Forex & Commo Market News

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

- Oil prices rose by more than 1 percent in early Asian trading, pushed up by uncertainty over whether OPEC would manage to agree a production increase at a meeting in Vienna later in the day.
- Gold prices held steady, after hitting a six-month trough in the previous session, as the U.S. dollar pulled back from a 11-month peak on profit-booking.
- Copper prices were poised to decline for a second week, pressured by fears that trade conflict between Washington and Beijing would hit demand in China, the top consumer of industrial metals.
- U.S. soybean futures were on track for their fourth week of decline, pressured by concerns over demand from top importer China following a trade war between Washington and Beijing.
- The highly anticipated OPEC meeting on Friday is viewed as one of the most contentious in recent history, say analysts for Energy Aspects." This is perhaps the most politicized OPEC meeting there has been in years, from Trump's tweets and Saudi Arabia's alleged promise to the U.S. to backfill the market for losses due to Iran sanctions, to Iran, Iraq and Venezuela openly opposing any output increase and Russia talking down the market," say analysts in a recent note. "One week has heard it all."
- Twitter announces plans to acquire Smyte, a startup that focuses on safety, spam and security. Twitter has set improving the level of discourse and reducing abuse on its platform as a goal. Ahead of the US midterm elections, the company is under pressure to reduce the influence of misinformation on its social network, which it bans for violating its rules against spam. Twitter didn't disclose financial terms of the deal. Twitter falls 3.3% to $44.60.
- Foreign investors are likely to buy fewer U.S. government bonds if there is a full-blown trade war because central banks won't need to invest as much in the U.S., given that their countries won't make as many dollars from international trade, says Bank of America Merrill Lynch. Other analysts say the fall in investment would be a sign of retaliation against U.S. protectionism. China, for instance, as the U.S.'s biggest creditor, has bought U.S. bonds as international trade grew. The dollar is the most common transactional currency, and so the dollars that China accumulated were invested by reserve managers. "Lower global trade volumes should result in a slowdown of global reserve accumulation," which should result in a weaker need to spend dollars on U.S. assets.
- Shares in auto maker Daimler AG fall to their lowest since mid 2016 after the company warned that Chinese import duties on U.S.-built vehicles, as well as new European emissions regulation and diesel recalls, would hurt earnings. The shares last trade down 4.1% at EUR57.96, having dropped as low as EUR57.65, and David Madden at CMC Markets says if the falls continue the stock could target EUR55. "This is evidence that the escalating trade tensions between the US and China has the potential to hurt companies," he says.
- The increase in U.S. dollar is likely to be more than just a temporary blip, as previously expected, says Barclays. The dollar was falling last year as investors were reading into the eurozone economic recovery a sign that the European Central Bank could soon raise interest rates. Then the dollar started rising slightly this year, as those expectations slowly quietened down, while the Federal Reserve was guiding on more interest rate rises. Now, the ECB has made it clear it won't raise rates at least till the end of summer of 2019. There are also political uncertainties in Germany and Italy. The divergence between U.S. and rest of the world monetary policy "will support longer and greater USD strength than we had anticipated," Barclays says.
- Implied volatility in the world's most traded currencies shows markets "remain complacent about the risk of a full-blown trade war," says Societe Generale. USD/JPY volatility has dropped back to the year's lows, and is currently lower than at any time in 2015, 2016 and 2017, SocGen says. "EUR/USD and AUD/USD implied volatility have perked up recently from Italian political risks and U.S.-China trade tensions respectively, but are still trading notably towards the lower end of the range in recent years," SocGen adds. Implied volatility is an indicator of the cost of buying options in the foreign exchange market. If the risk of full-blown trade war would go higher, options would become more expensive, pushing up implied volatility.
- Sen. Mark Warner (D-VA), a prominent political voice on issues related to the gig economy, this week introduces legislation directing the Treasury Dept to conduct a study of tax issues related to independent, non-salaried work. The research would examine how to improve tax filing and compliance for workers such as freelancers, gig workers and others earning non-employee business income. Goals include making sure appropriate taxes are being collected by the IRS for non-traditional income; and making reporting, withholding and filing simpler for independent workers. Warner also asked the Government Accountability Office to study how taxes are reported and collected from people who earn income through online platforms such as Airbnb and Uber. Prior legislation of Warner's, to fund pilot programs offering benefits to gig workers, has gotten little traction.
- The Bank of Canada is likely to raise its benchmark interest rate in July, but Desjardins Group says worries over trade relations and the country's real estate sector mean the pace of future increases is uncertain. Firm's economists say the tone of recent BoC statements has been increasingly positive, with the central bank now "clearly signaling" its plans to raise rates in July. "What comes after that remains unclear for the BoC, but serious ongoing concerns about the real estate sector and trade relations could persuade it to keep its increases at a very gradual pace of just 0.25% every six months," Desjardins says.
- Goldman Sachs is betting buoyant domestic growth and tailwinds from tax cuts will propel further earnings growth over the next three years. The bank's analysts raised their estimate for S&P 500 EPS growth to 19% in 2018, 7% in 2019 and 5% in 2020. While those numbers still trail bottom-up consensus estimates, they are up from Goldman's earlier projections of 12% in 2018, 5% in 2019 and 3% in 2020. "The U.S. economy is growing, corporate profits are rising, and stock prices should continue to climb through 2019. However, the appreciation potential will be constrained by tightening monetary policy, a flattening yield curve, rising trade tensions and the upcoming midterm Congressional elections," Goldman writes.
- EUR/USD is likely to fall below 1.15, Societe Generale says. On Thursday, EUR/USD touched 1.1509, its lowest in three weeks. If it were to go below this level, it would fall to an 11-month low, suggesting 1.1509 is a strong support for EUR/USD. SocGen says "the contrast between negative sentiment in Europe and the continued optimism coming from the U.S. may be a recipe for an overshoot in markets." EUR/USD last trades down 0.2% at 1.1544.
- PG&E plans to take a $2.5B charge in 2Q related to a spate of deadly wildfires in California last October. The charge, PCG said in a filing, stems from the likelihood the company and its utility, Pacific Gas & Electric, will incur losses from 14 of the 16 fires that state fire investigators have so-far determined were sparked by PG&E utility equipment. Investigators are expected to release reports on several more October fires in the coming weeks and days, meaning PCG could face further losses. The charge is a warning of sorts for state officials, who PCG has been pushing to reform a utility liability law that could leave the company on the hook for multibillion dollar losses. PCG's CEO has called the rule "a risk to the financial health" of all California investor owned utilities.
- The euro falls against the dollar, touching a three-week low of 1.1509 given that a U.S.-EU monetary policy divergence, as well as political and trade uncertainties, are putting pressure on the common currency. The Federal Reserve continues to tighten its monetary policy, while the European Central Bank has committed to not raise interest rates at least until the end of summer next year. Political issues in Italy and Germany are raising concerns about eurozone stability. Comments from ECB member Ewald Nowotny on Wednesday confirmed ECB sees the risks for financial stability in Europe currently more political than economic. Mr. Nowotny said this will have an impact on the exchange rate.

Jun 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as Iran signalled it could be won over to a small rise in OPEC crude output, potentially paving the way for the producer cartel to agree a supply increase during a meeting on Friday.
- Gold prices posted a six-month low, pressed down further by a firm dollar and as the U.S. Federal Reserve Chair confirmed an outlook for higher interest rates in the United States.
- London copper rebounded from a three-week low after China said it was eyeing cuts in banks' reserve requirement ratios (RRR) and other measures to spur economic growth, which could support copper demand in the world's top user.
- U.S. wheat futures eased after gaining in the previous session on fears that dry weather could hit production in top exporters Russia and Australia.
- Daimler and BMW shares open weak after the U.S.-China trade war prompted a profit warning at Daimler, which said Chinese import duties on U.S.-built vehicles would hurt earnings for the Mercedes SUVs it makes in Alabama. Daimler cites other factors, such as new emissions regulations, but called Chinese duties the "decisive factor." BMW, which manufactures cars in the U.S. that are exported to China, also slides, with investors nervous that other companies could issue profit warnings in the coming weeks as the effects of tariffs sink in. Daimler trades 2.8% lower after falling more than 3% at the open; BMW trades 2.3% lower.
- During today's presser, Trudeau was asked to reflect on his relationship with Trump, saying Canada's government has sought to develop points of mutual interest and that he's worked to show trade measures taken against his country "will often have negative impacts on workers in the United States." Earlier this month, Trump withdrew US support for a G-7 leaders' statement and called Trudeau "dishonest and weak" after the Canadian leader said the country wouldn't be "pushed around" on trade. Trudeau said today he would next see Trump at the coming NATO summit in Brussels and looked forward to a continued, constructive relationship.
- Canada Foreign Minister Chrystia Freeland tells reporters in Montreal she's encouraged by testimony before Congress from Wilbur Ross in Washington, in which the Commerce Secretary played down any security threat Canadian steel and aluminum pose to the US. "We think that's self evident and we have been saying that from the beginning," Freeland says following remarks before Montreal Council of Foreign Relations. Ross also said in testimony that the US runs a trade surplus with Canada on steel. Freeland, who has repeatedly said the metals tariffs on Canada are "unjust" and "insulting," said it was "good to hear all those comments from" the Commerce Secretary.
- The stock market's stability Wednesday has some analysts scratching their heads. Are investors no longer worried about the threat of a trade war? Perhaps not--for now, Bank of America Merrill Lynch analysts write in a report. Since the Trump administration rolled out tariffs on $50B of Chinese goods Friday, shares of companies with the most positive revisions to their EPS estimates have outperformed those with the most negative revisions. That's even as factors like a company's exposure to foreign revenues and susceptibility to inflation--things that investors fear could become a bigger headwind to corporate profits under a trade war--have appeared to have minimal impact on stock performance. "Scary headlines might be more hype than reality as of now," BAML says.
- Restaurant businesses in Washington, D.C. could be in for big increases to their labor costs. Voters there have cleared the way for the city to increase the minimum wage for tipped workers like bartenders and waiters to $15 an hour by 2025, up from $3.33 an hour now. Restaurant industry employers and some workers had campaigned fiercely against the initiative, warning they might have to cut back on staff hours, shed workers or even close their doors if the wage hike came to pass. Employees said they worried about job security and their tips drying up. It's possible the initiative might not end up going in effect--the city council has the ability to overturn ballot initiatives, and several council members have spoken out against it.
- Central banks which are tightening their monetary policy "may be caught by surprise if the trade situation worsens," says Invesco's Chief Global Market Strategist Kristina Hooper. "I believe is a strong possibility," Ms. Hooper says. She points to last week's International Monetary Fund report, which said that import tariffs could hurt global trade. This would bring "adverse effects for both the U.S. economy and for trading partners." However, risk appetite returns on Wednesday just after two days of risk aversion, with equity markets going up. Risk aversion diminishes in the currency markets as well, with USD/JPY trading slightly higher at 110.16.
- The dollar continues to rise slightly on Wednesday versus the euro, with EUR/USD down 0.1% at 1.1576, even as risk appetite recovers. But Saxo Bank analysts say "the degree to which the U.S. dollar can continue its broader rally if risk appetite stabilizes here is an open question." The U.S. currency, however, will certainty gain against the low-yielding, safe-haven Swiss franc, "even if the greenback heads sideways elsewhere," Saxo Bank says. If USD/CHF were to rise above 1.0050, it would open the door to highs above 1.03. USD/CHF is last up 0.1% at 0.9947.
- Tariffs or no tariffs, many farm-sector followers believe the time will come when China will have to import US-grown soybeans, due to the sheer number of hogs, chickens and other meat animals China raises -- South American producers can't meet China's full demand. But ongoing tension between China and the US could play to Chinese soybean buyers' advantage: So far this month, November-delivery soybean futures prices have dropped more than 10%. "We believe the Chinese government is betting that the trade dispute will be resolved before it becomes desperate for U.S. product and, in the meantime, the dispute will have helped drive soybean prices much lower," Vertical Group analysts write.
- Pressured by the lack of a clear political stance on Brexit and the lack of investors' expectations regarding a tighter monetary policy, sterling has lost nearly 8% against a strengthening dollar since mid-April, and is likely to weaken even further, says Rabobank. GBP/USD is last flat at 1.3182, and Rabobank expects it to fall below 1.30 in coming months and then end the year at 1.28. "Fears about the impact of trade wars and rising U.S. interest rates on risk appetite, and the resultant risk of a retrenchment from EM currencies, has been a contributing factor behind our constructive view on the dollar," Rabobank says. In the U.K., political uncertainty should keep sterling under pressure, the bank says.
- The dollar gains on Wednesday, even as equity markets calm as there are no further developments in the U.S.-China trade altercations. "The danger today, with only existing home sales due for release in the U.S., is that we see market stability drag on U.S. yields up and support the dollar," says Societe Generale. The dollar also rose in recent days, when markets were risk averse and equities fell, due to the U.S. currency's safe haven status. The dollar firms against most currencies Wednesday, with EUR/USD down 0.1% to 1.1580.

Jun 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices recovered some day-earlier losses in Asia, supported by a drop in U.S. commercial crude inventories and the loss of storage capacity in oil producer Libya.
- Gold prices were little changed after slipping to a near six-month low in the previous session, amid a steady dollar and firmer equities.
- London copper prices steadied after touching a three-week low earlier in Asian trading, but a deepening trade row between China and the United States capped any recovery in risk appetite.
- Chicago soybean futures edged higher with the market taking a breather after hitting its lowest in almost a decade in the last session on pressure from an escalating U.S.-China trade spat.
- EUR/USD continues to edge lower on Wednesday, last trading down 0.2% at 1.1567. Monetary policy divergence between the U.S. and eurozone, political issues in Germany, and increased worry of a full blown trade war, are keeping EUR/USD under selling pressure. "The margin for a EUR/USD rebound has become less pronounced than in the past," UniCredit says. "Looking at today, both ECB President Mario Draghi and Fed Chair Jerome Powell speaking in Sintra may attract attention, though both of them are largely expected to stick to the tones of their press conferences last week, and thus the ultimate impact on EUR/USD is likely to remain negligible."
- The London market is set to open higher after a broadly positive session in Asia as traders shrugged off jitters about the U.S.-China trade row. The FTSE 100 Index is tipped to rise 35 points to 7638. Jasper Lawler at London Capital Group says selling exhaustion has started to set in as markets become accustomed to U.S. President Donald Trump's "trade game." "Any fresh news of retaliation could see traders snatch risk back off the table quickly," he says.
- European bourses are expected to open in positive territory, London Capital Group says. "The markets have been trading on the same piece of general trade-war news for a while, as a result selling exhaustion has started to set in," it says. Still, the escalating tension between the U.S. and China continues to worry some investors and has them adopting a cautious stance, says Michael Hewson, chief market analyst at CMC Markets UK. "Given the tit-for-tat positions being staked out in the past few days some investors appear to be adopting the position of discretion over valor and locking in some profits, as concerns about a much deeper selloff start to gain traction," Mr. Hewson says.
- Phones are the biggest potential target in the latest round of tariff talk from DC. Some 3/4 were assembled in China in 1Q, according to IDC, including almost all iPhones. It puts Apple and many of its suppliers in a major pickle. If the US slaps tariffs on Chinese smartphone imports and if China retaliates with ones on components made in the US, Apple or its suppliers would either have to eat the cost or pass it on to consumers. Last year, Apple chose to protect its profit margin by passing on increased expenses from memory chips by hiking iPhone 8 and 8 Plus prices $50, notes Mehdi Hosseini at Susquehanna. "Any further escalation would force them to make tough decisions," he adds. Apple suppliers' stocks underperformed Tuesday in Asia and Apple dropped 1.6%.
- Home builders are urging the Trump administration to reconsider tariffs on Canadian lumber. The National Association of Home Builders said its leaders met with Commerce Secretary Wilbur Ross on Tuesday to ask the administration to resume negotiations with Canada over the North American lumber trade. The U.S. last year hit Canadian imports with antidumping tariffs, helping to stoke a rally that pushed lumber prices to records and hurt home builders. Rising lumber prices have added nearly $9,000 to the cost of an average single-family home, the NAHB says. The association's home-builder confidence index fell in June in large part because of the high cost of timber.
- JPMorgan Chase & Co. Chairman and CEO James Dimon called for "comprehensive immigration reform right now" in an internal memo to bank employees Tuesday that was reviewed by The Wall Street Journal. Dimon also chairs business trade group Business Roundtable, which released a statement urging the Trump Administration "to end immediately the policy of separating accompanied minors from their parents," according to Dimon's memo. Dimon, who leads the largest U.S. bank by assets, wrote that reform is necessary, including a legislative solution for DACA recipients that allows them to stay in the U.S. He added: "Fixing these issues will clearly boost the economy and help companies like ours hire great talent, but more importantly, it will reflect our American and core human values of fairness, decency and mutual respect."
- The American Medical Association says it will oppose the merger of CVS and Aetna, arguing the deal would have "anticompetitive effects" on Medicare's Part D drug benefit, pharmacy benefit-management services, health insurance and retail and specialty pharmacies. The doctor group, which previously opposed the now-scuttled combinations between Aetna and Humana and Anthem and Cigna, said the CVS-Aetna deal would "substantially lessen competition in many health care markets." Some analysts saw the CVS-Aetna deal, which is currently undergoing antitrust review, as potentially gaining some ground in the wake of the court ruling against the Justice Department's challenge of AT&T's takeover of Time Warner.
- Canadian officials are preparing for the possibility that the Trump administration imposes tariffs on motor vehicles and auto parts imported from its Nafta partner, Foreign Minister Chrystia Freeland told lawmakers. The government's support for its auto sector "will be equally firm and clear," she said. The Commerce Department has begun a probe on the need for tariffs on imported cars and auto parts on national-security grounds, similar to what was done before with levies on imported aluminum and steel. Freeland said US tariffs on vehicles and car parts from western allies would be "an unprecedented act" by the White House.
- USDA Secretary Sonny Perdue and other Trump Administration officials have mulled ways to shield US farmers from fallout as trade disputes expand with major food importers like China, Mexico and the EU. But some farmers aren't impressed. The National Association of Wheat Growers and US Wheat Associates call on President Trump to rethink a "tactical policy" of tariffs, saying that it makes the already-risky business of farming more volatile, while "the Administration's vague promises of protection for the farmers we represent offers little consolation."
- Canadian Foreign Minister Chrystia Freeland says the Liberal government is mulling financial aid for domestic steel and aluminum producers and their employees to deal with US tariffs on the metals. "[They] need our support," Freeland told lawmakers on a parliamentary trade committee. She added, "I agree we need to work on ways to directly support workers and industry. That work is underway." Canada last year offered a C$867M financial package for domestic lumber producers and their employees after Washington imposed 20% tariffs on Canadian softwood lumber, used mostly in the construction of homes.
- Companies funding political organizations risk angering employees and customers by supporting candidates or initiatives that run counter corporate policies, the Center for Political Accountability warns in a new report. Financial support for party organizations or state and local candidates can backfire if those funds are later traced to controversial policies, says the group, which also rates large public companies on their political-spending disclosures. The report notes more than two dozen well-known companies that favored US participation in global climate accords, but funded state attorney general candidates who sued to block clean-water and clean-air rules.
- US auto companies slump after President Trump directed his administration to consider an additional $200B of tariffs on Chinese exports. Investors worry those stocks could come under further pressure amid escalating trade tensions between Washington and Beijing. Auto stocks were already struggling after China promised to levy tariffs on high-value American exports, including US autos, in response to some $50B in tariffs the Trump administration had imposed last week. Shares of Ford and GM sank 1.9% and 4.1%, respectively, in recent trading. Roughly 5% of GM's total revenue comes from China, compared to Ford's 3.8%, according to estimates from FactSet.

Jun 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell on expectations that producer cartel OPEC and key ally Russia will gradually increase output after withholding supplies since 2017.
- Gold prices rose, supported by safe-haven buying, as an escalating trade spat between the United States and China sparked a sell-off in equity markets. 
- London metals gave up early gains, while Shanghai contracts continued their fall following an extended weekend after China said it would firmly respond to any measures by the United States to widen tariffs on Chinese goods, escalating trade tensions between the world's top two economies.
- Chicago soybeans slid 2 percent to their lowest since March 2016, while corn dropped for a fifth consecutive session on concerns over a deepening trade war between Washington and Beijing.
- The dollar fell against the yen and Swiss franc after U.S. President Donald Trump's threats of additional tariffs on China escalated a trade spat between the world's two largest economies in a worrying sign for global growth prospects.
- Beijing may target US businesses in China as bilateral trade tensions build up, says Deutsche Bank. US firms sold $448 billion worth of goods and services to China in 2017, including $168 billion through trade and another $280 billion through subsidaries' operations in China, the bank estimates. China's commerce ministry said today that it is considering a combination of of "qualitative and quantitative" measures in response to Trump's threat of imposing tariffs on $200 billion worth of Chinese products.
- European shares fall on fears that the U.S. trade spat with China could hit other regions. The Stoxx Europe 600 drops 0.8%, or 3.05 points to 382.86 after U.S. President Donald Trump laid out an extra $200 billion worth of Chinese products to be targeted by tariffs. "There's little sign that Trump is about to give up, with Chinese negotiations clearly sending out a message to the EU, setting a precedent to their discussions," says Joshua Mahony at spread-betting firm IG.
- Even if U.S.-China trade tensions escalate to the point where China starts selling some of its substantial holdings of U.S. debt, "oddly enough, it might be good for the dollar," says Marshall Gittler, chief strategist of forex trading analysis firm ACLS Global. If China sells U.S. Treasuries prices would fall sharply as yields rise, and the dollar has had a tendency to rise and fall along with U.S. Treasury yields in recent years, he says. The dollar benefits from elevated risk aversion due to concerns about U.S.-China trade conflict, and is last up against most currencies except the Japanese yen.
- The U.S.-China trade war could spread into the financial world if China starts selling some of its "massive" holding of U.S. debt, says Marshall Gittler, chief strategist of forex trading analysis firm ACLS Global. He says China owns some $1.18 trillion of U.S. Treasurys, or 30% of all foreign official holdings of Treasuries, "not to mention their holdings of agency bonds and others." China may be shooting itself in the foot because bond prices would plunge, but U.S. mortgage rates would also soar, he says. "China might feel the pain was worth it to make middle-class U.S. voters sit up and take notice."
- Sterling falls 0.4% to 1.3201 against the dollar, as the U.S. currency benefits from its safe-haven status on the back of an escalating trade conflict with China. But there are domestic issues facing the pound as well. Brexit talks haven't progressed much since March, while the June 28-29 summit is looming. The Brexit withrawal bill is still being debated in the U.K. parliament, while weaker U.K. economic data has lowered the chance of an interest rate increase this year. According to the derivatives market, there is only an 8% chance of a rate increase this Thursday, when the Bank of England meets. EUR/GBP is flat at 0.8773.
- Safe haven demand lifts the dollar as a trade war escalates between the U.S. and China, pushing EUR/USD down by 0.4% to 1.1577 while the DXY dollar index rises 0.1%. But Commerzbank says the dollar could also benefit on the grounds of macroeconomic fundamentals if the trade war continues. "As the U.S. economy is already at full capacity, import tariffs would likely fuel inflation," which in turn would increase the likelihood of further interest rate increase. The dollar falls, however, against the Japanese yen, the currency which typically gains most in times of risk aversion. USD/JPY is last down 0.8%, having reached a one-week low of 109.55.
- European bourses are expected to open lower as the escalating trade conflict between the U.S. and China looms over the market, Michael Hewson, chief market analyst at CMC Markets UK. "While it is easy to argue that a lot of yesterday's selloff is tariff-related and in particular China's retaliation to last week's U.S. tariffs, the narrative appears to be one of concerns about escalation, and how the U.S. administration will react as well as concerns about a spillover extending to the EU as well as the stalled NAFTA talks with Canada," Mr. Hewson says.
- Oil futures have turned lower after Trump announced he's seeking a list of $200 billion in possible additional tariffs to slap on China if it doesn't back down. It adds to the risk-sentiment seen during Asian trading yesterday, which sent oil futures down as much as 2% in Monday's action there before rebounding 3-4% during the course of European and US trading. With uncertainty continuing about just out big an output-cap increase might be from major producers later this week (predictions of a smaller increase than before helped fuel oil's rebound), expect topsy-turvy trading to continue. July WTI is down 0.45% at $65.55/barrel and August Brent is off 0.4% at $75.07.

Jun 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices slumped after China threatened duties on American crude imports in an escalating trade dispute with Washington.
- Gold prices inched higher after falling to a 5-1/2-month low in the previous session, as a trade dispute between the world's two largest economies triggered safe-haven buying, but a strong dollar put a cap on the upside.
- London copper slipped and touched a near two-week low hit in the previous session on pressure from a stronger dollar, while a holiday in China drained buying interest from the market.
- Chicago soybean futures ticked higher as the market took a breather following last session's deep losses that dragged the market to a one-year low on escalating U.S.-China trade tensions.
- The recent widening in emerging market, or EM, credit spreads and the weakening of EM local currencies aren't a sign of a deterioration in fundamentals, says Enzo Puntillo of GAM Investments. Instead, he says, the gradual rise in U.S. interest rates and a stronger dollar represent a considerable headwind for the entire EM asset class, and the market is focusing specifically on these factors. Italy-related uncertainty has further increased risk aversion among global investors. GAM considers the correction an opportunity to further increase exposure in various countries and it believes it's a good starting point for investors who aren't yet invested in this asset class.
- It is unclear which direction currencies will take this week due to the escalating global trade war risks, says ING. But one thing is clear: emerging market currencies, especially Asian ones, are likely to get hurt by the fall in the risk appetite on Monday. Except the Japanese yen, which acts as a safe-haven. USD/JPY is last down by 0.1% at 110.53.
- The dollar rises on safe-haven demand as investors become more risk averse due to escalating global trade war fears after the U.S. imposed tariffs on China. China retaliated, pushing U.S. President Donald Trump to say he could respond with even more tariffs. Though the dollar is rising, and China "can neither feed nor water itself and has much less favourable demographics," politically, these developments are affecting the U.S. more than China, RBC says. "Chinese President Xi retains a significant political advantage over Trump and therefore has a greater staying power in a drawn out trade war," RBC says. EUR/USD falls 0.3% to 1.1578, while the DXY dollar index is up 0.2%.
- European markets should open in negative territory as escalating trade tensions unnerve investors, but losses may be limited, says Michael Hewson, chief market analyst at CMC Markets UK. On Friday, concerns about an impending global trade war were stoked by China responding to U.S. tariffs against its products with its own imports levies. "The amount of the tariffs in the wider scheme of things is still quite small in economic terms, in the short term at any rate, which may help explain why we could well see markets in Europe trade only modestly lower on the open this morning," Mr. Hewson says.
- The FTSE 100 Index is expected to make limited gains in early deals after trade tensions led to a broadly negative session in Asia. London's blue-chip index is tipped to start the session about 8 points up at 7641, after China on Friday responded to U.S. President Donald Trump's $50 billion worth of tariffs on Chinese imports by hitting U.S. commodities with import duty pledges, Jasper Lawler at London Capital Group says. "The tit-for-tat response is putting the two powers a step closer to an all-out global trade war," he says.

Jun 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent oil prices extended declines, as Saudi Arabia and Russia, architects of a producer deal to cut output, indicated ahead of a key OPEC meeting in Vienna next week that production could rise.
- Gold prices steadied below a one-month high hit in the previous session and were on track for a second straight weekly gain amid concerns over U.S.-China trade dispute.
- London copper prices slid for a second session, with the market set for its biggest weekly decline since late April on concerns over demand in top consumer China.
- Chicago soybeans slid to their lowest since June last year as benign weather across the U.S. Midwest raised hopes for a bumper harvest, while concerns over Chinese demand also weighed on the market.
- The euro was headed for its worst weekly loss in 19 months after a cautious European Central Bank signalled it will keep interest rates at record lows well into next year.
- The margin for a rebound in the euro "has now become more constrained" after the European Central Bank monetary policy decision on Thursday, says UniCredit. But "this does not mean that it is necessarily over" and the ECB's negative impact on the euro "will progressively fade," it says. "The intentions of both the Fed and the ECB are now on the table and there is less surprise effect left going forward." Moreover, CFTC data shows investors have returned to being net sellers of the dollar. "One tailwind that has boosted the dollar since mid-April is thus probably gone." EUR/USD continues Thursday's falls, falling to a two-week low of 1.1543, according to Factset. It is last flat at 1.1570.
- On a morning in Asia marked by the latest US economic pressure on China, one of the country's senior financial policymakers said Beijing is acting rationally while decrying "unilateralism" for sending "dark clouds" over the world. Hu Xiaolian, a former central banker who's now chairman of the Export-Import Bank of China, told a forum in Shanghai that "unilateral, anti-global and waving the stick of tariffs is hogging the media headlines. But China's Belt and Road Initiative is about openness and inclusion."
- For all the huffing and puffing, Europe's privacy push won't have much of an impact on big tech, according to one Wall Street analyst. The "General Data Protection Regulation," or GDPR, that went into effect in late May is "more light breeze than stiff headwind" for companies such as Alphabet (GOOGL) and Facebook (FB) wrote Baird analyst Colin Sebastian in a late Thursday research note. "Overall, GOOG and FB appear relatively under-exposed to GDPR headwinds, and we remain confident in Q2 growth estimates, with room for potential revenue upside."
- The Trump administration and a bipartisan group of legislators are jostling, mostly behind the scenes, to determine which agency should be in charge of supervising commercial space ventures such as asteroid mining or deep-space missions run by private entities. The President has made clear he favors the Commerce Department, and has signed a formal directives. But Sen. Ted Cruz, the Texas Republican who chairs a space subcommittee, says "there is a great debate that is raging" on Capitol Hill whether Commerce or the Transportation Department should get "the lead and principal role." In drafting legislation, he sees "good and serious arguments that can be made on both sides."
- It's a brave trader or analyst who sees upside in Chinese tariffs on American crops, particularly soybeans. But that might be just what grain markets need, says Dan Hueber of The Hueber Report. The threat of retaliatory Chinese duties against US agriculture has loomed over prices for several months now, sparking several selloffs that helped push soybean prices in particular to $9.31 a bushel, the lowest point this year. "We have been agonizing about such a move for months now, with spot futures currently $1.40 or 13% down from the March high when all this chatter began," Hueber says. "If it actually comes to fruition, what is left to fret about? It is now fully factored into the price structure."
- The Trump Administration is determined "to have the largest club we can" to pursue future space exploration, including working with other countries and commercial entities to ensure a "greater diversity of options," according to Scott Pace, the top White House space adviser. He has stressed that "does not mean we are going to dominate in every" arena of space "except for military," but the US aims to lead international efforts. Pace and other White House officials, however, have made it clear they don't anticipate additional international treaties affecting commercial space operations.
- The U.S. administration's protectionist platform only works with a weaker dollar, says LMAX Exchange, as it should encourage competitiveness. That's why the dollar hasn't benefited from the fact that the Federal Reserve raised interest rates. In an email, Joel Kruger, its currency strategist, says: "The U.S. administration has imposed its will on currency traders over the past several months through the introduction of a protectionist platform that encourages soft dollar policy." He adds: "This...seriously undermines prospects for any meaningful U.S. dollar appreciation, even in the face of more hawkish-leaning Fed guidance." EUR/USD rises 0.3% to 1.1826.

Jun 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices eased, dragged down by rising output and a decline in China's refining activity, although strong fuel consumption in the United States and a drop in its crude inventories provided the market with some support.
- Gold prices eased as the U.S. Federal Reserve forecast a slightly faster pace of interest rate hikes this year, although lingering worries over trade tensions between Washington and Beijing prevented steeper losses.
- London copper edged down, trading near a one-week low, after a slew of Chinese data including industrial output pointed to weaker-than-expected activity last month in the world's No. 2 economy and top copper user.
- Chicago wheat slid more than 1 percent, adding to deep losses in the previous session on selling by funds although expectations of lower production in the Black Sea region are likely to put a floor under the market.
- The dollar slipped back from three-week highs against the yen, quickly erasing gains made after the Federal Reserve took a slightly more hawkish policy tone in signalling two more rate hikes by year-end.
- A noticeable slowdown in the eurozone's economic dynamics and a series of uncertainty-generating factors may prompt the European Central Bank to hold back on any concrete decisions until its July meeting, say HSBC analysts. These factors include the trade conflict with the U.S. and the political situation in Italy, they say. While HSBC doesn't expect a decision on the future of asset purchasing at the upcoming meeting, their base case scenario is a one-time extension of asset purchases until year's end, with the monthly run rate to be reduced to EUR10 billion in October. The ECB buys EUR30 billion of assets a month.
- Even though European Central Bank chief economist Peter Praet recently hinted that there may be a debate over the future of the asset-purchases program at the upcoming meeting, any decision at this stage isn't a done deal. DZ Bank says the recent turmoil in Italy and trade issues with the U.S. may warrant some caution from ECB President Mario Draghi. "The latest political turbulence in Italy and the ongoing trade spat rather suggest that Team Draghi will adopt a wait-and-see stance," DZ Bank says. DZ Bank's analysts say they see a "tangible road map" for the unwinding of QE only being presented at the July meeting.
- Federal Reserve Chairman Jerome Powell says the agency has a "pretty full docket" of regulatory changes in the works, as it prepares to implement a bill signed by President Trump last month that increased the threshold for a stricter regulatory burden on banks to $250B in assets, from $50B. "We've got to think about how we will reach below that $250 billion threshold," said Powell at a press conference. He added that he wants to tailor post-crisis regulatory reforms for smaller banks. "We want to keep all that stuff. We want to make it even more effective and certainly more efficient."
- Ranking Democrat on Senate Commerce Committee queries federal regulators on whether probe has been opened of fires in Kia and Hyundai vehicles. "Spontaneous fires are serious safety hazards and should not be taken lightly," wrote Sen. Bill Nelson of Florida in letter to senior-most official at National Highway Traffic Safety Administration. "We have to find out what is causing these fires and what can be done to prevent them." Center for Auto Safety earlier this week called on agency to investigate Kia Sorento and Optima, and Hyundai Sonata and Santa Fe vehicles spanning model years 2011-2014 for fire hazards. No immediate comment from NHTSA.
- The new 21% corporate tax rate will be a magnet for so-called pass-through businesses to change their status, prompting 17.5% of them to switch to corporate status, according to a new study from the Penn-Wharton Budget Model. The corporate form, disadvantaged for decades, will become attractive to service businesses that can't qualify for the special 20% deduction for pass-throughs. So far, however, such shifts have been relatively slow, because businesses are waiting for regulations and are unsure how stable the new rates and rules will be.
- Democrats have been warning about the consequences of flat or reduced funding for the Internal Revenue Service, and they seem to have some support from the Trump administration. "Tax enforcement activities are a good investment for taxpayers," and produce $5 for every $1 spent, Mick Mulvaney, the budget director, wrote to House lawmakers who will consider an IRS appropriations bill on Wednesday. The House plan keeps the IRS enforcement budget flat instead of endorsing cuts earlier proposed by the administration. Final spending levels for fiscal 2019 won't be set until later this year.
- A federal judge's decision that AT&T can proceed with its purchase of Time Warner may have been a blow for the Justice Department, but it is unlikely to set the tone for the agency's policy on so-called vertical mergers in the future, according to one former member of the Federal Trade Commission. "This is a really case-specific, evidence-specific rejection of DoJ evidence here and, in particular, the economic evidence put forward by their experts," said Joshua Wright, a George Mason University professor who was considered by the Trump administration for the Justice Department's top antitrust job. "I'm not a big believer of the view that these agencies get gun shy when they lose a case," he said. While other large companies may try to merge, Wright is "skeptical" that their lawyers would advise "that a loss in a single case means its open season."
- A gauge of US business prices for steel mill products rose 4.3% in May from the prior month, the Labor Department said. This is the largest monthly gain since the beginning of 2011 when prices for the category rose 5.9%. Steel and aluminum prices have moved higher in the wake of the Trump administration's planned tariffs on those products. It appears the prices are filtering into what businesses pay.
- Germany's economy will grow much less than previously forecast due to the trade dispute with the U.S. and increased uncertainty in the eurozone, the Berlin-based DIW economic institute says. It cut the growth forecast for this year to 1.9% from 2.4% previously and lowered the outlook for 2019 to 1.7% from 1.9%. "Uncertainty stems mainly from growing concern about individual European countries, especially Italy, and the possibility of an escalating trade conflict between the U.S. and the rest of the world," says DIW. "It affects the investment activity of companies world-wide. This in return slows down German export."
- Sterling is "always more likely" to react to good news rather than bad, says Societe Generale, which means the pound isn't likely to fall by much if inflation misses forecasts on Wednesday or if other data comes in lower than expected in the near term. However, the bank recommends shorting sterling against the Norwegian krone, which "may pay off near-term." The U.K. runs a trade deficit, while Norway has a trade surplus. With global trade-war uncertainties in the background, countries that import more than they export are under the radar. GBP/NOK trades 0.3% lower at 10.73. GBP/USD falls 0.2% to 1.3352 and EUR/GBP rises 0.2% to 0.8801.

Jun 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, pulled down by rising supplies in the United States and expectations that voluntary output cuts led by producer cartel OPEC could be loosened.
- Gold prices were steady after falling to one-week lows the session before, with investors waiting for the conclusion of the U.S. Federal Reserve's meeting later in the day for clues on the timing of future interest rate hikes.
- Base metals prices fell, led by Shanghai aluminium, which touched a six-week low, as investors fretted over liquidity in China and awaited news from the U.S. Federal Reserve's policy meeting.
- Chicago soybeans slid more than 1 percent to its lowest since mid-September, weighed down crop-friendly weather and a lack of Chinese demand for U.S. supplies.
- The dollar reached a three-week high against the yen and stood tall against the euro ahead of a Federal Reserve policy meeting that could give clues on how many more U.S. rate hikes there will be this year.
- Jake Sullivan, an Obama-era US department of state official, said President Trump's diplomatic approach with Korean leader Kim Jong Un could be effective, in theory. Sullivan said some may dismiss Trump's approach as more concern with pageantry than diplomacy, but with such a wide divide between the estranged nations, working on a personal relationship with Kim before a substantive proposal could be a successful tactic. "I do think there is a rationale with starting with a summit and working your way back," he said.  Sullivan, who was director of policy planning at the state department between 2009 and 2012, said, however, that it remains to be seen if Trump could forge progress beyond the pageantry.
- The Dow less than 2 points to 25320, the S&P adds 0.2% to 2786 and the Nasdaq rises 0.6% to 7703 as market watchers weigh talks between President Trump and Kim Jong Un. Utilities and real-estate companies gained as investors snapped up bond-proxy stocks ahead of the Fed's interest-rate decision Wednesday, although 10-year Treasurys were little changed, yielding 2.960%. Energy stocks are the worst performers even with oil prices closing up 0.4% to $66.36. Twitter jumps 5%, leading the S&P after JPMorgan raised its price target.
- US defense stocks predictably retreat in the wake of the North Korea summit, with Lockheed Martin, Raytheon and Northrop Grumman all losing 1%-3%--but fellow contractor SAIC, which reports fiscal 1Q results after the close, is only flat. The government IT specialist's sideline of upgrading armored vehicles ought to be a loser from any diplomatic moves that reduce the probability of a land battle on the Korean peninsula, but analysts note that any reduction in military exercises in South Korea is likely to be balanced by them being staged elsewhere as the Pentagon continues its focus on improving readiness.
- Risk that President Donald Trump will unilaterally withdraw from Nafta "have clearly risen again," says Capital Economics, citing the rancor after G-7 summit in Canada and the White House's pointed attacks on PM Justin Trudeau. The forecasting firm says markets have shrugged off the escalation of US-Canada rhetoric. CapEcon says warning signs abound over intransigence on Nafta, noting US and Canada can't even agree on the size of the trade imbalance between the countries. Withdrawal notice represents a big risk to Canadian economy, as does potential of tariffs on Canadian vehicles and auto parts. Congress could intervene, firm adds, but "they have shown little appetite for standing up to Trump's destructive impulses."
- The Canadian dollar has softened in the aftermath of the G-7 summit fallout, and President Trump's warning on auto tariffs in a tweet directed at Canada PM Justin Trudeau. Gluskin Sheff chief economist David Rosenberg tells clients in a note there's "little reason to visualize," a catalyst that can reverse C$ softening, given deteriorating US-Canada relations and the impact on trade. Rosenberg said Trump's threat on autos is increasingly worrisome, as cars and auto parts account for one-fifth of Canadian exports. He added that auto tariffs would trim "at least" a half-point from Canada GDP growth, but would also "crush" the US consumer who would see car prices rise on average by up to $7K per car on average.
- Investors cooled on US defense stocks as a historic summit between North Korea and the US wrapped up in Singapore. Shares of Lockheed Martin fell 1.6%, while Raytheon, maker of the Tomahawk missile, lost 2.4% and Northrop Grumman slid 1%. North Korea said in an agreement that it would commit to "work toward complete denuclearization of the Korean Peninsula," while President Donald Trump said separately that he would cease "tremendously expensive" joint military exercises with South Korea as long as talks with North Korea continued to be productive. Defense stocks had jumped over the past year on reports that Trump would pull out of the summit or that North Korea had conducted missile tests, only to reverse course when the two countries appeared to make progress on talks.
- The tax cut passed in December is resulting in stronger capital spending, wage growth and economic growth, in line with expectations, said Kevin Hassett, Chairman of the White House Council of Economic Advisers Tuesday at the WSJ's CFO Network annual meeting. Hassett referenced the 9.2% growth in capital spending clocked in the first quarter as evidence that the tax cut is showing up in business-investment data. The tax cut also resulted in wage growth, as seen by public firm announcements and growth in the employment-cost index, Hassett said.
- The latest analysis of the impact of US tariffs on steel and aluminum suggest among major industrialized economies, "Canada suffers the largest negative impact from the tariffs," according to CD Howe Institute, a Toronto think tank. Canada is the largest supplier of foreign steel and aluminum to the US, and PM Justin Trudeau has been pointed in criticism over the Trump administration's tariffs on national-security grounds. CD Howe said based on economic modeling, the tariffs will lead to 6K job losses in Canada; a $8B decline in GDP; and a drop in productivity by 0.08%. The analysis does not incorporate retaliatory measures, which Canada plans to impose on July 1.
- General Motors has not delayed or altered capital-investment plans amid trade uncertainty, although "continued uncertainty will eventually have an impact," CEO Mary Barra said ahead of the auto maker's annual shareholders meeting. GM makes 1M+ vehicles in Canada and Mexico annually, most of which are imported for sale in the US. The sharpening rhetoric between President Trump and Canadian Prime Minister Justin Trudeau has left strained relations between the trading partners and threatens to harm NAFTA negotiations. Trump last month said he wants to impose a 25% tariff on vehicle imports.
- Kevin Hassett, chairman of the White House Council of Economic Advisers, said Tuesday at a WSJ CFO conference that he doesn't try to advise President Trump on Twitter but that "we need to stay out of a world where there's a tweet before every number." Hassett's comments were in reference to Trump's tweet before the Labor Department's release of the May jobs report, in which he said he was "looking forward" to seeing the figures. "I am the Chairman of the Council of Economic Advisers, not the Chairman of the Council of Twitter Advisers," Hassett says.
- Kevin Hassett, chairman of the White House Council of Economic Advisers, said Lawrence Kudlow, President Donald Trump's top economic adviser, is expected to make a speedy recovery after a heart attack Monday. "It seems like it's minor," said Hassett at the Wall Street Journal's CFO conference Tuesday, noting Kudlow is "a very special person" to the White House.
- Gold prices edge down 0.13% to $1,298.45 a troy ounce, as markets give a subdued reaction to U.S. President Donald Trump's meeting with North Korean leader Kim Jong Un. Equity, foreign exchange, bond and commodities markets are all muted in the wake of the Singapore summit between the U.S. and North Korea. "The summit between Trump and Kim did not spark any particular movement on the precious metals markets," Commerzbank says. Talk of a possible nuclear war between the two countries provided a boost to gold prices almost a year ago, but traders appear to have become less sensitive to those fears. Some of that gentle downward pressure on gold was coming from an uptick in the dollar, according to John Meyer, an analyst at SP Angel.

Jun 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged up alongside global markets as U.S. President Donald Trump said a summit in Singapore with North Korea's Kim Jong Un had made "a lot of progress," boosting hopes of a deal to end a nuclear standoff on the Korean peninsula.
- Gold prices eased as the dollar strengthened amid encouraging signs from a historic U.S.-North Korea summit and a likely interest rate hike by the U.S. Federal Reserve, limiting demand for the yellow metal.
- Shanghai copper prices slid for the first time in eight days, while London copper continued to lose ground as the dollar strengthened and BHP responded to a proposal from unionised workers at its Escondida copper mine in Chile.
- Chicago wheat slid for a third consecutive session to its lowest in almost one week with improved weather in parts of Australia and Europe easing supply concerns.
- The Trump-Kim joint statement is "brief and vague" and lacks in any new commitments, says Control Risks, adding the duo left all the real questions to be addressed in subsequent talks, probably occurring over months, and implemented over years. "It is certainly underwhelming," the risk-consulting firm adds, "but this was only ever going to be the start of a process--a very precarious one amid a persistent risk of breakdown and re-escalation." But it does admit having a summit was "remarkable" and has probably reinforced the path for diplomacy. For the potential business that opening of North Korea may bring, Control Risks sees "no straight line" from improving security relations to embracing economic reform, predicting North Korea to remain "an extremely complex and risky investment environment for the foreseeable future, even in best-case scenario."
- FTSE 100 miners edge lower after demand for metals wanes overnight, though dealers note some buying in the far East. "Turnover across the metals complex began to subside yesterday and this disinterest is more than likely the market awaiting the outcome of central bank meetings," says Alastair Munro at Marex Spectron. "We also read with interest the view that the soccer World Cup historically results in low volatility. No doubt the Trump/Kim meeting removes geopolitical risk. But in a world expecting a more hawkish environment, we wouldn't be surprised to see markets trade sideways." Anglo American is the sector's top faller and was last down 1.77%.
- No mention of a "verifiable and irreversible denuclearization" of the Korean peninsula in the summit document arguably suggests that Trump and Kim aren't yet on the same page in regards to concretely defining that, says the Economist Intelligence Unit. The research/analysis firm is still of the opinion that behind closed doors North Koreans haven't agreed to dismantle their nukes but instead said yes to slowing the process in exchange for ongoing talks. "This is a huge win for the Democratic People's Republic of Korea," says analyst Anwita Basu, adding that's probably what the North has been working towards for so long: being legitimized as a state despite its isolation.
- Trump and Kim meeting was significant, but what's more important is whether both sides can keep the warm atmosphere going and continue talking, says SEB strategist Melody Jiang. "We think downside risks still exist given Trump and Kim are both quite unpredictable and prone to angry outbursts." That as North Korea has agreed to give up its nuclear aspirations previously, to no avail. "Whether it will be a repeat of history or a new era with peaceful talks between the US and North Korea remains to be seen," says Jiang.
- Vague pledges out of today's summit are unlikely to be very convincing for markets, says Bank of Singapore. "There is doubt, and perhaps rightfully, on whether we can expect anything concrete and expansive today given the tight timeline leading up to the summit and precious few details from both leaders so far," Eli Lee, head of investment strategy, tells WSJ. That said, Trump and Kim meeting as long as they did today was a positive outcome, he added.
- London shares are broadly flat as talks between U.S. President Donald Trump and North Korea's Kim Jong Un seemed to leave markets unimpressed. The FTSE 100 Index falls 0.13%, or 9.93 points, to 7727.50. "The vague wording of the document signed by Trump and Kim Jong Un, with the former's promises of U.S. 'security guarantees' to North Korea and the latter's pledge to 'work toward' the complete denuclearization of the Korean peninsula, resulted in a muted open in Europe," says Connor Campbell at Spreadex. Meanwhile, homebuilders fall after downbeat 1H results from Crest Nicholson.
- The dollar rises against the Japanese yen to a three-week high of 110.48 following the meeting between U.S. President Donald Trump and North Korean leader Kim Jong-un. "Markets have a risk-on tone as the Trump-Kim meeting has so far produced much positive symbolism, but little in the way of substance," says RBC. Risky currencies, such as the Australian and New Zealand dollars, are also up. "Amidst all of the political noise recently, our Risk Aversion Thermometer has been remarkably stable and remains moderately risk-seeking," says RBC. Mr. Trump has a press conference at 1500 GMT. USD/JPY last trades up 0.2% at 110.30.
- London stocks are expected to open slightly higher with market sentiment to be supported by the meeting of U.S. President Donald Trump and North Korean leader Kim Jong Un. "Investors are becoming desensitized to Trump's temper tantrums, and now it is actions that will move markets, and not words," says David Madden, market analyst at CMC Markets. CMC looks for the FTSE 100 to open 10 points higher at 7744. Investors will look at U.K. monthly unemployment and earnings data.
- Recent developments in Italy and the meeting between the U.S. and North Korean leaders should help reduce investors' worries, says CMC Markets UK market analyst David Madden. Italy's FTSE MIB index saw strong performance on Monday after the country's new finance minister, Giovanni Tria, said in a interview over the weekend that the government is committed to the common currency. "This settled investors' nerves greatly as the prospect of one of the largest eurozone economies dropping the euro rocked investor confidence in recent weeks," Mr. Madden says. The talks between the leader of the U.S. and North Korea "should go a long way to put investors' nerves in the region at ease," he adds.
- Trade tensions are "a far, far bigger existential global threat" than geopolitical risks regarding the Korean peninsula, contends Rob Carnell, chief economist and research chief in Asia-Pacific for ING. "Aside from the photo opportunities that today brings, from a financial-market perspective today ranks as a meh." He says that outside of Korea, it is basically business as usual--with it likely returning there as well by tomorrow. Then, "we can revert to things that matter"--like the week's major central-bank meetings and the Brexit bill.
- As Trump looks to overcome history in November's midterm elections by limiting losses by the GOP, he needs a victory regarding North Korea to create and keep momentum regarding his dealmaker image, says Steen Jakobsen, chief economist and CIO at Saxo Bank. That as the idea of peace seems out of reach in the Middle East.
- Tame your summit expectations as today is only the first big step in a long negotiating process for having peace in the Korean peninsula, says political-risk consultancy Eurasia. It expects Trump and Kim to agree to initiate formal negotiations to flesh out plans for eliminating North Korea's nuclear-weapons program, generating some additional optimism in the market. But Eurasia adds such a plan will likely take at least a year and potentially through the end of Trump's 1st term. A lot is at stake politically with chatters about Trump's eying a Nobel Peace Prize, but "even if the summit produces a reasonably robust outcome, Trump's detractors will still likely argue that he underdelivered," Eurasia says.

Jun 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (Dow Jones)
- Oil prices fell, pulled down by rising Russian production and U.S. drilling activity creeping to its highest in more than three years.
- Gold prices edged higher as the dollar softened ahead of key central bank policy meetings and the U.S.-North Korea summit this week, and as a weekend G7 summit fanned trade war fears.
- Base metal prices were mixed as positive sentiment over strong import data in China, the world's biggest metals consumer, was tempered by renewed fears of a global trade war amid a lack of consensus at the G7 summit in Canada. 
- Chicago wheat futures gained almost 1 percent, rising for a fourth session in five, as expectations of lower production in the Black Sea region supported the market.
- The Canadian dollar fell modestly, after U.S. President Donald Trump disrupted the G7's efforts to show a united front and bashed Canada's leader as "very dishonest," though market reaction was relatively muted.
- The European Central Bank's meeting on Thursday "should be euro-positive and partly counterweigh the potentially more hawkish Federal Open Market Committee bias" on Wednesday--when the Fed is due to meet--but "the retention of the open-endness of the quantitative easing program should prevent a material euro rally," says ING. The ECB is likely to reduce its extension of QE by one quarter to end-2018 and cut monthly purchases to EUR10 billion from EUR30 billion, ING says. EUR/USD is up 0.2% at 1.1798.
- The Stoxx Europe 600 rises 0.5% in morning trade as markets shake off geopolitical risks after a turbulent G7 summit and satellite group Inmarsat gains. The pan-European index lifts 1.81 points to 386.93, with the DAX up 0.5% and CAC 40 rising 0.2%. "After a stormy G7 meeting, the U.S. seems to have turned its back on its allies and is prepared to ratchet up trade pressure," says Neil Wilson at "Nevertheless, expectations coming into the event were exceptionally low and so there's been little negative market reaction so far." Inmarsat gains nearly 13% on hopes of a higher takeover bid from rival Echostar.
- If EUR/USD doesn't break the 1.1840 barrier this week it won't go back to 1.20, says Societe Generale, which adds that "a return to 1.16 is not impossible." The European Central Bank "will of course discuss how the quantitative easing exit may look," but it is unlikely the central bank will announce concrete plans for the program, says SocGen. The Federal Reserve also meets on Wednesday with an interest rate increase to 2% from 1.75% expected as "a formality after the latest employment report." Overall, "the two meetings may not cause much of a splash," SocGen says. EUR/USD is up 0.3% at 1.1807.
- The FTSE 100 rises 0.5% as traders shrug off the weekend's inconclusive G7 summit to focus on the U.S. meeting with North Korea. London's blue-chip index gains 37.23 points to 7718.3. Spreadex's Connor Campbell notes the G7 communication breakdown between U.S. President Donald Trump and U.S. allies, but also highlights positive sentiment toward his meeting with Kim Jong Un. "Optimism, misplaced or otherwise, that the two countries could secure some kind of nuclear agreement led to a broadly positive Asian session, and helped the European indices to a strong start on Monday."
- Germans have become more pessimistic about their economic future, mainly due to U.S. President Donald Trump's trade policy, according to a survey by Forsa Institute. Of those polled for broadcasters RTL and n-tv, 43% expect Germany's economic conditions to deteriorate in the coming years, up 17 percentage points compared with January. "Germans' economic expectations are more pessimistic than ever in the past four years," says Forsa head Manfred Guellner. Only 18% of those polled expect the economic situation to improve, while 36% see it unchanged. Mr. Trump has criticized Germany's trade surplus and threatened to launch punitive tariffs on cars, which would hurt Germany and its auto sector.
- EUR/USD is up 0.4% at 1.1818 even though U.S. President Donald Trump refused to endorse the G7's final statement calling for tariff reductions because other data points are more important for the currency pair, says ING. "Although the overhang of global trade wars is still very much alive, the global forex price action this week will be driven by the stream of key event risks" such as Tuesday's U.S.-North Korea summit, the Federal Reserve meeting on Wednesday and the European Central Bank meeting on Thursday. "The first two in particular pose some downside risk to the already fragile risk environment," ING says.
- Even though Trump has termed Tuesday's summit with Kim as a "mission of peace," the meeting is still considered as a major risk event for financial markets given the "very-unpredictable" nature of the duo, says broker ForexTime. Some say the meeting itself is a positive signal, but traders and investors may want to err on side of caution and wait for any results. Gold would be the big loser if there's a positive outcome, says ForexTime, while the yuan and Korean won would get hit if the meeting doesn't go well.
- Chances are Trump used the G-7 summit to look more like an "aggressive alpha male" ahead of his meeting with Kim, says Rabobank senior Asia-Pacific strategist Michael Every. Trump is unlikely to spoil 2 gatherings in a row, adds Every, which suggests a higher probability of "a less-fire-and-brimstone outcome." He goes on to say a positive outcome from Tuesday's meeting will ease some geopolitical-risk overhang, boding well for the markets.
- Currency markets will watch US inflation data and the Fed's response this week more closely than the Trump-Kim summit, says DBS. CPI comes Tuesday and PPI on Wednesday ahead of that day's updated economic forecasts and policy statement from the Fed--widely expected to include another rate hike. DBS sees another increase giving the dollar and Treasury yields a fresh lift. That as the ECB, which also gathers this week, is expected to be more "cautious than hawkish" in its deliberations on when to end QE.

Jun 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable, supported by Venezuela's struggles to meet its supply obligations and by ongoing output cuts led by producer cartel OPEC, although surging U.S. crude output was looming over markets.
- Gold prices held steady as investors remained cautious ahead of a G7 meeting starting later in the day and other key events next week such as a United States Federal Reserve policy meeting and a U.S.-North Korea summit.
- London copper retreated after a six-day rally that pushed the metal to its strongest in 4-1/2 years in the previous session, amid worries over potential supply disruptions at the world's biggest copper mine where wage talks are underway.
- Chicago soybean futures were set for their biggest weekly loss in 10 months as benign weather across much of U.S. Midwest boosted hopes of another bumper crop.
- The dollar wallowed near a three-week low against its peers as U.S. Treasury yields fell sharply, while the euro's recovery remained intact amid expectations the European Central Bank will begin unwinding its stimulus programme.
- For markets, Tuesday's Trump-Kim summit won't weigh much on the minds of money managers, predicts KGI Securities. That meeting will be followed later next week by policy meetings at the Fed and ECB. "What comes out from there will be more important for the markets," KGI trading strategist Nicholas Teo tells WSJ. Investors aren't expecting a breakthrough from next week's Singapore gathering, he says, adding that "geopolitical events are unpredictive and generally don't dictate strategic changes in fund flows."
- As negotiations with Canada and Mexico continue over changes to the North American Free Trade Agreement, economists surveyed by WSJ this month on average pegged the probability of President Donald Trump pulling the US out of Nafta at 29%. More broadly, 47% said the risks for GDP growth over the next year were tilted to the downside, versus 43% who saw risks tilted to the upside. More than two dozen economists mentioned tariffs or a trade war as potential risks.
- Voestalpine's insufficient risk-reward ratio, and concerns about its CEO change and auto exposure lead analysts at Kepler Cheuvreux to downgrade its stock to hold from buy, and cut its target price to EUR48 from EUR57. "We see more downside than upside for the stock," Kepler says. The future direction of the Austrian company is a concern following news that CEO Wolfgang Eder will retire next July, says Kepler. Voestalpine's exposure to long-term auto contracts might also become a growing concern since U.S. President Donald Trump's initiation of a Section 232 investigation into car and truck imports into the U.S., Kepler says. Voestalpine shares trade up 3.9% at EUR45.67.
- The dollar is likely to keep rallying into the U.S. midterm elections, which is probably going to hurt more emerging-market currencies, says Bank of America Merrill Lynch. So far, according to BAML's moving average aggregator, the selloff in EM currencies "has been selective and localized," with USD/TRY, USD/ARS, and USD/INR falling the most. Going further, USD/KRW, USD/ZAR and USD/EUR "have the most potential upside if the EM weakness continues," BAML says.

Jun 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose to shake off some of the previous session's losses, supported by plunging exports by OPEC-member Venezuela.
- Gold prices inched up as the euro rose to 2-week highs against the U.S dollar, with investors waiting for meetings of key central banks and the U.S.-North Korea summit all due next week.
- London copper prices rose up to 0.9 percent to a 2018 high, gaining ground for a sixth session on concerns over disruption at the Escondida mine in Chile.
- Chicago wheat gained 1 percent, rising for a third consecutive session as dry weather in key exporting countries raised concerns over world supplies.
- Hog futures recovered from a tumble after Mexico said it would target US pork with duties. Many traders had pointed to tariffs from the industry's largest export customer as a contender for worst-case scenario, leading to a selloff on Tuesday. But buyers returned to the hog market on Wednesday, with the underlying supply-and-demand outlook painting a less pessimistic picture. Supplies have tightened somewhat, in line with seasonal trends, while prices for physical pigs and wholesale pork have trended higher. But traders will be looking to see whether export sales to Mexico drop off, as they did when China hit the industry with duties of its own. CME June lean hog futures rise 2.2% to 78.175 cents a pound. Cattle prices are also slightly higher, as traders bet that meatpackers will pay steady to higher money for slaughter-ready animals this week.
- Canada PM Justin Trudeau is rejecting musings from President Trump and his top economic advisor, Lawrence Kudlow, that negotiations toward a revamped Nafta be conducted on a bilateral basis, as opposed to the current trilateral talks. "Canada's position is -- and always has been -- that the trilateral approach is better," Trudeau told reporters before attending the Liberal Party's weekly caucus meeting in Ottawa. "Demonstrating the strength of Nafta as a solid community as we take on the world is very much in all of three of our advantages, and we are going to continue to negotiate that way." Trump raised possibility of bilateral talks last Friday, and Kudlow reiterated the point Tuesday on Fox News. Nafta talks have stalled over disagreements on autos.
- Risk sentiment should stay supported and that will likely help EUR/USD go higher, says Morgan Stanley. "A weakening dollar would be supportive of risk sentiment," Morgan Stanley says. Moreover, stronger fundamentals and a greater resilience to external shocks "should keep emerging market currencies supported." News that China would consider increasing its purchases of agricultural goods and commodities from the U.S. to help narrow the trade deficits suggests the risks of escalating protectionism may be falling, "which augurs well for risk." EUR/USD is up by 0.5% at 1.1770.
- About 28,000 US farmers have received a form of government support for 32 consecutive years, according to an analysis by the Environmental Working Group. The group, which has criticized the nation's farm-safety net system, says subsidy and disaster relief payments to the farmers totaled more than $19B between 1985 and 2016, with the average payment for the 32-year period totaling $687K. "It's a staggering number, especially in light of the debate over dependency," said EWG's Scott Faber, who along with conservative and taxpayer watchdog groups opposed the recently defeated GOP-written farm bill due partly to provisions that could benefit wealthy farmers while subjecting food-stamp recipients to new work requirements.
- To those investors who think we are in for a period of calm, Societe Generale recommends shorting the Swiss franc against the Swedish krona and the Norwegian krone. But, if one thinks we are in for noise without any direction in EUR/USD, SocGen advises shorting the dollar against the Swedish krona. "With such a fluid situation in Italy, another vertiginous drop in EUR/USD before the uptrend resumes can't be ruled out," SocGen says.
- Genting Singapore is a noted decliner today amid tight security arrangements around its resort in Sentosa. Though Resorts World Sentosa isn't hosting Tuesday's Trump-Kim summit, neighboring Capella is. Analysts say visitors to Genting's casinos are likely to be cautious and could prompt some to stay away. Shares are down 2.3%, erasing the week's gain, after having dropped 4.6% the prior 2 weeks.
- The euro is benefiting from reports that the next European Central Bank meeting on June 14 may be when an exit from quantitative easing will be discussed, while the dollar continues to struggle slightly. EUR/USD is up by 0.2% at 1.1740. The dollar continues to fall against the Australian and Canadian dollars after strong 1Q Australian gross domestic product and reports that U.S. Treasury Secretary Steven Mnuchin told President Donald Trump to exclude Canada from the aluminum and steel tariffs. AUD/USD is up by 0.5% 0.7656 and USD/CAD is down by 0.3% at 1.2934.
- A connected car technology backed by General Motors and Toyota received lukewarm praise from a senior US DOT official Tuesday. While the government is "pleased" by the two automakers' plans to deploy a wifi-based wireless system strongly pushed by the Obama Administration, NHTSA Deputy Administrator Heidi King said the agency won't favor that technology over others. "We remain technology neutral relative to communication protocols," King said at a conference in Detroit. The Obama White House proposed requiring auto makers to phase in wifi-based dedicated short-range communications, or DSRC, starting in 2021, but some auto and telecom companies that support a rival cellular-based approach have lobbied the Trump Administration, which has yet to formally make a decision, to reconsider that policy.
- In slapping retaliatory import duties on US pork, the Mexican government also opened a 350K-ton tariff-free quota for other countries to secure domestic supply this year. The US is the biggest source of imported pork in Mexico, which also brings the meat from Canada, Chile, Spain, Denmark and Italy. The Agriculture Ministry says France, Germany, Belgium, Australia and New Zealand also have plants that meet Mexican health requirements. Mexican pork imports average 754K tons per year. The country produces 1.45M tons and exports about 105K tons, the ministry adds.
- Banking lawyer Jelena McWilliams was sworn in Tuesday for a five-year term as the 21(st) chairman of the Federal Deposit Insurance Corp, the agency said. She takes over from former FDIC Chairman Martin Gruenberg, who was the last Obama- nominated regulator in charge of a major banking oversight agency. While her specific policy views aren't widely known, McWilliams is expected to be more likely to sign on to deregulatory actions than  Gruenberg was.

Jun 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Global oil prices rose during Asian trade after Venezuela raised the prospect of halting some crude exports, according to people familiar with the matter, but gains were capped amid reports the U.S. government had asked Saudi Arabia and some other OPEC producers to increase output.
- Gold prices inched up on a weaker U.S. dollar and lower treasury yields, but expectations of a U.S. rate rise next week kept a lid on gains.
- Shanghai base metals rose, with copper and lead gaining ground on fears of a supply squeeze, while nickel and zinc tracked the ferrous complex higher after a blast at an iron ore mine in China and amid falling inventories.
- Chicago wheat rose for a second session with prices underpinned by concerns over global supplies following dry weather in the United States, Russia and Australia.
- The euro held firm as investors started to focus on the European Central Bank's policy meeting next week, while concerns that the United States could pull out of a trade pact with Canada and Mexico hit the peso and the Canadian dollar.
- In slapping retaliatory import duties on US pork, the Mexican government also opened a 350K-ton tariff-free quota for other countries to secure domestic supply this year. The US is the biggest source of imported pork in Mexico, which also brings the meat from Canada, Chile, Spain, Denmark and Italy. The Agriculture Ministry says France, Germany, Belgium, Australia and New Zealand also have plants that meet Mexican health requirements. Mexican pork imports average 754K tons per year. The country produces 1.45M tons and exports about 105K tons, the ministry adds.
- Banking lawyer Jelena McWilliams was sworn in Tuesday for a five-year term as the 21(st) chairman of the Federal Deposit Insurance Corp, the agency said. She takes over from former FDIC Chairman Martin Gruenberg, who was the last Obama- nominated regulator in charge of a major banking oversight agency. While her specific policy views aren't widely known, McWilliams is expected to be more likely to sign on to deregulatory actions than  Gruenberg was.
- Investor concerns about a possible breakdown in Nafta as Mexico details retaliation measures against US steel tariffs has helped send the peso to a new low for the year, recently trading in Mexico City at 20.3625 to the US dollar versus 20.0765 Monday. The decreasing likelihood of positive news on the trade front, and the approach of July elections in Mexico will likely "either compound any sell-off pressure or cap any rally potential in the MXN coming from shifts in external risk sentiment," says Nomura, which expects the peso to fare poorly in coming weeks.
- Securities and Exchange Commission approved a proposal that scales back compliance requirements for banks subject to the Volcker Rule, which bans taxpayer-insured banks from proprietary trading. The SEC is the last of five agencies that needed to vote to issue the plan for public comment. The SEC passed the measure on a 3-2 vote, with Democratic commissioners vocally resisting the move. "Overall, this proposal cleverly and carefully euthanizes the Volcker Rule," Commissioner Kara Stein said. The plan broadens what qualifies as "hedging" and thus opens the door to more risky trading by banks, she said. SEC Chairman Jay Clayton says the proposal is an attempt to improve the rule and its cumbersome compliance requirements.
- The tax law came at the exact right time, cutting the cost of capital as workers were getting more scarce, said Kevin Hassett, chairman of the White House Council of Economic Advisers. Hassett said the law has helped produce faster capital spending and wage growth. "Everything has kind of surprised on the upside," he said.
- A second farm-state Republican senator harshly criticizes EPA chief Scott Pruitt and questions his future. "...If the president wants to drain the swamp, he needs to look at his own cabinet," Sen. Joni Ernst (R., Iowa) says. While Democrats have hammered Pruitt over a wave of scandals, Ernst joins fellow Iowa Republican Chuck Grassley upset by Pruitt's management of the Renewable Fuel Standard and ethanol consumption mandates. Grassley has already threatened to call for Pruitt's resignation. Ernst declines to do that, but says the combination of his ethanol decisions and "other transgressions," tied to Pruitt's spending and "the way he misuses," his office may make his position untenable. "I do believe Administrator Pruitt is trying to undermine ... the president's promises to our American farmers ...," Ernst tells reporters.
- President Trump is dictating a resolution, not finding compromise in a fight over ethanol and the Renewable Fuel Standard, Sen. Joni Ernst (R., Iowa) tells reporters. She downplays what many had touted as a deal reached during a White House meeting last month. "It don't want to call it an agreement. There was no agreement when we left the White House," she says. "There was a directive that was given by the president. He wants the issue resolved." But parts of the plan--especially allowing credits for exported ethanol--will undermine the law and be bad for corn-growers, Ernst and other allies say. "This will hurt a lot of the very people who supported the president," Ernst says.
- Hog futures fall sharply on reports that Mexico will move ahead with threatened retaliatory tariffs on US pork. CME July lean hog futures fall 3% to 75.6 cents a pound. Reuters reports that Mexico's economy ministry will proceed with tariffs on pork legs and shoulders. Mexico is the largest customer of the American pork industry, which is already dealing with Chinese tariffs. Prices tumble even though duties were widely anticipated. "Not a good situation," says Dennis Smith of Archer Financial Services. Cattle futures are higher as traders bet the market is finding its seasonal low.
- "Technical aspects" are the biggest obstacle for the Trump administration to start a bailout for coal and nuclear power plants, a senior Trump administration energy official says. "We want to make sure whatever we do works, and is upheld by courts," Mark Menezes, under secretary at the Energy Department, tells reporters outside the EIA Energy Conference in Washington. The Trump administration wants to stop the closings of coal and nuclear power plants. A draft memo leaked last week shows the department is proposing to effectively force consumers to buy electricity from certain power plants. A plan would likely face court challenges, and is already opposed by a wide array of groups including the oil and gas industry and environmentalists. It is just one of the options the department is considering, Menezes says.
- Competitive electricity markets aren't capable of ensuring the grid keeps running--or responds quickly--during a catastrophe, a senior Trump administration energy official says. "These are not natural markets," Mark Menezes, under secretary at the Energy Department, tells reporters outside the EIA Energy Conference in Washington. "In fact, electricity is a natural monopoly." The Trump administration wants to stop the closings of coal and nuclear power that are failing to beat out competitors. A draft memo leaked last week shows the department is proposing to effectively force consumers to buy electricity from certain power plants--likely mostly coal and nuclear--to ensure the grid maintains a mix of sources. Menezes tells the conference that diversity is essential for the grid to withstand attacks, and tells reporters later that current regional markets can't effectively ensure that.
- LBBW will watch four events that could move markets in June, the bank's economists say. On June 13, the U.S. Federal Reserve is expected to carry out its second interest-rate increase this year, while the question on June 14 is if the European Central Bank will reveal some information about the future of asset purchases beyond September. LBBW also looks at the June 12 meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un. The Turkish elections on June 24 round off LBBW's list of key events in June.
- The U.S. dollar is slightly higher versus the euro on Tuesday, helped after eurozone retail sales data came in below market expectations, with EUR/USD last down 0.2% at 1.1678. However, the dollar is under the radar as global trade war uncertainties come back on the agenda. With the G7 summit in Canada, the trade issue is even more prominent. "The near term focus for financial markets is very much whether [U.S. President Donald] Trump can be talked down from his protectionist perch by fellow G7 leaders at their weekend meeting in Quebec," ING says. ING thinks the DXY dollar index should stay in a 94-95 range. DXY trades up 0.1% at 94.09.

Jun 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rebounded after falling in the previous session on expectations that inventories in the United States may decline but increasing U.S. production and concerns that OPEC may raise output continue to weigh on sentiment.
- Gold prices were steady after falling for three days, as investors opted for riskier assets amid increasing prospects of an interest rate hike in the United States following strong U.S. economic data.
- Copper edged lower as the market took a breather after climbing to a near two-week high in the previous session on support from potential supply disruptions amid wage talks at the world's biggest mine.
- Chicago corn ticked higher after dropping to a near seven-week low earlier in the session on pressure from crop-friendly U.S. weather which is boosting expectations of a bumper harvest.
- The euro was supported by signs of stability in Italian politics and the dollar maintained an uptrend against the yen after a strong U.S. jobs report sparked bets of three more U.S. rate hikes by the end of year.
- Political uncertainties in Europe "may force the European Central Bank to delay any significant policy announcements until July or even September," likely intensifying the monetary policy divergence between the U.S. and eurozone, which should push EUR/USD to 1.15, says HSBC. However, HSBC says "we think it may hold for now." EUR/USD rises 0.2% to 1.1689 on Monday.
- Sell the Australian dollar versus the Japanese yen for a target of 80.50 and a stop at 85.10, says HSBC. Global trade war risks are back in the picture after the U.S. imposed aluminum and steel import tariffs and this points to a risk-off environment, which "would favor the Japanese yen and the dollar, and challenge trade-sensitive currencies such as the Australian dollar," HSBC says. AUD/JPY, however, last trades up 1.2% at 83.87 on the back of better-than-expected Australian April retail sales. AUD/USD is also rising by 1% to 0.7646.
- The euro fell last week on the back of Italian politics, but the new government doesn't necessarily point to the country dropping the euro, according to FX Knowledge, which says "the macro case for a weaker EUR is weakening by the day." Eurozone economic data came in below market forecasts recently, but this was due to "excessively high expectations." FX Knowledge says "last week's pick up in eurozone inflation [...] may generate interest at the European Central Bank and amongst market participants." The research firm says this should help the euro, and an EUR/USD level of 1.20 looks "like a feasible target again." EUR/USD is last up 0.2% at 1.1680.
- Energy Secretary Rick Perry stresses cybersecurity as one of the primary reasons the Trump administration is looking to help coal and nuclear power. A draft memo leaked last week shows the department is proposing to effectively force consumers to buy electricity from certain power plants -- likely mostly coal and nuclear -- to ensure the grid maintains a mix of electricity sources. A wider variety of fuel sources ensures the grid can reliably produce power during and recover from attacks and natural disasters, Perry says. Trump has also pledged to help revive coal and has taken millions of dollars in donations from coal-company executives. Perry, speaking at his department's Cyber Conference in Austin, says the country's grid relies on infrastructure vulnerable to cyber-attacks. That "requires us to think differently, to act proactively," he says.
- Relatively high U.S. rates can make the U.S. dollar vulnerable to global shocks "because there is relatively more to be de-priced," says JPMorgan. This is even more true of a late-cycle economy, which is how many view the U.S. "The dollar could struggle relatively more against other safe-haven currencies like the Swiss franc and the Japanese yen" under global risk aversion, says JPMorgan. USD/JPY is flat at 109.50 and USD/CHF is down by 0.2% at 0.9861 on Monday.
- US tariffs on Canadian aluminum exports amount to a "direct attack" on the economy of Quebec, the province's economy minister Dominique Anglade says. Canada's aluminum production is heavily concentrated in Quebec, which exports about C$8 billion worth of aluminum per year, according to Quebec's government. Speaking at a summit on aluminum in Montreal on Monday, Anglade said the industry is an important part of the Quebec economy where it provides roughly 30,000 direct and indirect jobs. "What happened last week was a direct attack on our economy" and will have negative impacts on both sides of the border, Anglade said.
- Emerging market currencies are rebounding on Monday as some risk appetite returns, but Societe Generale says "now is not yet the time to rush back into EM despite the cheaper valuations." There is uncertainty in Turkey, with general elections due June 24, global trade war talk is back on the agenda, while the Federal Reserve continues to tighten monetary policy. Investors have continued to take money out of EM equities, according to data from EPFR and IIF. However, the pace of outflows in EM equity funds has slowed and inflows to bonds returned for a second week, IIF data shows.
- Aluminum extends its gains to 2.7% from a week ago after the White House last week decided not to renew exemptions on steel and aluminum import tariffs for products from Canada, Mexico and the EU. Meantime, U.S. sanctions on Russian individuals were back in the news, with the Financial Times reporting that the U.S. Treasury Department had extended the period allowed for trading in assets of global No. 2 aluminum company United Co. Rusal and its parent firm EN+ Group. Both firms are controlled by sanctioned billionaire Oleg Deripaska. Aluminum is up 1.1% at $2,324/ton so far Monday.
- Ahead of last weekend's round of US-China trade talks, Northern Trust chief economist Carl Tannenbaum told WSJ that neither country "has the upper hand." As a result, negotiations will ultimately bear fruit, he predicted, even if what did--and didn't--happen over the weekend may raise questions for some. That as there is "some urgency for China" as party leaders said last fall they would be willing to sacrifice some near-term economic growth for economic sustainability, Tannenbaum noted. "We've never seen a developing economy grow this fast for this long," substantially cutting poverty in the process. Meanwhile, trade continues to be much-more important for the China, with exports to the US making up 4% of the country's GDP. It's 0.7% for US exports to China.
- The foreign-exchange market's appetite for risk shouldn't wane this week, even as the G7 summit in Canada and "the runup to it should be the main source of headline news," ING says. After the U.S. imposed steel and aluminum tariffs on EU, Canadian and Mexican imports, political tensions and the risk of a global trade war are back in focus, making the summit more important than usual. The "expected solid economy data from both U.S. and eurozone and the stabilization of the situation in Italy" are also likely to encourage appetite for risk, says ING.

Jun 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude oil futures dipped for a second session, with prices coming under pressure from record U.S. output and expectations of higher OPEC supplies.
- Gold prices were little changed as expectations of a U.S. rate hike this month offset support from trade war worries.
- Shanghai copper rallied to the highest in more than six weeks, underpinned by a slightly softer dollar and supply concerns amid wage negotiations at the world's largest copper mine.
- Chicago corn prices slid for a second session to touch their weakest since April 24, pressured by favourable weather across the U.S. Midwest.

- A new analysis highlights the difference in health-care costs between the US and other developed nations. Commonly used treatments for colorectal cancer cost twice as much in Washington state as in neighboring British Columbia, Canada: $12,345 versus $6,195 monthly per patient. But average survival was the same, according to a study released Friday at the annual meeting of the American Society of Clinical Oncology. The most common treatment used in Washington was chemotherapy, while in British Columbia it was chemotherapy plus Roche's  Avastin. Researchers from the Fred Hutchinson Cancer Research Center in Seattle and the BC Cancer Agency--which operates cancer treatment centers there--harvested the numbers from health claims data of private health insurers in the US and the BC agency.
- Canadian government bonds gained on investors concerns that rising trade tensions with the US will curb economic growth, analysts said. The US tariffs would cover steel and aluminum imports from Canada, Mexico and Europe. Prime Minister Justin Trudeau is planning retaliatory trade levies in response. Bonds were also supported by investors seeking to add longer-maturity debt to replace securities maturing on June 1. The date is customarily one when a large number of bonds mature, sending investors into the market to restock their holdings, said Andrew Kelvin, a strategist with TD Securities. Bonds also continued to be in demand after Thursday's disappointing GDP data release. The yield on the 10-year Canadian government note fell to 2.227% from 2.245% Thursday, according to Tradeweb.
- US hog producers fret that trade disputes will sour a high-stakes bet on strong export demand. The US is on track for another year of record pork output in 2018, after meatpackers built new plants and farmers expanded their herds. But Chinese tariffs have dampened demand, and now Mexico has threatened to levy duties on pork chops and other cuts. Dean Meyer, who recently expanded his hog-farming operation near Rapid Rock, Iowa, to sell around 22,000 hogs a year, says his income has taken a hit. His farm is just currently just about breaking even, he said. Lean hog futures have fallen since the Chinese tariffs went into effect in April. "That's what's going to dictate the profitability of our operation and the future for us," he said. "We're at a point in our operation where profits are compromised."
- Fiat Chrysler's chief executive criticized his auto making peers for "wavering" on their request to President Trump for relaxed fuel economy standards. Recent comments from the heads of Ford Motor and General Motors suggesting they favor a toughening of fuel economy regulations contradict what those companies' leaders told President Donald Trump in a meeting early last year, CEO Sergio Marchionne said at a press conference outside Milan. "That kind of wavering with the White House is not helpful," Marchionne said. The Fiat Chrysler CEO said he does not support a "rollback" of current rules, but does want future standards to better reflect American consumers' shifting preferences toward light trucks.
- Spirit AeroSystems CEO Tom Gentile says aluminum tariffs won't have a material impact, though it's yet to quantify any potential hit and the effect may be much greater for some of its smaller suppliers. Spirit secures much of its metal through TMX, the Boeing supply-chain unit run by ThyssenKrupp, and its Airbus equivalent. Much of the rest comes from the US and Canada--which is affected by the tariffs.
- Berkshire Hathaway's NV Energy said it will invest more than $2B in renewable energy and battery energy storage in its home state of Nevada if a proposed state constitutional amendment fails. The proposed amendment would establish a competitive retail electricity market in Nevada and end NV Energy's monopoly. The amendment has already been approved by voters once but needs to pass again in November in order to succeed. If the amendment is approved, NV Energy might not proceed with the investment, the company said. NV Energy's proposed investment "demonstrates that we are navigating the uncertainties in the current market," said NV Energy CEO Paul Caudill in a statement.
- In a tweet, President Donald Trump takes aim at the US-Canada lumber trade. "Highly restrictive on Trade!" he writes. "They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?" One of the Trump administration's early moves to remake trade relations was to hit Canadian lumber producers with duties of around 20% in 2017, alleging that they benefit from government subsidies and dump timber in the US. Around a third of American wood comes from Canada. Previous administrations have negotiated deals with Canada over the long-running issue; those in the lumber industry, however, think tariffs have become the new normal under Trump.
- The direct impact of US steel and aluminum tariffs on Canada could be limited to 0.1%, BMO Capital Markets says. Firm says that while Canadian shipments of steel and aluminum to the US are worth a little over 1% of GDP, producers in Canada likely won't lose a lot of business since the US has limited capacity to boost production at home. BMO says the US could get hit just as hard as Canada, as rising prices for anything that uses steel and aluminum cut into US household purchasing power. Canada also announced retaliatory tariffs against the US on Thursday.
- European stocks climb as the government deal in Italy overshadows the new U.S. tariffs and the vote to oust Spain's Prime Minister Mariano Rajoy, says Joshua Mahony, a market analyst at IG. "News of an Italian coalition has helped drive improved risk attitudes," Mr. Mahony says. Europe's largest bourses gain ground, with Spain's Ibex 35 and Italy's FTSE MIB posting some of the best performances. "Political sentiment in Italy has boosted investor sentiment in Europe," David Madden, Market Analyst at CMC Markets UK, says.
- Some traders appeared to take President Trump's tweet that he was "Looking forward to seeing the employment numbers," as a sign that the report would come in strong. The dollar began rising after Trump's tweet, a move TD Securities' Mark McCormick described as "a little suspicious." The greenback strengthened from around Y109.21 to Y109.47 shortly before the data was released. The dollar is now up 0.8% at Y109.70. The jobs report and other major economic indicators are provided to the White House before public release. Under a long-standing directive from the White House's Office of Management and Budget, the Labor Department provides the employment data to the president via the chairman of the Council of Economic Advisers as soon as it is available. The CEA is tasked with briefing the White House on its details.
- President Donald Trump tweeted Friday that he is "looking forward to seeing the employment numbers at 8:30 this morning." The tweet came just more than an hour before the May jobs report is released to the public. The president and some White House officials have the opportunity to see the report before its public release. Economists surveyed by The Wall Street Journal expect employers added 190,000 jobs last month and that the unemployment rate held steady at 3.9%, matching a 17-year low.
- The U.S. decision to impose tariffs on European steel and aluminum imports lacks any comprehensible justification, says Bernhard Mattes, head of German auto industry association VDA. Mr. Mattes says it was inexplicable that the U.S. would use protectionist instruments against one of its most important partners. "In a globally networked economy, customs barriers do not benefit anyone, including the U.S. itself," he says.

Jun 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Crude oil futures lost more ground, with the U.S. market set for a second week of decline on pressure from record U.S. production and expectations of OPEC boosting output.
- Gold prices were steady in early Asian trade amid renewed fears of a global trade war, while a firm dollar and positive U.S. economic data weighed on the market.
- London nickel prices and Chinese nickel futures both rose for a fourth day, supported by strengthening Chinese steel futures and plunging global nickel inventories.
- Chicago wheat is poised for its first weekly decline in three weeks with improved U.S. weather weighing on prices, although losses were limited by concerns over dryness in the Black Sea region and Australia.
- The euro seemed set to post its first weekly gain in seven weeks as worries over Italy's political crisis eased, but the Canadian dollar and Mexican peso were looking frail after Washington went ahead with stiff tariffs on imported steel.
- President Trump's tariffs on European imports of steel and aluminum of 25% and 10%, respectively, "is a moderate negative hit for FCA [Fiat Chrysler] and less relevant for VW, BMW and Daimler," says JP Morgan Cazenove analyst Jose Asumendi. Overall, the indirect negative impact of rising trade tensions, as well as the possibility of car-import tariffs, is much larger than effects from the now imposed steel and aluminum tariffs, he says. If the U.S. closed the car-import duty gap to Europe, BMW's earnings could see a 5% hit in the worst case, while Volkswagen earnings could lose 4% and Daimler 3%, he estimates. Fiat Chrysler, which sources the majority of vehicles from North America, would see a lower impact, he notes.
- Equities rise sharply after Italy's populist parties reached a deal on forming a government, ending concerns about possible new elections. Italy's FTSE MIB jumps 2.7% to 22369.82, reversing much of the steep slide it suffered earlier this week. The U.K.'s FTSE 100 and Germany's DAX are up 0.7%, and even Spain's Ibex 35 rises 1.3% despite expectations that Prime Minister Mariano Rahoy will be ousted after a vote of no confidence. But uncertainties remain and the euro "wasn't quite as enthused," Connor Campbell at Spreadex says, pointing to the U.S. imposing trade tariffs on the EU, "the nature of the Italian government" and the Spanish uncertainty. EUR/USD was last down 0.1% at 1.1686.
- London stocks are expected to open 21 points higher at 7699, according to London Capital Group, with investors likely to be mildly relieved after Italy's populist parties reached a deal on forming a new government. This will ease immediate concerns about the prospects of new elections, though uncertainty remains. Investors are also expected to shrug off fears of a trade war for now after the U.S. imposed tariffs on steel and aluminum from the EU, Canada and Mexico, but again these may soon return to haunt markets. On a relatively quiet day for company news--other than an S&P downgrade of Germany's Deutsche Bank--attention will focus on U.S. jobs data at 1230 GMT and a U.K. purchasing managers' survey on manufacturing at 0830 GMT.
- European bourses should have a positive open despite the U.S.-imposed tariffs on steel and aluminum imports from Canada, Mexico and the European Union, London Capital Group says. "The market is becoming more familiar with this administration's negotiating tactics and as a result, rather than seeing a move straight into risk off trading, we are seeing some investors take a wait and see approach. The traditional safe haven Japanese yen moved lower versus the dollar, as did gold and European bourses are pointing to a stronger start on the open," it says. The immediate economic impact of the tariffs may be limited, says Michael Hewson, chief market analyst at CMC Markets. However, the U.S. move may lead to an escalation.
- Canada has a message for US producers whose goods stand to be affected by C$16.6B in retaliatory Canadian tariffs: call your local lawmaker and members of Congress to get the Trump administration to reconsider levies on imported Canadian steel and aluminum. Foreign Minister Chrystia Freeland issued the advice in a recent interview with the Canadian Broadcasting Corp., adding that its list of targeted items--US-made steel, aluminum and some agricultural products--was ready in the event the Trump administration opted to drop Canada's exemption on steel and aluminum tariffs. She said she spoke with US Trade Representative Robert Lighthizer early Thursday, and told him she was "very disappointed," and believed the tariffs on Canadian metals "was a mistake."
- Facebook investors came armed with fiery questions at the social-media company's annual meeting Thursday. "If privacy is a human right, than we contend that FB's poor stewardship of user data is tantamount to a human rights violation," a representative of Northstar Asset Management said, pointing to the fact that more than 80 million users had their data compromised by Cambridge Analytica, the political firm that bought Facebook user data and aided the Trump campaign. "Scandal is not good for the company's bottom line," another investor said. Executives responded by reiterating that Facebook is taking a broader view of its responsibilities.
- Canada's retaliatory measures against US steel and aluminum tariffs went beyond metals to include a range of specific household and other goods. That's likely because Canada does not import a significant quantity of aluminum from the US, so tariffs on steel and aluminum alone would not have matched the impact of the US move. The Canadian government said Thursday it would impose a 25% tariff on steel imports from the US and a 10% tariff on aluminum and some other specific imports -- including ketchup, small packages of insecticide, sleeping bags and toilet paper. Canada said its full list of tariffs target 16.6 billion Canadian dollars' ($12.871 billion) worth of U.S. imports, matching the total value in 2017 of Canadian exports that will be affected by U.S. steel and aluminum tariffs.
- The US decision to slap tariffs on steel and aluminum imports sends "a fatal signal" for transatlantic trade, says Thilo Brodtmann, the managing director of Germany's VDMA industry group, which represents about 3,200 engineering companies. Trump's actions will ultimately prove to be "an own goal," he says, as they will also hurt US companies that will see their input costs for steel and aluminum rise.
- Former senior Canadian trade negotiator Gordon Ritchie--an instrumental figure in helping reach the original US-Canada free-trade agreement--said the country's economy stands to suffer in the event the Liberal government retaliates against the Trump administration over steel and aluminum tariffs. "Retaliation would be stupid, because it would damage your own consumers and producers," Ritchie tells WSJ. However, he said for tactical reasons, PM Trudeau has no choice but to launch trade measures meant to hurt US industry. "If you don't hit back at the bully, the bully ups the ante." Trudeau is scheduled to speak to reporters in Ottawa at 1:30 PM ET.
- Major European indices close in the red after the U.S. confirmed plans for tariffs on steel and aluminum imports from the EU, Mexico and Canada, while political turmoil also weighed. The levies will kick in at midnight, putting pressure on European equity benchmarks, with the DAX dropping 1.4% and France's CAC-40 falling 0.5%. Milan's FTSE MIB was down just 0.06% as hopes that fresh Italian elections can be avoided boosted sentiment. Still, Spain's IBEX 35 declined more than 1% as Prime Minister Mariano Rajoy faces a vote of no confidence Friday, with early indications suggesting he will lose.
- "These tariffs will harm U.S. farmers and take many American farm operations to the breaking point," warns Brian Kuehl, executive director of Farmers for Free Trade, after the Trump administration applies tariffs to steel and aluminum imported from Canada, Mexico and the EU, threatening retaliation that could hit US agricultural exports. The group, set up to defend Nafta and US agricultural trade generally, promises a hot summer for lawmakers returning home from Washington and reminds President Trump that farmers "overwhelmingly" supported his candidacy in 2016, "but will not be silent in the face of trade wars that harm U.S. agriculture." US net farm income is projected to fall to $62.3B this year, half what it was five years ago, due to low crop prices. Farmers fear trade disruptions will make that worse.
- Aerospace supplier RBC Bearings says it's built in protections against tariff-driven rises in steel prices. CEO Michael Hartnett says on investor call that it has collars to change prices if steel costs rise or fall by more than 5%. The Airbus and Boeing supplier also bought steel ahead of the tariffs, and Hartnett says it has enough forward supplies to "last us through next year." RBC shares narrowly ahead, and aerospace stocks are mixed, though Boeing down more than 1% on trade tension concerns.

May 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped, after sharp gains in the previous session, weighed down by a surprise increase in U.S. crude oil inventories and expectations that OPEC and other producers could decide to increase output at a meeting in June. 
- Gold prices edged higher, as the dollar eased from 6-1/2-month highs hit earlier this week, with prices further supported by concerns over U.S.-China trade.
- Nickel and zinc prices rose sharply on the Shanghai Futures Exchange (ShFE), with nickel striking a fresh three-year high, after the manufacturing sector in China, the world's top metals consumer, grew at its fastest pace in eight months.
- Chicago wheat fell for a third consecutive day, trading near the one-week low reached in the last session with forecasts of crop-friendly weather in the United States and Canada weighing on prices.
- The euro won a reprieve, holding on to the strong gains it made on Wednesday, as Italian leaders moved to mitigate political turbulence and avoid a potentially disruptive early election.
- Shares of companies that produce steel and aluminum rise in after-hours trading following a WSJ report that the Trump administration plans to let the EU's exemption on previously-announced tariffs lapse and make good on a threat to apply tariffs on European steel and aluminum. US Steel adds 4.4%, while Alcoa climbs 1.7% and Century Aluminum is up 2.2%. Those stocks have fallen in recent weeks after initially surging following the announcement of global tariffs as investors debate whether protectionist trade policies might ultimately hurt commodity demand and lead to lower metals prices globally.
- Canada's steel and aluminum producers say they don't know what to expect when the country's tariff exemption expires on Friday. Canada is among several countries the US temporarily excluded from tariffs it imposed earlier this year. The Trump administration has suggested Canada's exemption may be tied to a successful resolution of Nafta talks, which now appear stalled over rules of origin for the automotive sector. "We continue to be hopeful that there will be another extension," given that Nafta talks are ongoing, Canadian Steel Producers Association president Joe Galimberti said. Aluminum Association of Canada president Jean Simard said he doesn't know what the US will decide. "Everybody is looking at all the scenarios: quotas, tariffs, none of the above, all of the above. It's very hard to say," Simard said in an interview.
- Canada Finance Minister Bill Morneau said country's business community is "rightly anxious" about country's ability to compete on global stage, and attract investment. He said Ottawa's move to buy Kinder Morgan's Trans Mountain project, to ensure its expansion to Pacific coast is finished, should not be viewed "as a symbol of how to get things done. In our country, we see this as an example of stepping in when things get difficult." He said Canada also dealing with changes in trading environment, and vowed to listen to complaints and ideas from business owners and operators about how to best position Canadian economy -- including on tax policy, given moves made earlier this year by Trump administration.
- In speech in Calgary, Alberta, or the heart of Canada's energy patch, Canadian Finance Minister Bill Morneau says Ottawa "reluctantly" stepped up to buy the Trans Mountain pipeline project. Liberal government opted to buy pipeline and its associated assets for C$4.5B "because we know it's absolutely the right to do for this project and our economy." He said at start of talks with Kinder Morgan -- which threatened to abandon expansion project this week unless political uncertainty removed -- government officials did not want to become pipeline owners, but figured that was best way to ensure Trans Mountain's expansion. He reiterated Ottawa's goal is to have private-sector investors take over ownership and management of Trans Mountain "at a time that makes sense."
- Airbnb CEO Brian Chesky said the company would be ready to go public next year, but he wouldn't commit to doing so after he previously ruled out an IPO in 2018. He also said the company is committed to hiring one or two female directors and is near to appointing one; he didn't say who. Airbnb today has a six-member all-male board, only one of whom is independent. Valued at $31B, Airbnb is one of the world's largest startups.
- Peru's decision to revoke five offshore oil contracts from London-based Tullow Oil will hurt efforts to increase production and attract private investments, BMI Research says. President Martin Vizcarra recently revoked the contracts, which were signed by his predecessor Pedro Pablo Kuczynski, amid opposition from fishermen and other coastal residents in northern Peru. BMI says Peru's offshore potential is "significant, with large tracts of prospective frontier acreage available," but the revocation will deter other businesses from investing. "Regulatory uncertainty, combined with more prominent opportunities in other parts of the LatAm region, will see upstream investment fall in Peru," it says.
- Airbnb CEO Brian Chesky said San Francisco and New York remain two of its "worst" cities for regulatory challenges. Chesky, speaking at the Code tech conference in Southern California, says he anticipates years more fighting over regulations regarding Airbnb in New York, but that it's too important of a market to give up. He blamed the hotel industry for obstructing, including blocking Airbnb from collecting hotel-style taxes in the city, so that it can make it an issue with voters there.
- Canadian Prime Minister Justin Trudeau told reporters Wednesday he impressed upon Vice President Mike Pence in a Tuesday phone call that national-security issues "don't really apply when you talk about steel and aluminum from Canada." Canada's exemption from US tariffs on steel and aluminum expire on June 1, and optimism in Ottawa about that exemption being extended has soured in recent days. "We are going to continue to work on this," Trudeau said. Canadian Foreign Minister Chrystia Freeland is DC and told reporters Tuesday she relayed similar message to US Trade Representative Robert Lighthizer. She added Canada is "always prepared to defend our workers" in the event the Trump administration decides to waive Canada's exemption on steel and aluminum.
- Grocery store meat cases aren't top of mind for many Missouri citizens following news of Governor Eric Greitens' resignation late Tuesday. But state cattle ranchers and beef sellers have a particular interest in what's next. Missouri's state legislature has passed a bill restricting the words "meat" and "beef" to products made from cattle carcasses, an effort pushed by beef producers to defend against growing sales of plant-based meat alternatives and under-development meat grown from animal cells. Gov. Greitens, mired in multiple legal matters, hadn't indicated whether he'd sign it, but Missouri Cattlemen executive VP Mike Deering is certain Lieutenant Gov. Michael Parson will after he assumes office June 1. Parson's spokeswoman has no immediate comment.
- The euro recovers much of the previous day's steep losses, helped by data showing a bigger-than-expected pick up in German inflation, with EUR/USD last up 0.6% at 1.1607. But the euro could still be vulnerable after sliding to a multi-month low of 1.1509 Tuesday due to Italian political uncertainty. "Investors have been quick to take profit at month-end," says Niels Christensen, currency analyst at Nordea in Copenhagen. "But that doesn't change the trend, which is very much downwards." He sees the potential for steep EUR/USD falls if the U.S. Federal Reserve raises interest rates in June and doesn't signal any concern that European political uncertainty could hurt the U.S. economy.
- The cost of shorting the dollar is "too high" to turn negative on the U.S. currency, even though it has risen mainly because the rest of the world is going through political distress and economic slowdown, says ING. Currently, "three-month EUR/USD hedging costs are -2.9%," so "one needs conviction that the U.S. dollar will weaken by more than" for investors to justify shorting it, ING says. "There's no surprise that this conviction has been lost given the constant feeling of uncertainty." EUR/USD last trades up 0.8% at 1.1631 as the euro reverses much of Tuesday's losses on the back of Italian political uncertainties.
- US firms didn't restock aggressively in April. Wholesale inventories were flat that month compared to a month earlier, the Commerce Department said. Retailers, however, boosted inventories by 0.6%. The figures are preliminary. More comprehensive data will be released in June.

May 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched down amid concerns that Saudi Arabia and Russia will pump more crude in the second half of the year in response to falling global crude inventories and rising consumer prices.
- Gold prices edged up as political turmoil in Italy and concerns over Sino-U.S. trade conflict spurred safe-haven demand, though a strong dollar limited gains for the metal.
- London copper fell more than 1 percent to a two-week low, pressured by a firmer dollar and as Italy's deepening political crisis pulled investors out of risky assets.
- U.S. wheat futures fell more than 1 percent to retreat from their highest in over 10 months touched the session before, with investors locking in gains after worries over dry weather in key growing regions stoked a rally.
- The euro was buried near multi-month lows against major rivals as Italy's political crisis deepened, raising the likelihood of an early election that some market players fear could lead to a eurosceptic government in Rome.
- Sanofi can hedge against the impact of U.S. President Donald Trump's pharma plans due to its unique portfolio, as sales of Dupixent, Aubagio and Praluent see growth, says Credit Suisse. However, the company remains exposed to rebate-related losses, says the bank, especially concerning Lantus, an insulin brand. Additional approvals in the U.S. and the EU for the treatment of atopic dermatitis through its asthma drug Dupixent further strengthen uniqueness for Sanofi, says Credit Suisse. Shares are up 0.7% to EUR66.23.
- Teva is among the companies that will be least affected by U.S. President Donald Trump's pharma plans, says Credit Suisse, which sees potential in the uniqueness of the company's portfolio and 2018 expected sales being driven by its innovative drug division. The bank also sees promise in Teva's potential for biosimilars. Despite recent U.S. Food and Drug Administration refusals on its generics and substantial Copaxone erosion--which CS estimates will end soon--Teva is likely to benefit from incentives to up the ante on generics and biosimilars. Shares are down 1.4% at ILS76.90.
- The dollar is likely to benefit from its safe-haven status "as long as the repositioning in Italian/eurozone assets endures," says Societe Generale. Solid ADP data on U.S. private sector payrolls at 1215 GMT could add to this trend, potentially pushing the DXY dollar index to 96, it says. DXY is at 94.55, down 0.2%. "There is no arguing over the safe-haven status of the U.S. dollar in today's troubled political waters," SocGen says. "Solid U.S. ADP private sector employment data today...will only reinforce bullish dollar momentum." A WSJ poll forecasts a rise in ADP payrolls of 187,000. EUR/USD rises 0.6% to 1.1611 on Wednesday, in a correction after steep losses the previous day. Against the Japanese yen, the dollar is down 0.1% at 108.65.
- China is unlikely to make any "significant" concessions to the US on the technology front, says Louis Kuijs from Oxford Economics, as the former sees its technology and industrial policies as fundamental to future growth. "China is likely to feel slighted and will have to respond in some way" in regards to looming US tariffs. He adds the short-term economic impact is likely to be modest, with the long-term implications more serious. Kuijs thinks the surprise announcement from Trump yesterday is aimed at renewing pressure on China ahead of bilateral talks and the possible North Korea summit.
- Trump deciding to move ahead with US tariffs against China harms American credibility, contends Mei Xinyu, a researcher at a think tank under China's commerce ministry. "If he continues playing this 'wolf's coming' game, who would want to play with him?" In dealing with Trump's unpredictability, Mei recommends China sticking to its own pace of opening up and learn to live with prolong trade disputes with the US.
- Canada PM Justin Trudeau was critical of the Trump administration's push to consider tariffs on imported vehicles on national-security grounds. Vehicle imports posing a national security issue for the US "is less likely to find any real traction on legal grounds," relative to the section 232 levies imposed on steel and aluminum, he said at a Bloomberg News event in Toronto. "It looks more like a negotiating tactic [on Nafta] than aggressive attempts to hurt Canada," he said. He added the level of integration between US and Canada on autos, steel and aluminum means tariffs on Canadian goods would have a negative impact on US economy as well.
- Canada PM Justin Trudeau reiterates he's willing to accept the end of Nafta rather than agree to a flawed agreement. Talks on a revised Nafta have stalled on US and Mexican differences on autos. "No Nafta is better than a bad Nafta, I have made that very clear to President Trump," Trudeau said at a Bloomberg News event. "We are not going to move ahead just for the sake of moving ahead."
- Canada PM Justin Trudeau says Ottawa does not "intend to be in the pipeline business in the long term" after acquiring Kinder Morgan's Trans Mountain pipeline project. At a Bloomberg News event in Toronto, Trudeau said Canada stepped in to buy pipeline project because of British Columbia's efforts to directly contest the federal government's authority to approve and regulate interprovincial pipelines. "It became a question of, 'Is Canada able to get big projects built?' We are demonstrating that, yes, we will do what we need to do to get projects that we properly approved built." He argued there's compelling business case attached to Trans Mountain pipeline, and expects investors to eventually step up and buy the asset.
- China, the last regulatory hurdle in the way of Qualcomm's effort to complete its slow-moving purchase of NXP Semiconductors, is holding up the deal as it negotiates trade agreements with the US. Bernstein Research analyst Stacy Rasgon analyzes what China has to gain and lose by approving or killing the deal. In green-lighting the transaction, Beijing stands to increase its leverage in negotiations with Washington while potentially extracting valuable concessions from Qualcomm -- but it would foster a competitor to its own emerging semiconductor industry. If it continues to stall, it holds onto a powerful bargaining chip while placating local vendors, but risks giving the White House ammunition to escalate trade tensions. Rasgon believes China has greater incentive to approve the deal than quash it -- but only after getting what it can from the delay.
- Canadian Finance Minister Bill Morneau said the government's decision to purchase Kinder Morgan's Trans Mountain pipeline project for C$4.5B would carry "no fiscal cost" to the Canadian government. The project's completion carries a total pricetag of roughly C$7.4B. Morneau said tolls from the existing pipeline, paid by shippers, will be help finance additional investments. A loan guarantee from Export Development Canada, the export-credit agency, will ensure construction work can begin this summer. Finally, province of Alberta has pledged up to C$2B in emergency financing if necessary. "There is no fiscal hit on this purchase," Morneau said, adding the pipeline would appear on the balance sheet as an asset.
- Canada's $3.5B deal with Kinder Morgan to take ownership of the Trans Mountain pipeline project to save it is "credit positive" for Kinder Morgan, says Moody's' senior vice president, Terry Marshall. "The sale removes the significant risk attached to the TMEP expansion, eliminating at least C$6.4 billion - before potential cost overruns - of additional capital to complete the project and the uncertainty of construction scheduling and completion, given the opposition to the project from various stakeholders." Kinder Morgan's chief executive Steve Kean said the deal is the best way to hopefully get the job done, "and thereby realize the great national economic benefits promised by that project."
- Indigenous leaders and environmental groups say they'll continue their opposition to the Trans Mountain pipeline project after the Canadian government announced plans to buy the project from Kinder Morgan. "We will never allow a pipeline to come through British Columbia and harm our inlet," Tsleil-Waututh Elder Ta'ah Amy George said in a press release. Indigenous leaders from the Tsleil-Waututh First Nation said they are preparing to escalate protests, and a spokeswoman from Greenpeace USA said the project will continue to face "massive resistance." Canadian police have arrested more than 200 people involved in Trans Mountain demonstrations in recent months. Statements from environmental and indigenous groups are indicative of some of the challenges ahead for the pipeline's construction.

May 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were mixed in Asian trading, but remained under pressure from expectations that Saudi Arabia and Russia would pump more crude to ease a potential shortfall in supply.
- Gold prices steadied after two straight sessions of fall, but a strong dollar continued to weigh on the market amid renewed hopes of a U.S.- North Korean summit.
- Nickel prices gained more than 2 percent to a 3-year high in Shanghai, and rose also in London as trading resumed after a UK public holiday on Monday.
- U.S. wheat futures rose nearly 1.5 percent to hit their highest in more than 10 months, with traders worried that adverse weather across key growing regions would crimp production.
- The euro struggled near a 6-1/2-month low against the dollar, as the bounce seen at the start of the week faded and investors took a grim view on the prospect of fresh elections in Italy.
- The most recent Italian political developments, including the failure to form an antiestablishment party, has no bearing on Moody's Investors Service's decision last Friday to place Italy's 'Baa2' rating on review for downgrade. That decision was taken amid risks of material weakening in Italy's fiscal position, given the fiscal plans of the then-incoming coalition government. "Italy's sovereign rating would likely be downgraded if we were to conclude that whoever emerges as the next government will pursue fiscal policies that will be insufficient to place the public debt ratio on a sustainable, downward trajectory in the coming years," Moody's says. It would consider confirming the rating if it had a high level of confidence that the debt ratio would be put onto a sustained downward trend.
- The chances of EUR/USD falling to 1.10 by the end of the summer are "significantly higher than the possibility of a recovery to 1.20," according to Societe Generale. The euro is being pushed down by the political risks in Italy. SocGen says possible new elections later this year "may be seen as a referendum on Euro-membership," given that the Italian populist movement may be growing even bigger in the run-up to elections. Because of these uncertainties, the European Central Bank's "plans for providing forward guidance on policy normalisation are up in the air," which puts further pressure on the common currency. EUR/USD falls nearly 1% to a ten-month low of 1.1514.
- EUR/USD extends losses, falling to a 10-month low of 1.1531 on Tuesday, according to Factset. The slide in the German bund yield and the widening spread between bunds and Italian BTP yields is likely to push the euro down further, according to Societe Generale, who says "we should now call this a crisis." Political uncertainties in Italy have not only pushed Italian bond yields up, but they have also pushed down German 10-year bund yields sharply due to safe haven demand. Bund yields--which fall as prices rise--fell below 0.20%, having last week traded above 0.50%. SocGen says EUR/USD should hold above 1.0860, which is "the springboard from which the euro rallied after the French election [in 2017]."
- EUR/USD trades with a "significant risk premium" on the back of Italian political risk, says ING. The 3% risk premium based on the short-term financial fair value model "is well outside its 1.5 standard deviation band," which "suggests a degree of cushion against a pronounced EUR/USD decline." EUR/USD fell to its lowest in nearly seven months at 1.1585 on Tuesday, extending Monday's losses after news that Italian President Sergio Mattarella refused to appoint a populist government with a euro-sceptic finance minister at the front of it, leading to possible further elections later this year and strengthening of the populist movement.
- As Asia's "prime safe-haven currency," the yen will be the currency to watch to measure investor sentiment toward relations between the U.S. and North Korea, and the chances of a bilateral summit happening next month. After U.S. President Donald Trump said he was cancelling the summit last week, recent comments from North Korea suggest the country may be willing to make concessions, while officials from both sides are meeting to try to salvage the talks. "JPY will likely strengthen if markets become gloomy about the talks and weaken if they become rosy," Rabobank says. The yen falls slightly against the dollar, with USD/JPY last at 109.34.

May 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slumped, extending steep declines from Friday, as Saudi Arabia and Russia said they may increase supplies and as U.S. production gains show no signs of abating.
- Gold prices eased, following their biggest weekly gain in six weeks, as U.S. President Donald Trump revived hopes of his summit with North Korean leader Kim Jong-un, after cancelling the meeting last week.
- Chinese lead futures retreated from their strongest level in nearly eight months, tracking losses in London in the prior session, as investors cashed in on the recent sharp gains.
- The euro pulled up from multi-month lows, after Italian President Sergio Mattarella rejected a vocal critic of the single currency as the economy minister and raised the prospect of an early election.
- EUR/USD falls to a 27-week low of 1.1647 and GBP/USD also matches its lowest level this year, as political risks and softer economic data are weighing on both the euro and the pound. "Rising euro area political risks pulled the euro down, while sterling was hit by a weaker-than-expected U.K. inflation figures and further Brexit uncertainties," Societe Generale says. Political uncertainty in both Italy and Spain are weighing on sentiment, while SocGen also notes that eurozone PMI data for May "showed no signs of a rebound," SocGen says. The euro also falls to its lowest since late June 2017 against the safe haven yen and to an 11-week low against the safe-haven Swiss franc. GBP/USD falls as low as 1.3305.
- Canada PM Justin Trudeau and Mexico's President, Enrique Pena Nieto, spoke this week about Nafta's fate and their "strong concerns" over the Trump administration's use of a national-security law to threaten tariffs on imported cars. Trudeau's office released a three-paragraph summary of the call, adding the conversation took place the previous day. In an interview with Reuters Thursday, Trudeau said US move appeared based on "flimsy logic" and was likely tied to Nafta talks, which have stalled over autos.
- US bonds rise as recent bullish momentum combine with disappointing economic data and thin pre-holiday trading push yields lower. Orders for durable goods fell 1.7% in April from the month before, exceeding the median decline forecast by economists. The data was also colored by new tariffs on imported automobiles being sought by the Trump administration. The yield on the benchmark 10-year Treasury note fell to 2.928% from 2.981% Thursday.
- USD/TRY is likely to end 2018 at 4.60 and next year at 4.85, according to UniCredit, but "risks are very much to the upside and forecasts are under review." USD/TRY is last up 0.6% at 4.7364 on Friday, with the Turkish lira continuing to fall despite the fact that the central bank raised interest rates this week. However, UniCredit expects "some near-term relief" in USD/TRY, potentially towards 4.50, "assuming more responsible rhetoric coming from President Erdogan."
- The Turkish lira falls further on Friday, with USD/TRY up 0.7% at 4.7445, even after the central bank raised interest rate by 300 basis points, because they've only done it after the currency had depreciated by over 15%. "By doing that, it signalled very clearly that it will only stand up to the political pressure when the pressure from the financial markets becomes unbearable," Commerzbank says. "This pressure will rise again," Commerzbank says, but adds that even the most optimistic person must now have realised that the central bank is under enormous political pressure to keep interest rates low." Unless the risk environment gets better, "it seems just a matter of time...before USD/TRY breaches the 5 [level] on a sustainable basis."
- Among major European pharma companies, Roche is set be the most affected by Trump-proposed price reform and biosimilars competition, Credit Suisse says. The company will see a "dramatic" deterioration in the uniqueness of its portfolio in 2021, with more biosimilars in the market and increased competition to its cancer drug Tecentriq. It is also most exposed to Part B reform of Medicare, notes the bank. On the heels of erosion trends in Europe and multiple U.S. policy changes, CS downgrades Roche to underperform from neutral. Shares are down 0.7% to CHF217.50.
- The Russian ruble has been quite resilient in the face of a broader emerging market currency sell-off and this has likely made the Central Bank of Russia "confident that the shock from the last round of U.S. sanctions has passed," says Commerzbank. CBR governor Elvira Nabiullina signalled Wednesday she is "comfortable enough with the ruble's recent development to signal that the policy rate will be brought down gradually." She said "progress may be slower than once thought, but the direction is clear and a hike can be ruled out under normal circumstances." USD/RUB is last marginally up at 61.6225, but it is well below the 65 level it reached after the second wave of sanctions were imposed.
- German government bonds are likely to remain supported amid concerns about Italian politics and global trade tensions, says UniCredit. Ten-year bund yields--which move inversely to prices--trade lower at 0.459%, according to Tradeweb, having dropped below 0.5% on Thursday. Charts show the next support for yields at 0.43% to 0.44%, UniCredit says. "With the German Ifo [due 0800 GMT] expected to show a further decline, the global risk environment deteriorating due to trade and geopolitical tensions and uncertainty in Italian politics likely to continue weighing on investors' mood, it is difficult to see a correction of the recent rally in core bonds." On Thursday, U.S. President Trump cancelled a meeting with North Korea's Kim Jong Un.
- EUR/USD falls 0.1% to 1.1706 on Friday as the dollar recovers slightly after Thursday's news that U.S. President Donald Trump won't meet North Korean leader Kim Jong Un. The safe-haven Japanese yen is retracing gains against the dollar as well, with USD/JPY up by 0.2% at 109.41. EUR/USD could fall to 1.1676 if the German Ifo business climate index at 0800 GMT comes in lower, says ING. "Following the lower than expected eurozone May PMIs...there is a risk of a disappointing IFO reading today," it says. The consensus in a WSJ poll is for business expectations to fall slightly to 98.5 in May from 98.7 in April.
- Trump calling off the Kim summit may simply be due to both sides needing more time to prepare and find a middle ground, says Bank of Singapore. "The market is waking up to" the meeting playing out not "like a Hollywood blockbuster but a long Korean drama series."
- President Trump's decision to cancel his summit with North Korea, citing Pyongyang's anger, will keep geopolitics squarely at the top of market concerns on Friday. Australia & New Zealand Banking Group notes the White House move prompted an unsurprising knee-jerk reaction on markets, including in haven assets such as gold, JPY and CHF. "It's hard to know whether denuclearisation of the Korean Peninsula or cutting the US-China trade deficit by US$200 billion in two years is the more 'aspirational' goal," ANZ says.
- Canadian government bonds gain as yields fall in concert with a similar move in US government debt, as investors sought safe assets after Trump sought new tariffs on auto imports. The move raises uncertainties about the prospects for economic growth in North America, given the way supply chains in the industry are interwoven between the US and major trading partners, including Canada. The yield on Canada's 10-year government note fell to 2.410% from 2.442% Wednesday, according to Tradeweb.

May 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices eased as Russia hinted it may gradually increase output, after having withheld supplies in concert with producer cartel OPEC since 2017.
- Gold prices eased on profit-taking, after breaking above $1,300 in the previous session when U.S. President Donald Trump's decision to call off a meeting with North Korean leader Kim Jong Un triggered safe-haven buying.
- Almost all base metals rose, led by Shanghai nickel which hit a near three-year high, after the dollar took a hit following U.S. President Donald Trump's decision to cancel a summit with North Korean leader Kim Jong Un.
- U.S. wheat futures edged higher, putting the grain on track for a 2.5 percent weekly gain as concerns about dry weather in key global producing regions kept prices near a 10-month high.

- The yen stepped back from a two-week high against the dollar when North Korea said it was open to resolving issues with the United States after President Donald Trump called off a June summit with its leader, Kim Jong Un.

- EUR/USD falls 0.1% to 1.1706 on Friday as the dollar recovers slightly after Thursday's news that U.S. President Donald Trump won't meet North Korean leader Kim Jong Un. The safe-haven Japanese yen is retracing gains against the dollar as well, with USD/JPY up by 0.2% at 109.41. EUR/USD could fall to 1.1676 if the German Ifo business climate index at 0800 GMT comes in lower, says ING. "Following the lower than expected eurozone May PMIs...there is a risk of a disappointing IFO reading today," it says. The consensus in a WSJ poll is for business expectations to fall slightly to 98.5 in May from 98.7 in April.
- Trump calling off the Kim summit may simply be due to both sides needing more time to prepare and find a middle ground, says Bank of Singapore. "The market is waking up to" the meeting playing out not "like a Hollywood blockbuster but a long Korean drama series."
- President Trump's decision to cancel his summit with North Korea, citing Pyongyang's anger, will keep geopolitics squarely at the top of market concerns on Friday. Australia & New Zealand Banking Group notes the White House move prompted an unsurprising knee-jerk reaction on markets, including in haven assets such as gold, JPY and CHF. "It's hard to know whether denuclearisation of the Korean Peninsula or cutting the US-China trade deficit by US$200 billion in two years is the more 'aspirational' goal," ANZ says.
- Canadian government bonds gain as yields fall in concert with a similar move in US government debt, as investors sought safe assets after Trump sought new tariffs on auto imports. The move raises uncertainties about the prospects for economic growth in North America, given the way supply chains in the industry are interwoven between the US and major trading partners, including Canada. The yield on Canada's 10-year government note fell to 2.410% from 2.442% Wednesday, according to Tradeweb.
- Four senior Democratic senators have criticized US air-safety regulators for allegedly waiting too long to mandate enhanced engine inspections on thousands of Boeing 737 jets. In a letter to acting FAA administrator Daniel Elwell, the lawmakers expressed concerns about the fact that airlines weren't ordered to conduct more detailed engine checks until a Southwest Airlines plane suffered a violent engine rupture last month that killed a passenger. The senators want, among other things, answers about why the agency didn't take emergency action in the wake of a similar but nonfatal Southwest accident in August 2016, and what the FAA can do "to ensure that this type of delay doesn't happen" again.
- Lions Gate Entertainment reports a $165M benefit from the cut in US corporate taxes during its fiscal year that ended March 31, the studio behind "The Hunger Games" and the Starz cable network says. In the three month period ended March 31, Lions Gate revenue declined 17% to $1.04B, due primarily to fewer movie hits than last year, when it released "La La Land." Thanks in part to its income-tax benefit, however, net income increased 46% to $89.6M.
- US stocks stumble after Trump canceled the North Korea summit. The Dow closes off 0.3%, or 75 points, to 24811, after falling more than 200 points Thursday morning, while the S&P declines 0.2% to 2727 and the Nasdaq falls less than two points to 7424. Energy stocks continue to fall as oil declines 1.6% to $70.66. The S&P 500's energy sector is off 1.7% and Pioneer Natural Resources, Apache and Schlumberger all fall more than 3%. The market also
weighed news that the White House is considering tariffs on vehicles and auto-parts imports. Ford closes 1.6% higher and GM gains 1.4%.
- Some US refiners are still buying Venezuela-produced crude oil while Washington considers sanctions and slams Venezuela's government for Sunday's "sham" election that saw President Maduro re-elected. "The US is still the leading destination" of Venezuelan crude, followed by China and India, vessel-tracking firm ClipperData says. "We are seeing a strong number of vessels arriving in the US Gulf just this week." Lower refinery utilization, higher levels of blending and an increasing scramble for cash has encouraged a recent uptick in barrels landing on US shores, it explains. Still, Venezuelan imports are trending lower longer-term. It notes Phillips 66 stopped taking delivery of Venezuelan crude last year though Valero is said "to be ramping up receipts."
- US antidumping tariffs aimed at Canadian forestry companies may have produced an unexpected winner: Canadian forestry companies. As supply shocks rippled through the lumber market after the duties were enacted last year, mills in British Columbia and elsewhere were able to raise prices and more than cover the tariff of around 20%. Their share prices have surged this year. Some, like West Fraser Timber, even used the extra cash to go on US shopping sprees. West Fraser last fall bought a slew of mills in the southeastern US, making it the largest producer in the region and allowing it to bypass tariffs on that production. "All of the tax has been basically passed on to the consumer," says Chris McIver, head of sales at West Fraser. "We were able to do that because the market was strong." West Fraser's shares are up 57% over the last 12 months.
- The leader of the United Auto Workers union says he supports Trump's decision to investigate putting a 25% tariff on vehicle and auto-parts imports, but stopped short of endorsing the idea of putting duties into effect. UAW President Dennis Williams says he believes the US has been a "dumping ground" for "very low-cost" auto components and he backs Trump's decision to investigate the use of tariffs on national-security grounds. He says "it's time for us to look at this" but cautions a trade war could affect US workers in agriculture and other sectors.
- The Stoxx Europe 600 closes down 0.5% at 390.54, its lowest closing level in more than two weeks, after U.S. President Donald Trump cancelled a summit with North Korea, causing investors to pull away from riskier assets like equities. Perceived safe havens such as gold, the yen and the Swiss franc rose. "The move has clearly rattled investors as nobody really saw it coming," says Neil Wilson at ETX Capital, adding this could "seriously affect" trade
talks with China and points to "disarray over foreign policy intentions." Germany's DAX drops 0.9% as car makers suffer from news of Trump considering tariffs on car imports, while Deutsche Bank falls 5% after the bank announced massive job cuts. France's CAC 40 ends down 0.3% and the U.K.'s FTSE 100 down 0.9%. Italy's FTSE MIB drops 0.7% and Spain's Ibex 35 loses 0.3%.
- The FTSE 100 index slides to a one-week low, closing down 0.9% at 7716.74, after U.S. President Donald Trump cancelled a meeting with North Korea's Kim Jong Un next month, sparking a rush to safety and a flight from riskier equities. "European and U.S. markets are on the slide, as markets prepare for another bout of uncertainty," says Joshua Mahony, analyst at IG. Equity markets are "likely to turn lower from here," he says. Oil price falls see oil giants BP and Royal Dutch Shell lose 1.8% and 2.3% respectively, though a rise in the price of safe-haven gold lifts precious metals miner Randgold by 1.4%. Mediclinic drops 9.4% after the private hospital group swung to a full-year pretax loss. Quality assurance specialist Intertek rises 3.4% after saying it would deliver 2018 targets.

May 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)  
- Oil prices rose as markets reacted to news that China and the United States have put a looming trade war between the world's two biggest economies "on hold".
- Gold prices edged down as the dollar rose and demand for safe-haven assets eased after U.S. Treasury Secretary Steven Mnuchin said a trade war between China and the United States was "on hold".
- Copper edged higher after China and the United States put their trade row on hold, easing concerns the dispute could escalate, although headwinds from a stronger dollar capped gains.
- Chicago soybeans gained more than 2 percent, rising for a second session to a near one-week high, after Washington and Beijing agreed to drop tariff threats, easing fears about demand for U.S. shipments in top importer China.

- London stocks are expected to open higher on Whit Monday, a public holiday in most continental European markets. London Capital Group expects the FTSE 100 to open 51 points higher at 7829. Peel Hunt says apparent progress in the U.S.-China trade discussions over the weekend should provide a boost for risk assets at the beginning of the week. There aren't any major U.K. data due for release on Monday. Ryanair is likely to be in focus after it reported rising net profits for full-year 2018 but forecast a profit fall in full-year 2019.
- President Donald Trump said in a tweet Sunday that he will demand the Justice Department investigate whether the FBI surveilled his presidential campaign for political purposes. "I hereby demand, and will do so officially tomorrow, that the Department of Justice look into whether or not the FBI/DOJ infiltrated or surveilled the Trump Campaign for Political Purposes - and if any such demands or requests were made by people within the Obama Administration!" he tweeted. The Justice Department declined to comment.

- Grain and soybean futures bounce after China says that it is dropping an anti-dumping investigation into US sorghum imports. The investigation, which started in February, was one of the early steps in an escalating tit-for-tat trade dispute between Washington and Beijing that threatens to engulf American exports of other crops, most notably soybeans. Traders are betting that the olive branch makes a resolution to the dispute -- no tariffs on US crops -- more likely. CBOT July soybean futures rise 0.5% to $10.00 1/4 a bushel. July corn climbs 1.5% to $4.01 1/4 while July wheat gains 1.7% to $5.05 1/2.
- Willie Walsh, chief executive of British Airways parent International Consolidated Airlines Group SA, expresses confidence Washington and London will ink an open skies deal to keep flight going even once Britain exits the EU. The U.S. has put forward a model agreement on which to base the accord. Mr. Walsh says "there is nothing in the model US open skies agreement that would create any concern for me." IAG shares 0.1% higher.
- EUR/USD is up 0.1% at 1.1808 and it is likely to stay around these levels on Friday "with the market focus on the upcoming developments in Italian politics," according to ING. The calendar is blank on Friday, but the coalition government is due to meet President Sergio Mattarella on Monday. As for the dollar side, U.S. Federal Reserve "speakers today should reiterate the message of the gradual policy tightening ahead, though we expect a limited reaction in the markets as this is in line with market expectations," ING says.
- The FTSE 100 index is expected to open 14 points lower at 7773, according to London Capital Group, pressured by nervousness over trade talks between the U.S. and China. Heavyweight mining stocks could suffer from weaker commodity prices, although oil stocks are likely to benefit from Brent crude staying close to $80 a barrel, last at $79.52. Lower metals prices plus a marginally firmer pound could "set traders up for profit taking into the weekend," says Jasper Lawler, analyst at LCG. Shares in pharma giant AstraZeneca will be in focus after results, while J Sainsbury will also be watched after news that the U.K. competition watchdog will investigate its proposed merger with Walmart Inc's Asda Group Ltd.

May 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held firm on strong demand, ongoing supply cuts led by producer cartel OPEC and looming U.S. sanctions against major crude exporter Iran.
- Gold prices edged down to near their lowest levels this year, pressured by a firm U.S. dollar amid surging U.S. Treasury yields.
- London aluminium futures slipped for a third straight session as inventories increased, easing worries over a supply shortage in the aftermath of U.S. sanctions on major Russian producer Rusal.
- Chicago wheat rose for a fourth consecutive session with the market poised to end the week on a positive note following last week's deep losses as dry weather curbs yields in key exporters Australia and the United States.

- Novartis continues to look well-positioned on paper, despite Wednesday's investor meeting being "somewhat subdued" by the disclosure of the company's payments to Michael Cohen, says Berenberg. All three Novartis divisions promise top-line growth and margin improvement, as blockbuster products are in the pipeline at the innovative medicines division, Sandoz leads biosimilar companies by sales, and Alcon is on the mend, Berenberg says. Still, price erosion, patent expiry and the ongoing investigations are dampening enthusiasm and Novartis will have to prove it can deliver before it gets investors fully back on board, says Berenberg. Shares closed down 0.1% at CHF77.64 on Thursday.
- In his first major major question-and-answer session with NASA employees nationwide, agency head Jim Bridenstine appeared to go out of his way to appease a wide array of critics who held up his confirmation for many months. Seemingly going further than before in acknowledging human activity is primarily responsible for climate change, he told a televised town hall meeting "we are putting huge amounts" of carbon dioxide into the atmosphere and "heavily contributing" to formation of greenhouse gases. Seeking to satisfy proponents of both lunar and Mars exploration, the new NASA administrator also reiterated the US is doing both "together, at the same time," with missions supportive of both goals. In addition, he pledged to maintain rigorous safety standards for astronauts.
- Canada PM Justin Trudeau says the offer to cover Kinder Morgan's costs due to politically-motivated delays in its Trans Mountain pipeline expansion is akin to an "insurance policy" aimed at removing some of the risk. Speaking to reporters in New York, he reiterated the project is in the national interest. Finance Minister Bill Morneau said this week "plenty of investors" would be interested in backing the project should Kinder Morgan walk away as it has threatened to do so, perhaps as early as May 31. Trudeau said Canada not at the stage yet to seek out new investors. But if Kinder Morgan pulls out, "we will look for other alternatives," the Trudeau says.
- Canada PM Justin Trudeau made clear Thursday his country won't be signing onto a revised Nafta with a sunset clause. The Trump administration has championed inclusion of the clause, which would give one of the agreement's parties the right to open a renegotiation after five years. Under this type of structure, "it would be hard to imagine a lot of folks being willing to make a five-year investment in Canada," said Trudeau at an event hosted by the Economic Club of New York. "We don't really feel a deal with a sunset clause is much of a deal at all." Otherwise, he said Nafta talks are progressing positively, and there is a broad consensus on autos. He declined to comment on deadlines, such as the informal one set today by Speaker Paul Ryan.
- European shares lift 0.65% as rising oil prices help offset Italian political jitters. The Stoxx Europe 600 rises 2.53 points to 395.74 after the price of a barrel of Brent crude topped $80 in response to news that energy company Total could leave Iran in the wake of fresh U.S. sanctions. Royal Dutch Shell A-shares gain 1.9%. "The FTSE 100 and DAX have set new multimonth highs, while the CAC 40 has hit a level not seen since 2008," says David Madden at CMC Markets. The DAX closes up 0.9% and the CAC 40 ends the session nearly 1% ahead.
- The US-Europe relationship faces a "big test" in how it handles Iran, Total's and CEO Patrick Pouyanné says during a talk in Washington. The oil and gas company is appealing to French and US governments for a waiver to keep operating in Iran free from any US sanctions tied to President Trump's decision to abandon the Iran nuclear deal. Speaking at the Center for Strategic and International Studies, Pouyanné warns that forcing Western companies from Iran will eliminate Western influence in the country and open it to influence from China and Russia. That is "not good for what we represent in the world," he says. "This will be the reality. ... The way that I think the Atlantic allies should think of that is 'Do we want to give all this Middle East region to China and Russia?'"
- Unicredit says volatility in USD/TRY has recently risen to as high as it was in early 2017, when the Central Bank of the Republic of Turkey raised interest rates. But while precedent suggests that "many signals are in place that speak for an emergency CBRT rate hike", strong opposition from the government and particularly President Erdogan, makes the prospect less likely this time around. USD/TRY is up by 0.8% at 4.4484, close to a record high around 4.5 reached Wednesday. The Turkish lira is set to fall even further if U.S. 10-year Treasury yields continue to rise, UniCredit says.
- France's Total intends to leave Iran by November and its CEO has ordered no further commitments in the country because of President Trump's decision to abandon the Iran nuclear deal. Patrick Pouyanné says during a talk in Washington that new sanctions likely to come from Trump's decision make it impossible to work in Iran. Nearly all of Total's business relies on US banks and the company has a large contingent of US shareholders. Total could lose all of that support under secondary sanctions that limit how much US financial institutions can engage with companies that do business with Iran, Pouyanné says. He adds that the company is appealing to French and U.S. governments for a waiver.
- A three-day spat over the US-UAE aviation agreement appears to be over, with the White House on  flagging a commitment from the emirate that its airlines have "no current plans" to add any more fifth freedom flights, like those already flown by Emirates which can pick up and drop off passengers in a third country. White House adviser Mike Navarro stirred controversy this week when he said the UAE had committed to a freeze on such flights, an interpretation contested by emirati officials.
- Brent continues to hover at around $80 a barrel as bulls embrace fresh signs of declining global oil inventories and expectations of geopolitical risk to supply out of Iran and Venezuela. Brent had climbed more than 10% recently amid President Donald Trump's decision to abandon the Iran nuclear deal, which should frustrate the OPEC member's oil exports. The latest boost to prices came Wednesday when the International Energy Agency said global oil stocks in the OECD fell below the closely-watched five-year average for the first time since 2014, while the U.S. Energy Information Administration reported declines in American crude stockpiles for last week. Brent is up 0.8% at $79.91 a barrel on London's Intercontinental Exchange.
- Brent breaches $80 a barrel for the first time in three and a half years, boosted by geopolitical risks to supply and declining petroleum inventories. President Donald Trump's decision to abandon the Iran nuclear deal--paving the way for sanctions that will likely hinder Iran's exports--helped crude prices rise by more than 10%. On Wednesday, the International Energy Agency said commercial oil stocks in the OECD fell below the five-year average for the first time since 2014. "The geopolitical noise and escalation are here to say," Norbert Ruecker at Julius Baer says. Prices could get a boost from supply disruptions in Venezuela, Tamas Varga of PVM Oil Associates says. Brent is up 0.7% at $79.86 a barrel, on London's Intercontinental Exchange.

May 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices firmed, with Brent crude creeping ever closer to $80 per barrel, a level it has not seen since November 2014, as supplies tighten while demand remains strong. 
- Gold prices made modest gains after touching their lowest level this year in the previous session, amid geopolitical uncertainty and a slightly weaker U.S. dollar.
- London copper futures rose for a second session, spurred by a retreat in the U.S. dollar from a five-month high against a basket of major currencies.
- Chicago wheat futures rose for a third consecutive session with prices underpinned by bargain-buying and dry weather in key producers the United States and Australia.
- Most emerging market currencies are little changed or only slightly lower against the dollar as U.S. 10-year Treasury yields continue to rise, but the Turkish lira is getting battered again. USD/TRY is last up 0.7% at 4.4448, although it has eased from Wednesday's high of 4.50. ING says without emergency interest rate increases "USD/TRY is likely to move above the 4.50 level persistently." Emergency rate rises are needed to "calm markets and stem lira downside," it says. "The focus still remains on the idiosyncratic stories such as TRY" EUR/TRY is also up by 0.7% at 5.2481.
- Modi's BJP has formed a government in southern state of Karnataka and has a fortnight to prove its majority in the assembly there. A stable BJP government in Karnataka may auger well for global companies such as Apple and Amazon as it would help improve policy coordination when required between the state and New Delhi. While Apple assembles iPhones in Karnataka's capital of Bengaluru, Amazon has its biggest Indian operations there. The previous Congress-led government often spat with Modi's administration for neglecting the state in terms of federal assistance and policy matters.
- Novartis's investor meeting in Basel on Wednesday was largely in line with expectations, with sales growth and margin expansion expected through 2022, says Deutsche Bank. The company's attempt to draw a line under its payments to Michael Cohen--which the bank sees as more damaging to its reputation than its finances--with a change in its general counsel is the beginning of a cultural change in top management, the bank says. Shares are still "a go-to defensive," but with growth expectations and risks well reflected in its premium to peers. Shares are down 1% at CHF76.98.
- Novartis's investor meeting in Basel on Wednesday seems to have had little impact on the company's shares. At the meeting Chief Executive Vasant Narasimhan addressed last week's disclosure of Novartis's agreement to pay $1.2 million to Essential Consultants LLC, a company owned by U.S. President Donald Trump's personal lawyer Michael Cohen, saying the company had made a "mistake," and was "beginning [its] journey to rebuild trust with society." Shares in Novartis are down 0.3% at CHF77.56

- Lawmakers and NASA's internal watchdog are stepping up criticism of White House proposals to cut off federal funding for the international space station by the middle of the next decade. Paul Martin, the agency's inspector general, told a Senate subcommittee that without billions of dollars in continuing taxpayer support, "it is questionable whether a sufficient business case exists under which private companies can create a self-sustaining and profit-making business" utilizing the orbiting laboratory. But even if the Trump administration overcomes strong bipartisan support and transition the space station to private enterprise, the inspector general's latest report concludes "it is unlikely that the bulk of the funding currently devoted" to station operations "could be immediately diverted" to other human exploration activities.
- ConocoPhillips' recent seizure of Venezuelan oil assets effectively has cut off the state oil company's access to downstream facilities in the Caribbean that handled more than 16% of Venezuela's oil exports, according to BMI Research. Conoco's actions have forced Petróleos de Venezuela SA, or PdVSA, to reroute crude to domestic ports to avoid confiscation, likely curtailing trade, according to BMI. PdVSA is unlikely to pay Conoco the $2B settlement it was awarded last month by an International Chamber of Commerce arbitration panel, BMI says.
- The Bank of Canada is trying to "lean against" the drag on the economy created by Nafta uncertainty with below-neutral interest rates, BoC deputy governor Lawrence Schembri says. During a question and answer session following an Ottawa speech, Schembri said uncertainty over Nafta negotiations is weighing on Canada's investment and exports. "The economy is operating close to potential, inflation is close to our target of 2%, yet monetary policy is below the neutral rate, in part because we have to lean against the drag coming from the uncertainty created by Nafta," he said.
- With U.S. President Donald Trump opening discussions with China on their trade relationship it looks like the risk of a global trade war is diminishing, but Gavin Friend, senior market strategist at National Australia Bank, says "we can't rule out a global trade war." China is willing to co-operate on some issues, such as imports of U.S. cars, but they are unlikely to give in too much in the negotiations, while Mr. Trump is on the lookout for a good deal. A trade war would be negative for global gross domestic product, including for the U.S., Mr. Friend says, adding: "We are sanguine about the global economy."
- The strong gain in Canada's March factory sales could reflect a boost from US tariffs on steel and aluminum, Capital Economics says. Canada's manufacturing sales were up 1.4% in March, driven largely by strong gains in primary metals sales, including sales by steel and aluminum producers. The advance might indicate a surge in sales to the US in early March, before it became clear that Canada would be exempted from the US tariffs, CapEcon's Paul Ashworth said. "But it could also reflect a more permanent post-exemption boost to Canadian sales, as U.S. buyers cancelled orders with firms in countries that are now subject to the tariffs and switched to the suddenly more competitive Canadian supply."
- Turkish lira turns higher against the dollar, having earlier dropped to yet another low, with Forexlive citing a report by NTV that the Turkish central bank governor is to hold talks with President Recep Tayyip Erdogan. USD/TRY falls as much as 0.9% on the day, and is last down 0.4% at 4.4297. The lira shot lower Tuesday after Erdogan said he wanted to take more responsibility for monetary policy. Investors are looking for the central bank to raise interest rates to curb high inflation and help stop the lira's slide, but Erdogan has said he thinks interest rates should be lowered. USD/TRY earlier rose to 4.5009, according to FactSet.

May 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, weighed down by ample supplies despite ongoing output cuts by producer cartel OPEC and looming U.S. sanctions against major crude exporter Iran.
- Gold prices recovered slightly on short-covering after sliding to the lowest level this year in the previous session on surging U.S. bond yields and a stronger dollar.
- London copper futures struggled to recover after a two-day slide as the U.S. dollar hovered near a five-month high versus a basket of major currencies following a surge in Treasury yields.
- Chicago wheat futures rose for a second session with prices underpinned by dry weather in key exporters the United States and Australia.
- While one new Trump administration initiative aims to reduce drug prices, another plan--proposed tariffs on Chinese imports--could keep prices high, in the view of the generic drug industry. The Association for Accessible Medicines, which represents companies including Mylan and Teva, says the administration's proposed tariffs on generic drugs, biosimilars or their ingredients made in China would have a "perverse effect on health care spending in the US." AAM says tariffs on generic or biosimilar medicines "would increase prescription drug prices and increase the risk of drug shortages for affected medical products." The group's statement comes as the US Trade Representative kicks off three days of hearings on the proposed tariffs.
- With oil prices rising and the Russian ruble falling on the back of the recent wave of sanctions from the U.S., Moody's has a positive credit outlook on Russia, says Victoria Maisuradze, head of Russian and CIS corporatesduring Moody's Emerging Markets Summit in London. Economic growth in Russia is likely to be sustained, despite sanctions, but at sub-optimal rates. Still, geopolitical risks, including the sanctions, will likely put further pressure on the investment appetite across all asset classes, she says. Dietmar Hurnung, head of European sovereigns at Moody's, says Russian sovereign debt is doing well from a fundamental point of view. There is economic, fiscal and institutional strength, he says. "It's a positive story."
- National Economic Council Director Lawrence Kudlow said Shenzhen - based telecommunications equipment producer ZTE is at heart an enforcement issue. "It's really divorced from the trade story," Kudlow said Tuesday at an event hosted by news outlet Axios. "They have been proven guilty not once, not twice, but three times," Kudlow said of ZTE, a corporation that has been hamstrung by a US ban on component sales. In reference to ZTE, Kudlow recognized that President Trump meshes together economic negotiations with national security.
- National Economic Council Director Lawrence Kudlow expressed optimism in US economic growth, saying if China reduced trade barriers, then the US will export more to China and thus support US growth. China needs to reduce tariffs on farm goods and technology, for instance, to help growth. "I think the time is right for China to make changes they should have been making," Kudlow said.
- National Economic Council Director Larry Kudlow says "blame China, not Trump" for current trade tensions, which he pins on unfair Chinese trading practices. "The trade numbers with China just only go one way," he says. The White House is seeking to form a "trade coalition of the willing on China," according to Kudlow, since "everyone agrees" that China's trade practices need to change, for instance by allowing Americans to own companies outright in China. Kudlow adds during a panel discussion in Washington that the "bromance" between President Donald Trump and China's President Xi Jinping is a good thing and may lead to a trade deal.
- Shares in oil majors gain as the price of crude hits a 3.5 year high, with some saying more gains are likely. BP PLC rises 1.3% to 578 pence, Royal Dutch Shell B-shares lift 0.9% to 2765p and Total SA advances 0.6% to EUR54.04. The price of a barrel of Brent crude gains 0.9% to $78.97 and U.S. light crude is up 0.8% at $71.53. Ayondo Markets says price drivers include the U.S. abandonment of the Iran nuclear deal and political turmoil in Venezuela. Ayondo's Jordan Hiscott says prices could continue rising for at least six months, possibly one year. "My initial price target would be $92, but it's likely it could be over $100 a year from now," he says.
- Among current geopolitical risk factors, there is nothing facing investors "in the order of magnitude of North Korea firing missiles over Japan like we saw last year," says Sergey Raevskiy, an analyst at SP Angel. Mr. Raevskiy says if it weren't for the macroeconomic headlines of the past year, "I think gold would probably be lower right now. It's been supported by the weaker U.S. dollar, but that support's been withdrawing." After hitting multiyear lows in recent months, the dollar has recovered in the past weeks. The WSJ Dollar Index is now up 3.3% in the past three months.
- The latest wave of Russian sanctions shows that the U.S. is on a path to implement more, according to Maxim Vydrine, deputy head of emerging markets debt at Amundi Asset Management. "We should expect more," he says, adding that investors should look at the midterm elections in the U.S. A new wave of sanctions could come into question in November or December this year, he says at the Moody's Emerging Markets Summit in London. The sanctions in April have come as a surprise to investors, but that's what sanctions are also supposed to do, take you by surprise, he says. Those in April have also puzzled investors. "It's not very clear why these particular individuals" deserve the sanctions more than others, he says.

May 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held firm as ongoing production cuts by OPEC and looming U.S. sanctions against Iran tightened the market amid signs of ongoing strong demand.
- Gold prices inched higher on safe-haven buying, but upside potential for the metal was capped by a firm dollar and outlook for further interest rate hikes in the United States.
- London copper prices slid for a second session, coming under pressure from a rise in stockpiles of the metal used in power and construction.
- Chicago soybeans rose for a second session with prices underpinned by higher-than-expected export inspections and hopes of a resolution to the U.S.-China trade dispute.
- The dollar inched up against a basket of currencies from its lowest level in more than a week as hopes for an easing of global trade tensions pushed U.S. bond yields higher.
- Agricultural giant Cargill continues to warn the Trump administration that a trade war with China would have disastrous consequences for US farmers and agricultural companies. But in written testimony submitted to US Trade Representative Robert Lighthizer, the Minnesota company also highlights a range of problems that substantive trade talks between the countries could address. For instance, Cargill would like to see China relax its policies on low levels of unapproved biotech crops in US grain shipments, as well as its policies on livestock drug use for imported meat. China's restrictions on those go beyond international and industry standards, Cargill says.
- The chief executive of Iowa's largest water utility is joining a call to ban large animal-feeding operations thanks to the role they play in fouling America's water supply. Bill Stowe, CEO of Des Moines Water Works, joins environmental advocates and others launching a nationwide campaign to disallow farms they say are responsible for burdensome amounts of manure that send chemicals, pathogens and antibiotics into US rivers, streams and groundwater, prompting illness outbreaks and more. The campaign comes a year after the utility lost a lawsuit in federal court seeking to hold upstream drainage districts responsible for water-quality problems caused by agricultural runoff. "Iowa's surface waters are filthy," Stowe said, urging residents to elect politicians who will protect public health.
- Fallout from companies' dealings with Trump attorney Michael Cohen continues as Democratic Sens Elizabeth Warren, Richard Blumenthal and Ron Wyden demand AT&T and Novartis cough up more details about their dealings with Cohen's Essential Consultants LLC. In joint letters sent Monday--Sen Wyden wrote Novartis last week in a separate letter--lawmakers ask how the companies agreed to Cohen's terms and what they know about where the money went. The companies are asked to respond by May 25.
- Health and Human Services Secretary Alex Azar criticizes the prices paid for a Celgene multiple-myeloma drug, though he doesn't name it, according to Evercore ISI. In a drug-pricing speech Monday, Azar refers obliquely to Celgene's Revlimid, Evercore ISI says, when discussing a commonly-used drug whose price has increased 20% in the last year. Azar complains the increased price means elderly in Medicare's Part D drug benefit will have to pay $690 a month, an extra $115 a month. Celgene shares are up 1%, nevertheless. Evercore ISI says Revlimid is protected from heavy discounting because it belongs to the class of cancer drugs that Part D must cover and there isn't an alternative.
- Shares of Qualcomm and NXP Semiconductors rise on improved prospects that the smartphone chip specialist would complete its purchase of the Dutch automotive chip maker, which has been held up by Chinese regulators amid rising trade tension with the US. President Trump, who last month blocked Chinese handset maker ZTE from buying US technology--a virtual death sentence for the company--on Sunday eased the hostility somewhat with a tweet saying he would look for way to save ZTE. The Qualcomm-NXP deal is widely viewed as being at risk as a trade war looms, and Qualcomm recently re-filed with the Chinese authorities and extended to late July its purchase deadline to allow time for tensions to cool. Qualcomm up 3%, NXP up 14%.
- A potential deal to ease Chinese restrictions on US soybeans in exchange for relief to beleaguered Chinese ZTE might give oilseed prices a short-term boost, says Terry Reilly of Futures International, but it wouldn't save them from weaker demand. US exporters have watched sales to their most important buyer drop off as Chinese importers source cheaper Brazilian beans. With the South American country producing more soybeans than ever, no deal is likely to change those underlying dynamics. "Any relaxation on China import tariffs on US soybeans won't really matter much," Reilly says. "You might see a ceremonial couple of cargoes being traded. But in the meantime China doesn't need beans, let alone US beans. They've already gone to South America." July soybean futures rise 1.9%.
- European shares edge lower as the euro rises and as the prospect of a populist coalition in Italy gains traction. The Stoxx Europe 600 loses 0.07%, or 0.27 points, to 392.13 while currency speculators lift the euro 0.2% after a European Central Bank official said policymakers could give fresh guidance on the timing of a eurozone interest rate hike. "With plenty of German data due this week, the wiser course may have been to hold off for now," says IG's Chris Beauchamp. Italy's FTSE MIB gains 0.16% as the Italian Five-Star Movement and League parties reportedly agree a program for government. Germany's DAX falls 0.15% and France's CAC-40 is flat at 5542.
- Uncertainty around NAFTA negotiations is still negatively affecting the Canadian dollar, but if the markets were to give "prevalent talk of progress the benefit of the doubt," some key technical levels could be broken, according to BNY Mellon. The first support level is at 1.2716 for USD/CAD, then the 200-day moving average, which is currently at 1.2646, according to Factset. "A break here and...1.2522 would be firmly in the market's sights," BNY Mellon says, adding that the rise in oil price may also give the Canadian dollar some boost. USD/CAD is last down 0.2% at 1.2764 Monday.
- Textron's Bell helicopter receives certification from Chinese aviation regulators for its 505 Jet Ranger X chopper. That paves the way for deliveries from the order from Reignwood Aviation announced during President Trump's trade visit to China last year. Some helicopter parts are included in proposed US tariffs on Chinese imports. China has not included such parts in its tariff regime.
- Analysts warn Venezuelan oil exports could fall further, pushing global oil prices higher, although others predict a government regime change "very soon" that could be bearish for crude prices. Creditors of Venezuela state oil company PDVSA, including ConocoPhillips, want to seize PDVSA assets, a move BMI Research says "will make it more difficult for Venezuela to export oil," and could "pose upside risks to our oil price forecast." But Colombia President Juan Manuel Santos said Friday a "regime change" is coming to Venezuela, "and will come very soon." Some say Venezuela President Maduro would be forced to leave office early if he loses presidential elections Sunday, which could spur Venezuela oil exports to rebound.
- Soybean futures rise overnight, while corn and wheat prices fall. Relief that trade tensions appear to have temporarily eased, with senior Chinese officials due to visit Washington this week, is helping bring buying interest into the oilseed market. Corn prices are dragged lower by the wheat market, meanwhile, which falls after data late last week showed that hedge funds were betting that it would rise. With recent USDA forecasts showing higher US production, analysts say some of those are eager to get out of those positions. CBOT July soybean futures rise 4 cents to $10.07 1/4 a bushel. Corn falls 1 1/2 cents, while wheat slides 5 1/4 cents.
- Aluminum prices are calm after the wild swings of recent weeks, down 0.1% at $2,274 a metric ton. United Co. Rusal released its first quarter results Friday, and with them remarks from the company voiding any forecasts made before the introduction of U.S. sanctions on Russian individuals including Oleg Deripaska, the controlling stakeholder of Rusal's holding company EN+ Group. The outlook for the coming quarter looks "grim," ING says. After those U.S. sanctions, local premiums in the U.S. and Europe shot up enough that it finally became profitable for Chinese traders who face export levies to ship aluminum anyway. And Chinese aluminum giant Chinalco agreed in April to export 30,000 tons of alumina, the key ingredient in aluminum, at an unknown price and to an unknown destination, ING says.

May 15 - Malaysia Reform Bodes Well for Some Aussie Stocks (Credit Suisse)
Australia's direct exposure to Malaysia--where Mahathir Mohamad led a coalition into power in a historic moment for the region--is small at a broad market level, but Credit Suisse's analysis shows the country is significant for some individual stocks. For one, safety-gear producer Ansell manufactures 40%-50% of its products in Malaysia. And Australia & New Zealand Banking owns a A$1 billion (US$752.8 million) stake in Ambank, while Healthscope's pathology business in Malaysia contributes about 5% to overall Ebitda. The investment bank believes the risk premium for each of these assets is set to fall as Malaysia embarks on a path of reform.

May 15 - NZ Dollar Underperforms, Eyes on Cattle Disease (BNZ)
The New Zealand dollar has been the underperformer in markets overnight, with NZD/USD falling from around 0.6960 to 0.6915 now as the market continues to digest last week's Reserve Bank of New Zealand statement. The spread of the cattle disease Mycoplasma bovis may also have affected sentiment toward the NZD, BNZ strategists say, with Agriculture Minister Damien O'Connor warning yesterday that every region of the country would be affected. While the cull cows to date (about 22,000) are a relatively small share of the national dairy herd, production will take a hit as the number of increases, denting confidence in a key sector of the economy, they say.

May 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell away from last week's multi-year highs as a relentless rise in U.S. drilling activity pointed to increased output, while resistance emerged in Europe and Asia to U.S. sanctions against major crude exporter Iran.
- Gold prices rose on the back of a subdued dollar as investors considered the prospects of fewer interest rate hikes in the United States this year.
- Aluminium prices slid for a third consecutive session as the market continued in correction mode after rallying last month on support from U.S. sanctions against Rusal, the world's second-largest producer, and its major shareholder.
- Chicago wheat slid for fourth straight session, dropping to its lowest in two weeks as abundant world supplies weighed on the market.
- The euro is rising on Monday, mainly due to dollar weakness, but also because Italy's 5-Star Movement and far-right League have agreed to form a government. Although there may be concerns about a government made up of anti-establishment parties, this "reduces any lingering risks of another Italian election and ongoing political impasse," says ING. However, "any follow-through to EUR price action should be minimal as we still await further details on policy proposals, the name of Italy's next Prime Minister and key ministerial positions." EUR/USD up 0.3% at 1.1973.
- The dollar is falling slightly on Monday as 10-year Treasury yields continue to fall and the yield curve continues to flatten after core U.S. inflation came in flat last week, disappointing any who were looking for a pick-up in inflation and a strong reaction from the Federal Reserve on the back of it. EUR/USD is up 0.1% at 1.1955. USD/JPY is up 0.1% at 109.46, with U.S. President Donald Trump due to have talks with China and in June with North Korea, a sign that threats of a global trade war and geopolitical distress are diminishing.
- Shares of antenna-solution provider Mobi have popped this morning amid Trump saying he working with Xi to prevent big telecom firm ZTE from going out of business. The company is reported to get nearly half of its revenue from ZTE. Mobi is up 23%, cutting the year's plunge to 26%. Meanwhile, some fellow Hong Kong-listed smartphone-component makers that have also been pressured by concerns about ZTE are also doing well. AAC and Sunny Optical, which jumped last week, are up a further 4% and 9%, respectively.  

- CWA's executive board authorized about 14,000 AT&T workers to strike if their demands for a new contract aren't met, turning the screws on a company struggling to explain a $600,000 contract it signed with Trump attorney Michael Cohen, who's under federal investigation. The union seized on that bad PR, slamming AT&T for paying "six-figure sums to a shady consultant," while holding out on workers. The contract covering workers mostly in the Midwest lapsed in April, though CWA says it hasn't picked a date to strike. That said, its leverage just grew.
- Shares of drugmakers and pharmaceutical companies briefly tumbled, then bounced higher, as President Donald Trump delivered an address at the White House calling for lower drug prices. Within a 30-minute window, Express Scripts fell as much as 4.4% to $67.85 before erasing losses to trade up 1.5%. CVS Health was also recently up 1.8% after falling as much as 2.5%, while Walgreens Boots was up 0.1% after falling as much as 1.8%.
- Looming deadlines for the US, Canada and Mexico to reach a deal on Nafta is on the minds of livestock traders, who push prices for cattle and hogs sharply lower. CME June lean hog futures fall 3% to 75 cents a pound, while June live cattle slide 1.1% to $1.064 a pound. House Speaker Paul Ryan says he needs a deal by next Thursday in order to consider it in the House this year, which is prompting negotiators to focus their efforts on a scaled-back, "skinny" agreement centered on the auto industry for the time being. If a deal isn't reached in time, traders are wagering the likelihood of a US exit will increase. The cattle and hog industries derive a huge portion of demand from their North American neighbors, Mexico in particular being the largest buyer of US pork.
- The National Rifle Association has sued NY Governor Cuomo and state financial regulators, accusing them of an unconstitutional "political blacklisting campaign" to stop banks and insurers from doing business with the organization. The group sued Friday in federal court in the northern district of NY. It follows a crackdown by the state on the NRA's "Carry Guard" insurance program, and other efforts to restrict financial firms from business relationships. NY officials have used "selective prosecution, backroom exhortations, and public threats with a singular goal-- to deprive the NRA and its constituents of their First Amendment right to speak freely about gun-related issues and defend the Second Amendment," the suit says.
- Royal Bank of Scotland reaching unexpectedly low settlement with the U.S. over mortgage-backed securities mis-selling may have been partly thanks to legal arguments made by Barclays, says Don Hawthorne, litigation partner at Axinn, Veltrop & Harkrider. Barclays's assertions that FIRREA legislation intended to penalize fraud affecting federally insured financial institutions was being used in an overly broad fashion to punish foreign banks may have played a part in RBS's $4.9 billion agreement, says Mr. Hawthorne. "These two settlements are a meaningful shift in leverage," he says, noting that the Trump administration seems less keen on FIRREA as an "all-purpose fraud statute." FIRREA stands for Financial Institutions Reform, Recovery and Enforcement Act.
- Republicans and Democrats disagree about whether the US economy is doing great or in miserable shape. That's based on the continued partisan divide in the University of Michigan's monthly survey of consumer sentiment. Overall, the sentiment index held steady in May at 98.8, a relatively high level. But the index for self-identified Democrats was 81.5 this month, versus 122.2 for self-identified Republicans. That split dates to shortly after President Donald Trump's election in 2016. Before election day, when Barack Obama was in the White House, Democrats were more optimistic than Republicans about the economy.
- Federal Reserve Chairman Jerome Powell says the central bank's governing board will vote on whether to remove a punitive cap on growth at Wells Fargo. The Fed planned to have staff make the decision about whether Wells had satisfied the Fed's demands, but Sen Elizabeth Warren (D, Mass.) had been pressing Powell for a vote and he agreed in a May 10 letter. He also told her the Fed will consider making public third-party reports on Wells' progress. The bank expects the cap to continue into 2019.
- President Donald Trump's decision this week to abandon the Iran nuclear deal and re-impose economic sanctions on the Islamic Republic has bolstered oil prices on concerns global supply will be reduced. That could prompt the Organization of the Petroleum Exporting Countries and partner producers, including Russia, to halt their agreement to curb oil output, according to Thomas Pugh, commodities economist at Capital Economics. "If the reimposition of sanctions on Iran leads to a reduction in Iran's oil output and exports, OPEC and its allies could exit the deal at the end of the year or even sooner in order to prevent a supply shortage in the oil market," Pugh wrote. He added: "The ability of OPEC and its allies to offset any reduction in output from Iran should prevent oil prices from rising too much further this year." Crude prices are slightly lower.
- The Malaysian ringgit rebounded for a time in offshore trading, recovering from its lowest level since December after the nation experienced its first change of government since it gained independence from Britain in 1957. The currency, on a one-month nondeliverable forward basis, got as high as 3.9875/per dollar but is now back to MYR4.0550. It slid to MYR4.06 yesterday. PM Mahathir has said the new government "will try to make the ringgit as steady as possible" and that there is no reason for the currency to fall simply because of a change in government, adding the country will remain business friendly.
- Politics matter. Morgan Stanley sheds its bullishness, and is now neutral, on the Malaysian ringgit after the surprise win by the opposition party because the change in power has increased uncertainty about the country's fiscal outlook. Many investors favored the Malaysian currency earlier this year because it remained cheap even after a big rally, a dynamic that was seen as being a long-term support factor. The ringgit has fallen some 3% against the dollar since the election, based on trading in the forwards market.

May 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped, easing from multi-year highs in the previous session on hopes that alternative supplies could replace a looming drop in Iranian exports from U.S. sanctions.
- Gold prices were steady in early trade, as the dollar held below its 2018 highs against a basket of currencies after softer-than-expected U.S. inflation data.
- London aluminium prices fell for a second session as technical selling continued to affect the light metal despite plunging London Metal Exchange (LME) inventories.
- Chicago wheat slid for a third consecutive session with the market set to post its biggest weekly decline in two months after the U.S. government estimated production above expectations.
- The engine rupture that killed a Southwest Airlines passenger has prompted various proposals by lawmakers seeking answers and proposing fixes. House GOP leaders are pushing an amendment to the Federal Aviation Administration's reauthorization bill calling for an industry-wide "Call To Action" delving into engine safety. Ninety days after passage, the proposed language requires the agency to reassess design, production, operation and maintenance of commercial jet engines. Different lawmakers advocate a deeper dive into metal fatigue issues related to engine reliability. And still others want the legislation to set general, less-prescriptive safety standards for many of the FAA's oversight functions, including engine safety. Sen Schumer of New York is demanding stepped-up FAA inspections of engines and has complained about a fall off in relevant enforcement actions.
- Oil is "currently all about Iran and Trump," according to Tamas Varga, an analyst at PVM Oil Associates Ltd. Oil prices ticked up Thursday on renewed market expectations that President Donald Trump will pull the U.S. out of the Iran nuclear deal, triggering the reimposition of economic sanctions and frustrating the Islamic Republic's oil output. "As far as global supply is concerned, there is up to 1 million barrels a day of production at stake," Mr. Varga writes in a note Thursday. "This is how much the Persian Gulf country has upped its output since sanctions were lifted," he added. Brent crude was edging toward $75 a barrel in Thursday afternoon trading, last at $74.68.
- US firms cut spending on big-ticket goods in March after investment soared to a high level the prior month. But spending for the first quarter overall rose steadily, suggesting companies, flush with cash after a tax cut, remain confident about the long term. Orders for non-defense capital goods excluding aircraft fell 0.1% in March from a month earlier. But over the first three months of the year, such orders rose 6.5% compared to the same period a year earlier. Investment spending has been rising since last year, so it's hard to discern the precise effects of the tax cut that took effect this year.
- While the prospect of additional U.S. tariffs on steel and aluminum imports may have limited immediate impact on aluminum prices, the implications would be more significant in the context of the Trump administration's recent trading disputes with China and allies like the EU. "I don't think [it will immediately affect aluminum prices] because the trade of those materials between the U.S. and the EU is small, but it will have further-reaching implications for the whole trade dispute between the U.S. and the rest of the world," says Carsten Fritsch, analyst at Commerzbank. The news of fresh levies comes ahead of President Trump's planned meeting with German Chancellor Angela Merkel later this week, and after the state visit of French President Emmanuel Macron.
- Base-metals prices are down even as a senior German official said the country expects the U.S. will soon hit the European Union with steel and aluminum tariffs. Aluminum prices have slumped more than 11% so far this week, as the U.S. Treasury Department extended a deadline for investors to exit their dealings with sanctioned Russian aluminum giant United Co. Rusal. The softer tone from Washington on the Rusal sanctions eased the pressure on European aluminum prices, but that was stalled by comments from Germany indicating the country expects the U.S. government to introduce higher steel and aluminum tariffs on May 1.
- Although prospects have improved following a White House meeting with French President Emmanuel Macron Tuesday, there is still a fair chance that U.S. President Donald Trump may reimpose sanctions on Iran, says Norbert Ruecker, head of macro and commodity research at Julius Baer. "We see the chance about even that the Trump administration snaps back its Iran sanctions ahead of the early May deadline," he says. "While the fundamental impact should be limited and should not cause any imminent oil trade disruption, such a move [sanctions] would further support geopolitical fears and fuel the bullish market mood," he writes in a note Tuesday. Brent crude prices last down 0.1% at $73.82.
- Crude oil prices had been bolstered at the start of the week--Brent breached the symbolic $75 a barrel marker for a time Tuesday--by a growing market consensus that President Donald Trump would pull the U.S. out of the Iran nuclear deal. That would result in the reimposition of economic sanctions, frustrating the Islamic Republic's oil output and draining global supply. But then following a White House meeting with French President Emmanuel Macron Tuesday, President Trump indicated he might be open to a new deal to rein in Iran's nuclear program, sending prices tumbling. Brent crude price last at $73.30.

May 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices clocked up more multi-year highs as traders adjusted to the prospects of renewed U.S. sanctions against major crude exporter Iran amid an already tightening market.
- Gold prices steadied as the dollar held firm near its 2018 peak on strong U.S. bond yields, with investors also keeping an eye out for any further impact from U.S. President Donald Trump's decision to pull out of a nuclear deal with Iran.
- London copper prices rose for a second session on falling inventories and strong import numbers from top consumer China continued, while aluminium retreated for the first time in four trading days.

- Chicago wheat ticked higher, recouping some of previous session's losses, but gains were capped by abundant global supplies and crop-friendly weather in parts of Russia.
- The dollar held firm after the 10-year U.S. bond yield popped above the psychologically important 3 percent mark and investors looked to U.S. consumer price data later in the day that could show an acceleration in inflation.
- DBS contends the Malaysian ringgit would have dropped regardless of who won yesterday's election because of broad dollar gains of late amid hawkish US monetary policy and a slowdown of late in the eurozone economy. "Consensus has been unrealistic in expecting the ringgit to extend its appreciation towards 3.80 this year," says the bank. It also sees GDP growth this year cooling toward 5%, versus last year's 5.9% jump. The dollar finished trading Tuesday around MYR3.94.
- The dollar has jumped more versus the Malaysia ringgit as the opposition's election upset there ushers in a period of uncertainty for investors. Recent action in the nondeliverable forward market has been choppy, with the dollar's one-month nondeliverable forward at MYR4.09, compared with MYR4.07 late Wednesday, according to Thomson Reuters data. The price rose 2.1% on Wednesday as voting occurred; Malaysian markets were closed yesterday and are set to remain so until Monday. The reaction in the ringgit "highlights the unexpected victory for the opposition and the uncertain policy and political landscape ahead," says Commerzbank. The ringgit had been a star performer in emerging-market Asia in recent months, though it has been hit of late both by the dollar's broad-based revival and the potential of an opposition win.
- A stunning result in Malaysia's parliamentary elections sent a US-listed ETF of the country's stocks slumping by the most since August 2011's S&P downgrade of the US if a December 2015 price adjustment following a capital-gain distribution is excluded. "The Malaysia election outcome is a huge upset. No pollster was expecting this," says Aninda Mitra, senior sovereign analyst at BNY Mellon Investment Management. "This upset ranks up there with Brexit and Trump election." While anticipating short-term volatility in Malaysian markets when they open Monday, "a long-term fix of governance, institutions and public life is now in sight." Still, "near-term policy uncertainty will be high. That will take a toll on the ringgit" for the moment.
- The return of strict US sanctions on Iran could wipe out 700,000 barrels a day of Iranian exports from the market by November, according to a new analysis by Rystad Energy. Iranian crude exports, currently at around 2.1 million barrels a day, could fall by a third beginning in June as buyers in Europe, Japan and South Korea begin to curtail their purchases, Rystad says. Storage facilities available for Iran's excess crude production are likely to be filled by November, at which point the country might be forced to cut output, according to Rystad
- More frustration for the National Rifle Association and its effort to sell policies that protect its 5M members from what can be steep legal costs of self-defense shootings: Lloyd's Corp, which oversees the Lloyd's market, is directing syndicates to end involvement with the effort. Given this has become "subject to an inquiry" by the NY Department of Financial Services, "Lloyd's Corporation has decided to direct underwriters in the market to terminate any existing programmes of this type and not to enter into any new ones," it said in a statement. The retreat follows a similar move by Chubb, back in the fall. Chubb's contract runs through 2019.
- Oil prices are up more than 3% on the back of President Donald Trump's decision to pull the US out of the Iran nuclear deal. The US withdrawal from the 2015 agreement is set to reimpose economic sanctions on Iran, frustrating the OPEC nation's oil output and reducing global supply. However, the sanctions are "unlikely to have a major impact on global oil supply," according to Thomas Pugh, commodities economist at Capital Economics. While there is likely to be a "higher risk premium" for oil prices over the next few months, the overall impact will depend on whether or not Iran and other international players continue to uphold the deal, as they have so far indicated. Brent-the global oil benchmark-was trading at $77.20 a barrel in late afternoon trade.
- President Trump offers a final deal in the fight over ethanol, but it is likely to face stiff legal challenges and take until next year to go into effect even in a best case scenario. The deal helps corn growers with a new waiver to allow year-round consumption of gasoline with a higher ethanol content and by raising the ethanol consumption mandate for some larger refiners to offset waivers given to smaller rivals. It helps refiners by allowing credits for renewable identification numbers--or RINs-to stay in the market and get traded even on ethanol that's exported. The legality of all of those changes could spark lawsuits and a senior administration official acknowledges the changes will be "tricky." EPA has lost similar suits before, B. Riley FBR says in a note.
- The impact of President Donald Trump's decision to pull the U.S. out of the Iran nuclear deal "depends on the European stance, which could support its business against US sanctions and take the lead in unifying the remaining signatories on the matter," according to Carsten Menke, commodities research analyst at Julius Baer. Mr. Trump's decision Tuesday to abandon the deal is set to reimpose U.S. economic sanctions on Iran that would reduce global supply. Brent crude is up nearly 3%, at $77.06 a barrel, in afternoon trade. "Europe is unlikely to re-impose the oil embargo ... given that Iran complies with the deal." The coming weeks "could strengthen the pragmatic ties between Iran, Russia and China, with the latter increasingly at odds with Saudi Arabia's oil politics," Mr. Menke adds.
- Seaport Global says Trump's Iran deal exit could mean a world with not enough oil rather than too much. "The EIA was out yesterday with its Short-Term Energy Outlook in which it projected oil markets will move from being fairly balanced currently to 0.6 MMbpd oversupplied in 2019," it says, noting it didn't bake in the Iranian sanctions impact. "Thus, all else being equal the events that unfolded yesterday could flip the market from oversupplied to undersupplied in 2019, which is a fairly obvious bullish development." Certainly, it says, "this is a grossly oversimplified analysis--there's a tremendous amount of uncertainty regarding the impact unilateral US sanctions will have." But at least it provides some numbers and context, it concludes.
- A "strong line" from the U.S. after President Donald Trump pulled out of the Iran nuclear accord could "be taken as a signal of their negotiating stance on other market-sensitive issues," says Mark Haefele, global chief investment officer at UBS. The issues include trade talks with Nafta partners and China, as well as the upcoming conference with North Korea. "Such geopolitical risks have the potential to divert investor attention away from strong fundamentals," he says. But it's still possible that the White House will "dilute or delay" Iran sanctions. "Keep in mind that President Trump has a record of making strong statements and then giving ground on implementation."
- Sturm, Ruger shares hit their highest level since last July after beating quarterly expectations for the first time in four quarters. The firearms maker reported a 22% drop in sales from a year earlier, but cut production by 27% and said demand improved through the quarter and it maintained its dividend payout, buoyed by buybacks. With banks under pressure over lending to gun makers, Sturm, Ruger says in a filing that its $40M credit line expires on June 18. Shares rose as high as $59.80 during the session ahead of investor call, recently up 2.6% at $59.20.
- British Columbia's recent efforts to clamp down on foreign investment in the Vancouver housing market not only appear to be softening sales activity, but it's also winning over voters in the province. Angus Reid Institute, a Vancouver-based pollster, said housing prices and affordability remains the top issue for voters in Canada's Pacific-coast province. Further, 75% of survey respondents approve of recent moves to bolster the foreign buyers tax, from 15% to 20%, and introduce a new speculation tax aimed at homeowners who don't pay income taxes in province. Recent data from the Greater Vancouver real-estate board indicate sales in April fell 27.4% from the same year-ago month, while price increases slowed to 14.3% on a year basis.

May 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose more than 2 percent, with Brent hitting a 3-1/2-year high, after U.S. President Donald Trump abandoned a nuclear deal with Iran, likely curbing the OPEC member's crude exports in an already tight market.
- Gold prices fell in Asian trading, as the dollar regained ground after U.S. President Donald Trump's decision to pull the United states out of the Iran nuclear deal boosted oil prices and pushed Treasury yields higher.
- London copper futures edged higher after sliding more than 1 percent in the previous session, however, gains were limited with investors cautious after the United States pulled out of an international nuclear deal with Iran.
- Chicago corn and soybean futures extended gains into a second session, with crop planting expected to be delayed in key growing regions of the U.S. Midwest.
- Shares in European plane maker Airbus are lower after the U.S. said it would withdraw licenses to sell airliners to Iran. Airbus in 2016 agreed a deal to sell 100 airliners to Iran Air. Boeing also signed a deal with the carrier for 80 planes. Shares in Airbus down 1.1%.
- The Turkish lira hit a fresh low against the dollar as markets remained under pressure after U.S. President Trump 's decision to withdraw from the nuclear deal with Iran. This is despite a central bank rate hike last month. Turkey's central bank "has not been able to convince the market that this was not a one off, that the central bank can really keep raising rates," Commerzbank says. "Our base-case is that CBT will raise rates again by 50bps at its June meeting. But, the situation is beginning to move away towards an inter-meeting emergency hike," it says. USD/TRY trades 0.6% higher at 4.3585 after the pair touched a record high of 4.37.
- Europe's data calendar is thin on Wednesday, leaving the bond market to be driven by political news and supply. "In the absence of data stimuli, the market is thus free to devote itself not only to geopolitical risks but also to what is happening on the issuance front," says Christoph Kutt, analyst at DZ Bank. The 10-year Bund yield is up 1 basis point at 0.57%, according to Tradeweb. Investors' focus remains on Italy with fresh developments pointing to new elections and on the aftermath of U.S. President Donald Trump's decision to withdraw from the Iranian nuclear accord. Germany auctions EUR1.5 billion in August 2048 Bund and Portugal offers EUR1 billion to EUR1.25 billion in October 2023 and October 2028 bonds.
- EUR/USD falls by 0.3% to 1.1832 on dollar strength after U.S. President Donald Trump pulled out of the Iran nuclear deal, pushing oil prices to new highs. ING says recent dollar strength is also due to positioning and that it is likely "soon to be exhausted." EUR/USD is undervalued 1.5% on a short-term basis, according to ING, which says "we don't look for the EUR/USD decline to last for long."
- Nordic stocks are set to edge lower Wednesday with IG calling the OMXS30 0.2% lower at around 1606. "Last night, U.S. President Trump announced that the U.S. will withdraw from the Iran nuclear deal and reinstate the highest level of economic sanctions on Iran," notes Danske Bank. "The overall U.S. market reaction to the announcement was muted, suggesting this U.S. move was likely to have been priced into the market already." The oil price rose initially, and after a short correction lower, it has continued higher overnight. Norwegian and Swedish CPI inflation data are in focus today. Swedish markets close at lunchtime while all Nordic markets are closed Thursday.
- The FTSE 100 is tipped to edge higher in opening deals as oil prices gain more than 2% after U.S. President Donald Trump's decision to withdraw from the Iran nuclear agreement. London's blue-chip index is expected to start the session four points up at 7569. "Trump's withdrawal from the Iran nuclear treaty had little impact on U.S. equities overnight but did manage to jolt the oil markets and encourage a brief flight into safe-haven currencies," says Jasper Lawler at London Capital Group. "The U.S. pull-out will now almost certainly see Trump re-impose sanctions aimed at Iran's oil industry, despite pleas from European allies to preserve the deal."
- Disney recorded a $134M benefit in the quarter ended March 31 from the new federal tax law, which included a substantial corporate tax cut, the company said Tuesday. In the prior quarter, Disney received a $1.6B benefit from the tax law. Over the past six months Disney has recognized a benefit of $2B from reductions in its deferred income tax assets and liabilities, but paid $350M in repatriation taxes. Its net tax rate for the quarter ended March 31 was 20.7%, compared to 32.3% in the same quarter of 2017.
- President Trump's withdrawal from the Iran nuclear deal won't have an immediate impact on global oil supplies, but Credit Suisse says it's still bullish anyhow. "From a practical perspective, we expect minimal impact to Iranian exports over the next several months, but a greater impact in 2019 as buyers of crude are given a period of time to show efforts at reducing Iranian imports and more restrictive sanctions targeting banks that transact in Iranian oil take effect." And with OPEC volumes--especially Venezuela--facing some downside risks, "our supply/demand balances imply a bullish outlook for crude even if Iranian production/exports are unaffected." WTI is 1.4% lower on the day at $69.67/bbl.
- Oil prices remained lower after President Donald Trump announced that the US would pull out of the 2015 nuclear deal. Don't say nobody warned you. Plenty of analysts were expecting that after weeks of anticipation and growing bullish bets that pushed oil to more than three year highs, the actual the announcement would be a "sell the news" event. Brian Larose, senior commodities analyst ICAP, said prior to the announcement that he expected oil's "panic spike" to be short lived." I don't think we're going to stay up here for very long," he said.
- Now that President Donald Trump has settled the question of whether the US will remain in the 2015 Iran nuclear deal, attention will turn to what this means for Iran's oil industry. A lot hinges on whether the EU reimposes its sanctions on shipping insurance, Thomas Pugh, an analyst at Capital Economics writes. If it doesn't, "the impact on oil supply could be relatively small as Iran would still be able to export oil to countries less concerned about US sanctions, especially in Asia."
- Federal and state spending on public works projects is lifting the fortunes of Jacobs Engineering Group, the company says. That is without the more than $1 trillion spending plan proposed by the Trump administration. Instead, state initiatives and other federal spending bills are boosting business. "We're seeing strong demand in U.S. infrastructure fueled by the recent omnibus spending bill and continued strength in state and local funding," CEO Steve Demetriou tells analysts. JEC boosted FY18 EPS guidance to $4.00-$4.40 from $3.85-$4.25. Jacobs Engineering shares up 9% to $61.82.
- Boeing shares see-saw after the White House announces plans to withdraw from the Iran nuclear deal, and perhaps negotiate a replacement. That killed a potential 110-jet sale to two Iranian carriers, but Boeing hadn't booked either in its order book or relied on them for existing production plans. Shares initially rose as the hangover from that potential deal was removed, only to fall sharply with the broader market as the imposition of prior sanctions and other diplomatic fallout was digested.

May 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices retreated from 3-1/2 year highs as investors waited on an announcement by President Donald Trump on whether the United States will reimpose sanctions on Iran.
- Gold prices remained subdued as the dollar held steady near its 2018 high on the relative strength of the U.S. economy.
- London copper rose for a fourth session, while zinc climbed 1.5 percent on expectations that Chinese data in the weeks ahead will show the economy in the world's top metals consumer remained strong in April.
- Chicago wheat futures slid for a third consecutive session and hit a one-week low as a slight improvement in U.S. winter crop ratings and ample world supplies weighed on prices.
- The unfolding "Reality TV"-styled US-China trade talks could last through the midterm elections in six months, says Nomura, which could raise the odds of further drama and volatility. The bear expects trade to dampen risk appetites in coming months. It adds that if the US targets firms beyond telecom-equipment bigwigs ZTE and Huawei, US chip suppliers and Chinese downstream customers will lose while players in Taiwan and South Korea would benefit.
- London spot-gold prices are down slightly in Asian trading as investors await Trump's announcement on the fate of the Iran nuclear deal. Following a Monday drop, spot gold is down 0.1% at $1,312.80/troy ounce.
- House Republicans are still trying to figure out what will go in a tax bill this year, beyond an extension of expiring tax cuts, Rep. Kevin Brady (R., Texas), the chairman of the House Ways and Means Committee, told reporters on Monday. Brady wouldn't commit to making decisions this month and said he's still talking with fellow House members. House Republicans are looking at changes to retirement and education tax incentives, though Brady said he wouldn't revive controversial proposals to treat waived tuition of graduate students as income or eliminate the deduction for student loan interest.
- US oil prices drop back under $70/bbl in late trading after hitting a multiyear intraday high of $70.82/bbl this morning, as President Trump says on Twitter, "I will be announcing my decision on the Iran Deal tomorrow from the White House at 2:00 pm." The price action is in line with the old adage that says traders should buy the rumor and sell the news, says Phil Flynn at Price Futures. He says tomorrow's decision is "sooner than expected and so traders sold the fact as they expect the Trump administration to pull out of the deal." The Nymex oil contract for June delivery is 0.01% lower on the day at $69.71/bbl.
- More capital is leaving Canada as the US and China are becoming more competitive globally, says RBC CEO Dave McKay. "We're hearing from clients in food processing, manufacturing, agriculture, real estate and clean technology," says McKay in a speech in Montreal. "They are telling us we need to take stock of our competitive conditions." The US tax overhaul dropped effective rates below Canada's. Business here is complaining that Canada's government must react or risk losing businesses to its largest, and closest, trading partner.
- Maryland officials disclose big proposed increases on premiums for Affordable Care Act plans, with the state's biggest insurer, CareFirst BlueCross BlueShield, seeking an 18.5% average boost on HMO plans and a 91.4% increase on its smaller PPO business. Kaiser Permanente is requesting a 37.4% increase. Maryland Insurance Commissioner Al Redmer Jr. says the increases reflect the "deteriorating health status of the pool," as healthy people continue to leave, resulting in pricier, sicker enrollees. He says Maryland's individual market has been in a death spiral. CareFirst CEO Chet Burrell says loss of enforcement on the ACA's coverage mandate next year may worsen the situation, though the commissioner says only a limited share of the proposed rate increases is tied to that shift. Maryland is seeking federal permission for a reinsurance program that might ease rates.
- Canada is "not serious enough" about building oil and gas pipelines and clearing jammed railways, says RBC CEO Dave McKay. "Farmers are struggling to ship crops to world markets with oil now being shipped along rail as opposed to through pipelines," says McKay in a Montreal speech. McKay doesn't mention Kinder Morgan Canada's stalled Trans Mountain project, but he's almost certainly referring to that project. Kinder is expected to announce whether it will continue to pursue expansion of its Trans Mountain pipeline by May 31.
- Obama-era fuel rules would force auto makers to put hybrid gas-electric technology in "nearly every vehicle sold in the US," according to an advance copy of Congressional testimony by the head of a leading industry lobby. Fuel economy standards should be eased in line with consumer demand for gasoline or diesel-powered SUVs and pickup trucks, Mitch Bainwol, CEO of the Alliance of Automotive Manufacturers, plans to tell lawmakers Tuesday at a House of Representatives hearing. Under rules the Trump administration plans to revise, auto makers would need to install so-called mild hybrid technology in almost all their vehicles, or install "strong hybrid" engines in more than 30% of vehicles in their line-up by 2025, according to his planned remarks, which were made public Monday by the House Energy and Commerce Committee Environment Subcommittee.
- FBI background checks on US gun sales rose 9% in April from a year earlier, and at 2.22 million were a record for the month. It also marks only the second stretch of seven months of checks -- unadjusted for some state double counting -- above two million. A good set-up for Sturm, Ruger earnings on Tuesday, with Vista Outdoor last week suggesting consumer inventories and discounting were starting to abate. While elevated, the 19% sequential drop from March was higher than in recent years. Sturm, Ruger shares unchanged, with American Outdoor recently off 1.7%.
- The simmering US-China trade spat hasn't cut into Tyson Foods' business either domestically or internationally, CEO Tom Hayes says. In Tyson's beef business, exports for fiscal 2Q climbed 22%, and in pork, Tyson's overall export business is small enough that the tariffs China put in place in early April haven't had much effect, with pork shipments to China representing less than half a percent of total sales. There could be some risk if rival US pork processors can't sell products to China and sell more domestically, pushing overall US pork prices down, but Hayes says Tyson's not seeing that now.
- Fears that U.S. President Donald Trump could pull out of the Iran nuclear deal later this week have already lifted oil prices, with Brent crude trading well above $75 per barrel, but the impact could spread to already weakened emerging-market assets, says Jameel Ahmad, analyst at FXTM. "A period of uncertainty could expose emerging-market assets and currencies to downside risks in an environment where investors are already maintaining a cautious stance." Global stocks could be at risk too, while currencies such as the South African Rand, Russian Ruble and Turkish Lira are "highly reliant on investors being attracted towards taking on risk." He notes also the risks to regional Middle East markets.

May 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices rose above $70 a barrel for the first time since November 2014 and Brent crude climbed to fresh highs, buoyed as a deepening economic crisis in Venezuela threatened the country's already tumbling oil supply.
- Gold prices hit their highest in a week, buoyed as the dollar slipped after marking its strongest level this year in the previous session.
- Shanghai zinc climbed off nine month lows to rally 1 percent, as consumers bought into the metal that has been in a shortage for much of the past year.
- Chicago wheat futures slid 0.7 percent, falling for a second session as an improving weather outlook for the U.S. winter crop weighed on prices.
- US benchmark oil spikes nearly 2% to just below $70/bbl, reaching its highest level since 2014 ahead of a possible decision next week by the Trump administration to re-impose oil sanctions on Iran. At the same time, the US jobs report showing an 18-year-low unemployment rate of 3.9% is boosting sentiment that demand for oil will stay strong. But some analysts note it also may push the Fed to quicken its pace of interest rate increases, a move that could strengthen the dollar further, putting pressure on oil prices which are priced in greenbacks. WTI rises 1.9% to $69.76/bbl.
- Venezuela's oil production is falling faster than expected, Rice University energy expert Francisco Monaldi says, adding that output could conceivably drop below 1M barrels per day by year's end. Monaldi had estimated a worst-case scenario of 1.2M barrels per day production by the end of this year, compared with about 2M bpd at the start of 2017. But Monaldi says Venezuela could reach 1.2M bpd by as early as July as the country goes broke and thousands of oil workers abandon their jobs amid hyperinflation. Adding to the concerns are tense relations between Venezuela's government and key foreign oil partners like Chevron, which has seen two executives detained on corruption and treason charges.
- Implied volatility in GBP/USD is likely to rise, says Bank of America Merrill Lynch, which means it will get more expensive to hedge against sterling moves. BAML goes long of GBP/USD volatility because sterling looks "vulnerable to further downside against the backdrop of weak data and rising domestic political volatility." GBP/USD has fallen to 1.35 from 1.42 in more than a couple of weeks after Bank of England Governor Mark Carney's comments and weak 1Q gross domestic product. Still, BAML says it will "be alert for opportunities to scale back into GBP longs." GBP/USD last down 0.5% at 1.3509.
- The political and economic upheaval in oil-rich Venezuela may pave the way for the anti-US government to hand more operational control of its struggling oil industry to allies Russia and China, US Army War College Professor Evan Ellis warns in an essay. Venezuela is already mired in a debt default and relations are fraying with US oil major Chevron. Any handover to Russia or China would mean a national security risk for Washington, which has tried to pressure Venezuela's authoritarian government through sanctions but to little avail. Much depends on the May 20 election, which is being boycotted by the bulk of President Maduro's political opposition and may give the unpopular leader a second six-year term. Maduro, Ellis says, may "choose the post-election honeymoon period to announce nationalizations of Western oil companies, which the government no longer believes it can coerce more investment and services from."
- Oil prices rise and are headed for a modest weekly gain buoyed by generally bullish sentiment on global supply and demand and as investors await a decision by President Trump on possibly re-imposing oil sanctions on Iran. "Any cut to Iranian volumes would only tighten the market further," says Energy Aspects. "While Trump is likely to pull out of the Iran [nuclear] deal, much will depend on what the US plans to do after doing so, how clearly it communicates this, and also the Iranian response." Meantime, US data showing an 18-year-low jobless rate of 3.9% suggests a strong economy will keep demand elevated. WTI rises 0.4% to $68.69/bbl.
- Base metals are trading higher in Asia as investors await policy signals from the US-China trade talks as well as slight dollar weakness. Aluminum leads the gains due to market tightness and uncertainty of supplies, though the US has softened its stance on sanctions on Russian producer UC Rusal. Despite reduced geo-political risks, BMI Research sayslingering worries could lead to further volatility. Three-month aluminum prices on the LME are up 1.2%, while copper and zinc gain 0.6% and 0.5%, respectively.
- Oil market volatility should only increase in the run up to President Trump's self-imposed deadline to decide whether or not to pull the US out of the Iran nuclear deal. Such a move would trigger the reimposition of economic sanctions on the Islamic Republic, hindering its oil output and reducing global supply. It "will be a binary event for the oil market: bullish if sanctions are reinstated, and bearish if the status quo prevails," analysts at UBS Wealth Management wrote in a note Thursday. Meanwhile, in the short-term, the analysts see "limited price downside due to lower inventories and an oil market still in deficit." Brent, the global benchmark was trading down 0.29%, at $73.16 a barrel in afternoon trade.
- The Stoxx Europe 600 closes down 0.7% at 384.62, tracking falls in U.S. stocks ahead of U.S.-China trade talks, concerns about higher U.S. interest rates and of profit-taking. "Some major European indices hit their highest levels since February yesterday, and investors are now locking in some profits," says David Madden of CMC Markets. Germany's DAX ends down 0.9%, France's CAC 40 down 0.5% and the U.K.'s FTSE 100 down 0.5%. Italy's FTSE MIB drops by 0.8% and Spain's Ibex 35 by 0.5%. U.K. medical device-maker Smith & Nephew is down by 7% after the company downgraded its 2018 sales guidance, while shares in German-based company Adidas AG drop 6.4% after 1Q results.
- Oil prices climbed to more than three-year highs since in April--with Brent temporarily breaching the symbolic $75 a barrel threshold--but they should ultimately fall back from current levels for three reasons, according to Thomas Pugh, commodities economist at Capital Economics. First, even if the US pulls out of the Iran nuclear deal and reimposes economic sanctions, the "impact of the oil supply is unlikely to be as severe as last time [sanctions were imposed] without support from other countries." Secondly, Pugh argues, the higher oil price environment is encouraging non-OPEC production, particularly in the US. Lastly, Pugh expects OPEC "to gradually increase output next year as stocks fall to their five-year average." Brent, the global benchmark, was down 0.37%, at $73.10 a barrel in afternoon trade.

May 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held steady after shedding earlier gains, as market jitters kicked in over the prospect of geopolitical risks from possible new U.S. sanctions against Iran.
- Gold prices rose for a third straight session as the dollar slipped further from 2018 highs, while investors turned their focus to the upcoming U.S. jobs data for fresh catalysts.
- London base metal prices made robust gains early as the dollar softened, making metals cheaper for holders of other currencies, while positive data from top metals consumer China helped spur a rebound from losses in the previous session.
- Chicago wheat ticked lower, but the market was set for its biggest weekly gain in two months as a crop tour finds lower yields in parts of U.S. southern Plains which have been hit by dry weather.
- Oil prices climbed to more than three-year highs since in April--with Brent temporarily breaching the symbolic $75 a barrel threshold--but they should ultimately fall back from current levels for three reasons, according to Thomas Pugh, commodities economist at Capital Economics. First, even if the US pulls out of the Iran nuclear deal and reimposes economic sanctions, the "impact of the oil supply is unlikely to be as severe as last time [sanctions were imposed] without support from other countries." Secondly, Pugh argues, the higher oil price environment is encouraging non-OPEC production, particularly in the US. Lastly, Pugh expects OPEC "to gradually increase output next year as stocks fall to their five-year average." Brent, the global benchmark, was down 0.37%, at $73.10 a barrel in afternoon trade.
- Traditional real-estate investors want to make some space flexible in their office buildings amid political uncertainty and the rise in serviced office-space providers like WeWork. "The election of Donald Trump and Brexit has led people come to us," says Matthew Brown, WeWork's senior director, at a CBRE panel discussion on Thursday. Flexible space would be used for short-term leases that could either be run solely by external operators--which could bring in hospitality-like expertise--or in conjunction with these operators. Some may venture into running those spaces on their own.
- A long, cold, and sometimes snowy spring in the US has pushed back planting for many farmers, raising concerns that yields for the corn crop could suffer if farmers aren't able to get it planted in the next few weeks. DowDuPont CFO Howard Ungerleider believes in farmers, as well as their high-powered tractors and rapid-planting equipment that now enable much of the US crop to be planted in a matter of days. "We've seen a steep increase in seed deliveries over the last two weeks," Ungerleider says, indicating that farmers are gearing up.
- Despite the wide range of commodities that DowDuPont deals in to produce plastics to pesticides, CFO Howard Ungerleider says on the company's quarterly earnings call that he doesn't anticipate a "material" impact on the company's businesses. That's largely because Dow and DuPont have positioned their processing facilities in the same countries that produce the necessary raw materials, like petroleum products and commodity chemicals, officials say.
- Terex has been passing along surcharges to customers as the construction equipment maker faces 50% higher steel costs (than in Q4) because of the Trump administration's newly imposed tariffs on that metal and aluminum. But CEO John Garrison says that hasn't hurt demand, telling analysts "order rates remain relatively strong." He added in a call Wednesday: 'When we describe what has occurred, how it's occurred, they don't like it, but most customers do understand it." Shares rise 2.6%.

May 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped, weighed down by swelling U.S. crude inventories and record weekly U.S. production that is countering efforts by producer group OPEC to cut supplies and prop up prices.
- Gold prices rose for a second session after the U.S. Federal Reserve held interest rates steady as expected at the end of a two-day policy meeting, while investors awaited U.S.-China trade talks.
- Shanghai base metals were mixed as the market fretted about the outcome of Sino-U.S. trade talks that would start later in Beijing.
- Chicago soybean futures slid for a second consecutive session to a six-day low with the market coming under pressure from falling U.S. exports as Chinese buyers shift purchases to Brazil.
- The dollar traded below a four-month high against a basket of currencies, with the focus shifting to economic data after the Federal Reserve did little to alter market expectations for further interest rate rises this year.
- Terex has been passing along surcharges to customers as the construction equipment maker faces 50% higher steel costs (than in Q4) because of the Trump administration's newly imposed tariffs on that metal and aluminum. But CEO John Garrison says that hasn't hurt demand, telling analysts "order rates remain relatively strong." He added in a call Wednesday: 'When we describe what has occurred, how it's occurred, they don't like it, but most customers do understand it." Shares rise 2.6%.
- Senate Republicans recently chastised Citigroup and Bank of America for their moves to stop doing some business with the gun industry. Now Senate Democrats are weighing in -- albeit in favor of gun control following the deadly shooting in February at a Florida high school. In a letter to 11 bank chief executives, including the heads of Morgan Stanley and JPMorgan, a dozen Senate Democrats, led by Hawaii Sen. Brian Schatz and California Sen. Dianne Feinstein, say they hope Citi and Bank of America will become models for other financial institutions. "There is a growing consensus in the private sector that companies can and should take action to address the problem of gun violence in our country," the senators write in a letter dated May 1.
- Mexicans working abroad sent home $2.6B in March, 4% more than a year earlier, bringing the total for 1Q to $7B, up 6% on the year. A strong US labor market and greater fears of deportation among migrants are probably behind the continued growth in transfers, Banorte says. "It could be argued that family remittances are an alternative form of savings for migrants," the bank says. "It is likely that Mexican migrant workers continue to discount a higher probability of being deported, which would significantly reduce their expectation of permanent income, and consequently increase the desire to save."
- For weeks, Democrats in Congress have been touting their efforts to find "one more vote" to pass a Senate measure that would reinstate Obama-era internet protections. But it's increasingly likely they will not need the extra vote. That's because Sen. John McCain (R., Ariz.), who is being treated for an aggressive form of brain cancer, probably won't be able to attend the Senate session where the resolution would be considered, close observers say. That would leave sponsors of the net-neutrality resolution with a 50-49 victory, assuming the current vote counts hold. But even if the Senate passes the resolution, it's not expected to make it through the House, and President Donald Trump also is widely believed to oppose it. Democrats believe though, that battling for the measure could be help turn out in November elections.
- The Stoxx Europe 600 index closes up 0.6% at 387.44, its highest close in three months, while Germany's DAX closes up 1.5% and France's CAC 40 is up 0.2%. "The market made up for lost time due to the public holiday yesterday," says David Madden at CMC Markets. "The mood in Europe is positive, as President Trump won't be imposing tariffs on EU steel and aluminum, at least for now," he says. Inmarsat PLC is a top gainer, up 8.1% after announcing a jump in 1Q net profit. Apple suppliers STMicroelectronics, Infineon and AMS AG up 4.3%, 4% and 6.6%, respectively. The FTSE 100 is up 0.3%, having reached a three-month high intraday. Spain's Ibex 35 and Italy's FTSE MIB both close up 1.1%.
- The U.K. FTSE 100 index closes up 0.3% at 7543.20, having reached a three-month intraday high of 7572.98, buoyed by gains in European stocks and led by rises in heavyweight mining stocks due to higher base-metal prices. Aluminum rallied after the U.S. Treasury on Tuesday granted Rusal owner EN+ Group an extension for compliance with sanctions. Evraz, a steel company with operations mainly in Russia, is the biggest gainer, up 5.2%. Among miners, Anglo American rises 3.2%, Glencore 3.2% and Rio Tinto 2.9%. Shares in Paddy Power Betfair are the biggest fallers, losing 6.3%, after the company said revenue decreased by 2% in the first quarter.

May 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices firmed slightly, supported by concerns that the United States may reimpose sanctions on major exporter Iran, although soaring U.S. supplies capped gains. 
- Gold prices rose, ticking up from a four-month low hit in the previous session, as Chinese buyers returned to the market following the Labour Day holiday, while investors awaited cues on the U.S. monetary policy from a two-day Federal Reserve meeting.
- London copper futures recovered from their weakest level in nearly a month after a private survey showed growth in China's manufacturing sector unexpectedly picked up in April, brightening the demand outlook in the top user of the metal.
- Chicago wheat slid as the market took a breather after rallying to a nine-month top in the last session and the focus is on a crop tour of the U.S. southern Plains where drought is expected to reduce yields.
- The dollar held near a four-month high against a basket of major currencies, buoyed by the outlook for a strong U.S. economy and rising yields amid signs of a slowdown elsewhere, especially in Europe.
- The Stoxx Europe 600 index closes up 0.6% at 387.44, its highest close in three months, while Germany's DAX closes up 1.5% and France's CAC 40 is up 0.2%. "The market made up for lost time due to the public holiday yesterday," says David Madden at CMC Markets. "The mood in Europe is positive, as President Trump won't be imposing tariffs on EU steel and aluminum, at least for now," he says. Inmarsat PLC is a top gainer, up 8.1% after announcing a jump in 1Q net profit. Apple suppliers STMicroelectronics, Infineon and AMS AG up 4.3%, 4% and 6.6%, respectively. The FTSE 100 is up 0.3%, having reached a three-month high intraday. Spain's Ibex 35 and Italy's FTSE MIB both close up 1.1%.
- The U.K. FTSE 100 index closes up 0.3% at 7543.20, having reached a three-month intraday high of 7572.98, buoyed by gains in European stocks and led by rises in heavyweight mining stocks due to higher base-metal prices. Aluminum rallied after the U.S. Treasury on Tuesday granted Rusal owner EN+ Group an extension for compliance with sanctions. Evraz, a steel company with operations mainly in Russia, is the biggest gainer, up 5.2%. Among miners, Anglo American rises 3.2%, Glencore 3.2% and Rio Tinto 2.9%. Shares in Paddy Power Betfair are the biggest fallers, losing 6.3%, after the company said revenue decreased by 2% in the first quarter.
- Vladimir Putin has said he will reshuffle the government after winning presidential elections in March and this could prove positive for the Russian ruble. If Mr. Putin were to bring former Minister of Finance Alexei Kudrin back in the government, "that would be a positive signal that Mr Putin endorses structural reforms," says Piotr Matys, EM forex strategist at Rabobank. Mr. Kudrin is known for wanting to liberalize Russia's economy. However, if oil prices continue to rise, there may be less scope for economic reforms, Mr. Matys says. USD/RUB is last up 0.3% at 63.88.
- With U.S. yields more attractive, investors are likely to be more selective when investing in emerging markets, focusing more on each country's fundamentals, says Piotr Matys, EM forex strategist at Rabobank. For instance, Poland may be attractive since its economy rose by more than 4% last year, Mr. Matys says. However, the increase was driven by a boost in consumer confidence, which in turn was fuelled by settlements given by the Polish government, and this may not be sustainable long-term due to funding issues, says Mr. Matys. EUR/PLN is up by 0.2% at 4.2758, after rising sharply on Tuesday.
- China's yet to impose tariffs on imports of US soybeans, but its threat to do so in response to the Trump administration's proposal for tariffs on a range of Chinese goods has already dented the flow of US-grown oilseeds to the world's top buyer. "The marketplace in general is assuming it's better not to be buying US soybeans for China, at least not throughout the summer," says Soren Schroder, CEO of crop-trading giant Bunge, in an interview. "My feeling is, there's no quick resolution to any of this." Bunge's positioned alright if soybean tariffs come, given its big presence in South America.
- ArcelorMittal's Nafta division should benefit from the introduction of a 25% tariff on steel products coming into the U.S., although the ultimate impact is still tough to gauge, says Commerzbank. The bank thinks there is significant upside to U.S. steel stocks, but notes that most big producers have so far been reluctant to upgrade earnings estimates. Commerzbank lifts its forecasts for ArcelorMittal's 2018 and 2019 Ebitda by 6% and 10% respectively, and expects the steelmaker to report another strong first quarter, thanks to good performance in Europe. The bank lifts its target price to EUR39 from EUR33. ArcelorMittal trades 1% higher at EUR28.38.
- London aluminum futures rise 0.9% to $2,262.50 a metric ton despite what might seem like bearish news from the U.S. Treasury Department late Tuesday. The Trump administration granted EN+ Group -- owner of United Co. Rusal -- an extension for compliance with sanctions. The expected sanctioning of Oleg Deripaska -- who controls EN+ -- has sharply boosted aluminum futures in recent weeks. That eases fears of tight market constrictions, but prices already fell sharply on EN+'s announcement Friday that Deripaska will cut his stake, says Macquarie's Vivienne Lloyd. "It seems likely that it was priced in already, and a statement from the U.S. Treasury was likely to follow from the announcement on Friday," she adds. With China returning to trading, "the price point might have seemed attractive to traders there."(
- President Trump's top trade adviser sees a "big, big challenge" in opening trade talks with China the week against the backdrop of massive tariff threats on each side. "We're going to spend the next year developing how we deal with each other over a period of time," US trade representative Robert Lighthizer told a China event at the US Chamber of Commerce in Washington, stressing that the economic relationship between the countries has to change.  Lighthizer is part of a delegation of half a dozen senior Trump administration officials traveling to Beijing this week to discuss complaints about everything from intellectual-property violations to the trade deficit.

Apr 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged lower as a rising rig count in the United States pointed to higher production, but prices held near more than three-year highs and were on track to rise for a second consecutive month. 
- Gold prices were little changed as investor interest in the yellow metal dropped as the U.S. dollar steadied and there were signs of easing tensions on the Korean peninsula, reducing the safe-haven demand for gold.
- London copper and aluminium climbed as the dollar eased from three-month highs and trade stayed quiet given a holiday in China and ahead of a slew of monthly manufacturing reports from the world's top user of metals.
- Chicago wheat gained 0.8 percent, rising to its highest since early March as concerns over dry weather in the U.S. southern Plains underpinned the market.
- Mexico's oil regulator moved a planned July auction of 37 onshore oil and gas blocks to the end of September, and will take offers at the same time on bids for nine blocks with non-conventional gas prospects in northeastern Mexico. The decision takes into account the industry's expressed interest in participating in both auctions, the hydrocarbons commission says. The auctions come after the July 1 presidential elections in which the leading candidate, leftist Andres Manuel Lopez Obrador, has said if he wins he would freeze auctions until benefits from previously awarded blocks are confirmed. Mexico's change of administration is Dec. 1.
- The bill passed by the House to extend FAA authority through the fall of 2023 calls for the agency to review and update its comprehensive cyber protection plans. The language is broad and the agency already has started down that road. But like other studies lawmakers ordered up -- regarding dangers of metal fatigue and engine durability -- the cyber provision is expected to prompt stepped-up efforts by FAA experts. The legislation also calls on the agency to delve into another potentially significant safety issue: potential changes to inspection requirements based on new assessments of the impact of metal fatigue.
- Nafta technical teams will continue discussions in person and remotely to push toward an agreement on the trilateral trade pact, while ministers -- Ildefonso Guajardo of Mexico, Canada's Chrystia Freeland and Robert Lighthizer of the US -- will take up the process again on May 7, Mexico's Economy Ministry says. The three trade chiefs held several meetings this week in Washington. The teams "delved into the technical work on all subjects of negotiation," the ministry adds. Freeland tells reporters: "This has been a week of solid, very good progress...there's meaningful progress on the rules of origin, which is fiendishly complex. This cannot be accomplished in a day."
- Three-month London aluminum futures are down 1.8% at $22,230 a metric ton having pared deeper losses in the wake of the news that Oleg Deripsaka -- who controls sanction-hit metals giant United Co. Rusal -- has agreed to reduce his stake below 50%. The proposal, announced in a statement to the London Stock Exchange has yet to be accepted by the US Treasury, but prices nonetheless reacted by dropping as much as 3% from flat in the minutes after the announcement. The industrial metal has experienced wild swings over recent weeks. Prices soared when Rusal was initially named in the sanctions. Prices plunged almost 10% Monday after Treasury said it delayed the implementation of sanctions on Rusal metal until October.
- The FDA approved a proposed Indiana fish farm that would raise a genetically engineered salmon developed by AquaBounty Technologies, but it remains to be seen when any GMO fish will be raised in the Hoosier state. While the FDA blessed the facility itself, AquaBounty still is barred from importing eggs for its salmon, which are produced in Canada. That's because a 2016 law passed by Congress set out regulations for labeling "bioengineered" food, and until labeling rules are finalized, AquaBounty's salmon eggs -- which qualify as food -- can't be shipped. AquaBounty for now is raising its GMO salmon, engineered to grow faster on less feed, in Panama, but meat from that fish is similarly barred from US markets until labeling is worked out.
- United States Steel CEO David Burritt says he's pleased by the early results from the 25% US tariff on imported steel. "We are encouraged by the progress so far," Burritt told analysts during a conference call. He said the company has been "actively engaged" in discussions with the Trump administration about whether to extend tariff exemptions for major US trading partners. The exemptions expire May 1. "I'm quite confident that we'll get to a right to a right conclusion," Burritt says.
- EUR/CHF has been rising from around 1.15 in late February to be around 1.19 in late April, breaking through the 1.20 level shortly last week, but according to Rabobank, it doesn't have much further to go. "Although further Russian repatriation would continue to support EUR/CHF, the loss of momentum in eurozone growth, higher U.S. interest rates and fears of trade wars are all conducive to a weakening in risk appetite," says Rabobank. "This implies that the pace of gains in EUR/CHF going forward should be capped," which means EUR/CHF should remain "centered on a range around the 1.19/1.20 through the remainder of the year."
- Electrolux previously announced it had put plans to invest $250 million in its Tennessee manufacturing operation on hold until details of U.S. tariffs on imported steel are known and Chief Executive Jonas Samuelson Friday said the company is still monitoring the situation. Speaking on a call after 1Q earnings, Mr. Samuelson said the tariff outlook in North America remains uncertain and as it doesn't yet have clarity, it will continue to consider its options. "We're taking a deeper look to fully understand the impact of any potential trade consequences on our cost structure," Mr. Samuelson said. "We're continuing to do the engineering work but we're not spending major capital at this point."
- Brazilian aircraft maker Embraer's talks over a possible combination with Boeing are advancing, but Embraer CEO Paulo Cesar de Souza e Silva can't say when the talks might be finished, or when the Brazilian government might approve a deal. He made the comments in a conference call about 1Q results today. Brazilian President Michel Temer has said he won't permit a change in control of the company, which was originally state-owned and still has close ties to the country's military. The talks are very complicated, because they include both companies, the Brazilian government and shareholders, Silva said.
- Core government bonds remain unattractive across the board, says Amundi Asset Management. The asset manager retains its overall view that central banks' strong commitment to removing excessive monetary accommodation is intact, with a risk that the U.S. Federal Reserve will be more aggressive in 2018 if geopolitical risks don't defuse.
- First Solar CEO Mark Widmar says that "strong demand" for FSLR's products in a "growing U.S. solar market" prompted his company's decision to build a $400M solar panel factory in Ohio. "It is a strong testament to the competitiveness of U.S. manufacturing with the global landscape," Widmar said during a conference call to discuss Q1 earnings. FSLR expects the plant to be fully up and running by the end of 2020. Widmar said tax reforms influenced the decision to build, as did a technology-driven drop in labor costs that reduced the benefit of manufacturing in Malaysia or Vietnam versus the US.
- Kinder Morgan's Canadian unit said British Columbia's decision to pursue a court reference in regards to the authority to regulate the shipment of crude oil "signal the province's continued intention to frustrate" the Trans Mountain pipeline expansion. Kinder Morgan has threatened to walk away from the project, which proposes to nearly triple the amount of crude oil carried from Alberta to the Pacific Coast, by May 31 unless political uncertainty is resolved. The company reiterated in a statement it remains "clear and steadfast" in obtaining political clarity and protecting its shareholders.

Apr 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)  
- Oil prices rose, supported by an expectation that the United States will re-impose sanctions against  Iran, a decline in output in Venezuela and ongoing strong demand. 
- Gold prices were little changed after falling to their lowest in five weeks in the previous session,  pressured by a stronger dollar, which held near more than three-month highs, and a rise in U.S. Treasury yields.
- London aluminium slipped again, after snapping a four-day losing streak in the previous session, as  the deadline extension to comply with U.S. sanctions on Rusal, one of the world's biggest aluminium producers, pulled down prices.
- Chicago wheat futures rose for a third consecutive session to hit a seven-week high, with prices  underpinned by short-covering and adverse weather that is curbing U.S. winter crop yields.
- Tim Cook is on President Trump's official agenda today. After attending last night's state dinner, Cook is returning to the White House to meet personally with Trump at 1:45 p.m., according to the White House schedule. The meeting comes amid escalating US-China trade tensions. China is one of Apple's biggest markets and the tensions could disrupt its business there. The meeting is the latest detente in an evolving relationship. Trump has criticized Apple for manufacturing overseas and Cook has criticized the Trump administration over the plan to end DACA. They recently found common ground over US tax reform with Apple announcing a plan to spend $300B in the US.
- James Comey's memoir "A Higher Loyalty," which went on sale April 17th, sold an impressive 360,000 hardcover copies in the US between its publication date and April 22, according to NPD BookScan. The service tracks an estimated 85% of retail book sales but doesn't report e-book or audiobook sales. Macmillan's Flatiron Books on Tuesday said the book sold more than 600,000 copies in its first week on sale in all formats. There are now more than 1 million copies in print.
- You didn't see this one coming. General Dynamics CEO Phebe Novakovic says speculation that proposed Chinese tariffs could impact its Gulfstream business jets is unfounded. Novakovic says on 1Q call that the chatter didn't affect customer discussions at a recent airshow in Asia, and may even have kindled additional interest in the high-end jets. Gulfstreams would have been captured in the proposed tariffs, which don't as yet capture many Boeing planes.
- German Economics Minister Peter Altmaier indicates Europe's largest economy is willing to offer concessions to Washington in the trade dispute with the European Union over steel and aluminum tariffs. "We still don't think that punitive tariffs are right and justified, but we also know that we are responsible for preventing an uncontrolled race to tariffs and trade barriers," says Mr. Altmaier. "I remain convinced that it would be reckless to stumble into a trade conflict. And I therefore believe that an amicable solution should be given precedence over a confrontational one." The U.S. gave the EU an exemption to looming steel tariffs until the end of April. The EU is expected to present next week its proposals in the negotiations with Washington to be granted a permanently exemption.
- EUR/USD is still holding support at 1.2150, as "the market is probably waiting to hear from the ECB tomorrow before making its next move," says ING. But EUR/USD could fall to 1.2050 this week if the European Central Bank "disappoints" on Thursday or U.S. gross domestic product data comes in on the firm side on Friday, it says. The Dutch bank says the euro is expected to rise against the dollar this year, but that "our bullish EUR/USD story requires feeding, either by Trump protectionism or by confirmation the ECB is on the path to ending QE towards the end of the year." EUR/USD is last down 0.2% at 1.2207.
- The dollar "short squeeze could have a little further to run," says ING, as EUR/USD falls 0.1% to 1.2215 and USD/JPY rises 0.3% to 109.12. The Dutch bank says "by moving back to 109, USD/JPY has arguably removed the protectionist risk premium which was built into it from early February." But it's unlikely USD/JPY will go above 109.50/110, ING says. The dollar DXY index is up by 0.2% at 90.9760, and according to ING, "DXY looks biased to 91.70 over the short term, with 90.30/50 now proving support." But then again, everything "could turn to dust in just a few tweets" from President Trump.
- US defense stocks were up around 15% versus a flat broader market before Tuesday's sell-off. Optimism hinged on rising spending after the bump in the Pentagon's 2018 budget and 2019 request. Many sell-side analysts seized on this as sustainable, even in the face of broader federal budget pressures emerging in the early 2020s. Now deputy defense secretary Pat Shanahan--a former Boeing executive--weighs in, reportedly telling media earlier Tuesday: "The picture is not 3%-5% growth year over year, it's flat lined." That spooked investors, with Lockheed's post-1Q slide of more than 6% along with falls of more than 4% at Northrop Grumman and Raytheon ahead of their own reports this week.
- Jeffrey Gerrish, a deputy US trade representative, will oversee day-to-day operations of the Export-Import Bank on an acting basis, the White House announced Tuesday. The move to tap Gerrish as the export-finance agency's acting director ensures someone is in charge of the bank, which has operated  without any board members for over a month. Still, the Trump administration has yet to nominate anyone to head the bank on a permanent basis since the Senate blocked former House Republican Scott Garrett for the post late last year. And a handful of additional bank nominees are still pending in the chamber. Gerrish was confirmed by the Senate in March as a deputy to US trade representative Robert Lighthizer, with a focus on Europe, Africa and other areas of trade.
- When Arizona Sen. Jeff Flake initially voted to block confirmation of the White House's choice for NASA administrator, GOP Senate leaders pulled out all the stops to get him to switch that vote. Texas Sen. John Cornyn, the majority whip, threatened to embarrass the Arizona lawmaker in novel fashion, according to one person briefed on the strategy. If Vice President Mike Pence had to jet back to the capital to counteract the no vote, this person said, the Trump administration was prepared to leak the cost of the last-minute military transport to the media. Sen. Flake ended up voting yes, and his press spokeswoman says the lawmaker was "never made aware of those intentions."
- Senate Finance Committee Chairman Orrin Hatch (R., Utah) asked the Internal Revenue Service to use its congressionally-granted power to make tax-exempt federal credit unions file Form 990s that would give the public more information about their operations. The move would provide "greater transparency," including details about compensation of credit union executives, he suggests in an April 24 letter. Expect bankers to cheer the change. Your move, credit unions.
- Wells Fargo CEO Timothy Sloan debates with a shareholder representing the American Federation of Teachers asking about the bank's relationship with the NRA and the firearms industry. The AFT recently ended its relationship with Wells Fargo's home loan program for teachers. The shareholder, Jordan Ash of St Paul Federation of Teachers, said Wells should terminate its relationship with the NRA. He also asked the bank to disclose how much money it makes from the NRA and assault rifle manufacturing industry. Sloan says Well's policy on firearms is an "issue best decided by the American people." He added: "We don't think it's a good idea for banks to decide what products and services Americans can buy. It should be up to me, to us, to decide that."
- Despite President Trump's tweet at the end of last week criticizing OPEC's efforts to hold back production and blaming the cartel for "artificially high" oil prices, he is unlikely to do much to try to lower prices, argues Thomas Pugh, commodities economist at Capital Economics. "Instead, Trump is more likely to push prices higher if he re-imposes sanctions on Iran," Mr. Pugh writes in a note. Growing speculation that Mr. Trump will pull the U.S. out of the Iran nuclear deal, triggering a reimposition of economic sanctions that would weigh on the country's oil output, pushed Brent crude prices above $75 Tuesday. "We doubt Trump will take any action to reduce oil prices...we expect prices to eventually fall back from current levels as higher oil prices encourage significant additional non-OPEC production, especially in the U.S.."

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Click here to read full stories.


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

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

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

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

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

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

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

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

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

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

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."