening deals after U.S. equities faced their biggest selloff in eight months and Asian indices plunged by up to 6%. The FTSE 100 Index is expected to open 90 points down at 7055 after the Dow Jones Industrial Average fell nearly 832 points and the China Shenzhen A-share index dropped 6.4%. David Madden at CMC Markets notes President Trump's colorful criticism of the Federal Reserve's interest-rate strategy. "Trump was implying the intense selloff in stocks was the fault of the Fed, ignoring the fact that he started the trade spat with China," he says.
- The FTSE 100 index closes down 1.3% at 7145.74, its lowest since early April, tracking sharp falls in European and U.S. stocks on concerns about rising bond yields, Italian political uncertainty and trade tensions. A rise in the pound on hopes a Brexit deal will soon be agreed adds to negative sentiment toward U.K. equities. Burberry is among the biggest fallers, sliding by 8.1%, in line with broad falls in luxury goods stocks after Paris-based company LVMH reported a slowdown in Chinese consumer demand as it announced 3Q sales. This adds to broader concerns about the impact of U.S.-China trade tensions and tariffs. Packaging company Mondi is the biggest faller, down 8.7%, while heavyweight mining stocks are also lower.

Oct 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell to two-week lows as they extended big losses from the previous session amid a rout in global stock markets, with oil also taking a hit from an industry report showing U.S. crude inventories rose more than expected.
- Gold prices inched down as robust U.S. data potentially bolstered the chances of multiple U.S. interest rate hikes over the next year, but a weaker dollar curbed losses.
- Base metals prices fell sharply, tracking a broad sell-off on equity markets as a gloomy macro-economic outlook raised concerns over demand-growth.
- U.S. soybean futures fell for a third consecutive session as ample global supplies and concerns that a Sino-U.S. trade war could escalate kept prices near their lowest since the start of the month.
- London shares are tipped to tumble in opening deals after U.S. equities faced their biggest selloff in eight months and Asian indices plunged by up to 6%. The FTSE 100 Index is expected to open 90 points down at 7055 after the Dow Jones Industrial Average fell nearly 832 points and the China Shenzhen A-share index dropped 6.4%. David Madden at CMC Markets notes President Trump's colorful criticism of the Federal Reserve's interest-rate strategy. "Trump was implying the intense selloff in stocks was the fault of the Fed, ignoring the fact that he started the trade spat with China," he says.
- The FTSE 100 index closes down 1.3% at 7145.74, its lowest since early April, tracking sharp falls in European and U.S. stocks on concerns about rising bond yields, Italian political uncertainty and trade tensions. A rise in the pound on hopes a Brexit deal will soon be agreed adds to negative sentiment toward U.K. equities. Burberry is among the biggest fallers, sliding by 8.1%, in line with broad falls in luxury goods stocks after Paris-based company LVMH reported a slowdown in Chinese consumer demand as it announced 3Q sales. This adds to broader concerns about the impact of U.S.-China trade tensions and tariffs. Packaging company Mondi is the biggest faller, down 8.7%, while heavyweight mining stocks are also lower.
- Farm groups welcomed President Trump's endorsement for higher ethanol blend fuels to be sold year-round, but the move won't much budge corn prices from the low levels they've been at for years now, according to JPMorgan. Allowing "E15" blends--gasoline made with 15% ethanol--to be sold from June 1 to Sept 15 will face intense opposition from the petroleum industry, though the Trump administration's hoping it will shore up tariff-hit farmers' spirits, and their political support. The likely impact on ethanol and corn demand, JPMorgan says, "in the foreseeable future is immaterial."
- Canadian Foreign Minister Chrystia Freeland hosted her counterpart, US Trade Representative Robert Lighthizer, at her Toronto home for a meal on Tuesday evening. A spokesman from Freeland's office described the get-together as a short working dinner, which was used to take stock of the next steps on the US-Mexico-Canada Agreement. The three countries announced the new trade pact last week, after more than a year of negotiations and a final-hour effort to bring Canada into an agreement that was reached this summer between the US and Mexico. The new trade pact did not address US national-security tariffs on Canadian steel and aluminum or Canada's retaliatory tariffs against the US, all of which remain in place.
- Russia is looking to increase its leverage over the West with its new gas pipeline Nord Stream 2, which will transport gas to Europe, says Frank Fannon, assistant secretary at the Bureau of Energy Resources in the U.S. State Department. Speaking at the Oil & Money conference in London, Mr. Fannon says "the United States will continue to support European energy diversification including by providing alternative sources of energy such as LNG." He says that competition from the U.S. will increase choices for European consumers and reduce prices, "even when the ultimate supply is from other producers."
- The dollar stalls temporarily after US President Donald Trump said the Federal Reserve shouldn't raise interest rates as fast, says ING. But this temporary blip is unlikely to alter the broader theme of dollar gains. "In terms of the overall outlook, until we see clear signs that the market has confidence where the top is for the Fed cycle and Washington softening its stance on China and trade, we would expect the dollar to stay supported against emerging markets and pro-growth currencies." Still, US midterm elections next month have the potential to dampen dollar demand. "A correction in the dollar is probably the US midterm elections, where a loss of the House would curtail most hopes for fresh fiscal stimulus." The DXY dollar index is down 0.1%.

Oct 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged lower after the IMF lowered its global growth forecasts but prices were supported as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 percent of U.S. Gulf of Mexico crude output.
- Gold prices held steady as expectations of more U.S. interest rate increases pressured demand, although the metal drew some support from the dollar coming off a seven-week high.
- Chicago soybean futures fell for a second session as expectations of a bumper U.S. crop and an escalating U.S.-China trade war weighed on the market. 
- Shanghai zinc jumped almost 2 percent, hitting its highest since mid-June as output cuts in China buoyed the market although prices in London ticked lower after rallying in the last session. 

- At the request of his chief trade negotiator, Mexican President-elect Andreas Manuel Lopez Obrador is asking Twitter what Mexico should call the new Nafta -- or USMCA -- in Spanish. The rules are that it should start with T for Tratado, since in Mexico the agreement is a treaty, that it should include the three member countries -- the US, Mexico and Canada -- and be pronounceable as a word. With 5,638 votes cast and five days left to vote, T-MEC was leading TEUMECA by 42% to 19%, while 39% say neither. Nafta in Spanish was easy enough -- TLCAN, pronounced "telecan."
- French oil giant Total SA was forced to abandon plans for a major natural gas project in Iran earlier this year after the US said it would re-impose sanctions on the country, but CEO Patrick Pouyanne said the company would return if it had the opportunity. "We cannot work in Iran because the US imposed sanctions," Pouyanne told the Oil & Money conference in London. "I've no regret, and if there's an opening tomorrow, we'll come back. We are a little stubborn."
- The Cboe Volatility Index, or VIX, rises for the fourth straight day as the levels of expected and realized volatility in markets continue to diverge. Stocks are down 0.7% since last Thursday but the volatility gauge has been jumpier than normal, breaking above 18 during the day Monday. "That seems like a bit of an over-reaction," wrote Pravit Chintawongvanich, equity derivatives strategist at Wells Fargo Securities. The volatility gauge's moves are surpassing experienced turbulence in markets. He says that expectations of volatility could remain elevated until the US midterm elections on Nov. 6. The VIX is a measure of expected volatility over the next month based on S&P 500 options prices.
- China aims to raise $3 billion in dollar-denominated bonds Thursday when it offers 5- and 10-year debt--and possibly also one longer tranche--despite continuing trade tensions with the U.S. A senior Chinese government official told investors at a briefing that he is confident of the debt offering's success as the tariffs dispute won't deal a significant hit to China's economy even though they are moving markets. He said U.S. customers are the ones who'll have to bear the higher product prices resulting from tariffs, while industrial production is unlikely to shift to America. Still, he did acknowledge investor worries about China's economy, including Chinese companies' high debt levels.
- Mark Gyvetvay, chief financial officer and deputy chairman of the management board at Russia's Novatek, pushed back Tuesday against U.S. and Western sanctions against Russia's oil and gas industry. He suggested the U.S. government was not allowing for a level playing field in the global gas sector. "Why is gas from Russia bad, but gas from the U.S. is good gas?" he said on the first day of the annual Oil & Money conference in London. "We need to stop with this nonsense and unpredictability that's coming out of Washington today," Mr. Gyvetvay said. He also criticized Washington for the reimposition of economic sanctions on Iran's oil industry, which he said was creating uncertainty in the oil market.
- Western sanctions on Russia's oil and gas industry have so far not caused much disruption on the "operational level," according to Tatiana Mitrova, director of the Skolkovo Energy Center. "Sanctions are not affecting the immediate performance of the industry, but they are creating huge risks-transaction costs," Ms. Mitrova said on the first day of the annual Oil & Money conference in London. She added that threats to Russia's oil industry will likely emerge between 2025 and 2030, if key production technologies are not developed. That would lead to a decline of Russian oil production that would prove "quite sensitive for the economy, which is so much dependent on oil and gas revenues."
- Though valuations are attractive in the emerging markets, ING says it remains "cautious" on the area. "In our view, the case to turn bullish on emerging markets forex isn't strong enough, due in part to the domestically focused Fed steaming ahead and continuing increasing interest rates." Furthermore, trade disputes between the U.S. and China are likely to halve trade growth next year, which would negatively impact the EM, ING says. The International Monetary Fund published Monday estimates for global growth and said global gross domestic product may fall by 0.8% by 2020 if trade disputes continue. "Coupled with the shaky general risk appetite, this poses headwinds to EM forex for the time being."
- U.S. regulations on methane emissions are not stringent enough, Royal Dutch Shell CEO Ben van Beurden says. The Trump administration is weakening rules governing methane leaks, even as big players in the industry make commitments to bring down pollution from the greenhouse gas. Speaking at the Oil & Money conference in London, Mr. van Beurden says some of the regulations in the U.S. does need reform, but the company wants to see strong rules around methane. "We don't think the U.S. is as tight on methane emissions as it should be," he said.
- Japanese 10-year government bond yields are close to the 2018 high of 0.161%, which is benefiting the Japanese yen due to signals from the central bank that higher yields are acceptable. "The signal that higher interest rate levels would be tolerated can cause capital flows even in the absence of a further normalisation of monetary policy. That is another reason why we expect to see a stronger yen," Commerzbank says. The BOJ eased its yield curve controls at the end of July. "A steeper yield curve might make it more attractive for institutional Japanese investors to increasingly invest in domestic government bonds again and to save the costs arising from hedging currency risks when making foreign investments." USD/JPY is down by 0.1% at 113.08.
- Rising Italian government bond yields are weakening the euro, but major falls are not in the cards as long as the euro's existence isn't threatened, and as long as European Central Bank President Mario Draghi's 'whatever it takes' promise is in place, says Commerzbank. "National crises within the eurozone will only cause serious currency turbulence if they attack the systemic foundation of the single currency in a manner which the European Central Bank's monetary policy is unable to deal with." EUR/USD is last down 0.1% at 1.1473 even though 10-year Italian yields reach 3.628%, just shy of Monday's 2018 high of 3.631%, according to Tradeweb.
- EUR/USD is likely to fall further, but the declines will "probably be a slow grind," says Societe Generale. It is "obvious from the intra-day price action that the area between 1.1475 and 1.1500 is holding firm." But "positioning for the EU/Brexit dinner next week and for Italy's ratings review later in the month still favour a bearish skew" in EUR/USD, SocGen says. The 2.5% decline since end-September "may not be the end of the mini-correction that has seen the pair retreat from 1.1815 to below 1.15." EUR/USD is last down 0.1% at 1.1477.

Oct 9 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as more evidence emerged that crude exports from Iran, OPEC's third-largest producer, are declining in the run-up to the re-imposition of U.S. sanctions and as a hurricane moved across the Gulf of Mexico.
- Gold prices edged higher drawing some safe-haven bids from risk-averse investors as Asian stocks fell amid worries over a potential slowdown in China's economic growth and as the dollar eased against the yen.
- Shanghai zinc rallied nearly 4 percent to a 3-1/2-month peak, as production cuts at Chinese smelters dragged down stockpiles to the lowest in more than a decade.
- Chicago soybean futures gained more ground to trade near last session's six-week high as rains in parts of the U.S. Midwest threatened to slow the harvest and reduce crop quality.
- While the Trump administration's trade policy has ruffled feathers across multiple asset classes, "I think Trump has managed to in the short-term and at face value, cause a revival in the U.S. aluminum industry," says Jorge Vazquez, founder and managing director at HARBOR Aluminum. "In terms of investment and profitability," Mr. Vazquez says he hasn't seen such dynamism in the primary and downstream U.S. aluminum sector in his 20 years in the industry, when speaking at LME Week. LME three-month aluminum futures were last down 1.1% at $2,082 a metric ton.
- The dollar should rise until the middle of next year, but then go back to current levels versus the euro towards end-2019, says Rabobank. "The hawkish sentiments expressed by Fed Chair Powell last week and buoyant U.S. economic data suggest that the Fed is likely to press ahead with its policy of progressive rate hikes at least for another couple of quarters." By contrast, "very few G10 central banks are likely to be hiking rates in this time frame." However, by mid-2019, "the Fed's interest rate cycle will have peaked," as will tax cuts' boost to the U.S. economy. Rabobank expects EUR/USD to fall to 1.12 by mid-2019 and end the year at 1.15. EUR/USD is last down 0.4% at 1.1477.
- The dollar may have reached its peak against the yen, ING says. Last down 0.1% at 113.60, a break below 113.30 could be the signal for this and the prompt for further falls. "We are tentatively inclined to say that this may be a short-term top for USD/JPY." The dollar rose last week on a record-breaking ISM non-manufacturing survey and rising U.S. yields, sending USD/JPY above 114 but has since retraced, partly due to a sell-off in global tech stocks, ING says. A "sustained move" below support between 113.30 and 113.50 is needed to confirm this. Still, factors supporting the safe-haven yen include: "ongoing U.S. stock market woes, any further negative U.S.-China trade war rhetoric, negative global growth sentiment from the IMF World Economic Outlook report."
- Italian bond prices have priced in one-notch downgrade from Moody's, says ING. But if S&P "also downgrades Italy's credit rating -and not just the outlook as our base case assumes - a sustained break" in the spread between 10-year Italian and German bonds above 300 basis points "might unfold." This would increase selling pressure on the euro, which will otherwise "trade fairly neutral" around the 1.15 level against the dollar, ING says. EUR/USD is last down 0.2% at 1.1495. The spread between the Italian and German government bonds was last at 289.80, according to Tradeweb.
- EUR/USD has stabilized around 1.15 and is likely to stay around this level, UniCredit says. The dollar should be driven by U.S. yields, but for the yields to go higher than the current 3.22%, a level they rose to on the back of the record-breaking ISM non-manufacturing survey last week, is unlikely, the bank says. The euro shouldn't fall much further due to the Italian budget projections, it adds. "The approval of the Italian budget law and rating-agency reviews may create some noise in the weeks ahead, but lasting pressure on EUR/USD from the situation in Italy is unlikely as long as there is no contagion to the rest of Europe." EUR/USD is last down 0.2% at 1.1504.

Oct 8 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude oil prices fell more than 1 percent after Washington said it may grant waivers to sanctions against Iran's oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.
- Gold fell as the dollar firmed after China's central bank eased its domestic policy to support the economy amid concerns that an escalating trade dispute with the United States could hurt growth.
- London aluminium prices fell more than 3 percent after a Brazilian court approved emergency waste measures that could allow the world's biggest alumina refinery to resume production.
- Chicago soybean prices rose for a second consecutive session, hitting their highest in more than six weeks as rains in parts of the U.S. Midwest delay the harvest of what is expected to be a record crop.

- EUR/USD has stabilized around 1.15 and is likely to stay around this level, UniCredit says. The dollar should be driven by U.S. yields, but for the yields to go higher than the current 3.22%, a level they rose to on the back of the record-breaking ISM non-manufacturing survey last week, is unlikely, the bank says. The euro shouldn't fall much further due to the Italian budget projections, it adds. "The approval of the Italian budget law and rating-agency reviews may create some noise in the weeks ahead, but lasting pressure on EUR/USD from the situation in Italy is unlikely as long as there is no contagion to the rest of Europe." EUR/USD is last down 0.2% at 1.1504.

Oct 5 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, as traders focused on U.S. sanctions against Iran's crude exports that are set to start next month to tighten global markets.
- Gold prices were steady as investors remained cautious after U.S. Treasury yields hit multi-year peaks and on expectations that stronger monthly employment data could boost the Federal Reserve's case for a tighter monetary policy.
- London aluminum held its ground as worries over an alumina shortage stoked cost inflation concerns, sending prices towards the biggest weekly gain in nearly six months. U.S. corn futures edged up to hit a two-month high as a forecast for rains stoked fears of harvest delays, pushing the grain towards its biggest weekly gain since July.
- The dollar's rally took a pause on Friday as investors awaited monthly U.S. jobs data later in the day and evaluated the impact of a two-day global government bond rout that has lifted U.S. Treasury yields to seven-year highs.
- U.S. Vice President Mike Pence's speech on China will damp hopes of a swift resolution to trade frictions, Australia & New Zealand Banking Group says. It views Pence's speech as going beyond the usual China trade rhetoric with new language such as "China is meddling in America's democracy" and accusations that China is employing a "comprehensive and coordinated campaign" to undermine support for President Trump. "No doubt, expectations for a trade war resolution will be dampened as the Trump administration switches focus beyond the exchange of goods and intellectual property," ANZ says. The AUD/USD is at 0.7078 early in Asian trading on Friday.
- McDonald's is the latest large company facing pressure from Sen Bernie Sanders, the Vermont independent behind a bill aimed at taxing big companies whose employees rely on federal benefits to make ends meet. "If Amazon and Disney can pay $15 an hour, so can McDonald's, which made $5.1 billion in profits last year," Sanders tweeted. In a letter to McDonald's CEO Steve Easterbrook, Sanders referred to a study that found that US taxpayers subsidize McDonald's workers "to the tune of $1.2 billion a year. In my view that is unacceptable." A McDonald's representative couldn't immediately be reached for comment.
- Market participants seem to be "too complacent," says Bank of America Merrill Lynch. "The Italian-bond selloff and inflation risk with rising oil prices failed to ignite broad market volatility." USD/JPY, a market-risk barometer, reached a 2018 high on Thursday as U.S. treasury yields soar and the stock market gains as well. In the foreign-exchange market, there is a "segmented local risk, with little regional contagion." And as Brexit negotiations approach final stages, "sterling is active across all tenors," but the risk "is contained from spreading to the euro."
- The trial for the U.S. pastor Andrew Brunson is due October 12, which could see him being released from the custody of Turkish officials. The "release could result in a further relief rally" in the Turkish lira, says Kiran Kowshik, EM FX strategist at UniCredit. But "we do not believe risk-reward favors being long the lira at these levels and ahead of this event," says Mr. Kowshik. "A stalemate would likely result in a sharp TRY sell-off as the market prices in a U.S. response," he says, adding that "while Turkey's macroeconomic vulnerabilities were long in the making, it was the U.S. sanctions against two Turkish government ministers in early August that actually sparked the very sharp sell-off in the currency."
- With China reportedly inserting a tiny microchip on circuit boards of many U.S. technology companies and on board U.S. Navy ships may "cast a pall over global markets very quickly and the rosy U.S. growth picture," says BK Asset Management. U.S. Vice President Mike Pence is expected to make a speech on Thursday at the Hudson Institute "that will be sharply critical of China." If Donald Trump comments on Mr. Pence's speech, USD/JPY "could drift back below 114 as risk-off flows push aside positive economic news." USD/JPY is last down 0.2% at 114.23. However, the dollar's safe-haven characteristics may protect it from major falls against other currencies.

Oct 4 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell from four-year highs reached the previous session, pressured by rising U.S. inventories and after sources said Russia and Saudi Arabia struck a private deal in September to raise crude output.
- Gold prices inched down, after upbeat U.S. economic data and hawkish comments from Federal Reserve policymakers raised prospects of the central bank sticking to its tighter monetary policy, boosting the dollar. 
- Aluminium prices rose to a more than three-month high, stretching a rally to a fifth session, amid worries the closure of the world's largest alumina refinery in Brazil will lead to a shortage of the raw material.
- Chicago corn futures edged higher, rising for three out of four sessions as rains in key growing areas of the U.S. Midwest are expected to delay harvest of this year's bumper crop.
- President Donald Trump is expected to announce the lifting of a ban on higher ethanol blends of gasoline during a visit to Iowa next week, Reuters reported Tuesday, citing "two sources familiar with the plan."
- Mr. Trump is slated to visit Council Bluffs on Oct. 9 to make the announcement about lifting the summer ban, the report said.
- The president also might announce tighter restrictions on the trade of ethanol blend credits, the report said.
- The New York State Department of Taxation and Finance said Tuesday that it is reviewing allegations made in a New York Times report that President Trump's father transferred money to him and his siblings through complex tax arrangements. The Times reported on Tuesday that during the 1990s, Fred Trump and Donald Trump engaged in a series of transactions to pass income and real-estate assets from father to son while limiting tax liability. Citing confidential tax records it reviewed, the Times reported that over his lifetime, Mr. Trump received at least $413 million in today's dollars from his father, a New York City landlord who built a real- estate empire from scratch. James Gazzale, a spokesman for the state's Department of Taxation and Finance, said the allegations in the Times article are under review and his agency is "vigorously pursuing all appropriate avenues of investigation."

- With China reportedly inserting a tiny microchip on circuit boards of many U.S. technology companies and on board U.S. Navy ships may "cast a pall over global markets very quickly and the rosy U.S. growth picture," says BK Asset Management. U.S. Vice President Mike Pence is expected to make a speech on Thursday at the Hudson Institute "that will be sharply critical of China." If Donald Trump comments on Mr. Pence's speech, USD/JPY "could drift back below 114 as risk-off flows push aside positive economic news." USD/JPY is last down 0.2% at 114.23. However, the dollar's safe-haven characteristics may protect it from major falls against other currencies.
- Canadian PM Justin Trudeau says he's glad the revised Nafta his negotiators clinched with Washington ditched the provision dealing with investor-state dispute settlement, or ISDS. Under this provision, known in Nafta as Chapter 11, companies can bring claims to an international tribunal when they believe their overseas investments were unfairly treated by another Nafta government. "Chapter 11 has cost the Canadian government hundreds of millions over the years, which is why we are pleased that [our] agreement eliminates Chapter 11," Trudeau told lawmakers during Wednesday's question-period session in the legislature. "We believe governments should have every right to protect the environment, and labor standards." Mexico was keen to keep ISDS in its US deal. The US-Mexico deal on Nafta agreed to soften Chapter 11, so certain sectors could still use it.
- Looming maturing debt, China's 40% import tariff on Tesla's cars and executive departures pose risks to Tesla, says Bruce Clark lead analyst for Tesla at Moody's Investor Services. The U.S. electric car maker faces $1.15 billion in debt coming due for repayment in the next 5 months. Rising trade tensions between the U.S. and China could dampen Tesla's cash generation, as the Asian country, which accounted for 20% of Tesla's automotive revenue in 2017, imposed a 40% import tariff on Tesla's cars in retaliation, he adds. Mr Bruce has hailed the the proposed fraud settlement between Tesla and the U.S. Securities and Exchange Commission as "constructive" but says the high executive turnover is "disruptive" at a "critical" time.

Oct 3 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were firm on expectations of tighter markets once U.S. sanctions target Iran's petroleum industry from next month, although a strong dollar and rising U.S. crude supply curbed gains.
- Gold prices touched a one-week high as the dollar softened and demand for the safe-haven metal got a boost on concerns surrounding Italy's plans to tackle budgetary deficit.
- Copper edged lower and zinc retreated from a near three-month peak as the dollar strengthened against a basket of currencies, with Asian activity still muted by a week-long break in top metals consumer China.
- U.S. wheat futures edged higher, extending three-day gains to about 2.5 percent, as fears grow that Russia will act to curb exports.
- The euro pulled ahead from a six-week low after a report that Italy plans to reduce its budget deficit in the coming years provided some relief to the battered currency.
- The euro continues to be driven by the Italian budget projections, this time going up on reports that Italy may not pencil in another 2.4% deficit-to-GDP projection for 2020 and 2021. Against the dollar, the euro rises 0.2% to 1.1577. UniCredit says risks are contained and EUR/USD is somewhat safe from major falls. Only a break below the August lows around 1.13 would trigger a more intense sell-off. "Interestingly, EUR/CHF has so far proved more resilient than expected to increasing pressure on Italian assets, as it has failed to drop below the 1.1350 handle," UniCredit says.
- The trade dispute between the US and China is good news for Woodside's and Santos's efforts to market their respective LNG growth projects, Credit Suisse opines. China's planned 10% tariffs on US LNG is lower than mooted previously, but still heightens the risk for Chinese buyers and so is likely to see them pivot the emphasis in their longer-term procurement strategies toward places such as Qatar and Australia, the investment bank says. That may prove critical to shaping the next LNG supply wave, it adds.
- Canada's trade minister attempts to play down concerns Ottawa handed over sovereignty to US in revised Nafta by agreeing to a provision that theoretically makes a free-trade pact with China more difficult to reach. "We have all kinds of aspirations" for a deeper relationship with China, Jim Carr told Canadian Broadcasting Corp. "We want to deepen our economic relationships with China." Carr adds, though, there are no "formal" discussions at the moment. The revised Nafta, to be known as USMCA, gives both the US and Mexico have the right to terminate the deal with six months notice if they aren't comfortable with a trading pact Canada has cut with a so-called nonmarket economy, such as China.
- AT&T CEO Randall Stephenson wants Congress to pass privacy legislation that treats his company similar to tech giants like Google and Facebook, though he concedes lawmakers aren't likely to do anything until after the midterms. "We are regulated very intensely," Stephenson tells WSJ's Jerry Seib during the Atlantic Festival in Washington. "The tech industry has grown up in a very different mode" with a level of control over personal info that the public "just accepted and ignored, including our policy makers." But he's no fan of state-level privacy regulations like California's--several more are considering their own--calling the ensuing uncertainty a "disaster."
- The Federal Reserve's regulatory czar says that current capital levels in the financial system are appropriate. Testifying before the Senate Banking committee, Randal Quarles was asked by Sen. Sherrod Brown (D-Ohio) if he would consider lowering the risk-based capital surcharge for the largest banks. "Do you agree we shouldn't lower big bank capital standards?" Brown asked. "I think that capital levels, the total loss absorbency capacity in our system, is roughly about right," Quarles responded. He added that "we should go where the analysis would lead it to go" to determine whether to lower the capital requirement.
- Members of Canada's steel industry tell lawmakers they are open to quotas on steel exports if that's what it takes to get US national-security tariffs lifted. David McHattie, a vice president for Tenaris in Canada, said quotas that allow for growth could offer a "possible path" forward in dealing with US tariffs. In order to work, quotas would need to be distributed by the Canadian government based on firms' past performance, Essar Steel Algoma CEO Kalyan Ghosh said. Both executives say they would prefer a full exemption from the tariffs. The steel industry's openness to caps on their exports, which President Donald Trump appears to favor, suggests a split among Canada's primary metals producers. The Aluminum Association of Canada said Monday it is opposed to quotas and sees a full exemption from national security tariffs as the only acceptable path.
- Quebec on Monday night elected the right-leaning Coalition Avenir Quebec to form the next government. Quebec follows Ontario, Canada's most populous province, in shifting its regional politics to right. Observers will eye how incoming Quebec premier, Francois Legault, responds to the Canadian government's deal to secure access in a trilateral North American trade pact. Prior to Monday's vote, all main Quebec parties harshly criticized the concessions Canada gave up to the US when it comes to increased access to the Canadian dairy market. The bulk of Canada's dairy farmers reside in Quebec. Canadian provinces can't technically veto trade deals but can pose major hurdles when it comes to implementation.
- The Australian dollar will continue to be driven by "the trade conflict, risk aversion and the development of the U.S. dollar as a result of future Fed monetary policy," says Commerzbank. The Reserve Bank of Australia's monetary policy is unlikely to play a key role and Commerzbank "only expects the first RBA rate step in the spring, at the earliest." The central bank left interest rates unchanged overnight at 1.5% because inflation is expected to remain at the lower end of its target range. This is despite Australia's GDP "growing above trend" while "exports are high, business sentiment is good and consumer spending positive." AUD/USD is down 0.6% at 0.7180, having reached a two-week low 0.7162.
- To offset the impact of U.S. tariffs on all Chinese imports, if it happened, the Chinese remnibi would have fall by 12% in trade-weighted terms, says Wei Yao, economist at Societe Generale. The Caixin/IHS Markit manufacturing purchasing managers' index, released this week, fell to a 15-month low of 50 in September, highlighting "how the tariffs war with the U.S. may be adversely impacting activity in the manufacturing sector" China, Mrs. Yao says. The full impact of recent U.S. tariffs hasn't been fully translated in official data yet, analysts say. And China was going through an economic slowdown before the tariffs. USD/CNY is at 8.8689.
- The dollar trades higher versus most currencies on Tuesday, but after the trade deal between the U.S., Canada and Mexico reached on Sunday, the U.S. currency should see further losses versus the Canadian dollar, says Societe Generale. The USMCA deal puts the Canadian dollar "in good stead and may attract investor flows positioning for further tactical forex appreciation this quarter." The Mexican peso should see further gains too, but not as many as the Canadian dollar. "The CAD is down 1.9% year-to-date against the USD, compared to a 5.4% gain for the MXN, so the loonie [Canadian dollar] has ground to make up. This is also the case in nominal effective exchange rate terms, where the CAD trades around 10% below its longer-term average."
- Lack of contagion in the rest of the eurozone bond market from the rise in Italian government bonds shows that "the budget talks are still perceived as a local issue," UniCredit says. "The market behavior suggests to us that the Italian developments are likely to just add noise to the common currency at the moment," the bank says, adding that EUR/USD is unlikely to fall to August levels of around 1.13. EUR/USD falls 0.4% to a six-week low of 1.1525.

Oct 2 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets were strong again, with Brent crude holding above $85 and near four-year highs reached the previous day as markets prepare for tighter supply once U.S. sanctions against Iran kick in next month.
- Gold prices rose as risk appetite faded after getting a boost from an agreement between the United States and Canada to salvage a North American free trade deal.
- Copper prices fell for a second session as growth in China's manufacturing sector slowed in September, raising concerns over demand in the world's biggest industrial metals consumer.
- Chicago soybean futures edged lower, giving up some of last session's gains which were sparked by wet weather delaying U.S. harvests.
- The dollar retained gains against a basket of currencies while slipping off a more than 10-month peak against the yen as the boost to risk appetites from the U.S.-Canada trade deal to replace the North American Free Trade Agreement faded.
- The FTSE 100 index is set to open 16 points lower at 7479, says London Capital Markets, as European stocks follow their Asian counterparts lower. Optimism over a revamped U.S.-Canada-Mexico trade deal faded during the Asian session and turned to renewed concerns about the impact of trade tensions, says LCG's Jasper Lawler. Heavyweight oil companies are likely to rise as crude oil prices continue their ascent. Housebuilders may be in focus after Nationwide said U.K. house prices rose 0.3% in September, while attention will also be paid to a purchasing managers' index on U.K. construction activity due at 0830 GMT. Building materials-distribution company Ferguson will be watched as it posts full-year results and comments on the impact of challenging markets.
- The executive chairman of one of Canada's top auto-parts makers says the revised Nafta agreement is a "great deal" that will keep the North American auto industry competitive. Martinrea's Rob Wildeboer tells WSJ Canada should benefit from requirements that auto makers build a greater portion of a car in North America and with higher-wage workers to avoid duties when those vehicles cross borders. He says the cap that was placed on Canadian auto exports in a side letter to the agreement allows plenty of room for growth and would only apply if the US put national-security tariffs on Canadian cars and car parts. "I think Canada did pretty well on negotiations," Wildeboer says.
- Another winner in Canada from the revised Nafta is BCE, the telecommunications company. And the National Football League. In an annex, Canada agreed to rescind a policy that allowed US commercials to air in the Canadian broadcast of the Super Bowl. With the exception of the Super Bowl, Canadian networks are allowed to substitute US ads on US shows with ads they sell to Canadian companies and organizations. BCE owns Canada's largest private-sector network, CTV, and owns the NFL rights. CTV has argued the 2015 decision to allow US ads to air during the Canadian transmission of the Super Bowl has resulted in a ratings drop and a decline in ad revenue. The NFL has argued Canadian authorities improperly intervened in a contract between the NFL and CTV.
- Sugar futures jump 3.7% to end at 11.61c/pound after the US agrees to a new Nafta agreement with Canada and Mexico. ED&F Man Capital Markets says the agreement changes little for sugar but the market rose because higher oil and gasoline prices are expected to further boost Brazilian ethanol, giving cane producers there further incentive to convert more cane to ethanol instead of sugar. Chicago ethanol rallies 1.4%.
- Dairy farmers in Canada are fuming after the country's newly struck trade deal with the US looks set to open up more of the Canadian dairy market to US exports. "It looks like our government was bullied into it, " says Jake Vermeer, whose family milks 500 cows in central Alberta. The new trade deal looks set to allow US producers to supply slightly less than 4% of Canada's dairy market, but coming after similar concessions Canadian trade negotiators made to Europe and Asian countries, "this seems like death by a million paper cuts," Vermeer says. He says Canadian dairy farmers will work to ensure they're compensated fairly for the lost sales.
- CME hog futures rally after the US and Canada reach a deal regarding the North American Free Trade Agreement. Hog futures rise 3.3% while cattle futures edge higher. Analysts say that traders are taking the developments between the US and Canada as a sign that the US may closer to making a deal with China as well. Hog futures also rallied after the US and Mexico made a trade agreement in August, as Mexico is the top buyer of US pork.
- The proposed Nafta revamp has mixed reviews from the aerospace and defense sector, with trade groups previously concerned about any move to include a five-year sunsetting agreement. The 16-year term does include breaks at years 6 and 12, which makes companies wary because of the long-cycle nature of their capital investments. Canada is the second biggest importing partner of the US in aerospace, and the fourth largest export partner.
- Oil prices are increasingly being driven by what's happening with Iran's oil exports due to US sanctions that start next month, and a Texas-based consultant says this makes OPEC's monthly oil market report a must-read for investors, more than ever. William Edwards of Edwards Energy Consultants tells WSJ OPEC's "secondary sources" numbers on Iran production and exports proved to be fairly trustworthy during previous sanctions, noting they juggle satellite ship-tracking systems and government data, and also have a bead on Iran tankers whose transponders are purposely turned off. Still, he says knowing Iran's exports won't equate with knowing where oil prices will be, pointing out prices were half what they are now when Iran sanctions were lifted around January 2016, a move that should have lowered prices due to new supplies.
- One of Canada's top labor leaders says he's "absolutely thrilled" with the revised Nafta Canada was able to secure Sunday night. Jerry Dias, head of private-sector union Unifor, says the provisions calling for increased North American-made content in automobiles and the removal of the threat of national-security tariffs on Canadian cars would "solidify the footprint" for Canadian manufacturing, "ensuring that jobs will not continue to bleed to Mexico." He adds he would have prefered to see national-security tariffs removed from steel and aluminum, but is content that a US push for quotas was ditched. He said he's confident the tariffs will be removed as Canada fights the levies via conventional methods. His only reservation was the concessions Canada gave on dairy and drug patents.
- The trilateral trade deal reached among the US, Mexico and Canada removes a major source of uncertainty for Mexico's outlook, and the focus will turn to the policies of President-elect Andres Manuel Lopez Obrador, Capital Economics says, "and the evidence so far is that he's striking a remarkably centrist tone." That should lead the peso to hold up, and inflation to resume a downward trend, paving the way for interest-rate cuts, the research firm adds. Lopez Obrador is scheduled to take office Dec. 1.
- Metals producers in Canada say they'll keep pushing for full exemption from US tariffs before Nafta is signed. Canada agreed to join the trade deal despite a US refusal to lift tariffs on Canadian steel and aluminum, which have frustrated the Canadian government and the metals industry. "We are very disappointed that it hasn't been resolved," Aluminum Association of Canada president Jean Simard says. Simard says ending tariffs completely is the "only acceptable path," and his industry opposes any resolution that would put a cap on Canada's exports to the US. The steel industry is also calling for tariffs to be lifted, but Canadian Steel Producers Association president Joseph Galimberti says the industry is also open to an alternative deal if it allows the industry it to keep growing. That suggests Canadian steel producers--unlike the aluminum industry--may be willing to negotiate a side letter like the one Canada and the US reached on autos, which provides tariff protection for the sector as long as exports don't exceed specific levels.
- Hog and cattle futures are trading higher after the US and Canada made a last-minute deal on the revision of Nafta late Sunday. Archer Financial Services broker Dennis Smith says he expected Canada to come around as the country "needed the agreement more than the US did," given that a large amount of Canadian exports go to the US. CME hog futures are up 1.3%, while cattle futures are up 0.2%.

Oct 1 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude oil prices rose to their highest since November 2014 ahead of U.S. sanctions against Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), that kick in next month.
- Gold prices dipped ss the dollar firmed in the wake of indications from the U.S. Federal Reserve last week that it will pursue a tighter monetary policy.
- London metal prices eased amid evidence that the Sino-U.S. trade dispute impacted China's manufacturing activity last month and as a week-long holiday got underway in the country.
- Chicago soybean futures slid for a second session, with the market under pressure from U.S. inventories at an 11-year high and expectations of a record crop.
- A deal between Canada and the U.S. that will allow Canada to join the U.S.-Mexico trade agreement is "positive" but not "game-changing" for the Canadian dollar, says RBC, as the Canadian dollar rises to a four month high against the U.S. dollar. "Details of the deal are still incomplete, though it appears Canada has conceded greater access to dairy markets and tighter rules of origin for cars," RBC says. USD/CAD is last down 0.6% at 1.2836, having earlier fallen to 1.2815, its lowest since late May, after Canadian and U.S. officials reached a deal on Sunday evening.
- Stock markets are set to remain volatile this week due to trade tensions, U.K. politics, Brexit and U.S. non-farm payrolls, says Jasper Lawler of London Capital Group. While markets in general are rallying on an improved picture for global trade, the FTSE 100 looks set to trade lower this morning, Mr. Lawler says. But Germany's DAX and France's CAC should open slightly higher today, he says.
- Canada's dairy lobby reacted swiftly to news of the deep concessions Canada made on dairy in order to join a rewritten Nafta. The Dairy Farmers of Canada says the deal grants access to an additional 3.6% of the country's dairy market; eliminates domestic price classes which it says have helped Canada compete with some US products; and limits Canadian dairy farmers' ability to export. "This has happened despite assurances that our government would not sign a bad deal for Canadians," adds group President Pierre Lampron.
- The Canadian Chamber of Commerce is "delighted" with the US-Canada deal on a new continental trade pact, saying it will offer relief for firms struggling with the uncertainty that trade policy potentially posed. But the country's biggest business lobby wants to review the pact's details before commenting further. The chamber did offer that the turbulent 13-month renegotiation should underscore that Canada "must never again allow [itself] to be overly dependent upon one trading partner." Trade diversification must be a top Canadian-government priority, it adds.
- An early winner from Canada poised to join a reworked Nafta is the loonie. The Canadian dollar was up some two-thirds of a percent versus other major global currencies in Monday morning Asian trading on word of a last-minute deal with the US. Canada will join the deal reached in late August between Mexico and America. The loonie is at its strongest level versus the US dollar since the spring and earlier got to C$1.2815, according to FactSet. Meanwhile, it's at 3-year highs versus fellow commodity currency the Australian dollar. Asian equities haven't yet shown a reaction to the trade news.

Sep 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched up, with investors trying to gauge the potential impact on supply from looming sanctions by the United States on Iran's crude exports.
- Gold prices inched up but held near six-week lows hit in the previous session, as the dollar firmed after upbeat U.S. economic data supported the Federal Reserve's resolve for steady interest rate hikes over the next year.
- Shanghai aluminium prices dropped for a fourth session and were on course for their steepest monthly drop since March after China decided not to impose blanket cuts on industrial output in 28 northern cities this winter. 
- U.S. soybean futures edged up to extend gains into a fourth session, though they were set for a quarterly loss of more than 2.5 percent as the Sino-U.S. trade war threatens demand for U.S. supplies.

- Dairy farmers need the Trump administration to work quickly on trade, according to a dairy industry executive. American dairy farmers largely support the president's push to open up the Canadian market to US dairy products, but they are struggling to stay in business during a painful downturn, says Beth Ford, CEO of Land O'Lakes. In August alone, 43 Wisconsin dairy farmers went out of business, Ford says at the WSJ Global Food Forum in New York. "We need market access," she says, adding that tariffs on dairy products from trading partners, excess food supplies and the strong dollar all have contributed to trouble in the dairy industry. "[Tariffs] are pressuring the market and many farmers aren't able to withstand that pressure after multiple years of a down cycle," she says.
- The Atlanta Fed says the latest trade data in the GDP report has caused it to downgrade its estimate of 3Q growth. The bank's GDPNow real-time growth estimator now stands at 3.8%, down from the 4.4% in the Sept. 19 estimate. The reduced estimate flags the fact that trade squabbles run a real risk of having a negative economic impact if they persist and worsen. The Atlanta Fed estimate compares with the 3.4% estimate offered by private forecasting firm Macroeconomic Advisers.
- A closely watched proxy for business investment, orders for nondefense capital goods excluding aircraft, fell 0.5% from July, the Commerce Department said Thursday. Still, through the first eight months of the year, those core orders are up 7.4% from the same period in 2017. That's well ahead of inflation and overall economic growth. The tax overhaul President Trump signed into law last year was designed to incentivize businesses to step up investment. Increased orders for items such as machinery and metals may reflect the law is working as intended, though other factors are also at play. One is oil prices moving this year to the highest levels since 2014, sparking investment in the domestic energy industry.
- The U.S. dollar rises versus most major currencies on Thursday after Wednesday's Federal Reserve rate increase. But its increase against the Canadian dollar comes also comes after U.S. President Donald Trump rejected on Wednesday a meeting with Prime Minister Justin Trudeau of Canada, threatening to punish Canada by taxing the cars it exports into the U.S. USD/CAD rises 0.4% to a nine-day high of 1.3070. ING says USD/CAD may rise to 1.35/36 on the back of the fact that NAFTA negotiations between the U.S. and Canada are in a limbo. "The prospects of azombie NAFTA may keep Canadian dollar under some pressure for now."
- US stocks rise modestly as investors weigh the Fed's decision Wednesday to hike short-term rates for the third time this year. The Fed also signaled one more increase before the end of the year and more hikes next year, if warranted. We get the latest reading on economic growth this morning with the final estimate of 2Q GDP. Trade tensions also on investors' minds after President Trump, in a press conference Wednesday, accused China of trying to interfere in the midterm elections. The US and China have been locked in a trade spat. Trump also took aim at Canada, saying he was "very unhappy" with trade negotiations. Apple higher in pre-market after JPMorgan initiates coverage with an overweight rating and a $272 price target on a "compelling services transformation." S&P futures up 3.25 points.
- The euro's 0.2% fall against the dollar to 1.1712 is mainly due to a stronger dollar after a U.S. rate increase, but it's also because the coalition in Italy is reported to have been calling for a 2019 deficit closer to 2.5% of gross domestic product. "Italy may miss today's budget deadline," says Societe Generale. "It now seems there will be a sting in the tail and this has short circuited this month's advance in euro crosses" and steepening of eurozone government bond yield curves, SocGen says. European Commission's economy chief Pierre Moscovici called for the deficit to be well below 2%, and Italy's financial minister Giovanni Tria previously insisted that the shortfall would be around 1.6%. The euro falls to a one-week low against the yen of 131.57.
- The dollar rises against the euro, with EUR/USD falling to a one-week low of 1.1686 a day after the Federal Reserve raised its benchmark federal funds rate to a range of 2% to 2.25% and said the U.S. economy is in a particularly bright spot. The Fed "can continue its gradual rate hike cycle as planned and doesn't have to suddenly speed up as there is no inflation to fight nor slow down as the real economy continues to develop well," says Commerzbank. However, there is "a moderate permanent negative factor" facing USD: uncertainty stemming from President Trump's decisions. "Who would want to exclude anything with this president?" Commerzbank asks.
- Base metals are trading lower in Asia amid a firm dollar following the Federal Reserve raising interest rates and signaling that it will continue to tighten monetary policy. Fears of an escalation in U.S.-China trade tensions following Trump's remark accusing Beijing of interfering in U.S. midterm elections has also contributed to the weak sentiment. Three-month copper and zinc prices on the LME are each down 0.3%, while aluminum is 0.5% lower.
- President Trump's remarks about Canada during a press conference on Wednesday suggest Nafta talks between the two countries are now on hold, Toronto trade lawyer Lawrence Herman says. Trump told reporters he is unhappy with Canada's handling of trade negotiations and threatened to put tariffs on Canadian auto imports if Canada doesn't bend on U.S. dairy demands. "This kind of behavior on the part of a U.S. president, threatening direct economic harm [on Canada] is unprecedented," said Herman, who is also a former Canadian diplomat. He said Trump's comments suggest he "doesn't want to deal with Canada on this issue, at least in the foreseeable future."

Sep 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose by 1 percent as investors focused on the prospect of tighter markets due to U.S. sanctions against major crude exporter Iran, which are set to be implemented in November.
- Gold prices rose as investors looked for bargains after the metal fell to a two-week low in the previous session following a U.S. interest rate hike and as limited gains in the dollar after the decision supported demand for the metal.
- Base metal prices fell after a U.S. interest rate hike pushed the dollar higher and as an anti-pollution plan in top metals consumer China did not impose blanket production cuts on heavy industry this winter.
- Chicago soybean futures lost ground, snapping two sessions of gains as the market was weighed down by a lack of Chinese demand for U.S. supplies amid an escalating trade war between the two countries.
- President Trump's remarks about Canada during a press conference on Wednesday suggest Nafta talks between the two countries are now on hold, Toronto trade lawyer Lawrence Herman says. Trump told reporters he is unhappy with Canada's handling of trade negotiations and threatened to put tariffs on Canadian auto imports if Canada doesn't bend on U.S. dairy demands. "This kind of behavior on the part of a U.S. president, threatening direct economic harm [on Canada] is unprecedented," said Herman, who is also a former Canadian diplomat. He said Trump's comments suggest he "doesn't want to deal with Canada on this issue, at least in the foreseeable future."

- Amid the National Transportation Safety Board's investigation of an Air Canada jet that almost crashed on top of airliners on a San Francisco taxiway last year, vice chairman Bruce Landsberg tried to take the heat off portions of the aviation industry. In a move seemingly reflecting the Trump Administration's broad deregulatory bent, he proposed to exclude certain private and business aircraft from board recommendations to implement enhanced cockpit alerting systems for mistaken landing approaches. But the revised language eventually was withdrawn, after board chairman Robert Sumwalt pointedly countered by emphasizing the board's traditional approach of refraining from cost assessments: "I do not believe this agency should be concerned," the chairman said, about championing safety changes "with a burden on the industry."
- Fed Chairman Jerome Powell takes on the Trump Administration's aggressive trade actions gingerly. "We are not responsible for trade policy and we don't comment on particular trade actions," Powell says at the press conference. But he notes "we have been hearing a rising chorus of concern" even as their hasn't been as much impact in actual economic data so far. Powell says an outcome with lower tariffs would be good for the economy. But if a lot of barriers go up and stay there, then "that's going to be bad" for the American economy. He also says on the prospects tariffs boosting inflation: "You could see prices moving up. You don't see it yet" but the tariffs could give firms cover to boost prices.
- In his press conference after the FOMC meeting, Fed Chairman Jerome Powell was asked about whether President Donald Trump's criticism of rate rises are a problem. Powell doesn't say the president's name and falls back on central bank boilerplate, noting "we don't consider political factors or things like that" when making policy. Instead, he says the Fed focuses on its mission.
- Recent trade tensions between the US and China are challenging German detergent and adhesive maker Henkel AG KGaA, according to the company's treasury chief. "The tariff conflict that we currently have gives us a headache because we have business in both countries," Head of Corporate Treasury Michael Reuter said at EuroFinance, an industry gathering in Geneva, Switzerland. President Trump presents a "risk that you cannot control," Reuter said. Henkel is responding by raising inventory levels in the US and China. That helps the company "insure ourselves against these risks," Reuter said.
- After saying he wouldn't participate because he feared for his security, embattled Venezuela President Nicolas Maduro announces in a video post on Twitter that he has landed in NY to attend the UN General Assembly. His trip comes a day after the US leveled a fresh round of sanctions on Maduro's wife and members of his inner circle while President Trump called on other countries to heighten economic and political pressure on Venezuela's authoritarian government. Both Trump and Maduro have said that they're willing to meet, though no meeting is scheduled. Maduro arrives just as five South American countries and Canada on Wednesday formalize a petition urging the International Criminal Court to open an investigation into alleged human rights violations by the Maduro administration.
- The Fed's interest rate forecasts may not hold any great surprises relative to what was seen in June, but it's notable that central bankers see an extended period of time of running monetary policy above its long run level. The Fed may be dispensing with descriptions of policy as "accommodative" and Fed Chairman Jerome Powell may be pushed the concept of neutral rates off to the margin. Still, against the Fed's estimate of a long-term fed funds target rate of 3%, they see monetary policy delivering rates above that in 2019, 2020 and 2021. Given the duration of the business cycle, trade war rumblings and the worries about the yield curve, it will be very interesting to see if the Fed can deliver on such a hawkish policy outlook.
- FCC rules will soon make it easier for wireless companies to install new small cells, forcing local authorities to act fast on complete permit applications and to levy cost-based fees. GOP Commissioner Brendan Carr, a champion of the order, says it gets "government out of the way so that the private sector can compete" building 5G networks. Commissioner Jessica Rosenworcel, a Democrat, calls it too hard on locals and warns "the litigation that follows will only slow down our 5G future." The rule still passes 4-0 with Rosenworcel dissenting in part.

Sep 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil benchmark Brent traded little changed after rising to its highest in nearly four years in the previous session while U.S. crude futures fell as United States' officials tried to assure that the market would be well-supplied before sanctions are re-imposed on producer Iran.
- Gold prices drifted in a narrow range as investors awaited cues of the U.S. Federal Reserve's two-day meeting, where policymakers are expected to raise interest rates for the third time this year.
- London copper dropped for a third session in a row ahead of a widely expected U.S. interest rate hike and persistent worries over an escalating U.S.-China trade war.
- Chicago soybeans rose for a second session as bargain-buying lifted the market after prices dropped to their lowest in 10 years last week.
- The dollar kept to tight ranges as investors focused their attention on the Federal Reserve's policy review later in the day as global markets fret over an escalating trade row between the United States and China.
- London shares are firmly in positive territory after an upbeat reaction to first-half results from fashion retailer Next and a jump in oil shares as crude prices rise. The FTSE 100 Index gains 0.55%, or 40.96 points, to 7499.37 as the price of a barrel of Brent crude advances 0.7% to $81.79. BP is the sector's top riser, up 2.1%. "The black stuff spent the morning flirting with $82 per barrel, a fresh four-year high inspired not only by OPEC's rejection of Trump's calls for the organization to bring down the oil price, but the impending U.S. sanctions on Iran," Connor Campbell at Spreadex says. Next shares gain 9.4% after it increased full-year guidance, despite cautious outlook comments.
- Nordic markets are expected to open slightly higher Tuesday with IG calling the OMXS30 up 0.2% at around 1658. With no major economic news today, market focus will be on political developments around the U.K.'s plan to leave the EU and the U.S.-China trade dispute as well as European Central Bank speeches, says Danske Bank. Regional eyes will be on Sweden as the Prime Minister faces a confidence vote. Markets reacted yesterday to more hawkish comments from ECB President Draghi, Danske adds. "Draghi said the ECB sees 'a relatively vigorous pick-up in underlying inflation', which is really hawkish from Draghi, as he never chooses words accidentally." OMXS30 closed at 1655.01, OMXN40 at 1572.32 and OBX at 865.37.
- Base metals fell sharply in Asian trading as escalating trade tensions and a modest rebound in the dollar hits investor sentiment. A white paper released by China essentially blaming the US for undermining the world's multilateral system of trade seems to be the latest trigger following fresh tit-for-tat tariffs, as investors price in the risk of a volatile trade situation, says Michael McCarthy, chief markets strategist at CMC Markets. Three-month copper and zinc futures on the LME are down 2% and 2.7% respectively, while aluminum is 0.9% lower.

- JPMorgan Chase CEO Jamie Dimon says on CNBC while several industries are feeling the effects of deregulation efforts by the Trump administration, they haven't hit the largest banks. "Have we seen actual changes in regulation for us? Not really." Dimon notes smaller banks have seen some changes, which he supports. While Dimon says he doesn't want to chuck the Dodd-Frank Act, he supports eliminating duplication or regulations that hurt some markets "so you can enhance growth and do it safely."

- Analysts find it difficult to come up with a clear scenario of what would happen in the event of a full-blown global trade war. And it could be some time before the full impact of trade wars is seen in the data. "This could mean that investors currently risk being lulled into a false sense of security," says Rabobank. "The market is becoming complacent about the potential impact of the trade war." The fact that China has refused to participate in the next trade talks with the U.S. and has imposed tariffs on an additional $60 billion of U.S. products did little to move the currency markets, leaving EUR/USD relatively unmoved.
- New US tariffs on Chinese goods haven't caused "extensive damage" to the US medical-technology industry, the head of the main industry lobbying group says. But Scott Whitaker, CEO of Advamed, worries that if the US-China trade dispute isn't resolved soon, additional, more damaging tariffs could follow. "The entire industry isn't feeling it yet, but if trade talks don't go well, our concern is we will feel it in a significant way," he tells the WSJ at industry conference in Philadelphia. The group represents major medical-device makers including Johnson & Johnson, Abbott Labs and Medtronic.
- Canada's chief US envoy, David MacNaughton, says Canadian officials are trying to get a Nafta deal that would allow President Trump to declare victory. "I don't like playing chicken with the future of the Canadian economy," MacNaughton said in Toronto at event hosted by Politico. Still, MacNaughton said Canada is not prepared to make concessions that he says would render a trade deal "meaningless." Two issues he mentioned: a need for an independent dispute-resolution process that resolves tariff disputes; and the need for a "curb on the arbitrary use" of tariffs under the guise of national security. Canadian-made steel and aluminum currently face such levies. MacNaughton's remarks come a day after USTR Robert Lighthizer threatened to move forward with a bilateral pact with Mexico due to a stalemate in talks with Canada.
- The euro is likely to stay stable due to the two factors: the European Central Bank's monetary policy and Italian politics, says ING, but may rise against the dollar if the U.S. currency weakens. "Expectations for an ECB rate hike in September 2019 have marginally notched higher," keeping the euro supported "at a time when Italian budget risks are bubbling in the background." ING expects "these two forces to continue counteracting each other--pointing to stable euro dynamics in the near-term." If EUR/USD does rise, it will be due to dollar weakness, the bank says. "Any EUR/USD move beyond 1.18 is more likely to stem from post-Fed dollar blues." EUR/USD flat at 1.1763. The Fed rate call is due at 1800 GMT.

Sep 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were holding just below four-year highs hit in the previous session, as looming U.S. sanctions against Iran and unwillingness by the Organization of the Petroleum Exporting Countries (OPEC) to raise output supported the market.
- Gold held steady as the dollar stood firm ahead of the two-day U.S. Federal Reserve meeting beginning later in the day, while simmering U.S.-China trade tensions kept investors nervous about risks to global growth.
- London copper prices slid for a second session with the market dropping more than 2 percent as an intensifying trade war between Washington and Beijing raised concerns over demand for industrial metals in top consumer China.
- Chicago soybean futures lost more ground as U.S. exports take a hit amid an intensifying trade war with the world's biggest importer China.
- Buy the dip, is what Wells Fargo analysts say in a note after shares in Newell fall after Sears' CEO warns about restructuring the company's operations as well as ongoing US tariff negotiations targeting products from China. Analysts say Newell's exposure to Sears is less concentrated, when compared with firms like Toys "R" Us, and is much more reliant on firms like Walmart, its largest customer in 2017. Wells analysts reiterated their outperform rating and a $33 price target on Newell shares. Newell stock is down 6% to $20.43. Sears shares shed 6.7% to $1.19.
- Bulls seem to own the oil market, with Brent up 3% today at a four-year high as global supplies tighten, squeezed by Iran sanctions and counter-seasonal US crude inventory draws. That's leaving oil bears to pin their hopes on weakening demand, though Stratas Advisors say they fight an uphill battle. "Concerns about demand, driven by President Trump's decision to place additional tariffs on Chinese imports and Beijing's response, will provide a price ceiling," it says, adding future demand could also be questioned, especially since US gasoline stockpiles are at near record-highs. But in the end, Stratas says the fact remains "demand remains a secondary concern next to global supply."
- The Turkish lira gains more than 2% against the dollar after the WSJ reported that Turkish authorities are sending signals that an American pastor facing terrorism charges could be released next month. "A story published by the WSJ reignited market optimism that tense relations between Turkey and the U.S. may ease if U.S. pastor Brunson is released. This would be the third important component required to expect sustainable recovery in the Turkish lira," says Rabobank strategist Piotr Matys. The other two are: "a strong commitment to tighten monetary policy, as reflected in the decisive rate hike on September 13, and a quick implementation of constructive macro prudential policies included in a new economy program revealed on September 20." USD/TRY is last down 2.3% at 6.1506.
- LME three-month copper futures are up 0.3% at $6,357.50 ton, having jumped 6.7% in the past week as investors become more confident that the trade dispute between the U.S. and China may have only a limited effect on the global economy. News over the weekend that China postponed planned trade talks with the U.S. until at least after the November midterm congressional elections came as Washington's10% levy on roughly $200 billion in Chinese goods is set to take effect Tuesday. However, analysts point out that there's only so much that prices base metals can take after having already withstood months of pressure. Last week's sharp rally was largely driven by traders responding to lower prices, notes Marex Spectron's Alastair Munro.
- Euro-denominated investment grade bonds issued By U.S. firms plummeted so far this year, likely as a result of U.S. President Donald Trump's repatriation tax rules passed in December 2017, says Hyung-Ja de Zeeuw, senior corporate credit strategist at Rabobank. A special low tax rate of 15.5% on cash and 8% on illiquid assets was applied in an attempt to repatriate around the $1.6 trillion pile of profits U.S.corporates hold overseas, she says. U.S corporates issued EUR8 million in euro-denominated investment grade bonds so far this year, down by 84% from 2017 levels and EUR50 billion fewer than in 2016, she says. "The impact of this tax measure on the EUR investment grade corporate bond market has been substantial, although one cannot conclude with certainty that this is the main reason," she says.
- China saying it won't attend the next round of trade talks hasn't made much of an impact on EUR/USD or other currencies which could be affected by possible global trade wars, such as the Australian dollar. "For now, the markets are viewing all the tariffs action more as theater rather than true economic action having only a minor impact on final demand," says BK Asset Management. In fact, the German business climate index, printing at 103.7, above the consensus in a WSJ poll for 103.2, showed that "trade actions did not seems to dampen German corporate sentiment." EUR/USD is last flat at 1.1756. AUD/USD falls by 0.4% to 0.7266, having dropped to a five-day low of 0.7248 during Asian trading hours.
- The pound trades higher on Monday, both against the dollar and the euro, reversing some of the losses it made on Friday after EU leaders rejected U.K. Prime Minister Theresa May's Brexit deal proposal and May reiterating in a speech that a no-deal scenario was better than a bad deal. GBP/USD rises 0.4% to 1.3126 and EUR/GBP falls 0.2% to 0.8967. Given that uncertainty remains around whether the U.K. will end up with a deal after Brexit, what kind of a deal it would be, and whether there would be one at all, means that GBP/USD will continue trading around 1.30, MUFG says. "The extreme range for hard and soft Brexit could be as wide as 1.1500-1.4500," says MUFG, and 1.30 is the middle ground.
- German corporate executives remain relatively indifferent to the escalations in the trade dispute between the U.S. and China, says ING economist Carsten Brzeski, after the Ifo Business Climate Index slipped to 103.7 in September from an upwardly-revised 103.9 in August. The economist says the survey nonetheless points to continued strong economic growth in the months ahead. "We expect the seesaw of disappointing and impressive macro data to continue," he says. "Maybe this is simply what characterizes a late-cycle economy, which balances between external risks, strong economic fundamentals and increasing domestic political tensions."
- Nordic markets are expected to open slightly lower Monday with IG calling the OMXS30 down 0.2% at around 1659. "Financial markets will be awaiting new developments in the trade row between China and the U.S. after China over the weekend officially cancelled the potential trade talks between the two countries this week after the U.S. announced new tariffs against China," says Danske Bank. Today, new U.S. tariffs on Chinese goods worth $200 billion will be implemented. European Central Bank President Draghi's appearance at the European Parliament will be scrutinized while Italy will also remain a key focus this week in the run-up to the government's presentation Thursday of its 2019 budget, Danske adds. OMXS30 closed at 1662.32, OMXN40 at 1581.68 and OBX at 855.42.

Sep 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as U.S. markets tightened just weeks ahead of Washington's plan to impose new sanctions against Iran, with major traders and banks expecting prices to rise over $90 per barrel in coming months.
- Gold edged lower as the dollar held firm on news that China has cancelled trade talks with the United States, with the market also eyeing this week's U.S. Federal Reserve meeting for guidance on future rate hikes.
- London copper eased as buying was thinned by holidays in China and Japan, a session after it notched up its biggest one-day advance in more than five years on receding trade war concerns.
- U.S. soybean futures fell nearly 1 percent on reports China had cancelled the upcoming tariff talks with the United States, stoking concerns of a prolonged trade spat.
- The safe-haven Japanese yen blipped briefly higher as investors reacted to news China had cancelled trade talks with the United States, just as the latest round of two-way tariffs kicked in.
- Nordic markets are expected to open slightly lower Monday with IG calling the OMXS30 down 0.2% at around 1659. "Financial markets will be awaiting new developments in the trade row between China and the U.S. after China over the weekend officially cancelled the potential trade talks between the two countries this week after the U.S. announced new tariffs against China," says Danske Bank. Today, new U.S. tariffs on Chinese goods worth $200 billion will be implemented. European Central Bank President Draghi's appearance at the European Parliament will be scrutinized while Italy will also remain a key focus this week in the run-up to the government's presentation Thursday of its 2019 budget, Danske adds. OMXS30 closed at 1662.32, OMXN40 at 1581.68 and OBX at 855.42.
- Peabody Energy is urging the US government to keep one of its largest coal customers in operation. Utility company Salt River Project said Thursday Middle River Power and Avenue Capital Group are no longer interested in buying the Navajo Generating Station in northern Arizona. And without a buyer, the facility is likely to close next year. Peabody has said the Navajo plant is one of its five largest customers and its closure would materially impact sales and adjusted Ebitda for its western US mining segment. Peabody shares, after losing 3% Thursday, rise 0.5% to $42.07 in Friday afternoon trading.
- What caused Venezuela's economic collapse? The answer is often split along political lines. President Nicolas Maduro and his supporters blame US sanctions while government detractors say its two decades of mismanagement, corruption and overspending. Francisco Rodriguez, chief economist at Torino Capital, says both can be right. In an essay, he argues US financial sanctions and prohibitions on new Venezuelan debt have starved the country of financing options, obstructed bank transfers and exacerbated the decline in oil production. "Claiming that Maduro's economic policies have caused a deterioration of living standards in Venezuela is not at odds with accepting the possibility that economic sanctions may have made things even worse," he says, recommending extreme caution to policymakers designing future sanctions that could worsen conditions.
- President Donald Trump has been pumping up the Fed's leadership ranks at a pace most presidents don't muster, notes Cary Leahey, of Decision Economics. If the president is able to fill all the open governor slots, he'll have added five new officials in two years, Leahey says, adding "this is fast, as a president usually appoints about one per year."
- Grain futures are mixed after yesterday's rally, with CBOT corn prices rising 0.8% while soybeans and wheat fall. Analysts say that traders will be watching for developments on trade relations between the US and China as well as Canada. Analysts are also watching reports that Argentina may raise export taxes on their own corn farmers and that the country bought US soybeans to crush, which could potentially be sold to China, after the country suffered drought conditions earlier this year.
- Speculators are long the dollar, adding more long positions in the week to Sept. 11, which makes the currency vulnerable, says MUFG. "The latest IMM positioning report revealed that leveraged funds remained heavily long on the U.S. dollar in anticipation of further near-term gains. It leaves the U.S. dollar vulnerable to further weakness in the near-term if those positions continue to be challenged more seriously." The challenge may come from the widening of the U.S. twin deficits and a more isolationist U.S. political approach. "Overall, we remain comfortable with our outlook for the U.S. dollar to weaken in 2019," MUFG says.
- Goldman Sachs says the US trade war with China is just getting going. They say there's a better than even chance the US will impose tariffs on the entirely of Chinese imports that haven't yet been targeted. Goldman says it believes "additional tariffs are the most likely outcome, as the policy issues underlying the dispute will be difficult to resolve, the bilateral trade deficit at the heart of the dispute is unlikely to narrow substantially regardless of policy actions, and the White House will have greater political flexibility to increase tariffs after the midterm election." They see further US action being announced in "the next couple of weeks."
- Oil prices that have climbed steadily over the past month suddenly fall after President Trump urges major oil producers in the Middle East to find a way to lower prices. "We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember," he says in a morning post on Twitter. "The OPEC monopoly must get prices down now!" His comments come after Saudi officials reportedly said they'd be comfortable with prices even higher than where they're at now. US oil prices closed at their highest level since July 10 on Wednesday, at $71.12/bbl. Early in NY, the Nymex oil contract for November is 0.2% lower at $70.66/bbl.
- Euro credit investors should keep in mind that a further escalation in trade tensions could weigh on corporate earnings in Europe in the coming quarters, says Comemrzbank. The German bank notes that concerns over Italy's new euroskeptic government have been the main driver for euro credit since May, but attention could shift again to trade tensions. "At times during the course of the year, in February for instance, [euro credit] spreads have been very reactive to trade war headlines," Commerzbank says.

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

- Oil prices were mixed after falling in the previous session as U.S. President Donald Trump urged OPEC to lower crude prices ahead of its meeting in Algeria this weekend.
- Gold prices edged up to a one-week high as the dollar weakened on receding fears of a full-blown Sino-U.S. trade war, keeping the yellow metal on track for its first weekly gain in four.
- London copper rose and was on track to post its biggest weekly advance in four weeks as investors viewed that trade tariffs would have a softer impact to global growth than earlier feared.
- Oil Prices Decline After Trump Tweet (WSJ)
  Oil prices fell from two-month highs Thursday after President Trump said oil prices have been rising too much, and urged major oil producers in the Middle East to find a way to get them lower. Light, sweet crude for October delivery ended 0.4% lower at $70.80 a barrel on the New York Mercantile Exchange. On Wednesday, the U.S. benchmark had settled at $71.12 a barrel, its highest closing level since July 10. Brent crude, the global benchmark, fell 0.9% Thursday to $78.70 a barrel.
  "We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!" Mr. Trump said in an early-morning post on the social-media site Twitter. "We will remember. The OPEC monopoly must get prices down now!"
  Oil prices had been rising in the overnight session, but declined immediately after the tweet was published, and remained lower during the New York session Thursday. Mr. Trump's comments follow a nearly 10% rise over the past 30 days in the price of West Texas Intermediate, the U.S. benchmark for crude oil. That has helped send the average price of gasoline for U.S. consumers to $2.86 a gallon, compared with $2.83 a month ago and $2.59 a year ago, according to price-tracking service GasBuddy. In July, Mr. Trump partially blamed the Organization of the Petroleum Exporting Countries for rising U.S. pump prices.
  The president's remarks also come just ahead of a meeting in Algeria this weekend among key members of OPEC and Russia-led non-OPEC oil producers, where they are likely to discuss oil prices and production levels. Earlier this week, Saudi Arabia officials reportedly indicated they would be comfortable with oil prices rising a bit more, at least temporarily, and those reports may be what set off the president.
  Peter Cardillo, chief market economist at Spartan Capital Securities, said immediately following Trump's Tweet that the remarks may not have a long-lasting effect on oil's upward trend. "The question is, will this reverse market sentiment?" Mr. Cardillo said. "We don't think so. It may lean on prices for a brief period of time, but the fundamentals and the Iranian situation are behind a solid run up." Mr. Cardillo was referring to U.S. sanctions on Iran that prohibit countries and companies from buying Iranian oil exports. The ban on Iran oil exports takes effect officially in November, but its impact is already being felt, which is reducing global oil supplies and helping to push oil prices higher.
 OPEC's response to the pressure from Washington in terms of where it sets production levels may ultimately determine the direction in oil prices, said one analyst. "The organization has limited options and will look to Saudi Arabia for leadership as some members have pressured internally to increase production for their own national interests," said Alfonso Esparza, senior analyst at foreign-exchange trading group Oanda. "This time the U.S. is mixing political and economic factors to force an increase in supply, even though the White House is the one who triggered the latest disruption" by sanctioning Iran.
 Thursday's decline in oil prices followed a nearly 2% rise Wednesday after a weekly report from the U.S. Energy Information Administration showed U.S. crude inventories had fallen by 2.1 million barrels last week, to 394 million barrels. It was the fifth consecutive week of declines and the lowest level since February 2015. The EIA data on U.S. inventories is unmatched in terms of reliability and accuracy, and as such many investors view it as the best gauge for overall supplies. Coming weekly EIA reports thus may end up having more of an impact on prices than any more rhetoric from Washington or OPEC. Among refined products, gasoline futures for October delivery fell 0.3% to $2.0146 a gallon. Diesel futures fell 0.8% to $2.2280 a gallon.

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

- Oil rose for a third day amid another drawdown in U.S. inventories and strong U.S. gasoline demand, while signs OPEC may not raise output to address shrinking supplies from Iran also supported prices.
- Gold prices nudged up as the dollar softened amid easing Sino-U.S. trade tensions and ahead of next week's U.S. Federal Reserve meeting.
- London copper hovered near a three-week peak amid relief that the latest tariffs in the Sino-U.S. trade conflict were set at lower levels than some had feared.
- Chicago soybeans lost ground with the market falling for five out of six sessions and trading near a 10-year low, weighed down by the Sino-U.S. trade war which comes amid an all-time high U.S. crop.
- Analysts at Merrill Lynch disagree with those in the forex market who think the BoJ's policy tweaks in July were the beginning of more adjustments to follow. There were no further tweaks in central-bank policy yesterday, and "we think the BoJ will remain on hold until key uncertainties disappear." That includes the November midterm election in the US and next year's consumption-tax hike in Japan. Merrill says there's some election-related risk for dollar-yen. But with some domestic flows supporting the pair, the risks still point to the upside. The investment bank expects the dollar to rise "gradually" toward Y115 by year's end. It's currently around Y112.20.
- Companies continued repatriating foreign profits at an elevated pace, bringing $169.5B to the US in 2Q, the Commerce Department said. That's in line with analyst expectations of $150B-$200B, but down from 1Q, when US companies repatriated $294.9B, revised from $305.6B. The prospect of unleashing stockpiled foreign profits, estimated at $2.7T, was a primary selling point of December's tax overhaul. So far, however, companies have moved cautiously, largely waiting until they had a concrete need for cash domestically, WSJ found. Before the tax-law change, companies repatriated $35B or so each quarter.
- The Canadian government should be prepared to walk out from Nafta talks if negotiations stall "and not fear the outcome," Bank of Nova Scotia economist Derek Holt says in a note to clients. Pressure tactics, such as comments from House majority whip Steve Scalise (R., La.) "won't sway Canada," he says. In Holt's opinion, Scalise's comments aren't in line with broad tone of remarks from Congress, calling for Canada to be part of any revised Nafta. He adds Trump's threat of tariffs on Canadian-made cars and car parts against Canada won't fly in US midwest, which depends on auto trade with Canada for its economic livelihood; and the odds are that the midterm elections "are likely to strip away the GOP's grip on power in Washington," favoring Canada.
- Improved expectations of a Brexit deal and a weaker dollar could help the pound rise further, says BNY Mellon. "Although the odds on a successful deal may still be uncomfortably high for all parties involved, the fact that they are seen to have been shortened by a newly-mollified EU approach may be all that is needed to keep sterling bulls in control." Moreover, "if the markets are becoming increasingly concerned about the longevity of the U.S. economic cycle, a weakened dollar would certainly provide sterling with a helping hand." Sterling is last down 0.1% against the dollar at 1.3129, having earlier reached an eight-week high of 1.3214.
- European shares rise 0.09% after an upbeat session in Asia following the latest moves in the trade rift between the U.S. and China. The Stoxx Europe 600 gains 0.34 points to 379.07 as the euro gains 0.3% against the dollar to $1.1704. The DAX rises 0.2% and the CAC 40 climbs 0.3%. "Though China announcing tariffs on $60 billion in U.S. imports isn't great news, it's not as bad as it could have been," says Connor Campbell at Spreadex. "The response was also tempered by the country's deputy leader Li Keqiang urging that the 'basic principles' of free trade are upheld, while promising China won't weaponize its currency."
- Germany's economy will grow less strongly than previously forecast as a result of protectionism and rising energy costs, says the business-funded IW economic institute. The think tank now predicts 1.8% real gross domestic product growth for this year, 0.2 percentage points less than forecast in spring, and sees 1.4% growth for 2019. "This is mainly caused by protectionism, which has left its marks all over the world," says Michael Groemling, an economist with IW. "U.S. President Donald Trump's 'America first' policy and the trade conflict with China have had a particularly noticeable impact on global trade and the domestic economy." Germany's economy, which relies strongly on exports, rose by 2.2% last year.
- China won't dismantle its industrial policy and a solution to the US-China trade conflict would likely need to address how to limit the impact of Chinese economic policies on America, says former top US trade official Wendy Cutler, who negotiated TPP during the Obama administration. "The negotiated solution will have to be centered around how these industrial policies don't harm China's trading partners," she said during a panel at the World Economic Forum gathering in Tianjin. Cutler added talks would need to address the types of subsidies China uses, how they are used and what measures would prevent Chinese overcapacity from flooding the rest of the world. She went on to say the tariff escalation damages the chances of an agreement soon, though "it raises expectations of how comprehensive and meaningful that agreement needs to be."

Sep 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady, as concerns that producers will not be able to respond to a shortfall in supply once U.S. sanctions on Iran are enacted outweighed a gain in stockpiles in the United States, the world's biggest oil user.
- Gold prices rose along with equities as the U.S. dollar softened, with markets showing little worry over the latest escalation in the U.S.-China trade war.
- Shanghai copper prices rose sharply, tracking a jump in London in the previous session and hitting a one-month high, while zinc climbed more than 3 percent, as investors shrugged off an escalation of the U.S.-China trade row.
- Chicago soybean futures ticked higher, snapping four days of losing streak, but the market is trading close to previous session's 10-year low on pressure from a record U.S. crop and crop-friendly weather in Brazil.
- The Japanese yen stood near-two-month lows as financial markets took fresh U.S. tariffs on Chinese goods in their stride and as U.S. bond yields shot up to four-month highs on fears of higher inflation.
- President Trump: If China Retaliates Against U.S. Farmers, He Will Consider Imposing $257 Billion in Additional Tariffs
President Trump said he would consider slapping tariffs on an additional $257 billion in Chinese goods if China retaliates against U.S. farmers and workers. Speaking to reporters in the Oval Office on Tuesday, Mr. Trump reasserted his threat to impose additional tariffs on China, a day after his administration announced new tariffs on $200 billion in Chinese goods, an action that left Chinese officials scrambling on how to respond. China announced new levies Tuesday on imports from the U.S. ranging from farm products and machinery to chemicals. They will take effect Sept. 24, the same day the latest U.S. penalties are set to kick in. The Chinese rates will range from 5% to 10%.
"We may make a deal at some point," Mr. Trump said. "If there's a retaliation against our farmers and our industrial workers and our ranchers, if any of that goes on we are going to kick in another $257 billion and that'll be also at 25%."
"We don't want to do it," he added, "but we'll probably have no choice."
- Wheat futures move higher on poor weather abroad, while new tariffs weigh on corn and soybeans, says Dan Basse of AgResource in Chicago. Basse says that the recent cold weather in Australia and wet weather in Russia could lead to crop losses, offering US wheat producers possible export opportunities. Meanwhile, corn prices are suffering as additional tariffs on Chinese goods weigh on soybean futures and as farmers expect large supplies of both grains. "If farmers are not making money on soybeans, they will plant more corn next year, which leads to a bounty of corn," Basse says. CBOT wheat futures are up 0.4%, while corn futures are down 1.3%. Soybean futures are down 1.1%.
- Fish groups are dismayed at the latest escalation in the US-China trade dispute, which brings tariffs on hundreds of millions of dollars of fish and seafood imported from China. The tariffs, announced Monday by the Trump administration, will hurt US fishermen, who send part of their catch to China for processing and re-export, as well as grocers and restaurants who likely will incur higher prices and then pass them on to consumers, fish groups say. The cost of duties "would be felt not by the Chinese, but instead by American companies, Alaska fishermen and US customers," the Alaska Seafood Marketing Institute says. The National Fisheries Institute called the tariffs a "tax on Americans," adding that "less employment in the seafood sector combined with higher prices for the product is a recipe for disaster."
- Grain traders were not taken by surprise as additional tariffs were announced against China on Monday, experts say. "The US/China situation continues to remain at a stalemate," said Adam Suntken of MaxYield Cooperative. President Trump said he will impose new tariffs on $200B worth of goods from China, formerly the largest consumer of US soybeans. China vowed to retaliate, with the country's Commerce Ministry saying in a statement that China "has no choice but to undertake synchronous retaliation." CBOT soybean futures are down 0.6%.
- Trade tensions between the U.S. and China is one of the negative factors weighing on the earnings of carmakers globally, says S&P Global Ratings credit analyst Vittoria Ferraris. Fiat Chrysler, Daimler, Ford, and General Motors have already announced they will miss earnings targets for 2018, she adds. "The escalating trade tensions add to concerns S&P Global Ratings has already expressed about the industry's profitability and earnings linked to the transition to electric mobility, full connectivity of cars, and autonomous driving," Ms. Ferraris said.
- China could opt to retaliate against U.S. tariffs on Chinese goods with non-tariff actions, which "would further exacerbate investor worries, damaging business and consumer confidence, and growth prospects," S&P Global Ratings analyst Terry Chan says. The Asian country could opt to pursue non-tariff actions affecting services and investments from the U.S., where the American country enjoys a net services surplus with China, he adds. This would be the next step for China as proportionally it has less room for maneuver. U.S. imports into China that are subject to current and potential tariffs already amount to 85% of a total import value of $130 billion, while the U.S. has only announced levies on half of the $505 billion of 2017 Chinese imports by value.
- Companies are hedging against foreign exchange volatility as the U.S. implements trade tariffs, says Chris Towner, director at JCRA, an independent financial risk management consultancy. "We are certainly seeing an increase in firms looking to review their foreign exchange exposures and put together hedging strategies to help them cope with the volatility," he says in an email.
- The U.K.'s Jaguar Land Rover and Sweden's Volvo have fewer options to mitigate risks from global trade tensions and tariffs among all European-based automakers, says S&P Global Ratings credit analyst Vittoria Ferraris. The news of a fresh escalation in the commercial confrontation between the U.S. and China brings the auto sector to the fore front, although the latest wave of tariffs announced "may not significantly directly impact auto shipments" between the two parties because they were previously targeted in summer. Yet it serves as a reminder of the fragility of European automakers. "The threat of a U.S. 25% tariff on cars sourced in the EU and imported into the U.S. would hurt all auto makers, but the severity depends on their production flexibility and sourcing options," she adds.
- About 2.5% of the world trade volume is now affected by higher import quotas after the U.S. imposed a 10% tariff on additional $200 billion of Chinese goods, adding to the previous $50 billion of taxed Chinese imports, ING says. Prior to Monday's announcement by the U.S., the percentage of world trade "directly affected by the entire U.S. trade war" was roughly 1%. If the U.S. acts on further tariff threats, this could go up to 4%. Although the 2.5% "may seem small, the tariffs will disrupt Sino-American [Chinese-American] supply chains, and may, therefore, triple the effects on world trade," says ING.
- Almost one quarter (net 24%) of global fund managers expect global growth to slow down in 2019, up from a net 7% saying so in August, according to the findings of Bank of America Merrill Lynch's monthly global fund manager survey. This marks the worst outlook on the global economy since December 2011, BAML adds. Forty-eight percent of the survey's participants expect economic decoupling to end due to a deceleration of the U.S. growth. A smaller part (24%) of responding fund managers find that the decoupling is likely to continue and 28% think that growth in Asia and Europe will accelerate.
- U.S. tariffs on Chinese and other imports could prompt a slowdown in the U.S. economy next year, ING says. Data show the economy is doing fine for now, suggesting gross domestic product rose to 4.4% in the second quarter. But next year GDP growth is likely to slow to closer to 2%, says ING, prompting the Federal Reserve to raise rates by 25 basis points just once, compared with the expected four times this year. "The effects of a strong dollar, higher U.S. interest rates, fading U.S. fiscal stimulus and emerging market woes are likely to gradually exert a toll [on the economy]," ING says. Trade tensions will "only exacerbate" this risk.
- Eurozone government bond markets appear to largely shrug off a new 10% tariff on $200 billion of Chinese goods. "Given the very light macro data calendar this week and [US President] Trump's announcement on tariffs behind us, the EMU [eurozone] bond market will again be dominated by headline on the Italian budget," say UniCredit's rates strategists. The market sentiment has recently turned "very constructive" over Italy on hopes that the government will respect the EU's budget deficit rule. The better risk appetite has allowed Italian bond yields to decline and German Bund yields to trend upwards, given less demand for safe havens. The 10-year Bund yield is trading at 0.45%, down one basis point, while the 10-year Italian bond yield is unchanged at 2.86%, according to Tradeweb.
- EUR/USD is proving more resilient than analysts had expected to U.S. trade tariffs because buying dollars in response to trade conflicts escalating isn't as appealing anymore, UniCredit says. The U.S. tax reform implemented last year has resulted in limited dollar repatriation. Combined with some fears of a U.S. economic slowdown, this is contributing to reluctance to buy the dollar, the bank says. Moreover, market speculators have added long EUR/USD positions in the week to Sept. 14 for the second consecutive week as worries surrounding Italian politics fade. EUR/USD flat at 1.1686. The U.S. currency has previously risen as trade disputes escalated due to investors seeking safe haven assets.

Sep 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets fell as the latest escalation in the Sino-U.S. trade war clouded the outlook for crude demand from the two countries, which are the world's top two oil consumers.
- Gold prices fell as investors sought safety in the U.S. dollar amid concerns of slowing global trade after the United States imposed a new round of tariffs on Chinese imports.
- London copper drifted lower for a third session after the United States imposed new tariffs on about $200 billion of Chinese imports as President Donald Trump escalates his trade war with Beijing.
- Chicago soybean futures dropped to a 10-year low as harvest of a record U.S. crop advanced rapidly amid a growing trade dispute between Washington and Beijing.
- Schroders ticks down its global GDP-growth views for both this year and next for a second straight quarter after underwhelming 1H readings out of Japan and Europe. The investment firm anticipates "a soft patch in the world economy in coming months ... indicated by the weakness of industrial metals prices, our global activity indicator" and recent export readings in PMI reports. For 2019, the firm now expects "deeper and more-prolonged trade tension[s] between the US and China. Recent comments from both sides suggest this will be a drawn-out affair, and both global trade and capital-investment spending will suffer from the uncertainty created."
- Financial markets have seen a "muted" reaction to the announcement by President Trump of a 10% levy on $200 billion of Chinese imports, rising to 25% in January. RBC says the delay in imposing 25% tariffs may explain the lack of reaction, in addition to the fact that the tariffs were widely anticipated. "Some cling to hope that the delay of 25% tariffs until January will mean more time for negotiation and reconciliation post mid-terms [mid-term elections]," RBC says. This may be misguided, however, as RBC believes it "unlikely." The DXY dollar index is little changed at 94.52, EUR/USD flat at 1.1684.
- U.S. tariffs on China are reaching a point where they will affect U.S. consumers and damp consumer spending, says RBC. This comes after U.S. President Trump announced a 10% levy on $200 billion of Chinese imports, rising to 25% by the end of the year. RBC economists calculate that increasing the tariff rate to 25% would increase the U.S. GDP price index by about 60 basis points. This would eat into disposable incomes and "is a hit to real GDP," RBC says, noting that a recent rise in savings may help offset this.
- EUR/USD shows a muted reaction to the U.S. announcement that it will charge 10% on another $200 billion of Chinese imports starting from next Monday, last trading flat at 1.1687. Typically trade tensions have been positive for the dollar, but the U.S. announcement had been widely expected, while UniCredit analysts say the euro has proved resilient recently and "quite able to face headwinds." But ING says this complacency "could easily be unwound were China to retaliate with their own tariffs on another $50-60 billion worth of U.S. imports." Without giving further detail, a report by Russian media service RT says China will levy retaliatory tariffs on September 24, simultaneously with Washington.
- The FTSE 100 index is expected to open 40 points lower at 7,262, according to CMC Markets after President Trump announced a 10% levy on $200 billion worth of Chinese imports, rising to 25% by the end of the year. Mr. Trump threatened tariffs on a further $267 billion of additional imports if China retaliates. CMC Markets analyst David Madden says sentiment has been "soured" by the latest tariff announcements. Shares in Sky will be in focus after 21st Century Fox Inc. said late Monday that it had extended the acceptance period for its offer for the broadcaster. Retailer Ocado will also be watched after it announced 3Q sales figures.
- A vice chairman at China's securities watchdog characterized US plans to impose new tariffs on $200 billion worth of Chinese imports as a negotiation tactic which will backfire. Speaking on a panel at the World Economic Forum in Tianjin, Fang Xinghai said the US move right before scheduled trade talks has "poisoned the atmosphere for negotiators." He added China wants to make some of the changes the US wants--for example getting rid of the JV requirement for foreign financial firms and improving a cumbersome regulatory system. But Fang said efforts to pressure China into making concessions wouldn't work. "Negotiations cannot be done with this kind of tactic...It may work with some small country...It doesn't work with China."
- US stocks are extending declines as trade worries return to the forefront. White House chief economic adviser Larry Kudlow, speaking at the Economic Club of New York, says that "announcements will be coming soon" on additional trade actions against China. Kudlow's message followed weekend reports that Beijing was considering new ways to retaliate against the US, which is expected to unveil new tariffs on as much as $200B in Chinese goods. The Dow Jones Industrial Average was down 53 points, or 0.2%, to 26102, around a session low, while the S&P 500 fell 0.4% and the Nasdaq Composite shed 1%.
- Lawrence Kudlow, a top economic adviser to President Trump, says surging budget deficits that followed the passage of tax cuts aren't really a function of that change, in a New York appearance. "We have to be tougher on spending. People are quick to blame deficits on tax cuts, but I don't buy that," he says, adding entitlement spending is something that will need to be looked at over time. He also warns Democrats, who may take by the House of Representatives this fall, not to mess with what he sees at Trump-driven success. "It would be a shame if efforts were made to unravel or overturn the policies," Kudlow says.
- Former astronaut and ex-NASA administrator Charles Bolden, who has generally steered clear of policy debates since leaving the agency, has come out firmly in opposition to one of the White House's current space priorities. He said he only sees "very gradual progress" in efforts to replace or supplement commercial activities underway on the station. By 2025, President Trump seeks to phase out roughly $3B in annual direct US government support for the orbiting laboratory. But Bolden and other critics argue that timetable is too swift to create viable, long-term commercial opportunities. Instead, he says, "we should follow the plan we were working on with our international partners" to continue US support to 2028. So far, Congress appears unwilling to adopt the White House's plan.
- European shares close just higher as gains for retailers offset trade tensions. The Stoxx Europe 600 ends the session 0.1%, or 0.46 points, higher at 378.31, though the DAX falls 0.2% and the CAC 40 backtracks 0.1%. Swedish fashion retailer Hennes & Mauritz rose nearly 17% after third-quarter sales grew as it continues to revamp its logistics infrastructure. Shares in Casino Guichard-Perrachon jump 7.6% after the French grocer's parent company Rallye signed a EUR500 million credit line maturing in 2020. Traders shrugged off concerns that President Trump is close to pulling the trigger on tariffs on $200 billion worth of Chinese imports.
- Grain futures start the week lower as traders await trade developments between the US and China, the world's largest soybean consumer. The Trump administration plans to enact additional tariffs on $200B of Chinese goods, and China is expected to retaliate. "It's a waiting game to see how (the countries) are going to react," said Brian Grossman of Zaner Group, adding that "people are getting exhausted by it." CBOT November soybean futures are down 0.6% to 8.25 3/4 a bushel. December corn futures are down 0.9%, and December wheat futures are down 0.3%.
- USD/JPY rising above 112 shows that investors are "confident about another steady Bank of Japan meeting outcome on Wednesday," UniCredit says. Gov. Haruhiko Kuroda will likely reiterate that the BOJ doesn't plan to end its quantitative easing program and yield curve-control anytime soon, says UniCredit. However, USD/JPY isn't likely to rise above its recent peak of 113.15, given "lingering sources of risk aversion worldwide," the Italian bank says. The U.S. is expected to announce 10% tariffs on $200 billion worth of Chinese imports, meaning that global trade dispute risks remain. USD/JPY is last flat at 112.055.

Sep 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Global oil prices eased in early Asian trading on concerns that the United States is poised to impose additional tariffs on China, outweighing supply fears from upcoming sanctions on Iran.
- Gold inched up as bargain-hunters bought the metal after prices dipped in the previous session, amid reports that the United States is set to impose a new round of tariffs on Chinese imports.
- Base metals prices fell sharply on reports that the United States may be about to impose tariffs on another $200 billion worth of Chinese goods.
- Chicago wheat futures rose for a second session, with the market hitting its highest since Sept. 12 on concerns over quality controls in Russia that are expected to delay shipments from the world's biggest supplier.
- The dollar held above a recent 1-1/2 month trough against a basket of major currencies as investors awaited details on a new round of U.S. tariffs against China, which could further sour relations between the two giants.
- EUR/USD trades flat at 1.1636 on Monday, and movements are likely to be limited for now, ING says. It expects to see the dollar consolidate this week due to the absence of first tier U.S. data releases, but says Italy concerns could limit any euro rise. U.S. President Donald Trump is expected to announce 10% tariffs on $200 billion of Chinese imports soon, but that shouldn't have too much impact on the U.S. currency. And risks surrounding Italian politics are likely to hinder the euro, says ING. "Smooth sailing on this issue could be a dangerous assumption with a populist government and we wouldn't be chasing EUR/USD higher on this alone."
- Base metals fell across the board in Asian trading in line with weak regional equity markets amid concerns that US-China trade tensions could escalate. That worry has seen metals add to Friday's drop with copper pulling back below a psychological mark of $6,000/ton, a level it crossed briefly last week when US and China were expected to hold fresh trade talks. There are now reports that China may no longer go ahead with the talks if US imposes additional trade tariffs on Chinese goods. Three-month copper and aluminum prices on the LME are both down 1.3%, while zinc futures is 1.4% lower.
- The US appearing on track to put tariffs on another $200 billion of Chinese exports and the lack of a clear response from China on resuming trade talks is hanging over Asian equities this morning as regional markets fall. But CMC Markets contends that folks probably aren't as sensitive to bad trade news as they were a few months ago. "Investors are probably tired of the 'talk-tariffs-threat-talk again' cycle as market participants are a bit numb about trade bombs hitting media headlines" for month now. The firm thinks market downside is likely to be limited.
- Market watchers should pay attention to a formal response by China's commerce ministry to the US invitation on trade talks, says OCBC. "Should China send a lower-rank delegation this time, the market sentiment may be dampened again." Beijing over the weekend was finalizing plans for a top commerce ministry official to visit DC later this week to lay the groundwork for a planned trip by Vice Premier Liu the next week. But the latter meeting may not happen as fresh trade tariffs could be announced in the next day or 2.

Sep 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil clawed back some of its losses from the previous session, when prices fell the most in a month, as concerns about oil supply are countering worries that emerging market crises and trade disputes could dent demand.
- Gold rose as the dollar faltered after softer-than-expected U.S. inflation data dimmed the case for a faster pace of policy tightening by the U.S. Federal Reserve, amid signs of movement in the Sino-U.S. trade standoff.
- London copper edged lower, pulling back from a two-week high reached in the prior session, as investors exercised caution ahead of possible trade talks between the United States and China to resolve an escalating tariff war.
- Wheat futures rose over 1 percent after three consecutive sessions of deep losses, but they were poised for a second weekly drop on pressure from outlook for higher Russian crop.
- An official in the Trump Treasury Department is getting a promotion. Bimal Patel, a banking lawyer who is serving as deputy assistant secretary of the Treasury for the Financial Stability Oversight Council, will be nominated to be assistant secretary for financial institutions, the White House says. The move will require Senate confirmation. Patel would fill a position previously held by former congressional staffer Chris Campbell.
- Rob Johansson, the Agriculture Department's chief economist, defends the agency's methods for divvying up billions of dollars' of payments to US farmers to offset losses from retaliatory tariffs. Johansson during a hearing of the Senate agriculture committee said payment rates announced by USDA in August were based on "gross trade damages" rather than prices, benefiting producers of commodities that export larger volumes to countries like China, namely soybeans. The methods draw criticism from lawmakers who point out that cotton producers are on track to receive $277M in payments, despite strong prices for that crop, and forecasts the market will continue to climb. A possible second wave of payments could take into account other factors, like prices and regional effects, Johansson says.
- US forecasters surveyed this month by WSJ still expect healthy growth, falling unemployment, and an average 18% risk of a recession over the next 12 months or so. Still, nearly 70% of economists said they saw the risks for growth tilted to the downside--a sharp pickup from about 58% in August. The majority cited trade disputes and tariffs as potential threats to the economy. "Trade tensions are upping the ante on a recession in 2019 instead of 2020," Diane Swonk, chief economist at Grant Thornton, says in the survey.
- Iran's crude production in August fell to its lowest level since July 2016, as "more buyers distanced themselves from Tehran ahead of looming U.S. sanctions," the International Energy Agency said Thursday in its latest monthly oil market report. China and India--Iran's two biggest customers--cut back their imports of Iranian crude by 200,000 barrels a day and 380,000 barrels a day, respectively, according to the agency. "In the run-up to Washington's November 4 deadline for purchasers of Iranian oil to make other arrangements, there will be a further shift in trade flows," the report said. Iranian crude production fell by 150,000 barrels a day last month, while crude exports dropped by 280,000 barrels a day month-on-month.
- Many fret that unfolding trade disputes and tariffs will push up US consumer prices. So far, that doesn't appear to be happening outside of the appliance category. The price of goods, except food and energy, fell 0.2% from a year earlier. That includes the cost of imported goods such as clothing and electronics. The Labor Department report doesn't break out imports from domestic products. But one factor that could be holding the cost of imports in check is a stronger dollar. That makes foreign goods relatively less expensive for US consumers. One major exception: the cost of laundry equipment rose 13.6% from a year earlier.
- The euro falls slightly after the European Central Bank left interest rates on hold as expected on Thursday, and reiterated its guidance on the quantitative easing program. EUR/USD trades 0.1% lower at 1.1618, down from around 1.1632 before the announcement. ECB President Mario Draghi holds a press conference at 1230 GMT, during which he could downgrade eurozone's growth projections for 2018. That is widely expected, however, and is unlikely to have a major impact on the common currency, analysts say.
- The euro isn't likely to fall by much on Thursday even if the European Central Bank downgrades its 2018 eurozone gross domestic product forecast during its interest rate announcement, ING says. EUR/USD is flat at 1.1624 and it's unlikely it will fall below 1.1580/1600, the bank says. "The reason for the ECB staff's downgrade is likely to be a slowdown in global trade amid trade war uncertainty, rather than an eurozone-specific factor." ING adds that analysts' consensus expectations for 2018 eurozone GDP "have already shifted down." Eurozone inflation projections, however, will "remain unchanged." These are "arguably more crucial for the timing of the ECB's first rate hike," and this will likely leave the euro little changed as well.
- Nordic markets are expected to open little changed Thursday with IG calling the OMXS30 flat at around 1619. Risk sentiment is on the rise as trade talks between the U.S. and China might be brewing, says Danske Bank. "U.S. Treasury Secretary Steven Mnuchin is reportedly looking to meet China's key economic official, Liu He, to resume talks...equities assumed an upbeat tone in both the U.S. and Asian session." U.S. PPI figures came out on the weak side of expectations yesterday, ahead of today's CPI release, meanwhile crude oil prices continued to edge higher. Swedish GDP and rate calls from the Bank of England and European Central Bank are also due. OMXS30 closed at 1618.81, OMXN40 at 1550.89 and OBX at 839.58.

Sep 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, reversing some of the strong gains from the previous session, as economic concerns raised doubts about ongoing fuel demand growth. 
- Gold prices held steady near a more than one-week high hit in the previous session, with hopes for a new round of U.S.-China trade talks weighing on the dollar.
- Shanghai copper prices rose sharply to a near two-week high on Thursday after a U.S. official said Washington had invited Beijing to restart talks aimed at resolving the trade dispute.
- Chicago corn rose as the market rebounded after the biggest one-day decline in more than a year, although it remained under pressure from a crop report that pegged U.S. output above market expectations.
- Canada collected C$286M ($220M) in surcharges for US imports that were subject to retaliatory tariffs in July and August, the country's border agency says. On July 1, the Canadian government began charging tariffs for US steel, aluminum and dozens of other products--ranging from ketchup to toilet paper--in response to US tariffs on steel and aluminum from Canada. A spokesman for the Canada Border Services Agency said the tariffs included C$134M for steel imports and C$43M for aluminum imports. US Customs and Border Protection, meanwhile, said it had assessed tariffs totaling $1.84B for steel imports and $535M for aluminum imports from all global suppliers as of August 28. The US tariff figures aren't broken down by country.
- US stocks are paring losses as reports suggest the White House has reached out to China for a new round of trade talks. Trade tensions have kept stocks under pressure this month, even as economic data have pointed to a strong labor market and continued growth. Wednesday's report helps ease some of those worries, with people briefed on the matter telling the WSJ that senior US officials have sent an invitation to Beijing for another meeting to talk about bilateral trade. The S&P 500 rises 0.1% and the Dow is up 0.3% at a session high. Treasury yields are paring declines, with the yield on the 10-year Treasury note at 2.968% versus 2.958% earlier and 2.979% Tuesday.
- JPMorgan Chase Chief James Dimon said he "could beat" President Donald Trump but he couldn't beat "the liberal side of the Democratic party." Dimon, speaking during a JPMorgan event about its new $500M initiative to boost economic growth in US cities, has said publicly he won't run for president despite rumors over the past two years. Dimon, who also reiterated the need for US policy reform at the JPMorgan event, also said that he's "as tough as [Trump] is, I'm smarter than he is." Dimon also compared himself to Trump by saying "this wealthy New Yorker actually earned his money. It wasn't a gift from Daddy."
- Semiconductor stocks are leading the broader tech sector lower again, with Micron Technology the S&P 500's worst performer after Goldman Sachs downgrades the highflying chip maker to neutral from buy. Micron is down 4.6%, while Applied Materials, KLA-Tencor and Lam Research are all down more than 3%. Goldman also downgraded the broader semiconductor capital equipment space to neutral from attractive. Worries about lower chip prices and the impact of global trade tensions have hurt the semiconductor sector lately, after it was one of the market's best performers in recent years. The PHLX Semiconductor Index is down 2.4% Wednesday, on track for its fifth drop in the past six sessions.
- Asian and U.S. investors are more nervous about committing significant fund flows into euro and sterling-denominated investment grade debt, says Anthony Barklam, co-head of debt capital markets, including loans and bonds, at MUFG. High grade funds recorded their largest ever outflow over the week to 7 September, mainly driven by outflows from three funds, according to BAML data. Mr. Barklam says U.S. investors have been diverting funds towards their local market instead. Most factors weighing on sentiment are political. These include risks of a no-deal Brexit, Italy's euroskeptic coalition, the rise of far-right wing political parties at Sweden's election on Sunday, and uncertainty over next year's European Parliament election. Outside Europe, Mr. Barklam says the uncoming U.S. mid-term election is also impacting sentiment.
- Barnes & Noble says Bob Woodward's new book "Fear" has generated the "fastest sales for an adult title since Harper Lee's 'Go Set a Watchman' went on sale in July 2015." Woodward's book, which hit the shelves on Tuesday, ranks No. 1 on the bookseller's website. An investment fund run by Richard Schottenfeld recently disclosed that it has increased its stake in the book chain to 6.9%. In early morning trading, Barnes & Noble shares were down 8 cents to $5.08.
- The unexpected PPI data suggest there was less pressure on consumer prices to rise last month, analysts say. The decline occurs against a backdrop of rising trade tensions, which has led many investors to expect that the pace of price increases throughout the economy should rise as the US and its trading partners become increasingly inclined to levy tariffs on imported goods. "Despite concerns that tariffs would feed through to higher costs, we're not seeing evidence of this dynamic (yet)," writes Jon Hill, a strategist at BMO Capital Markets.
- London shares rise as sterling falls on reports that U.K. Prime Minister Theresa May could face a leadership challenge from Conservative party lawmakers unhappy about her blueprint for leaving the EU. The FTSE 100 gains 0.18%, or 13.3 points, to 7286.84 as the pound falls 0.29% to $1.2991. Media speculation suggests May is facing a growing revolt from her backbenchers, with one report suggesting she could face a challenge within days. "The threat of this has prevented the pound making further gains in recent days as it's seen as increasing chances of no-deal Brexit," says Craig Erlam at currency trading firm Oanda. SSE falls 7.9% after a profit warning.
- Base metals prices trade broadly higher, recovering from increased concern from investors about growing trade frictions between the U.S. and China. Copper is up 0.71% at $5,922 a metric ton. Metals investors revealed their macroeconomic anxieties Tuesday, amid reports that China will ask the World Trade Organization for permission to impose sanctions on the U.S. That came days after President Trump said he was considering imposing a third round of tariffs on $267 billion of Chinese goods. Traders had expected the White House to announce a fresh tranche of levies late last week, but the absence of any such tariffs suggested that the Trump administration was considering lobbying efforts by U.S. businesses against tariffs, says Saxo Bank's Ole Hansen.
- German machine-tool maker Trumpf had a weaker-than-expected start to the new fiscal year amid slowing demand, particularly from China. The company, from Ditzingen near Stuttgart, recorded the best fiscal year in its corporate history in FY 2017/18, but is now noticing "a cooling-down," said Nicola Leibinger-Kammüller, Trumpf's CEO. "We are below target in July," she said at a press club in Frankfurt late Tuesday. August numbers -- distorted by the vacation period -- are always hard to assess, "but in September we are still slightly below target," albeit "a very ambitious" one, Ms. Leibinger-Kammüller said. In China, sales volumes "are coming down," she said, "and we're taking it seriously, because China is the third-largest market for us." In the 2017/18 FY, Germany was the biggest single market for Trumpf with sales of over 700 million euros, followed by the U.S. and China, each with sales of around EUR450 million. "In China, we can already speak of a crisis," Ms. Leibinger-Kammüller said. Trumpf's U.S. business, however, is still doing fine, supported by U.S. corporate tax cuts.
- Economic data in the U.S. is strong, but a flattening U.S. yield curve, rising twin deficits and trade disputes are limiting the dollar's strength. Consequently, the DXY index, which measures the dollar's value against a trade-weighted basket of currencies, has been relatively flat since mid-May. "The dollar is being torn between positive cyclical factors and more negative structural factors," MUFG analysts say. However, "it is difficult to argue against dollar strength when the U.S. data flow is so compelling" and "there are certainly risks of cyclical factors taking control if the recent flow of impressive U.S. data is maintained." The NFIB small business optimism index rose to a record high in August and the capital spending plans index jumped to its highest level since July 2006.
- The Canadian dollar continues to rise slightly on Wednesday, with USD/CAD down 0.1% at 1.3057, staying firmer after rising on Tuesday on the back of a possible breakthrough in U.S.-Canada NAFTA talks. But Commerzbank analysts remind investors that a deal has to be reached between the two by the end of this month "to ensure a smooth participation of Canada in the NAFTA compromise reached between the U.S. and Mexico." The "clock is ticking," they say, adding that "it is a truism of trade negotiations that nothing is done until everything is done."

Sep 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose following a report of declines in U.S. crude inventories and as looming sanctions against Iran raised expectations of tightening supply, while top producer Russia warned of a fragile global crude market.
- Gold prices edged lower as a key technical resistance acted as a deterrent for the metal and the yuan weakened against the dollar on fears the U.S.-China trade war could escalate.
- Shanghai base metals fell on reports that China is considering more flexible industrial production restrictions in its northern provinces this winter as part of the country's fight against smog.
- Chicago soybean futures eased for a second session, dropping to their lowest is almost two weeks with expectations of a bumper U.S. crop and poor Chinese demand weighing on prices.
- The dollar is slightly stronger against most major currencies, mostly due to the 10-year U.S. government yield trading close to 3% again, RBC analysts say. USD/JPY is flat at 111.5340 given that the trade conflict between the U.S. and China hasn't escalated further yet and President Trump said that Nafta talks with Canada are going well. However, there is still a "headline risk relating to U.S.-China trade policy and Nafta," the analysts say. Against most emerging currencies, the dollar is rising as well, with USD/ZAR making the highest gains, last up 0.6% at 15.1573.
- Excluding the US, many stock markets globally are feeling the pain of trade tensions, and they're "hitting Asian markets quite dramatically," says Edward Alden, a senior fellow at the Council on Foreign Relations, at the CLSA Investors' Forum in Hong Kong. That could be interpreted as a sign that the US has an advantage in the trade battles. "From the Trump administration's perspective, the market's reaction is reinforcing the president's view that he has the stronger hand here." Indexes in Hong Kong and Shanghai, as well as a benchmark emerging-markets measure, have entered bear-market territory in recent months. Meanwhile, Alden posits that in the absence of trade-war uncertainty, the S&P 500's 8% gain so far this year would be even bigger.
- The Securities and Exchange Commission added a fifth member, giving the regulator enough commissioners to form a majority on controversial votes. The SEC had been operating with four members, including two Democrats who could vote as a bloc to stop measures they oppose. Elad Roisman, a Republican commissioner, took office on Tuesday, after the Senate approved his nomination last week. Roisman, a former chief counsel of the Senate Banking Committee, could give SEC Chairman Jay Clayton enough votes to move forward on rule proposals that have divided the commission, such as new curbs on stockbrokers' conflicts of interest.
- Former Canadian prime minister Brian Mulroney says he would be "very surprised" if Canada could achieve a negotiated, revised Nafta pact without some sort of compromise on the country's dairy regime. Canada needs to be flexible about its dairy regime, which controls production and price levels and thwarts foreign competition with tariffs, he said. "You are not going to get any deal without a compromise that gives President Trump a victory for his farmers," Mulroney told reporters at an Ottawa event. Mulroney, a Tory, helped craft the original Nafta and Nafta's predecessor, the US-Canada free-trade agreement.
- Bank of America Merrill Lynch strategists believe Canada may have to compromise on both dairy and dispute resolution in order to secure a Nafta deal. BAML notes Canadian exports of auto, aluminum and ferrous metal products to the US count for 4% of GDP. Dairy is negligible, the firm says, adding concessions from Canada on this front are probable. Canada is under pressure from the Trump administration to upend its dairy regime, which controls production and prices and thwarts foreign competition through tariffs. BAML indicated dairy concessions may not be enough. Firm's baseline scenario has Canada weakening its position on Nafta's existing dispute-resolution system--which Ottawa has said must be maintained as part of any renegotiation. US wants the system scrapped.
- Royal Bank of Canada is assigning a 15% chance that Canada's stubborn support for its dairy sector will sink efforts to reach a North American Free Trade Agreement deal this month. Negotiations with the US now hinge on two main issues: US demands for more access to Canada's dairy market, and retention of a dispute resolution mechanism in the revised trade pact. Canada's dairy sector is protected through a system called supply management, which sets quotas on domestic production and limits imports, allowing prices to be set at an above-market level. Eric Lascelles, chief economist for RBC Global Asset Management, says the most likely outcome for Nafta talks is that a deal will be struck with some sacrifice from Canada's dairy sector. That could range from a complete dismantling of the Canadian supply management system to a "more tame" scenario where US and Mexican importers are allocated up to 10% of the Canadian dairy market.
- Wholesalers in the US picked up their restocking pace in July to the fastest rate since the beginning of this year. Wholesale inventories grew a seasonally adjusted 0.6% in July from the prior month, the largest increase since February. Both durable and nondurable goods inventories contributed to the hefty growth last month. Meanwhile, hardware inventories grew at the fastest pace since May 2017. Recent trade actions by the Trump administration and impending summer storms could have contributed to the increase.
- GM stands by its forecast of $2B in income from China despite sagging industrywide sales in the nation's largest car market, according to RBC Capital. The bank citing a recent meeting with CEO Mary Barra, said GM plans for a softer second half of the year in China but management doesn't believe its US brands are suffering from any negative consumer sentiment tied to escalating trade tensions with the Trump administration. GM has sidestepped major sales declines suffered by rivals Ford & Fiat-Chrysler, while also shifting sales to a more-profitable mix of SUVs and Cadillac luxury cars. Industrywide vehicle sales in China fell for a second straight month in August.
- European shares fall 0.3% after it was reported that China is seeking permission from the World Trade Organization to impose sanctions on the U.S., relating to America's non-compliance with a dumping duty ruling tracing back to 2013. The Stoxx Europe 600 drops 1.23 points to 374.28 as the euro retreats 0.1% to $1.1585. "This news immediately sparked fears that the next round of trade-row escalation isn't far off, sending the FTSE and DAX down 0.6% apiece," says Connor Campbell at Spreadex. Financial, chemical and semi-conductor stocks lead the pan-European index down.
- Having reached its highest level since March 2016 on Monday due to worries of further sanctions on Russia, USD/RUB is paring back some gains on Tuesday, last trading down 0.6% at 70.1684. But UniCredit says the near-term bias "argues for further USD/RUB upside." Uncertainty surrounding further sanctions "could remain for a while, resulting in further risk reduction," it says. Foreign investors have been reducing their risk, with non-resident holdings of Russian marketable debt--both local and hard-currency--falling to 28% as of end-July, down from a peak of 34.5% in March. The proportion of holdings of fixed-coupon local currency government bonds also fell to 42.4% from a peak of 55.6% in September 2017.
- EUR/USD could rise further to 1.1650/1.1660 Tuesday on a "decent" German ZEW sentiment indicator at 0900 GMT, ING says. A WSJ poll of economists projects the ZEW expectations measure will edge up to -12.9 in September from -13.7 in August. EUR/USD is last up 0.3% at 1.1628, helped by Italian officials "calming market fears over a loose 2019 budget" and a broadly weaker U.S. dollar, ING says. Italian foreign affairs minister Enzo Moavero said earlier the government intends to comply with EU fiscal rules in its 2019 budget planning.

Sep 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose amid looming U.S. sanctions against Iran's petroleum industry, despite efforts by Washington to get other major suppliers to make up for the expected disruption.
- Gold prices inched lower as the dollar was boosted by expectations U.S. interest rate will rise this month and by worries the Sino-U.S. trade war could escalate.
- Copper dipped for a second session as an intensifying trade war between Washington and Beijing raised concerns over demand for industrial metals in top consumer China.
- Chicago wheat futures rose for a second straight session and hit a near one-week high as concerns over tightening supplies in key exporters Russia and Australia underpinned the market.
- The yen slipped on news a Japanese chipmaker was buying a U.S. peer for $6.7 billion, while sterling held onto overnight gains after the European Union's top negotiator raised hopes a Brexit deal can be struck in the coming weeks.
- European markets should open higher despite lingering trade concerns, CMC Markets UK says. The newsflow on Brexit and a possible second meeting between the leaders of the U.S. and of North Korea should be positive for markets. In addition, easing tensions over Italy should bolster stocks, David Madden of CMC says. "The cost of borrowing for the Italian government has been waning recently and that should help eurozone equity markets," he says.
- Europe shares rise 0.47% as gains for Italian stocks offset uncertainty over trade tensions and emerging market economies. The Stoxx Europe 600 lifts 1.74 points to 375.51, while the DAX rises 0.2% and the CAC-40 advances 0.3%. Meanwhile the Dow Jones Industrial Average trades down nearly 22 points. Italian banks gain on government reassurances that the country's budget will respect European fiscal rules. Banco BPM is the biggest riser, up 4.85%. "China's trade figures over the weekend showed the country's surplus with the U.S. is now at a record level," says David Madden at CMC Markets. "President Trump has threatened more tariffs, but nothing has been announced yet."
- The risk of the U.S. imposing further trade tariffs on China, and the prospect of China then retaliating won't be positive for the dollar, says ING, which favors short dollar positions against the safe-haven yen. The dollar has been lifted by "U.S. economic sentiment and related portfolio inflows," but this would "go into reverse if the U.S. and China slap further tariffs on each other." Chinese data showing a record trade surplus with the U.S. "couldn't really have come at a worse time" as it may add fuel to President Trump's arguments for tariffs. "This remains an FX world driven by politics," ING says. USD/JPY flat at 110.99.
- European bourses are set to start with a mixed performance a week that should see the pound and trade still in focus, David Madden of CMC Markets UK says. "Trade concerns hang over the markets, and the data that was released over the weekend only puts further strain on the trading relationship between Beijing and Washington DC," Mr. Madden says. Lingering uncertainty over Brexit should keep the pound in focus, he says.

Sep 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as U.S. drilling for new production stalled and as the market eyed tighter conditions once Washington's sanctions against Iran's crude exports kick in from November. 
- Gold held on to a small loss from the previous session,
- as the dollar firmed amid expectations of a U.S. Federal Reserve interest rate hike in September and fears of escalating trade tensions between the United States and China.
- Chicago wheat slid for a fifth consecutive session as weak demand for U.S. supplies and selling by investors added pressure on prices.
- South Korean trade officials hope that a revised free-trade pact with the US will take effect on Jan. 1 following a signing due later this month. It still needs legislative approval, and Korean lawmakers have warned they would block the deal if Trump decides to impose new tariffs on the country's autos and auto parts. He said last week he expected the signing to occur "in a couple of weeks" in New York. The leaders will be there for the annual UN General Assembly.
- Asian stocks are widely lower in extending last week's selling. There's some new worry today with Trump's comments about Apple and where it manufacturers its wares helping pressure Asian tech stocks. The region is home to many of the firm's key suppliers, especially in China and Taiwan. Indexes in both are down a bit more than 1%, as is Hong Kong. Declines of about 1% are also being logged in the Southeast Asian markets of Indonesia and Philippines, both of which have been seeing stock selling amid persistent currency weakness for those 2 countries. But the dollar's gains has helped Japan's Nikkei finish morning trading with a 0.03% gain after 6-straight trading days of declines and Korea's Kospi has risen 0.1% as beaten-down chip companies Samsung and Hynix climb amid the Trump/Apple comments.
- Helping push down Chinese stocks today is tech-related weakness, which is also pressuring the market in Taiwan. Trump over the weekend said in response to Apple comments about increased tariffs that the company should make more of its wares in the US. Apple is reliant on many firms in both China and Taiwan for parts and assembly of its products. The Shenzhen Composite is down 0.9%, the startup-heavy ChiNext has shed 1.3% and the large-cap CSI 300 has declined 1%. Meanwhile, after opening slightly higher the Taiwan Taiex is down 0.8%. Apple product assembler Hon Hai has slipped a further 3%, hitting fresh 2-year lows, and lens maker Largan has retreated 5%.

Sep 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held steady stable, as the market balanced a fall in U.S. crude inventories to the lowest levels since 2015, with Sino-American trade tensions and economic weakness from emerging markets.
- Gold extended gains as the dollar fell against the yen after a report suggested that U.S. President Donald Trump would next take up trade issues with Japan, while investors feared a new round of Sino-U.S. tariffs could come at any moment.
- London copper slid with the market facing a second week of losses on concerns about demand, as a trade war between the United States and top metals consumer China intensifies.
- Chicago wheat futures slid to a six-week low with the market dropping for a fourth consecutive session, driven down by investor selling and poor demand for U.S. supplies.

- Department of the Interior completes what it calls a "historic" two-day oil and gas auction for parcels of land on the New Mexico side of the shale-rich Permian Basin. "The two-day sale brought in more revenue than all BLM [Bureau of Land Management] oil and gas sales in 2017 combined," it says, calling the sale which grossed nearly $1B, "a testament to the Trump Administration's America First Energy Plan." Sales included a 1,240-acre parcel in Eddy County that fetched a national record-high $81,889 per acre. The auction highlights investors' appetite for oil acreage with fracking potential, especially compared to recent offshore Gulf of Mexico auction, where oil companies bid for just 1% of the acres offered.
- European markets fall ahead of U.S. job data and amid renewed trade tension. The Stoxx Europe 600 drops 0.2%, or 0.9 points, to 372.59, while Germany's DAX retreats 0.26% and France's CAC 40 backtracks 0.1%. "U.S. futures are trading a little lower ahead of the open on Friday, as we await the latest jobs report from the world's largest economy and President Donald Trump hints at a fresh trade conflict with Japan," Craig Erlam at foreign-exchange group Oanda says. Engineering consultancy Altran Technologies loses further ground, down 6.5% after saying Thursday that first-half profit missed expectations.
- The US is going to keep tightening the trade screws on China, says Raymond Yeung, ANZ's chief economist for China. And it's not just to cut the countries' trade gap, he adds, as White House policy towards China also targets technology transfers. "The ultimate objective is to ensure that the US remains the largest economy in the world."
- Eyes are on Japan today after Trump hints the country is in his "tariff crosshairs," said Oanda's Stephen Innes just ahead of the start of trading there. How Japan performs today could "well set the tone in Asia this morning," he added. If so, it's not good with the Nikkei down 0.9% in the opening minutes. That as the dollar is dropped below Y110.45 from Y110.74 in late New York trade and around Y111.35 at the end of Tokyo stock trading yesterday. Innes calls the pair "incredibly fragile."

Sep 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped as emerging market woes weighed on sentiment, while a deadline neared for a potential new round of U.S. tariffs on another $200 billion of Chinese goods.
- Gold rose for a second straight session as the dollar remained weak, making the metal cheaper for buyers in other currencies, also supported by good physical demand in Asia.
- Copper rose for a second session as a weaker dollar underpinned prices even as bearish sentiment lingered amid a trade war between the United States and top metals consumer China.
- Chicago wheat futures edged higher as bargain-buying underpinned the market after two days of deep losses even though gains were capped by lack of demand for U.S. cargoes.
- Germany's economy will grow slightly better than previously forecast this year and next due to strong private consumption and favorable labor market conditions, the Ifo institute says. The Munich-based institute raises its growth forecast by one percentage point to 1.9% for both this year and next after growth of 2.5% in 2017. "We have currently a strong economy in Germany," says Ifo. Low interest rates help boost investments and companies' full order books point to higher production, it says. Germany's export industry should benefit from the strong global economy, although Ifo said it has based its growth scenario on the assumption of a truce in the trade dispute between the U.S. and Europe and an orderly exit of the U.K. from the European Union.
- Canadian PM Justin Trudeau says his government is mulling options such as special legislation and an appeal to the country's high court in the aftermath of a judicial ruling that halted work on the expansion of the Trans Mountain pipeline. An appeal-court judgment last week said Canada didn't sufficiently consult indigenous communities affected, and fully consider the effect of increased oil-tanker traffic on the environment when cabinet gave the project the go-ahead. The government now owns the project, in a deal with Kinder Morgan aimed at saving pipeline. "If that project expansion was still in private hands, the court of appeal ruling would have killed it," Trudeau says in Edmonton, defending Ottawa's decision to buy Trans Mountain, and vowing to proceed because expansion is in Canada's interest.
- HD Supply says existing US tariffs have had little effect on its sourcing of products from China, but the proposed next round will. CFO Evan Levitt says on post-earnings call that 75% of its proprietary-branded products are made in China, and it may switch suppliers while also looking to pass on tariff-related costs to customers, probably from 4Q. Shares fall 0.6% despite 2Q beat-and-raise, with gross margin declining, in part because of tariffs levied on rebar imports. The comment period on the Trump administration's proposed next round of China tariffs closes Thursday.
- The US trade deficit climbed in July at the fastest rate since March 2015, reflecting falling exports and rising imports, according to a Commerce Department report released Wednesday. The trade deficit in goods and services increased 9.5% from the prior month to a seasonally adjusted $50.08B in July. The report highlighted a decline in soybean exports as accounting for the bulk of an $880M drop in food exports. Meanwhile, imports of industrial supplies, as well as imports of petroleum, were the highest since December 2014.
- The widening US trade deficit suggests 3Q gross domestic product growth won't see as much of a boost from exports--if any--as 2Q did. July's expanding deficit offers the first month of trade data for 3Q and supports economists' expectations for imports to grow faster than exports. One category leading the fall in July exports is soybeans, which had surged in 2Q ahead of retaliatory tariffs announced by China, helping to propel economic growth. In July, soybean exports dropped by $682M.
- The US posted its widest monthly trade deficits on record in July with China and the European Union, with shortfalls in goods of $36.8B and $17.6B, respectively. Those deficits come despite the Trump administration's efforts to reduce trade gaps by using tariffs and confrontational rhetoric, and could raise questions about the effectiveness of the strategy.
- Drugmakers eased off price increases in August, which may be a result of heightened political scrutiny. Companies raised US prices on 60 products in August, down from 110 in July, while prices dropped for 48 drugs, versus 32 in July, Wells Fargo analysts say in a report today. One of the biggest hikes was a 404% increase for Nostrum Laboratories' nitrofurantoin, a treatment for urinary tract infections. The July figures don't include the price hikes planned by Pfizer, which the company postponed after criticism from President Trump. "We believe August essentially shows that President Trump's criticism might be working and may have at least deterred some companies from raising prices in the near-term and ahead of mid-term elections," firm notes.
- Metals prices stabilize on Wednesday after gentle pressure turned to heavy selling on Tuesday on the back of an ascending U.S. dollar. Copper is up 0.61% at $5,875.50 a metric ton, although the metal remains close to the 13-month low it hit in August. Investors remain preoccupied with the outlook for emerging markets amid concerns that the Trump administration may impose new tariffs on China this week. Emerging-market currencies came under pressure, with some close to multiyear lows against the dollar. The WSJ Dollar Index was last up 0.1%, having climbed 1.03% over the past five days. The rising dollar has made dollar-denominated commodities more expensive for holders of other currencies.

Sep 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as a tropical storm hit the U.S. Gulf coast with high winds and heavy rain, but the impact on production was not as strong as initially expected.
- Gold edged up, after slipping to a more than one-week low in the previous session, as the dollar eased despite concerns of an escalation in the trade conflict between the United States and China.
- Shanghai copper hit its lowest in more than a year overnight and was down for a fifth straight day, tracking a 2.6 percent drop in London copper as U.S.-China trade tensions continued to weigh on metal prices.
- Chicago wheat futures rose, recouping some of last session's deep losses on expectations of lower production in key exporting countries.
- Canada's government sees protection for its cultural industries as a "red line" issue in Nafta negotiations with the US, according to a person familiar with the government's position. Nafta talks are set to resume on Wednesday, with Canada and the US still far apart on several major issues, including access to Canada's dairy market and a US proposal to scrap an existing dispute-resolution system. Protections for Canada's cultural industries could also be a point of contention during talks this week, the person says. The current Nafta agreement includes an exemption for Canadian cultural industries, allowing the government to regulate how much Canadian content broadcasters must carry. Industry groups say Canadian literature, television and music would be overwhelmed by US products if the exemption is dropped. "The cultural exemption must stand," Canadian Prime Minister Justin Trudeau says during a media availability. Giving up the exemption "would be giving up of our sovereignty and our identity."
- The Bank of Canada is widely expected to keep its benchmark interest rate on hold at a policy announcement on Wednesday--allowing it to avoid back-to-back rate increases and leaving more time to see how final-hour efforts to include Canada in a new North American Free Trade Agreement unfold. Economists from nine out of 11 primary dealers of Canadian government securities tell WSJ they anticipate the Bank of Canada will keep the key rate on hold on this week at 1.50%. A majority of those surveyed say the central bank will likely wait until October before raising the rate again.
- Greece's Aegean Air is suspending flights to Tehran, the latest European carrier to pull out of the market. Aegean, though, says it is "forced to temporarily discontinue this route due to foreign exchange bank restrictions that affect its viability." Other airlines have cited demand weakness after the U.S. reimposed sanctions on Iran.
- Nafta uncertainty is likely to feature prominently in the Bank of Canada decision Wednesday, Cambridge Global Markets tells clients in note. Cambridge has BoC on hold, adding a likely emphasis on trade-related risks "could introduce an element of downside risk," leading to softer C$ and drop in bond yields. Talks on a new Nafta resume Wednesday, after the US and Canada were unable to resolve differences before a deadline last Friday that President Trump imposed. Cambridge notes that despite rhetoric from President Trump on Twitter, his administration may be bargaining from a weaker position than articulated to date. Cambridge cites looming midterms, and what looks like little appetite from Congress to proceed with a continental trade pact without Canada.
- The Stoxx Europe 600 falls 0.5%, or 1.88 points, to 380.63 as traders remain nervous about trade tensions and weakness in emerging markets. The DAX drops 0.8% and the CAC 40 is off 1.1%. Car makers are down on worries about trade tariffs. "German car manufacturers like BMW and Daimler are notable fallers this morning as President Trump knows full well the European auto sector is a great industry to apply pressure on Brussels," says David Madden at CMC Markets. Advertising and marketing firms are also off after downbeat first-half results from WPP. Publicis Groupe drops 2.8%.
- The news that Societe Generale may reach an agreement with U.S. authorities over a sanctions-related dispute in the coming weeks--and that penalties will be "almost entirely covered" by existing provisions--is "a relief for the bank," Kepler Cheuvreux says. With an agreement, "SocGen would have put an end to a long and uncertain chapter regarding litigation," it says. The news removes some uncertainty weighing on the stock, it adds. "Management can now fully dedicate its time and attention to turning the bank around," Kepler says. Shares in SocGen trade 1% higher at EUR35.74.

Sep 04 - DJ Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices rose, breaking past $70 per barrel, after two Gulf of Mexico oil platforms were evacuated in preparation for a hurricane.
- Gold prices inched down as the dollar hit a one-week high on the back of intensifying global trade tensions and economic worries in emerging markets.
- London copper prices fell for a fifth straight session even though inventories continue to drop, as a trade dispute between China and the United States chilled factory activity in August and tempered appetite for metals.
- Chicago wheat futures slid 1.4 percent, falling for two out three sessions after Russia's farm ministry said it had no plans to restrict grain exports, easing worries over supplies.

- The dollar is the main beneficiary from growing concerns about trade tensions after U.S. President Donald Trump tweeted a threat to expel Canada from NAFTA ahead of talks between the two this week. "If sentiment remains poor today with risk aversion remaining elevated the dollar will continue to appreciate," Commerzbank says. EUR/USD falls 0.3% to its lowest in more than a week at 1.1575, while GBP/USD falls 0.2% to 1.2845. The dollar also rises against the Japanese yen and Swiss franc, the two other perceived safe haven currencies, with USD/JPY up 0.3% at 111.35 and USD/CHF up 0.2% at 0.9713.

Sep 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell amid rising supply from OPEC and the United States, outweighing concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November.
- Gold fell, with prices dropping below the $1,200 technical level, as the dollar strengthened on worries over the potential for more tariffs between the United States and China as part of their trade war.
- London copper slipped to its lowest in 10 days on Monday as jitters over renewed trade tensions between the United States and China weighed on risk appetite and pushed up the dollar.
- U.S. corn and soybean futures rose on Friday as traders covered short positions ahead of a long holiday weekend, but both commodities posted monthly declines as prospects for large U.S. harvests weighed on prices.

- President Trump said Canada would be left out of a new North American Free Trade Agreement if a "fair deal for the U.S." isn't reached -- and warned Congress he would terminate the deal entirely if lawmakers "interfere" in the negotiations. Mr. Trump's warning on Saturday comes a day after U.S. and Canadian negotiators failed to reach an agreement on Friday, a deadline he set, to revamp the trade deal that includes Mexico. The two sides have agreed to continue the trade talks.
- His threat via Twitter coincided with the services at Washington National Cathedral attended by many congressional leaders for the late Republican Arizona Senator John McCain, a frequent adversary. "There is no political necessity to keep Canada in the new NAFTA deal," Mr. Trump tweeted. "If we don't make a fair deal for the U.S. after decade of abuse, Canada will be out. Congress should not interfere with these negotiations or I will simply terminate NAFTA entirely & we will be far better off." He and other senior U.S. officials have indicated a willingness to replace Nafta with a bilateral Mexico deal in the event Canada and the U.S. can't resolve differences.
- While the president does have the power to terminate the pact, with six months' notice, it isn't clear if such a decision could withstand legal challenges, of which there would likely be many. And lawmakers and business groups whose support has usually been vital for passage of trade pacts have made clear that a bilateral trade deal that excludes Canada would face an uphill battle for the required congressional ratification.
- Four days of marathon talks ended with significant differences remaining between the U.S. and Canada. Mr. Trump said he still planned to stick with the timetable he laid out earlier this week to sign a new pact in late November to replace the three-nation accord, which on Saturday he described as "one of the WORST Trade Deals ever made."
- In response to Mr. Trump's tweets, a spokesman for Canadian Foreign Minister Chrystia Freeland said Canada is committed to working toward a modern Nafta, and "with good will and flexibility on all sides, a win-win-win outcome is achievable." The spokesman added, though, that Canada would only sign a deal "which is good for Canada." Canadian officials expect threats from Mr. Trump throughout the talks and maintain such threats won't affect Ottawa's strategy, according to a person familiar with the situation.
- Mr. Trump's statement that "Congress should not interfere" with the Nafta talks is likely to provoke bipartisan consternation on Capitol Hill. Democratic and Republican lawmakers alike tend to believe they have the authority to play a role in shaping trade agreements. Congress in recent years has written increasingly detailed rules requiring the White House to consult in negotiating and enacting deals, most recently in the 2015 Trade Promotion Authority law. The battle over the balance of power in trade policy will be particularly intense if Mr. Trump tries to proceed with a new Nafta that excludes Canada. Lawmakers from both parties have over the past week warned that if he does so, they would make the required congressional ratification all but impossible, effectively killing it. The debate revolves around whether the new Nafta will qualify for "fast-track" consideration by Congress, which would enable passage with a simple majority and prohibit any amendments. Only trade agreements considered under "fast-track" have won congressional ratification in recent history. But lawmakers have demanded that in return for their forgoing the ability to change a negotiated trade pact, the president give them detailed advance notification of the type of trade agreement he intends to negotiate.
- That is where the potential for conflict lies. Before launching the Nafta negotiations a year ago, Mr. Trump notified Congress that he was entering talks with both Mexico and Canada. Many members of Congress say that as a result, only a treaty with both countries qualifies for fast-track consideration. "To use Trade Promotion Authority's 'fast-track' procedures, the administration must also reach an agreement with Canada," Pennsylvania Republican Sen. Pat Toomey said in a statement earlier this week. "Conversion into a bilateral agreement would not qualify for TPA's 'fast track' procedures and would therefore require 60 votes in the Senate." Trump administration lawyers have been studying the question and say they disagree. When asked Friday about the argument made by Mr. Toomey and others, a senior administration official told reporters, "That strikes me as an odd reading of the statute." But the official added, "At the end of the day, obviously it's going to be up to the Congress."
- In contrast with Mr. Trump's warning against congressional meddling, his U.S. trade representative, Robert Lighthizer, has tried to convey the administration's deference to the role of Capitol Hill. "Will there be congressional review? Absolutely," he told reporters on Monday. "Congressional review is a whole process. It's very detailed... There's congressional studies, and there's testimony, and we write a bill together." Before Trump's tweets, some experts were optimistic on Saturday that the U.S.-Canada talks would result in a deal.
The negotiations "witnessed progress, not perfection in the NAFTA renovation," Daniel Ujczo, a trade lawyer with Dickinson Wright in Columbus, Ohio, wrote in a note to clients. "The process is moving forward, and, in spite of the theater... [the] countdown to get a deal signed by the end of November is procedurally on track."

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."