Forex & Commo Market News

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

- Brent crude oil futures rose above $60 a barrel for the first time in over a week after a data report showed a larger-than-expected drop in U.S. crude inventories, but ongoing worries about a possible global recession capped gains.
- Gold prices held steady after recovering to above the key $1,500 an ounce level in the previous session, with investors waiting for the minutes of the Federal Reserve's July meeting for possible clues on further U.S. interest rate cuts.
- London copper prices inched up after a more than 1% drop in the previous session, as the dollar fell from a three-week peak and investors awaited the minutes of the Federal Reserve's July policy meeting.
- Chicago corn futures edged up to recover from their lowest in more than three months, buoyed after a U.S. crop tour forecast lower yields.

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

- Crude oil prices held mostly steady on optimism that U.S.-China trade tensions would ease and on hopes that major economies would enact stimulus measures to counter a possible global economic slowdown that could affect oil demand.
- Gold prices were flat, after declining more than 1% in the previous session hit by an uptick in risk appetite, while investors awaited meetings by policy-makers later in the week for clues on possible interest rate cuts.
- Shanghai aluminium hit an over nine-month high, tracking gains in London in the previous session, as fears of a shortage added to gains from China's measures to boost the economy.
- The dollar hovered near a three-week high, as expectations policymakers around the world would unleash fresh stimulus drove an improvement in appetite for riskier assets and lifted U.S. government bond yields.

- Chicago corn futures rose, recouping some of previous session's heavy losses, when a U.S. crop tour forecast below-average yields after a wet spring delayed plantings.
- Raw sugar futures on ICE fell on Monday to their lowest levels in over a week, while arabica coffee fell to a fresh nearly three-month low, with both markets weighed down by plentiful global supplies and a weak currency in top grower Brazil.
- Malaysian palm oil futures were slightly up at the midday break in range-bound trading, hit by declines in soyoil on China's Dalian Commodity Exchange while a weaker ringgit and a recovery in U.S. soyoil offered some support.

- The NZD/USD continues to plumb lows last seen in mid-2015, with U.S. dollar bulls unfazed by President Trump's call to cut rates by at least 100 basis points. "The minutes from the Fed's July meeting, due tomorrow night, may provide the USD with some direction ahead of the Jackson Hole symposium," Australia & New Zealand Banking Group says. It's a light day for New Zealand data today, although the RBA minutes in Australia will garner attention. The NZD/USD is at 0.6408 early on Tuesday.
- Nickel prices dropped 1.5% to $15,930 a ton on the London Metal Exchange amid continued uncertainty about when Indonesia will introduce a ban on ore exports. Speculation that the ban will be brought forward from 2022 has driven prices higher in recent weeks, but there have also been a series of pullbacks. The authorities are likely to "strike the right balance judging by the previous bans they have put into effect for both nickel and tin ores," says Edward Meir of INTL FCStone. He notes Indonesia is rapidly expanding its capacity to produce refined nickel: 22 smelters are under development on top of the 13 currently in operation. Meanwhile, copper prices lose momentum after making a strong start to the week on hopes that Chinese interest-rate reforms pave the way for monetary stimulus.
- President Trump, despite describing the economy as strong, is calling for the Fed to pursue what in most times would be viewed as an emergency path of rate cuts. He wants the Fed to lower rates by a full percentage point in "a fairly short period of time." There's almost no precedent for the Fed doing something like that given that most of the current data looks OK and downside risks remain largely unrealized. What's more, the sort of rate cuts the president wants--Trump also wants renewed bond buying--might be counterproductive to his aims. That scope of easing might send a message to the public that the Fed is fighting imminent recessionary risks, not right-sizing an overly aggressive tightening campaign, which could spook the public even more, making a downturn that much more likely.

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

- Crude oil prices rose following a weekend attack on a Saudi oil facility by Yemeni separatists and as traders looked for any signs that Sino-U.S. trade tensions could ease.
- Gold prices slipped due to a stronger U.S. dollar and a recovery in equities, as hints of more stimulus from major central banks around the world eased concerns about a recession.
- Copper prices advanced as China announced new measures to support its economy amid a damaging trade war with the United States, potentially improving demand for the red metal.
- Chicago corn futures lost ground, giving up some of previous session's gains as crop-friendly weather over the weekend in parts of the U.S. Midwest boosted hopes of bumper production.
- Safe-haven currencies such as the yen and Swiss franc were under pressure as expectations that policymakers would unleash new stimulus eased immediate concerns about a slowing global economy.

- President Trump held conference call with CEOs of JPMorgan Chase, Bank of America and Citigroup as stock market dropped precipitously on Aug 14 and recession fears grew; CEOs later spoke with Treasury Sec Steven Mnuchin about macroeconomic affairs.

- U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales. The delay which, affects about half of the $300 billion target list of Chinese goods - along with news of renewed trade discussions between U.S. and Chinese officials - sent stocks sharply higher and drew cautious relief from retailers and technology groups. Trump's 10% tariffs will be effective from Dec. 15 for thousands of products including clothing and footwear, possibly buttressing the holiday selling season from some of the fallout from the protracted trade spat between the world's two largest economies.
"We're doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers," Trump told reporters in New Jersey. "Just in case they might have an impact on people, what we've done is we've delayed it so that they won't be relevant to the Christmas shopping season."

- The U.S. Trade Representative's Office announced the decision just minutes after China's Ministry of Commerce said Vice Premier Liu He conducted a phone call with U.S. trade officials. Liu agreed with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to speak again by phone within the next two weeks, the ministry said. Trump has said the two sides may still meet in early September as scheduled.

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

- Crude oil prices rose following two days of declines, buoyed after data showing an increase in retail sales in the U.S. helped dampen concerns about a recession in the world's biggest economy.
- Gold prices dipped but were headed for a third consecutive weekly gain, as fears over a global economic slowdown and a lack of clarity on the U.S.-China trade war boosted the metal's safe-haven appeal.
- Shanghai nickel prices surged, while a key indicator of supply shortage jumped to a decade high, amid ongoing worries about supplies disruption from top ore producer Indonesia.
- Chicago corn futures ticked higher, but the market was set for its biggest weekly drop in three years, driven down by expectations of a bigger U.S. crop.
- The dollar held onto gains after a surge in U.S. retail sales eased concerns about the world's top economy, but traders cautioned against reading too much into one piece of data given the growing risks to the outlook.

- Oil prices remain firmly lower after the news that Gibraltar's supreme court has ordered the release of the Iranian tanker Grace 1 impounded in early July, after Tehran made assurances the oil on board will not go to Syria as initially alleged. Brent crude is down 2.1% at $58.23 a barrel and WTI crude is down 1.1% at $54.64 a barrel. Even if Iran responds in kind and releases the Stena Impero --the British-flagged tanker captured in retaliation-- it means little for oil markets, says BNP Paribas's Harry Tchilinguirian. With yields inverted in the U.S. and U.K. and the market having swallowed a cocktail of weak economic and oil stock data this week, "the focus is still on demand rather than supply," he adds.
- Argentina's opposition presidential candidate, Alberto Fernandez, says that it is "reasonable" for the peso to be trading at 60 per USD. Fernandez also says he asked President Mauricio Macri to preserve the current central bank reserves for the next administration, and not spend USD trying to defend the peso. The peso weakened sharply against the dollar this week after a primary vote on Sunday showed Fernandez, a leftist, as the heavy favorite to win October's presidential election against Macri. The peso strengthened to 54.26 per USD Thursday.
- Copper prices fall after Beijing threatened to hit back at looming U.S. tariffs on $300 billion worth of Chinese products. The Ministry of Finance said Beijing has to take counter-measures to the new round of levies, Reuters reports, prompting declines in base metals and other riskier assets such as stocks. Wenyu Yao of ING says weak industrial-production data and GDP data from China and Germany are also continuing to weigh on the base-metal market. "The market is focusing on global-growth and demand worries," she says. Copper is down 0.7% at $5,732.50 a ton on the LME, close to a two-year low.
- Fears over a currency war are excessive, says Yves Bonzon, head of investment management and chief investment officer at Julius Baer. The slight fall in the Chinese renminbi trading band at the beginning of last week stoke fears of a currency war, but the ultimate goal of the Chinese government, in the very long term, is to establish the renminbi as an alternative reserve currency to the U.S. dollar, he says. "It would be counterproductive to aggravate the difficulties to other emerging countries affected by the global economic slowdown," he says. Bonzon says that China prefers to display stability and responsibility rather than seek short-term gains to offset U.S. tariffs.
- The 10-year German Bund yield remains near the all-time low level of -0.668% to which it fell a day earlier, as multiple risks spark flight into safe havens and reinforce expectations of fresh easing measures to be announced by the European Central Bank in September. "The global fixed income rally has continued unabated over the last 24 hours as risk appetite remains severely under pressure," says Danske Bank senior analyst Jens Naervig Pedersen. Markets react to rising tensions around Hong Kong, intensifying Brexit fears, second thoughts over whether President Trump's China tariff exemptions are of any importance and, not least, as the macroeconomic backdrop in both Europe and China continues to weaken, he adds. The 10-year Bund yield last trades at -0.663%, down 1.1 basis points, according to Tradeweb.

Aug 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, adding to sharp overnight losses as U.S. crude inventories unexpectedly rose, fears of recession mounted and economic data out of China and Europe disappointed.
- Gold prices rose, as investors flocked to safer havens after an inverted U.S. bond yield curve pointed to new recession fears following poor economic data from Germany and China.
- London copper hovered near a two-year low and Shanghai copper fell, weighed down by growing fears of a global recession and weak industrial output growth in China.
- Chicago corn rose for the first time in four sessions as bargain buying lifted prices, but gains were limited on expectations of favourable rains across the U.S. Midwest.
- The yen held gains against major currencies as sliding Treasury yields fanned fears of a severe global economic downturn and drove investors into safe-haven assets.

- The 10-year German Bund yield remains near the all-time low level of -0.668% to which it fell a day earlier, as multiple risks spark flight into safe havens and reinforce expectations of fresh easing measures to be announced by the European Central Bank in September. "The global fixed income rally has continued unabated over the last 24 hours as risk appetite remains severely under pressure," says Danske Bank senior analyst Jens Naervig Pedersen. Markets react to rising tensions around Hong Kong, intensifying Brexit fears, second thoughts over whether President Trump's China tariff exemptions are of any importance and, not least, as the macroeconomic backdrop in both Europe and China continues to weaken, he adds. The 10-year Bund yield last trades at -0.663%, down 1.1 basis points, according to Tradeweb.

- The economic gloom weighing on shares, industrial commodities and bond yields is lifting safe haven precious metals. After yields on two-year Treasury notes briefly dipped below those on 10-year notes--an indicator that a U.S. recession is on the horizon--gold futures are up 0.7% at $1,525 a troy ounce. Silver is also on the rise, gaining 1.3% to $17.20 a troy ounce. "From our perspective, trade tensions and the ensuing global economic slowdown, along with rate cuts from the Fed, are going to be the biggest drivers of gold in the short term," says Bernard Dahdah of Natixis. Gold typically benefits from lower interest rates since it pays no yield itself. However, Dahdah says gold will lose momentum in 2020. He expects President Trump to attempt to reach a trade deal with China ahead of the election to lift the U.S. economy and alleviate pressure on Republican voters in the Farm Belt.

Aug 15 - Trump roils the markets, again (WSJ DJ)

- The Post reports: "U.S. stocks plummeted Wednesday after the inverted yield curve, one of the most reliable indicators of a recession, sparked a new wave of investor fears, erasing the short-lived bump from Tuesday's trade easing." That means for the first time in 12 years, short-term rates on U.S. bonds are higher than long-term bond rates. It's a sign investors are fleeing to the safety of the bond market; with high demand for those bonds, the rates drop. "This phenomenon, which suggests investors' faith in the economy is faltering, has preceded every recession in the past 50 years. It isn't a sure thing, but it's one of the more reliable signs that something is amiss in the economy."
- Even after President Trump pulled back on his threat to impose new tariffs on China on a range of consumer products, the market's still falling. ("The warning sign dealt another blow to markets in a time of year that is already notoriously tough on stocks. By late morning, the Dow Jones industrial average had fallen more than 600 points. ") This doesn't mean there will definitely be a recession, and, if there is, we don't know when it will hit and how severe it will be. However, several things are clear.

- First, a downturn in the economy before the election will very likely shatter Trump's hopes for reelection. Presidents in economic downturns generally don't get reelected, and if the president already is widely disliked and has no other notable accomplishments, an economic decline may be an insurmountable problem for the incumbent.

- Second, it will be very hard for Trump to avoid blame for the downturn, given the immediate cause of economic volatility is his misguided trade war. Like many economists at Wall Street firms, Michael Strain at the American Enterprise Institute writes, "[Businesses'] paralyzing uncertainty is driven by the president's veering from one position to another. Businesses seem increasingly convinced that he doesn't understand the basics of international economics."
He explains, "Trump bemoans the relative strength of the dollar one day, declaring China a currency manipulator, and the next he praises dollar-strengthening inflows of foreign investment. With such a tenuous grasp on the facts of the situation, how can he make predictable policy? How can businesses anticipate what he'll do?" Moreover, despite spin by embarrassed free-traders such as Larry Kudlow, it sure doesn't seem that Trump is simply using tariffs to get a good free-trade deal. "There's growing acceptance that the president really is a protectionist to his core," Strain observes.

- Third, if a recession does hit, we are in a terrible position to cushion the blow. Economist Jared Bernstein explains, "The most important thing you need an administration and Congress to do in a downturn is to quickly offset the demand contraction with fiscal stimulus. That means strengthening the safety net, which Trump has consistently tried to weaken. It means state fiscal relief including to big, blue states." He continues, "It means infrastructure, something they've never been able to pull off. And don't forget: We'll be entering the next recession with a debt-to-GDP ratio that's twice the historical average (80 vs. 40 percent)." As to the latter, we are already looking at a deficit soon to hit $1 trillion; there's only so much debt we can take on without driving up rates.

- The other tool to soften a recession is monetary policy. Once again, however, Trump has depleted our stock of tools to prop up the economy. Thanks to badgering from Trump, the Federal Reserve just cut interest rates (although Trump whined it wasn't enough) at a time unemployment is at 3.7 percent and interest rates are already historically low. When we really need that economic juice in a year or two, the Fed won't have that much room to maneuver.

- In sum, Trump claimed the economy he inherited as his own. He rationalized tax cuts on the notion he'd boost growth above 3 percent; now we're on recession watch. He told us a trade war would be quick and good for the economy; it's now stymieing business investment decisions. So yes, if a recession hits, Trump will richly deserve blame.

Aug 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell on disappointing economic data from China and a rise in U.S. crude inventories, erasing some of the sharp gains in the previous session on signs of an easing in Sino-U.S. trade tensions.
- Gold prices dipped after the United States delayed tariffs on some Chinese imports, easing trade concerns, although political uncertainties and lingering global growth concerns limited losses for the safe-haven metal.
- London copper fell on weak Chinese data and as a resumption of copper exports from some of Peru's top mines, following weeks of suspension, soothed supply concerns.
- Chicago soybean futures climbed for a second session, supported by easing U.S.-China trade tensions and concerns over dry weather in parts of the U.S. Midwest.
- The yen held onto gains as weaker-than-expected Chinese economic data reinforced the view that resolving the trade war was a long way off even if U.S. President Donald Trump had delayed some additional tariffs.

- Markets rally as Trump plays Santa on tariffs
CHRISTMAS came early for global stock markets after the Trump administration delayed tariffs on some Chinese goods, including laptops and mobile phones, until Dec 15.
Shares rallied on hopes that US shoppers and Apple will be shielded from higher costs in the run-up to the festive period. Games consoles, toys, computer monitors and clothes will also be left out of the latest tariffs, reducing the risk of American consumers feeling the pinch from the trade war. "We're doing this for the Christmas season," president Trump said. The S&P 500 benchmark index leapt as much as 2.1pc on hopes that tension with China is cooling, as Apple shares rose 4pc in afternoon trade.
The delay means the new iPhones will not incur tariffs at launch next month. The reprieve came after a call between Robert Lighthizer, US trade representative, and Liu He, Chinese vice-premier, ahead of tariffs that would have hit $300bn (£249bn) of imports from Sept 1. The two sides plan more talks in the next two weeks, Chinese state-run media revealed. A separate, unspecified, list of products "based on health, safety, national security and other factors" will be exempt altogether, Mr Lighthizer said.
- The delay to some U.S. tariffs on China has caught out some investors and traders betting against copper. The industrial metal is highly sensitive to Chinese economic growth and slumped to a two-year low in early August, when President Trump threatened to extend levies on imports from China. But the "massive short position" that developed in the market left it vulnerable to a sudden spike in prices in the event of positive news on trade, says Daniel Ghali of TD Securities. He says funds are unwinding some short bets following the U.S. Trade Representative statement announcing the delay. That requires them to buy back copper futures, driving their price higher.
- "This news that the U.S. is holding off on some tariffs... is giving a huge boost to risk sentiment and oil is bouncing like crazy," says SEB Markets' Bjarne Schieldrop. Brent crude is up 3.9% at $60.83 a barrel and WTI is up 3.3% at $56.74 a barrel after the U.S. announced a delay in the application of some trade tariffs on Chinese goods sparking sharp rallies across financial markets. "Finally, suddenly, we see some positive news on the trade war and it's a shot in the arm for oil markets," with a rally through the $60-a-barrel level for Brent surprising analysts. "There's a lot of short-covering going on now and I didn't think speculators were positioning for a break above $60," Schieldrop adds.
- A potential thaw in chilly US-China trade relations boosts stocks of agricultural traders and suppliers. Archer Daniels Midland and Bunge each rise 2.6%, outpacing gains in US stock indexes, after US officials say they Trump administration will delay some planned tariffs on Chinese products until mid-December, giving investors hope that China could begin buying US crops and meat again. Ethanol makers, which have banked heavily on Chinese demand for the corn-based fuel additive, also get a boost, with Green Plains up 3%.
- Major US stock averages climb after the US Trade Representative says the US will delay some tariffs against China until December 15. The US will also remove "certain products" from the tariff lists on the basis of health, safety and national security. The DJIA and S&P 500 gains around 1.5%, while the tech heavy Nasdaq rises nearly 2%. Included in the items are cell phones, laptop computers, video game consoles and footwear. Treasury prices slide on the headlines, with the 10-year yield rising to 1.69%.
- Hugo Boss faces an estimated risk of about 3% to its cost of goods sold from the U.S. tariffs to made-in-China apparel, Citi analyst Thomas Chauvet says after hosting the German premium-apparel company's management at a roadshow. Hugo Boss sources 20% of its products from China and makes 15% of its sales in the U.S., Citi says. The risk posed by U.S. tariffs "will be mitigated by a number of options, including price reductions from Chinese suppliers, price increases or relocation of manufacturing," the bank says. Boss trades 3% lower at EUR51.22.
- WH Group has applied to the Chinese government for a waiver that would reduce the amount of taxes they have to pay on U.S. pork imports but no decision on their application has been made, according to company director Luis Chein. U.S. pork imports have been hit with two 25% tariffs since trade relations between the U.S. and China deteriorated last year. In May China's State Council Customs Tariff Commission announced that China will administer an exclusion process for additional Chinese tariffs imposed on specific products imported from the United States.
- Gold edges higher, reaching a six-year high overnight. It could rise further, as geopolitical tensions between the U.S. and China persist while investors retain an appetite for safe havens. "The market is also still digesting U.S. President Trump's latest salvo on China, saying on Friday that he is fine if the next round of trade talks is called off," ANZ says. Demand for safe-haven assets is also likely to climb on other factors, including Hong Kong's political unrest. Spot gold is up 0.3% at $1515.03/oz.
- Hong Kong political unrest is a bigger deal for the globe, for economics, and for markets, than any posturing the U.S. and Chinese sides can throw at each other, says Greg McKenna, strategist at McKenna Macro. That's because the men and women of Hong Kong are facing off with the totalitarian regime of Xi Jinping are just the natural extension -- perhaps a window into the future -- of the free world versus the CCP's desire, nay need, for total control to sustain itself, he adds. McKenna has little doubt that at some point Xi's hardliners -- of which he is probably the hardest -- will act.
- More US sanctions on Venezuela are creating a maze of uncertainty that makes the future of the country's Houston-based refiner Citgo "unclear," Eurasia Group says. "The Trump administration on 5 August issued a new executive order that blocks all assets owned by the Venezuelan state in the US, which the opposition is characterizing as a sort of asset protection order against various creditors, particularly when it comes to US-based refiner Citgo," Eurasia says. "However, a previous Treasury Department license exempts PDVSA 2020 from sanctions, which would seem to still be in effect." Overall, it says the new sanctions suggest the White House wants to "reinsert" itself into Venezuela's political standoff.

Aug 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices slipped, offsetting narrow gains in the previous session, as sluggish demand forecasts countered expectations that major producers would prop up oil prices by limiting crude oil output.
- Gold prices scaled their highest in more than six years, as concerns around protests in Hong Kong and an Argentine currency crash amid fears of global economic slowdown, prompted investors to move away from riskier assets.
- Shanghai aluminium rallied to its highest in more than two months, as a typhoon in China hit the world's top aluminium producer and raised concerns about supply disruptions.
- Chicago corn futures lost more ground, dropping to their lowest in nearly three months after a U.S. government forecast for higher-than-expected crop volumes.
- The yen traded close to a seven-month high against the dollar, as unrest in Hong Kong and gyrations in Argentina's markets heightened investor risk aversion and fanned demand for the safe-haven Japanese currency.

- More US sanctions on Venezuela are creating a maze of uncertainty that makes the future of the country's Houston-based refiner Citgo "unclear," Eurasia Group says. "The Trump administration on 5 August issued a new executive order that blocks all assets owned by the Venezuelan state in the US, which the opposition is characterizing as a sort of asset protection order against various creditors, particularly when it comes to US-based refiner Citgo," Eurasia says. "However, a previous Treasury Department license exempts PDVSA 2020 from sanctions, which would seem to still be in effect." Overall, it says the new sanctions suggest the White House wants to "reinsert" itself into Venezuela's political standoff.

- USD will be driven by heightened U.S. China trade tensions this week.
On Saturday, President Trump said he was indifferent when questioned if September's scheduled U.S. China trade talks would still go ahead. Trump's ambivalence further increases the risk that a resolution remains some way off, says CBA. U.S. CPI inflation readings for July on Tuesday are unlikely to be a ground breaker on the macro front as inflation pressures remain low. The University of Michigan inflation expectations survey on Friday may provide some newer, more helpful information as central banks, including the Fed, appear to be paying increased attention to inflation expectations surveys.

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

- Oil prices dipped amid worries about an economic slowdown and the Sino-U.S. trade war, which have led to a cut in the growth outlook for oil demand.
- Gold prices held steady in holiday-thin trade, holding near the key $1,500 pivot, as uncertainties around Sino-U.S. trade war and concerns of slowing global economic growth offered support.
- London nickel prices plunged after an initial surge in volatile trade as bulls that placed bets on Indonesia bringing forward a ban on mineral ore exports moved to close their positions.
- Chicago corn and soybean futures slid as traders squared positions ahead of a U.S. supply-demand report, although losses were limited by concerns over dry weather curbing yields in parts of the U.S. Midwest.
- The dollar remained on the defensive against the safe-haven yen as the Sino-U.S. trade dispute looked set to drag on with no settlement in sight, while holidays in Japan and Singapore made for very thin trading.

Aug 10 - Market Talk Roundup: Latest on Trump, U.S. Politics ( WSJ DJ Reuters)
- Both spot sterling and sterling options reflect rising risks of a hard Brexit, says Bank of America Merrill Lynch's Vadim Iaralov. He warns investors not to be complacent and to consider hedging their exposure. "GBP skew has tilted for puts across G10 and GBP volatility has risen for all G10 pairs," suggesting "elevated downside risks ahead," he says. Put options are bets on the currency falling. Sterling is on a downtrend trend against each of the nine other G10 major currencies, he says. "We remain bearish GBP/USD and GBP/JPY, which appear most vulnerable given rising volatility on the way down." GBP/JPY falls to its lowest since late 2016 at 127.87, according to FactSet.
- Moody's Investors Service says Mexico's "lack of policy coherence," will slow the country's growth to 1.2% in 2019 and 1.5% in 2020, down from 2% in 2018. "Anxiety over economic policy has dampened investor sentiment," the ratings firm says. Moody's also forecasts state oil company Pemex's capital spending on exploration and development will grow by close to 21% in 2019 to $6.9B, from $5.7B in 2018, an amount likely to be insufficient to increase reserves adequately. Since President Andres Manuel Lopez Obrador took power in December, he has canceled a multi-billion dollar airport project, and approved the construction of an $8B oil refinery by Pemex whose viability is questioned by analysts.
- Canada's ambassador to US, David MacNaughton--a key player for Ottawa during the negotiations toward a revised North American free-trade pact--is leaving his post at the end of the summer, Prime Minister Trudeau says. Trudeau says MacNaughton is returning to his home in Toronto and will take up a post in the private sector. MacNaughton was the Liberal government's key point person in Washington during Nafta negotiations, and was instrumental in trying to persuade members of Congress and lawmakers at the state and local levels about the need to maintain Nafta. A replacement has yet to be named. Congress has yet to ratify the revised trade deal, and the Liberal government said it would pursue its own ratification in tandem with the US.

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

- Oil prices fell amid fears over demand as the U.S-China trade row casts its shadow over markets, although prices got some support from expectations of more OPEC production cuts.
- Gold firmed above the key $1,500 pivot, en route to its best week since April 2016, as an escalation in the Sino-U.S. trade dispute and fears of a global economic slowdown triggered fresh interest for safe-haven assets.
- London nickel prices eased, slipping from a 16-month high struck in the previous session, after Indonesia's nickel miners association said it had urged the government not to bring forward a ban on mineral ore exports.
- Chicago corn and soybean futures were little changed as traders squared positions ahead of a U.S. government report next week, which is expected to clarify how many acres have been planted, with both the markets poised for weekly gains.
- The yen traded near an eight month high versus the dollar as renewed concerns about the U.S.-China trade dispute and signs that central banks are more worried about the global economy boosted safe-haven assets.

Aug 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil futures jumped more than $1 a barrel, recovering half of the nearly 5% losses in the previous session, on expectations that lower prices may lead to production cuts.
- Gold held steady, hovering near the key psychological level of $1,500, supported by uncertainties around Sino-U.S. trade war and a slew of interest rate cuts by global central banks amid fears of an economic slowdown.
- Nickel prices shot up, with London nickel touching a 16-month high and Shanghai nickel hitting a record amid worries that major supplier Indonesia could soon ban exports of ore.
- U.S. soybean futures took a breather, as the oilseed struggled to find support amid heightened fears about the impact of a protracted trade war between Washington and Beijing.
- The yen was supported, after global central banks startled markets with heavy rate cuts and threats of more to come as world economic risks grow, boosting the appeal of the safe-haven Japanese currency.

- Chicken-processing plants were targeted for raids today by Immigration and Customs Enforcement, though it isn't yet clear how many plant employees may be affected. Alabama-based Peco Foods confirms raids on three of its Mississippi plants and says it's fully cooperating while "navigating a potential disruption of operations." The company says it follows employment laws and uses the E-Verify system to screen hires. Koch Foods, which operates four Mississippi plants, was also targeted according to local media; the company didn't respond to a request for comment. Other state plants run by Tyson Foods, Sanderson Farms and Wayne Farms weren't affected, officials say.
- Markets are likely to remain volatile for the rest of the summer, Evan Brown, head of macro asset allocation strategy at UBS, says. In the near term, Brown says UBS is focused on whether the US Commerce Department issues any partial waivers that permit American companies to continue shipping products to China's Huawei. This, along with China agreeing to boost the number of agricultural goods it purchases from the US, would de-escalate tensions, he says. "Conditions can improve just as quickly as they can deteriorate," Brown says.
- Broadcast station owner Sinclair Broadcast Group expects 2020 to be its most lucrative year of political advertising on record, company executives said during 2Q earnings call. Chief Operating Officer Steven Marks says that considering how political campaigns have already raised more than previous presidential elections, it's safe to expect revenue will reach record levels in 2020. Known for having a conservative editorial voice, Sinclair's stations were a popular outlet in 2016 for President Trump's campaign.
- The wave of US equity selloffs following the Chinese yuan's weakening and intensified trade tensions was relatively orderly, Barclays says. A weakened yuan is mildly beneficial for US equity earnings, the firm says, as US companies are net importers. This season's earnings results, which Barclays says have been slightly above expectations, should also dampen the pessimism. The market also expects the Fed to come to the rescue with more rate cuts by the end of 2020, according to Barclays. "The probability of our 'soggy soft patch' scenario (escalation of trade tensions which are neutralized by Fed easing) has now increased, leading to downside risks to our current price target," Barclays says.
- Trade groups representing grain-trading giants like Cargill, Archer Daniels Midland, Bunge and Louis Dreyfus push back on the Trump administration's proposal to loosen regulations for approving new genetically engineered crops. Farm commodity traders support biotech crops in general, but warn that speeding new varieties to market--before major crop-importing countries grant their own approvals--could lead those countries to block imports of US crops, snarling global trade flows. It's happened before: In late 2013 China blocked US corn after detecting unapproved GMO varieties, costing grain companies hundreds of millions of dollars. The Trump administration's June proposal "risks undermining consumer acceptance and international regulatory recognition of APHIS's regulatory oversight," say officials from the National Grain and Feed Association and other agribusinessgroups.
- The 10-year Treasury yield falls back to all-time lows at 1.618%, according to Tradeweb, after U.S. President Donald Trump tweeted Wednesday that the Federal Reserve "must Cut Rates bigger and faster, and stop their ridiculous quantitative tightening NOW". Similarly, the 10-year Bund also fell to -0.597%, a new record low. The yield curve spread between 2 and 10-year Treasury bonds also flattened, after narrowing to below 8 basis points, Tradeweb data shows. The "Yield curve is at too wide a margin, and no inflation!," continued Trump's tweet. The dollar falls against the euro and the yen, with EUR/USD up 0.3% at 1.1236 and USD/JPY down 0.8% at 105.65.
- Further escalation of tensions between the U.S. and China could continue to eat into European credit total returns on bonds rated at single A or below and compound the pressure on spreads via outflows, says Commerzbank's Cem Keltek. So far, China's pledge on Tuesday not to intentionally devalue its currency saw the selloff in risk-assets abate, he says, but European corporate bond spreads lagged the tightening seen in credit default swap indices. The selloff on Monday triggered by U.S. President Donald Trump's threat to impose a 10% tariff on the remaining $300 billion in imported Chinese goods sparked a differentiation in pricing among rating categories and negative total returns in euro-denominated investment-grade bonds, he adds.
- Gold is up 1.2% at $1,501.60 a troy ounce in early-day trade as the recent upturn in U.S.-China trade tensions continues to affect markets. Investors can't get enough of the haven asset; ETF investors bought around 0.9 million troy ounce of gold over the past week with total known ETF holdings of gold increasing to a fresh six-year high of 76.5 million troy ounces as of yesterday, ING strategists note. "Central banks are also likely to keep up with their gold purchases in 2H19, as the escalating political/trade uncertainty pushes countries to diversify assets," they add.                                                

- Brent crude oil is down 0.3% at $58.77 a barrel and WTI futures are down 0.2% at $53.52 a barrel after the U.S. variety sold off again late Tuesday. Brent, meanwhile, closed at its lowest level in seven months as trade barbs exchanged between the U.S. and China continued to weigh on various asset classes. With the latest twist in the trade saga signaling more difficulty ahead, analysts may once again revise demand growth estimates. Meanwhile, while President Trump "may not have too much to brag about when looking at the markets in recent days... perhaps this is one unintended benefit, as we all know he loves lower oil prices, " says OANDA's Craig Erlam.

Aug 07 - Trump sinks the markets - and maybe his reelection chances (WSJ DJ Reuters)
- Oil prices steadied after falling at the start of the session, with the potential for damage to the global economy and fuel demand from the intensifying Sino-U.S. trade dispute continuing to cast a shadow over the market.
- Gold prices jumped 1% to their highest in more than six years, as the trade war between China and the United States showed no signs of abating, spurring investors to seek refuge in safe-haven assets.
- London copper prices struggled to rebound from a two-year low as markets remained fragile with barely any signs of progress in the year-long trade negotiations between the United States and China.
- U.S. corn futures edged higher, though concerns forecasts for crop-friendly weather and fears of a protracted U.S.-China trade war limited gains.
- The Aussie and kiwi dollars skidded to multi-year lows after New Zealand's central bank shocked markets by flagging the chance of negative interest rates, sending safe-haven assets soaring.

- As a result of President Trump's deepening trade war with China and decision to label China a currency manipulator, financial markets on Monday took a beating, with the Dow down 767 points (about 3 percent) in the worst trading day of 2019. The Post reports: "The U.S. last named China a currency manipulator in the early 1990s, and has not applied that designation since. … Under the designation, America could impose much more significant tariffs on China than it has so far — which could trigger further retaliation from China." Even worse, economists fear that "the most dangerous potential consequence of a currency battle would be a slowing of overall economic growth in the U.S. and China, at a time when analysts already fear a global slowdown could push the U.S. into a recession." The market continued to sink in after-hours futures trading on Monday.

- Brent crude oil is down 0.3% at $58.77 a barrel and WTI futures are down 0.2% at $53.52 a barrel after the U.S. variety sold off again late Tuesday. Brent, meanwhile, closed at its lowest level in seven months as trade barbs exchanged between the U.S. and China continued to weigh on various asset classes. With the latest twist in the trade saga signaling more difficulty ahead, analysts may once again revise demand growth estimates. Meanwhile, while President Trump "may not have too much to brag about when looking at the markets in recent days... perhaps this is one unintended benefit, as we all know he loves lower oil prices, says OANDA's Craig Erlam.
- Tenet Healthcare CFO Dan Cancelmi tells analysts the company helps its patients estimate their cost for various procedures, working to factor in insurance coverage. Cancelmi describes those efforts in response to an analyst's question about a Trump administration proposal to make public the prices hospitals negotiate in confidence with health insurers. Cancelmi didn't comment specifically on the administration's proposal. "We are certainly supportive of making the experience for our patients as good as possible and enabling our patients to understand the economics associated with any care that will be provided to them," he says.
- Alphabet gains despite renewed criticism from President Trump via Twitter. Google's parent company rises 1.8% to $1,175.20, ahead of the Nasdaq for the day. Trump tweeted that he was "watching Google very closely" after WSJ reported last week that former Google engineer Kevin Cernekee says he was fired for expressing conservative political beliefs. Google denied that. Trump writes that Google CEO Sundar Pichai "was in the Oval Office working very hard to explain how much he liked me."
- The more the U.S. dollar rises, the more likely U.S. President Donald Trump will try to weaken it, increasing the prospects of currency intervention, TD Securities' Mark McCormick says. "Higher U.S. stocks and a stronger USD simply can't cohabitate and a weaker global economy fuels a stronger USD," he says, adding that intervention fears may contain dollar rallies. For now, risk aversion fueled by the escalation in the trade dispute between the U.S. and China favors fading any rallies in USD/JPY and USD/CHF, he says.

Aug 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose more than 1% as traders betting on falling prices bought back contracts to lock in profits after declines over the last three sessions due to the escalating trade tensions between China and United States.
- Gold prices held firm near six-year highs as investors flocked to safety after the United States designated Beijing a currency manipulator, escalating a protracted trade war between the world's two biggest economies.
- London base metals edged higher, as the U.S. dollar weakened after Washington labelled Beijing a currency manipulator, marking a sharp escalation in the year-long trade dispute between the two economies.
- Chicago corn prices rose for a third session, underpinned by concerns over forecasts of adverse crop weather in parts of the U.S. Midwest that could potentially curb yields.

- In an angry outburst, Trump accused China of ‘currency manipulation’ and branded its decision a ‘major violation’. The US President has long claimed Beijing unfairly suppresses the value of the yuan to boost its own exporters. Trump tweeted: ‘China dropped the price of their currency to an almost historic low. It’s called “currency manipulation”.’ The fiery row spooked markets, causing traders to turn to safe havens such as gold and government debt. Amid the turmoil, £46bn was wiped off the value of the UK’s top companies in a blow to millions of pensioners who have their nest eggs tied up in stocks. Across the Atlantic, the Dow Jones Industrial Average plunged by more than 900 points as the panic spread to Wall Street in the worst day for US stocks this year. It eventually closed down 2.9pc, or 767.27 points, at 25,717.24. The pan-European Euronext 100, Germany’s Dax, France’s Cac 40 and Italy’s FTSE MIB index also racked up losses.

- Brent crude oil is up 1% at $60.41 a barrel and WTI futures are up 1.1% at $55.25 a barrel, with both varieties clawing back a fraction of their heavy losses in recent trading sessions, as equities, FX, and commodities all show the strain from a fresh escalation of the U.S. and China's trade spat. While the U.S. labeled China a currency manipulator after the yuan weakened to 7 to the dollar, JBC Energy also points to an escalation in U.S. sanctions on Venezuela, imposing a total economic embargo. That said, JBC cites Argus reporting that exemptions remain in place for refiner Citgo as well as Chevron's stake in its joint venture with PdV.
- The FTSE Straits Times Index falls 1.4% to 3149.71 in early trade amid escalating U.S.-China trade tensions. In the short term, markets will experience "a lot of pain" in the aftermath of Trump latest call for increased tariffs and the devaluation of the renminbi that the U.S. administration is calling currency manipulation, says Joel Ng, the head of research for KGI Securities, but he expects the Monetary Authority of Singapore to adopt a looser stance in response to the current situation. Stocks on the index are broadly down, with DBS Group opening 1.3%
lower, Singapore Airlines down 0.2% and Singapore Telecommunications down 0.6%.
- Casino stocks join the sell-off, as the yuan weakens and President Trump accuses China of currency manipulation. Wynn Resorts falls 7.3% in mid-afternoon trading, Las Vegas Sands is down 4.4% and MGM Resorts loses 2.6% while ADRs for Melco Resorts fall 7%. Executives have said some casino customers are worried about tensions between the US and China. "We hear anecdotally ... that customers are concerned about the trade war. It is impacting some of their business," Las Vegas Sands COO Robert Goldstein told investors July 24 in a call about 2Q. Meanwhile, Hong Kong, a major customer base for casinos, is struggling with a political crisis, including street clashes and a citywide strike.
- Tech stocks are bearing the brunt of the market selloff amid an escalation in the US/China trade dispute. "It's a black cloud across the tech space with Apple and [semiconductor companies] front and center," Wedbush analyst Daniel Ives tells WSJ. "This is a growth and cost overhang on semis and can potentially disrupt the supply chain, that remains the major Street worry." Overall, Ives says, this could take 100 bps to 200 bps of growth off the space. Apple falls 5.4%, Advanced Micro Devices declines 5.7%, Nvidia sinks 7.3% and Broadcom is off 4.8%.

- Many livestock traders are maintaining some level of optimism, convinced US pork simply can't be ignored in a world battling swine fever. "Even if the Chinese try not to buy pork from the US, they are going to have to get it from Brazil or the EU," independent trader Dan Norcini says. "That means they could empty Brazil or the EU of all their hogs, forcing the customers of those countries to come here to the US to secure supplies." Combined, the EU and Brazil are projected to produce nearly 28M metric tons of pork this year, according to USDA data, while the US is projected to produce 12.6M tons.
- Oil prices remain lower due to broad-market selling and risk aversion related to a US-China trade fight, but a weak dollar may be preventing even steeper declines in crude. Oil is bought and sold in US dollars, so its price sometimes move inversely to the currency. The WSJ Dollar Index is down 0.6%, near a two-week low amid China trade tensions and weak US service-sector data. WTI's front-month contract for September delivery was recently 1.3% lower at $54.95 a barrel.
- Videogame company stocks slump after President Trump criticized the "glorification of violence" in games following the weekend's mass shootings that left 30 people dead. Two other political figures--House Minority Leader Kevin McCarthy and Texas Lt. Gov. Dan Patrick--also blamed videogames for contributing to mass shootings, with Patrick saying Activision Blizzard's "Call of Duty" franchise was named in the El Paso shooter's manifesto. Activision Blizzard falls 6.6%, Take-Two Interactive Software declines 5.9% and Electronic Arts stumbles 4.5%, outpacing the S&P 500's 2.4% fall. Take-Two reports fiscal 1Q earnings after the close of trading today; Activision Blizzard reports 2Q results on Thursday.
- Grain futures trade lower overnight, a trend that may not stop once the market opens at 9:30 am ET. In a tweet this morning, President Trump accused China of "currency manipulation"-- not a good sign for those hoping for the US and China to find common ground to return to negotiating a trade deal. "China dropped the price of their currency to an almost a historic low. It's called "currency manipulation," says Trump via Twitter. "Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!" December corn is currently down 1.8%, November soybeans are down 1.2%, and September wheat is down 1.8%.

Aug 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell amid renewed global economic growth concerns after U.S. President Donald Trump vowed to escalate the trade war with China with more tariffs, which would likely limit fuel demand in the world's two biggest crude consumers.
- Gold prices jumped 1% to their highest level in more than six years, as the escalating trade war between the United States and China along with global growth worries drove investors towards safe-haven assets.
- Chicago soybean futures lost ground, falling for four out of five sessions, as an escalating trade war between Washington and Beijing caused headwinds to the market.
- London copper hit its lowest in more than two years after a trade war between the United States and China escalated, while Shanghai nickel prices hit a four-year high on renewed concerns of an export ban in Indonesia.
- China's yuan tumbled more than 1% to 11-year lows amid mounting fears over a sharp escalation in the U.S.-China trade war, sparking a sell-off in other currencies in the region.

- EUR/USD rises 0.1% to 1.1120 as the euro wins out over the dollar amid growing fears of escalating U.S.-China tensions after President Trump last week unexpectedly slapped further tariffs on Chinese goods imports, sending the Chinese yuan beyond 7 per dollar. Danske Bank sees limited scope for near-term gains in EUR/USD, with potential for the dollar to push higher after U.S. services PMI and ISM data later Monday. "We expect the U.S. service sector to remain healthy," Danske says. ING says sharply lower U.S. equity futures have helped lift EUR/USD, though it expects the euro to fall further against the safe-haven yen and Swiss franc.
- Gold is up 1% at $1,471.10 a troy ounce in early-day trading, as investors continue to buy haven assets after tweets from President Trump announcing expanded trade tariffs on China continued to drive markets. Fellow haven assets the Japanese Yen and the Swiss Franc were also higher, Deutsche Bank notes, while the Chinese yuan has weakened past RMB to the dollar. With China reportedly asking state-owned companies to suspend imports of U.S. agricultural products and the country's latest unofficial services purchasing managers index reading falling below market expectations, it's likely the fallout from the latest trade blow will remain in focus for investors in gold and broader markets.
- Brent crude oil is down 1.2% at $61.03 a barrel and WTI futures are down 1.2% at $54.98 a barrel in a fresh selloff after a brief rally on Friday. Sharp volatility began late in the U.S. day Thursday, with an 8% plunge after President Trump announced new tariffs on Chinese imports, renewing fears that the trade dispute between the two countries will drag on, stymying global growth. That marked oil's biggest drop since 2015. WTI and Brent recovered 3% and 2% on Friday. Traders are retaining focus on tariffs, JBC Energy says, while also keeping an eye on Iran. Iranian forces seized an Iraqi tanker allegedly smuggling fuel near Iran's Farsi Island in the Persian Gulf over the weekend.
- Oil prices are broadly lower in Asian trade as markets are still being dragged by President Trump's comments about imposing more tariffs on Chinese imports. U.S.-China trade issues will remain "the dominant factor shaping opinion on oil prices after the latest tariff escalation," VM Markets says. The trade tensions have weighed on global demand outlook and hurt oil prices. Oil prices may be supported near term by tensions in the Middle East. Front-month WTI was last down 0.5% and Brent futures was 0.9% lower.

Aug 05 - Trump tariff threat disrupts markets (WSJ DJ)

SHAREMARKETS around the world have come under pressure and the Australian dollar has taken a hit after US President Donald Trump ratcheted up his country’s trade war with China.

Investors piled into assets regarded as safe havens yesterday after Mr Trump announced the US would slap a 10 per cent import tax on those Chinese imports that are not already subject to tariffs.

From next month, the new tax will be levied on Chinese imports worth $US300 billion ($441.7 billion) a year.

Mr Trump’s move breaks a truce that was struck in June on moves to intensify the US-Sino trade war, and analysts say it could further disrupt global supply chains.

Eswar Prasad, an economist at New York’s Cornell University, said “the stage is now set for a further escalation of trade tensions between China and the US”. The US had already imposed 25 per cent tariffs on Chinese imports worth $US250 billion a year, and Beijing retaliated by taxing $US110 billion of goods imported from America. Australia’s benchmark ASX 200 index fell 20.3 points to 6768.6 points. The Aussie dollar fell heavily against the greenback, dropping as low as US67.86¢ yesterday.

Aug 03 - Global markets plunge on Trump's tariff threats (WSJ DJ)

Stock market volatility returned with a vengeance Friday on worries that U.S.-China trade differences will put the brakes on global growth.

The Dow Jones industrial average dropped 330 points before clawing back to a 98-point loss, closing Friday at 26,485. The wild day followed tariff threats and hardball statements by President Trump that he would be "taxing the hell out of China" if the Asian economic rival does not make a trade deal with the United States.

It was the worst week of 2019 for stocks. The Standard & Poor's 500-stock fell 21 points to close at 2,932, a drop of .73 percent on the day. The tech-heavy Nasdaq composite index fell 107 points, 1.32 percent, to close at 8,004 as markets headed into the weekend.

Nothing was spared. Software, chip stocks and the big technology names such as Microsoft and IBM, Intel, Salesforce and Oracle all declined on concerns over China and world trade. Investors fled to the safety of long bonds. The yield on the closely watched 10-year Treasury stayed beneath 2 percent and dipped to its lowest point in about three years.

In early 2018, the White House pivoted sharply away from its tax cut push and took initial steps toward launching a global trade war. These changes coincided with the departure of some top White House economic advisers and elevated others who were more supportive of Trump's adversarial approach. Though the stock market has had peaks and valleys since then, it is essentially in the same place it was when the trade wars began in early 2018.

The big drags on the Dow were companies most vulnerable to a closure in Chinese markets. Cisco finished down 3.86 percent, followed by Dow Inc. at 2.67 percent, footwear giant Nike at 2.38 percent, Apple at 2.12 percent and Caterpillar at 1.77 percent. The blue chips are still way up for 2019, at with a gain of 13.5 percent, heading into one of the historically worst months of the year for stocks.

The stock skid came despite a good jobs report Friday and a quarter-point rate cut by the Federal Reserve on Wednesday, both of which are seen as positive for the economy. But Trump's Thursday afternoon tweets threatening more tariffs on China brought the midsummer feel-good vibe crashing down.

Asian markets finished mostly down on Friday, led by a 2.35 percent decline in the Hong Kong Hang Seng Index. European markets were down across the board, led by France's CAC 40 at a nearly 3.6 percent drop.

Friday's losses pushed the Dow down more than 3 percent since hitting its all-time high of 27,359.16 more than two weeks ago. The Dow has lost more than 800 points since July 15.

"Just when you thought politics, tariffs and interest rates couldn't merge any more, the Fed announces a modest cut and the president ratchets up trade tariffs," said Nancy Tengler of Tengler Wealth Management. "We will likely enter a period when bad news will be good news again, but strap in for a volatile August."

Oil prices recovered Friday from steep losses the previous day on Trump's tariff threats. West Texas Intermediate oil was up $1.25 to $55.23 per barrel on Friday, a gain of 2.37 percent. The price had fallen 8 percent on Thursday.

"There was obviously some panic-selling" on Thursday, said John Kilduff of Again Capital. "But the tariff threat is weeks away and could easily be defused before the Sept. 1 deadline."

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

- Oil prices rose more than 2% rebounding from their biggest falls in years after U.S. President Donald Trump imposed more tariffs on Chinese imports, intensifying the trade war between the world's two biggest economies and crude consumers.
- Gold prices fell nearly 1% as investors locked in profit after U.S. President Donald Trump's fresh salvo in the year-long trade spat with China increased demand for the safe-haven metal in the previous session.
- London copper dropped to its lowest in over three weeks after U.S. President Donald Trump said he would slap a 10% tariff on the remaining $300 billion of Chinese imports from next month.
- Chicago soybean futures were on track for their biggest weekly decline in nearly three months as an escalation in a year-long dispute between Washington and Beijing weighed on the market.
- The Japanese yen surged to a five-week high versus the dollar and a 2-1/2-year peak against the pound, after U.S. President Donald Trump broke a truce in the Sino-U.S. trade war, bolstering demand or safe-havens.

- Sony Corp. and Nintendo Co. are among the Japanese companies most affected by President Trump's latest China tariffs that could take effect Sept. 1 as the list could include video game consoles, which are already being sold with slim margins. Nintendo has moved part of its console production from China to southeast Asia, including Vietnam. Sony Corp. said Tuesday it hasn't moved any manufacturing for the would-be-affected products from China as it wasn't clear at the time the tariffs on those products would materialize in the near term. Sony CFO Hiroki Totoki said Tuesday it may need to raise prices of affected products, including the PlayStation 4, if the U.S. goes ahead with tariffs on video-game consoles.
- It is unclear what caused Trump's latest intensification of the trade dispute. Worryingly, though, for the global economy, it appears Trump has gone all in and is hoping that China buckles under the pressure and caves to US demands. However, in such a scenario there is no way for China to fold without losing face since it goes against China's core demands of sincerity and the removal of existing tariffs, says NAB currency strategist Tapas Strickland. It is possible then that China will retaliate with an intensification of non-tariff barriers, as well as further Chinese stimulus to ward off headwinds. Chinese manufacturers will also continue to squeeze their margins to offset the tariff impact which will continue to add to a subdued global inflation picture.
- AUD/USD has declined some 1.0% to around 0.6800 and more than a ten-year low (excluding the 3 January 2019 flash trade). The Aussie is likely to remain under downward pressure as the ramifications of the trade tensions generate downward revisions to global growth, says CBA. While Australian exports to China have not been effected to date, in fact they have continued to grow, the market will continue to apply depreciation pressure to the currency. Commodity prices have provided some level of support against the depreciation pressures.
- US stocks fell sharply after President Trump said that the US will impose additional tariffs on China next month, after failing to make significant progress in talks this week. Before the afternoon announcement stocks were rebounding nicely from yesterday's losses as traders debated the chances of more Fed rate cuts this year. The dollar weakened and 10-year Treasury yield dropped below 1.90% as uncertainty gripped the market, sending gold prices higher. Financials and energy sectors both declined over 2% as oil prices plunged nearly 8%. DJIA drops 280 points to 26583, the S&P 500 slips 26 to 2953 and the Nasdaq loses 64 to 8111.
- Shares of retailers retreat after President Trump says he will impose a new round of tariffs on Chinese imports. Kohl's and Nordstrom slide 8% each, while Best Buy and Gap stumble 9.7%, and 8.9%, respectively. Although earlier tariffs mostly targeted industrial goods, the US plans to impose $300B of new levies on a range of consumer products, including clothing. With the tariffs due to take effect Sept. 1, retailers will have to weigh whether they can absorb the added costs themselves, spread them across vendors or pass them on to customers. All three of those options have the potential to stifle sales and profit growth this year, analysts say.
- October lean hog futures on the CME closed out trading down 5% at 67.475 cents per pound, with the market reacting negatively to President Trump's tweets announcing a new 10% tariff on $300M worth of Chinese goods come Sept. 1. "Trump and his love affair with tariffs is ruining US pork producers...The hogs are essentially back where they were when the news out of China broke at how great the carnage has been from [African swine fever] losses," says independent trader Dan Norcini. The hog market is now projected to stay bearish for the foreseeable future, although some weakening in the US dollar following the announcement could mitigate the bearishness, says Mike Zuzolo of Global Commodity Analytics. Meanwhile, October live cattle futures finished trading 1% higher, at $1.08725 per pound.
- US government bond yields have erased almost all of their rise following the 2016 presidential election when investors bet that massive tax cuts and infrastructure spending would stimulate growth and inflation. The benchmark 10-year Treasury yield has fallen more than 1 percentage point since peaking at a multiyear high of about 3.2% in November. Yields extended earlier declines Thursday after President Trump said he would impose additional tariffs on imports from China. The yield on the 10-year note was a recent 1.907%. It had been 1.867% on Nov. 8, 2016.
- The revelation that the US will lobby a new tariff of 10% on $300B worth of Chinese goods come Sept. 1, has hit grains futures--with December corn down 1.5%, November soybeans off 1.9% and September wheat down 2.3%. China's apparent failure to honor promises to buy more US agriculture appear to be one factor driving President Trump's decision. US grain export sales were again low in the past week, according to the USDA.
- Investors are turning to a familiar playbook on trade uncertainty: Raising bets that the Fed will keep lowering interest rates. Fed-funds futures now show a 91.5% chance of at least one more rate cut this year and a roughly 56% probability of at least two more cuts in the central bank's  remaining meetings of 2019. Traders had lifted bets on further rate cuts earlier in the session, then the odds of further cuts climbed even more following President Trump's announcement of an additional 10% tariff on more Chinese goods on September 1st.
- October hog futures are now down 5.9%, with President Trump confirming that the US-China talks earlier this week in Shanghai did not conclude on a positive note, and placing a new tariff of 10% on $300B worth of Chinese goods beginning Sept 1. Livestock traders have been hopeful that a trade deal would take place to allow US pork producers to take advantage of China's need for protein in the wake of devastation by African swine fever. The October contract is now as its lowest level since early March.
- President Trump's tweet about additional tariffs is causing fresh worries that a drawn-out trade spat will add more pressure on a slowing world economy, sending the Cboe Volatility Index up 8.3% to 17.46. It is now up 43% for the week, though it is still down sharply for the year. Wall Street's "fear gauge," which tracks expected swings in the S&P 500, has gotten a boost from uncertainty about interest rates and now trade policy the past two sessions. Most-active Comex gold futures are also rallying after-hours, climbing 0.9% as investors seek safer assets.
- Oil prices are now down about 6.7% at $54.68 a barrel after President Trump tweets that he is putting an additional tariff of 10% on $300B of Chinese imports starting Sept. 1, the latest example of fears about slowing global growth triggering oversupply fears for commodities. US crude is now heading for its largest one-day drop of 2019.

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

- Oil prices skidded declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and Sino-U.S. talks ended without apparent progress towards resolving a bitter trade dispute.
- Gold prices dropped to two-week lows after the U.S. Federal Reserve cut rates by 25 basis points as expected but tampered market expectations of a lengthy easing cycle, lifting the dollar to a two-year high.
- London copper prices slipped to a three-week low after Federal Reserve Chairman Jerome Powell said the U.S. central bank's first rate cut since 2008 was not the start of a long easing cycle, while Sino-U.S. trade talks appeared to have made little progress.
- U.S. corn futures edged higher rebounding from a seven-week low touched in the previous session, although gains were checked by forecasts for more favourable weather that eased concerns about the prospects for the coming crop.

- Fed Chairman Jerome Powell says the biggest threat from trade dispute is the impact on business confidence. "The mechanical effects of the tariffs are quite small... as it relates to U.S. economy," Powell said at the FOMC press conference. But the impact on business confidence, much harder to measure, continues to weigh on businesses, he said. "Businesses will tell you that it's a factor, particularly ... manufacturing business that have supply chains that cross international borders," Powell said.
- President Trump has been thrashing the Fed for months over monetary policy issues and calling for lower rates and an end to balance sheet shrinkage. Fed Chairman Jerome Powell was asked if the president's position had any bearing on lowering rates Wednesday, and he says it doesn't. "We never take into account politics," nor are rates changed to prove a point to politicians: "We also don't conduct monetary policy to prove our independence."
- Fed Chairman Jerome Powell acknowledged part of lowering rates was a "risk management" action and said "there's defiantly an insurance aspect" to what the central bank did. But he also added that Fed officials are dealing with novel uncertainty when it comes to trade amid the Trump Administration's disputes with other nations. This trade situation "is something we haven't faced before and we are learning by doing," Powell said.
- Health insurance investors are shrugging off the criticism leveled at the industry during last night's Democratic debate, perhaps signaling that the market is less jittery about the immediate prospects for "Medicare for all" policies. UnitedHealth, Anthem and Cigna are slightly higher. Humana's far steeper, 4.8%, increase is due to today's strong earnings powered by its core Medicare business. Humana and Molina also both beat projections for their medical-loss ratios, which have been a focus of investor concern with earlier earnings results.
- A lack of major developments in the US-China trade talks has hit the grain market following the conclusion of the talks in Shanghai this week. "The US trade delegation is leaving Shanghai with very little concrete progress having been made," AgResource says. Although the USDA announced a 104,500 metric ton sales of soybeans to an unknown destination, most likely China, the amount of the transaction is nowhere near enough to excite traders. November soybeans are trading down 0.7% Wednesday. US officials believe that China's new strategy is to wait out their US counterparts.
- The USDA reported the sale of 104,500 metric tons of soybeans Wednesday, with all but 500 tons to be delivered during the 2019/20 marketing year. The destination for the deliveries is unknown, which is usually believed to be China by market participants. However, November soybeans futures are down 0.5% overnight, as optimism about renewed US-China trade talks continues to dwindle. "No new good news on the trade front with face to face meetings in China concluding today with no new announcements," says Doug Bergman of RCM Alternatives.
- The CEO of medical-devices company Smith & Nephew says that he isn't worried about drug-pricing reform spilling over from the pharmaceutical industry to affect his sector. Speaking to the Dow Jones Newswires, Namal Nawana notes that "we're riding into a political cycle," and that what is said in the run-up to an election isn't always indicative of what happens after. "I don't feel at all in the same bucket as pharma," he adds.
- It is unclear what triggered President Trump's new round of tweets against China, but maybe what did the trick was news that U.S. soybean exports to China had collapsed in the first half of the year to the lowest level in more than a decade alongside another fall in pork sales in June, says NAB. This would seem like a pretty good guess given Trump's tweets that "China is doing very badly, worst year in 27 -- was supposed to start buying our agricultural product now -- no signs that they are doing so." Whether soybeans were the trigger will never be known, but it is certainly not a great look as U.S. trade negotiators enter a second day of negotiations in Shanghai. The only positive thing we can say for now is that the two parties are still willing to carry on talking, NAB adds.
- New Zealand's NZX-50 index opens flat at 10878.52 on Wednesday as President Trump's latest trade outburst stokes skittishness among investors. Trump tweeted on Tuesday morning that there were "no signs" of China making a new effort to buy U.S. agricultural products. The DJIA fell 0.1% overnight to snap a 2-day winning streak, ahead of Chinese and U.S. negotiators resuming trade talks this week in Shanghai. Fisher & Paykel Healthcare drops 0.9% to NZ$16.65, while Fletcher Building falls 0.8% to NZ$5.05. Some support is offered by A2 Milk's 0.3% rise to NZ$17.85, while Contact Energy lifts 1.7% to NZ$7.95.
- Apple is seeking exclusions on tariffs for some components for the Mac Pro because it wants to resume manufacturing of the product in the US, CEO Tim Cook says. The company this year shifted production of its new Mac Pro to China after making the previous model in Austin, Texas. It recently asked the Trump administration for an exclusion on tariffs for some components for the device. President Trump said Apple would be denied those exclusions and needed to make the Mac Pro in the US. Cook says Apple wants to do that. "We've been making the Mac Pro in the US and we want to continue to do that," he says.
- The NZD/USD stumbles toward monthly lows as President Trump's latest trade outburst damps market risk sentiment, Australia & New Zealand Banking Group says. Trump tweeted Tuesday morning that there were "no signs" of China making a new effort to buy US agricultural products. "That is the problem with China, they just don't come through," he added. Chinese and US negotiators are resuming trade talks this week in Shanghai. ANZ said the kiwi was also weighed down by a weaker Aussie dollar, with the immediate focus on ANZ Business Confidence data at 1pm in New Zealand, ahead of Aussie CPI not long after. The FOMC meeting also looms later on Wednesday. The NZD/USD is at 0.6613.

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

- Oil prices rose for a fifth day, buoyed by a bigger-than-expected drop in U.S. inventories and as investors awaited a widely expected cut in interest rates by the Federal Reserve, the first in more than 10 years.
- Gold prices were little changed as investors waited on the outcome of the Federal Reserve's meeting later in the day when policymakers are expected to cut interest rates for the first time since the financial crisis.
- Copper prices in London rose ahead of an expected interest rate cut by the U.S. Federal Reserve, but were on track to fall this month amid slowing growth from top consumer China.
- Chicago corn futures edged higher with bargain-buying supporting prices after the market dropped to its lowest in seven weeks, although gains were limited by improved condition of the U.S. crop.
- The dollar held firm as a wait-and-see mood prevailed, with traders looking ahead to the outcome of the Federal Reserve's meeting later in the day when policymakers are expected to cut interest rates for the first time since 2008.

- New Zealand's NZX-50 index opens flat at 10878.52 on Wednesday as President Trump's latest trade outburst stokes skittishness among investors. Trump tweeted on Tuesday morning that there were "no signs" of China making a new effort to buy U.S. agricultural products. The DJIA fell 0.1% overnight to snap a 2-day winning streak, ahead of Chinese and U.S. negotiators resuming trade talks this week in Shanghai. Fisher & Paykel Healthcare drops 0.9% to NZ$16.65, while Fletcher Building falls 0.8% to NZ$5.05. Some support is offered by A2 Milk's 0.3% rise to NZ$17.85, while Contact Energy lifts 1.7% to NZ$7.95.
- Apple is seeking exclusions on tariffs for some components for the Mac Pro because it wants to resume manufacturing of the product in the US, CEO Tim Cook says. The company this year shifted production of its new Mac Pro to China after making the previous model in Austin, Texas. It recently asked the Trump administration for an exclusion on tariffs for some components for the device. President Trump said Apple would be denied those exclusions and needed to make the Mac Pro in the US. Cook says Apple wants to do that. "We've been making the Mac Pro in the US and we want to continue to do that," he says.
- The NZD/USD stumbles toward monthly lows as President Trump's latest trade outburst damps market risk sentiment, Australia & New Zealand Banking Group says. Trump tweeted Tuesday morning that there were "no signs" of China making a new effort to buy US agricultural products. "That is the problem with China, they just don't come through," he added. Chinese and US negotiators are resuming trade talks this week in Shanghai. ANZ said the kiwi was also weighed down by a weaker Aussie dollar, with the immediate focus on ANZ Business Confidence data at 1pm in New Zealand, ahead of Aussie CPI not long after. The FOMC meeting also looms later on Wednesday. The NZD/USD is at 0.6613.
- Grains futures on the CBOT fall on President Trump's tweeted frustrations about the US-China trade talks as well as improved corn crop ratings. The one percentage-point improvement in the 2019/20 corn crop is also spurring managed money funds to sell off their corn long positions, says Doug Bergman of RCM Alternatives. "The 1% bump in corn ratings [is] giving 'the funds' the go ahead to dump more of  their corn longs," says Bergman. "Improved crop ratings, a managed fund long that has a lot of underwater positions, and uncertainty over the August crop report are keeping buyers away." September wheat is down 1.4%, December corn is down 1.2%, and November soybeans are down 0.9%.
- October hog futures jumped out to another decline Tuesday, with the contract trading down 2.7%. Hogs have now fallen over 5% since the start of the week, due to the negative comments from President Trump about China failing to hold up its end of the bargain on additional agricultural purchases, as well as the President's suspicions that China will not agree to a deal until after the US 2020 election. "[Hog] futures... remain exposed to China trade talk risk this week, which Trump may have amplified this morning with comments about their lack of follow-through on [agricultural] product purchases," says INTL FCStone. October live cattle futures are also down 1.1% so far in Tuesday's session.
- Sales of Eli Lilly's insulin products took a hit in the second quarter. Sales of Humalog fell 12% globally including a 15% drop in the US Lilly attributed the decline to higher rebates provided to industry middlemen and its increased share of covering patients' out-of-pocket costs in the Medicare Part D prescription benefit. The drop comes as Lilly and other insulin makers face various government investigations of a series of list price increases over many years. Lilly says the net US price for its insulin--after rebates to middlemen--has dropped in recent years, but that changes in insurance plans have exposed some patients to higher out-of-pocket costs. Lilly says it has tried to offset this with increased financial assistance and the introduction of a lower-cost version of Humalog. Shares slip 0.2%.
- Ralph Lauren's inventory was up 11% at the end of the recent quarter compared with the same period a year ago as the company pulled forward some shipments to mitigate the effect of trade tariffs on imports from China. The company also bulked up inventory in Asia as it expands in the region. Shares slip 3.6%.
- Grains traders hoping for good news from the US delegation in Shanghai this week on trade negotiations may see their cautious optimism derailed, thanks to tweets from President Trump this morning. "China is doing very badly, worst year in 27 - was supposed to start buying our agricultural product now - no signs that they are doing so," Trump tweeted Tuesday. "That is the problem with China, they just don't come through." Grains futures on the CBOT overnight
traded lower -- led by September wheat, which dropped 1.1%.

Jul 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose for a fourth day on optimism the U.S. Federal Reserve will this week cut interest rates for the first time in more than ten years, which should support economic and fuel demand growth in the world's biggest oil user.
- Gold prices dipped as the dollar rose to a two-month high, while investors awaited the outcome of a two-day U.S. Federal Reserve policy meeting expected to result in a cut in interest rates.
- Industrial metals rallied amid market expectations of a U.S. rate cut and as U.S. and Chinese officials meet in Shanghai to discuss their year-long trade dispute.
- Chicago corn futures slid for a fifth consecutive session after a weekly U.S. government report rated the crop condition above market forecasts.
- As the Trump administration readies to re-engage in Chinese trade negotiators this week, US farmers want to see progress. The American Farm Bureau Federation urges the Trump administration to make progress toward an agreement that will see China drop tariffs that the Washington-based agricultural lobby group says have cut exports by more than half from 2017 levels, after rising by about eight times from 2000 to 2017. "All eyes will be on this week's trade negotiations in China because reopening the door to one of the largest markets in the world is key to helping farmers get back on their feet," says Farm Bureau President Zippy Duvall.
- The dollar is a touch higher, boosted in part by gains against the British pound amid rising fears that the UK could leave the European Union without a deal to soften the economic damage from an exit. Though the new UK Prime Minister Boris Johnson has said he would prefer to leave the EU with the deal he has been more adamant than his predecessor, Theresa May, that Brexit will proceed with or without an agreement. The pound was recently down 1% against the dollar at $1.2258, while the WSJ Dollar Index was up 0.1% at 90.90.

Jul 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices fell as investors fretted over the outlook for global economic growth, while weekend talks between Iran and major powers ended on a generally positive note, suggesting an easing of tensions in the Middle East.
- Gold prices were stable ahead of a U.S. Federal Reserve meeting later in the week where markets will watch for indications of monetary easing in the world's largest economy.
- Most industrial metals on the London Metal Exchange advanced ahead of planned U.S.-China trade talks, but gains were capped due to a cautious view on the outcome of the discussion.
- Chicago wheat futures rose nearly 1% with the market to climb for three out of four sessions, underpinned by a reduction in estimates for output in top exporter Russia.
- The dollar clung to a two-month high against a basket of currencies in Asia after better-than-expected U.S. GDP data last week enhanced its yield attraction against rival currencies.

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

- Oil prices edged higher on worries about Middle East tensions, offset by a flagging global economic growth outlook amid the U.S.-China trade war.
- Gold prices steadied after touching a one-week low in the previous session, buoyed by expectations of monetary policy easing from leading central banks, while investors awaited U.S. economic growth data due later in the day.
- Copper prices fell, with London copper on track for its first weekly decline in three, as comments from European Central Bank President Mario Draghi were less dovish than expected and the bank held rates steady at its latest meeting.
- U.S. corn futures edged lower as the grain was poised to record weekly losses of 2%, despite fears ongoing adverse weather could wilt crops.
- The dollar stayed near a two-week high versus the yen as investors pared expectations for aggressive Federal Reserve interest rate cuts ahead of key U.S. economic data later in the day.

- Trade tensions with China are giving Intel Corp. (INTC) some anxiety. INTC CEO Bob Swan on an earnings call Thursday says that the prospect of further increases in tariffs on imports from China and other issues related to trade talks between the U.S. and the country give the company some uncertainty over the second half of the year. "There's still a little bit of unknown about how this China thing will play out," he says. "That's probably what makes me a little bit more anxious."
- Rockwell Automation says tariffs and protectionist trade measures by the US and other countries are causing companies to dial back investments in factories. "We're seeing the continued uncertainty over trade and tariffs that is starting to weigh on investment decisions," CEO Blake Moret tells analysts. Ongoing trade tensions between the US and China are causing collateral damage in third-party countries that are supplying less machinery or material to manufacturers in China that are now exporting less to the US. Rockwell reported better-than-expected EPS on improved margins, but sales slipped 2% and the company slashed its guidance for the year. Shares fall 0.7%.

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

- Oil prices nudged higher amid Middle East tensions and after weekly U.S. crude stocks dropped more than expected, but gains were stemmed by a fragile demand outlook on increasing signs of slowing global economic growth.
- Gold prices eased as the U.S. dollar hovered near multi-week highs, while some investors locked in profits ahead of major central bank meetings this month.
- Shanghai lead advanced, tracking a rally in London prices overnight, as investors were worried about a supply shortage amid some maintenance activities in China.
- U.S. soybean futures edged higher, as traders eyed a breakthrough in a trade war between Washington and Beijing.

Jul 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged higher, extending gains as rising tensions with Iran fuelled concerns about supply disruptions and as U.S. inventory data showed a much bigger than expected drop in crude stockpiles.
- Gold prices rose, moving away from a one-week low touched in the previous session, as escalating tensions in the Middle East drove investors towards the safe-haven metal, while a stronger dollar limited the metal's gain.
- London industrial metals prices advanced amid reports of progress in trade negotiations between the United States and China.
- Chicago corn futures were largely unchanged after closing higher, with fears about widespread yield losses due to recent adverse U.S. weather conditions underpinning the market.

- Brent crude oil is up 0.2% at $63.96 a barrel and WTI crude is up 0.5% at $57.04 a barrel on a morning of shallow moves after prices jumped following American Petroleum Institute data released Tuesday showing what JBC Energy calls a "massive draw." While Iran tensions simmer and investors await news on U.S.-China trade talks, JBC also says there is a growing case that U.S. shale production will slow down. "First, there is sobering news regarding shale company performance and the wide-spread sentiment that capital discipline is tightening up investments," JBC says, adding that "in the past tighter budgets might actually have encouraged aggressive production gains in the near term," but that may soon no longer be sustainable given declining rig counts among other factors.
- Industrial-metal prices rise after reports that the U.S. and China will resume face-to-face trade talks next week. A senior official in the U.S. administration told The Wall Street Journal that a delegation including Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will meet Vice Premier Liu He in Shanghai. Copper, aluminum and other base metals are acutely sensitive to China's economy, and have been in the doldrums since mid-April. But many analysts say tight supplies, especially in copper, would lead to higher prices if the trade tensions are resolved. Copper is up 0.2% at $5,995 a ton, aluminum is 0.4% higher at $1,828 a ton and nickel gains 0.3% to $14,270 a ton on the London Metal Exchange.
- Sterling could rally if Boris Johnson's victory in the U.K. Conservative Party leadership contest is confirmed this morning, says Kit Juckes of Societe Generale. However, he expects any rise to be short-lived, saying "the prospect of a difficult relationship with other leaders as [Johnson] tries to eke out some improvement in the terms on which the U.K. leaves the EU is hardly confidence-inspiring." The pound is down 0.4% against the dollar at $1.2425, though every other G10 currency is also lower after the deal to avert a U.S. debt-ceiling crisis. Juckes also has his eye on U.S. housing-start data due at 1.30pm BST.

- Stocks extend gains in afternoon trading after Bloomberg reports US negotiators are heading to China on Monday for face-to-face talks. No further details were immediately available. The S&P 500 rises 0.6%, while Dow Jones Industrial Average climbs 0.5%. Both indexes are trading at their highs for the day. Treasurys extend earlier losses, with the 10-year yield rising to 2.07%.
- 2Q results from Royal Caribbean and Norwegian Cruise Line will reassure investors that the overall cruise industry is healthy, according to Wells Fargo Securities, despite facing some challenges from having to redeploy ships due to the Trump administration's Cuba travel ban. Of note, will be Norwegian's commentary on pricing for Cuban cruise redeployments given the company has the largest industry exposure, with about 4% of annual capacity, Wells Fargo says. For the full year, both companies are estimated to see a negative EPS impact from Cuba travel restrictions and other factors. Royal Caribbean is expected to report results Thursday and Norwegian in August.
- Canada says it officially launched the procurement process by which it plans to acquire 88 new fighter jets for the air force. Suppliers have until the spring of 2020 to submit their proposals, and the approved candidates, the government said, are Airbus, Lockheed Martin, Boeing and Saab. Proposals will be judged on technical merit, cost and economic benefits for Canadian regions. A decision by Canada to purchase new fighter jets has dragged on for over a decade, as an initial plan to acquire F-35s from Lockheed Martin were ensnared in a political uproar in the previous Tory administration. The current Liberal government initially balked at acquiring F-35 but has since softened its stance.
- President Trump touts the $16B designated to aid farmers hurt this year by global trade turmoil in a tweet, saying "farmers are starting to do great again, after 15 years of a downward spiral. The 16 Billion Dollar China 'replacement' money didn't exactly hurt!" The tweet comes after the White House's Office of Management and Budget completed its regulatory review of the market facilitation program earlier this month. Some market participants speculate that the USDA may release more details about the program--which was originally announced in late May--this week, but the USDA did not immediately respond to a request for comment on that possibility.
- Toys have largely dodged tariffs but Hasbro isn't taking any chances that will last, especially with the key selling season approaching. The toy company says it incurred additional expenses as it moved products into the US earlier than it normally would ahead of the holiday season. CEO Brian Goldner says that the steps leave Hasbro "extremely well prepared for what would be a very challenging and damaging impact if tariffs were implemented." Retailers are increasingly reluctant to take ownership of import until they reach the US, so Hasbro anticipates it will have to import more product into the US, which increase shipping and warehousing costs.
- Sterling could rally if Boris Johnson's victory in the U.K. Conservative Party leadership contest is confirmed this morning, says Kit Juckes of Societe Generale. However, he expects any rise to be short-lived, saying "the prospect of a difficult relationship with other leaders as [Johnson] tries to eke out some improvement in the terms on which the U.K. leaves the EU is hardly confidence-inspiring." The pound is down 0.4% against the dollar at $1.2425, though every other G10 currency is also lower after the deal to avert a U.S. debt-ceiling crisis. Juckes also has his eye on U.S. housing-start data due at 1.30pm BST.
- Nordic markets are expected to open slightly higher Tuesday, with IG calling the OMXS30 up 0.5% at around 1609. U.S. stock markets rose further yesterday evening, driven by the oil- and tech industries while both U.S. and European futures are indicating a continued modest climb today, says SEB. Asian markets are also mostly in the green this morning. After weeks of intense negotiations, the U.S. congress and government have reached an agreement to raise the U.S. debt ceiling significantly, SEB adds. "The agreement will reduce political risks somewhat, since it shows a will to compromise in an otherwise very polarized political climate." Later today, the outcome of the U.K. Tory leadership vote is due. OMXS30 closed at 1600.88, OMXN40 at 1537.09 and OBX at 799.19.
- Former Air Force pilot and Delta Air Lines executive Steve Dickson is expected to win Senate approval to head the Federal Aviation Administration. But in the process, he must overcome a perplexing hurdle: change or overcome a decades-old law prohibiting both of the FAA's two top leaders from having a military background. Deputy FAA Administrator Dan Elwell, who has been the acting agency chief, also graduated from the Air Force Academy. Lawmakers seem inclined to eventually craft a legislative solution, though Elwell may have to step aside until then. The Senate also could confirm Dickson with the unorthodox expectation a legal fix will follow. But that's especially tricky, given the party-line committee vote to advance the nomination.

Jul 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged higher amid lingering concerns about possible supply disruptions in the Middle East, but an overall weaker demand outlook kept a lid on gains, helped by a vow by the International Energy Agency (IEA) to take swift action to keep global oil markets adequately supplied.
- Gold prices fell as the dollar strengthened and some investors locked in profits ahead of the U.S. Federal Reserve meeting next week.
- Most London base metals rose on expectations of monetary policy easing by major central banks this month, helping nickel prices rebound after two sessions of declines.
- Chicago corn futures rose as the market rebounded from last session's three-week low after a U.S. government report showed the country's crop condition lagging behind market expectations.

- Seeking to free up NASA funding to accelerate human space exploration, White House aides and some outside advisers are examining the idea of combining management of all US military and civilian rocket launches under the Pentagon. Such a move would be controversial, according to people briefed on the concept, but could save hundreds of millions of dollars for NASA over several years. NASA currently runs all supply missions to the international space station, and is developing commercial capsules to ferry astronauts to and from the orbiting international laboratory. If the Pentagon oversaw such flights, proponents of the idea argue it would save spending on overlapping teams. But the idea is bound to be opposed by international partners, and hasn't gained enough momentum to be publicly pushed by the Trump Administration.
- Brent crude oil is up 1.7% at $63.50 a barrel and WTI rises 1.4% to $56.55 a barrel as investors react to the latest escalation in tensions between Iran and the West after Tehran announced the seizure of a British-flagged oil tanker Friday. Iranian forces captured the British-flagged tanker in the Persian Gulf, a move widely seen as retaliation for the U.K.'s seizure of an Iranian vessel off Gibraltar two weeks earlier. "Despite there being no production outages yet, markets realize the situation is far from solved," says UBS Wealth Management's Giovanni Staunovo. He adds that markets had settled down last week after the Trump administration said Iran was willing to negotiate.

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

- Oil prices rose on concerns that Iran's seizure of a British tanker last week may lead to supply disruptions in the Middle East and after Libya reported the shut down of its largest oil field.
- Gold prices gained following a steep fall in the previous session as tensions in the Middle East and weaker financial markets supported the metal, while a stronger dollar kept a lid on gains.
- Nickel prices retreated as a buying rally that sent the metal used mostly in making stainless steel to its highest in more than a year, started to lose steam.
- Chicago corn futures slid 1.6%, falling for two out three sessions, as forecasts of cooler weather across much of the U.S. Midwest eased fears about potential yield losses.

- Brent crude oil is up 1.3% at $62.76 a barrel and WTI is up 1.1% at $55.88 a barrel with prices relatively steady over the past hours after some wild swings on Thursday. Aside from the ongoing spat between Iran and the U.S. in the Strait of Hormuz on Thursday--Iran seized a tanker before the U.S. downed one of its drones--there were reports that International Energy Agency director Fatih Birol announced a 100,000-barrel cut in the agency's 2019 oil demand forecast. Further reports that the contaminated Druzhba pipeline is up and running contributed to oil market volatility, Sucden Financial Research's Geordie Wilkes says.
- Brent crude oil is up 1.6% at $62.93 a barrel and WTI crude is up 1.2% at $55.94 a barrel with prices having turned around after hitting monthly lows on Thursday. It has been a severely volatile 24 hours, with oil selling off Thursday on a combination of fund activity and Iran's request that sanctions on its economy be lifted in exchange for stricter nuclear inspections. In the Strait of Hormuz, Iran said it had seized a foreign ship with a crew of 12 that had been smuggling oil, before President Trump announced later in the day that the U.S. had downed an Iranian drone in the Strait of Hormuz. Investors will no doubt be watching already-strained U.S.-Iran relations for further signs of deterioration today.
- The Trump administration is tightening "Buy American" requirements for federally funded projects that use steel. Previously, contractors were able comply even if some portion of the steel production was done elsewhere. Steelmaker Nucor says that loophole has been eliminated, requiring now that steel be melted, poured and rolled entirely in the US. "We're pleased," says John Ferriola, CEO of Nucor, which supplies steel plate for the US military. "It's a positive impact to us, but it is not a major impact."
- PPG CEO Michael McGarry says the trade dispute between the US and China is sinking consumer confidence in the Asian country, leading to fewer car purchases and hurting the paint maker's car business there. "The single biggest factor in this is the trade war, if that's what you want to call it. People have money in their pocket in China. People are employed," McGarry says on a call. "Whenever this does settle, we will see a pop."
- UnitedHealth doesn't plan to back down from its move to require that drug rebates be passed to consumers, despite the Trump administration's decision to pull back a proposal affecting rebates in Medicare. CEO David Wichmann says during the company's earnings call that the UnitedHealth's decision on rebates wasn't tied to the federal stance, and the company believes that passing rebates to consumers has improved adherence to medications. Asked about the UnitedHealth rebate policy's impact on its commercial business, he said that there have been "no implications with respect to that policy adoption." Shares slip 2%.
- Honeywell International says it hasn't received any indication from the Chinese government that it will be blacklisted because of its business involvement in weapon sales to Taiwan. There were reports this week in China's state media that the firm was among those facing sanctions from China because of involvement in the deals. Honeywell has said it didn't have input on the deals cut in Washington and continued to distance itself from the situation on Wednesday, noting that it sees no reason why it would face boycotts.
- The pound rises 0.4% against the dollar despite a warning from the U.K.'s Office for Budget Responsibility that economic risks are larger than they were two years ago. The OBR forecasts that a no-deal Brexit--an outcome that both U.K. prime ministerial candidates have signaled a willingness to pursue--would push the U.K. into a recession, with GDP falling 2.1% amid declining business confidence and higher trade barriers with the EU. In the case of a no deal, the OBR forecasts an additional GBP30 billion a year in borrowing from 2020-21 onward, and an additional 12% of GDP to net debt by 2023-4 compared with a March estimate, as tax receipts fall. Under the stress-test scenario, sterling would depreciate 10%, the OBR says.

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

- Oil prices rose nearly 2% as tensions brewed again in the Middle East after a U.S. Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows.
- Gold surpassed the key $1,450 level for the first time since May 2013, after comments from a top Federal Reserve official bolstered expectations of an interest rate cut, while fresh tensions in the Middle East further supported bullion.
- Nickel extended its rally, having hit a four-year high in Shanghai overnight, after comments from two Federal Reserve officials revived bets for an aggressive rate cut this month, lifting the entire base metals complex.
- Chicago corn futures ticked higher, but the market was poised for its biggest weekly drop since June 2017 as cooler weather across the U.S. Midwest boosted crop prospects.
- The dollar steadied but was still on the defensive after Federal Reserve officials bolstered expectations of an aggressive rate cut this month to address weakening price pressures.

- UnitedHealth doesn't plan to back down from its move to require that drug rebates be passed to consumers, despite the Trump administration's decision to pull back a proposal affecting rebates in Medicare. CEO David Wichmann says during the company's earnings call that the UnitedHealth's decision on rebates wasn't tied to the federal stance, and the company believes that passing rebates to consumers has improved adherence to medications. Asked about the UnitedHealth rebate policy's impact on its commercial business, he said that there have been "no implications with respect to that policy adoption." Shares slip 2%.
- Honeywell International says it hasn't received any indication from the Chinese government that it will be blacklisted because of its business involvement in weapon sales to Taiwan. There were reports this week in China's state media that the firm was among those facing sanctions from China because of involvement in the deals. Honeywell has said it didn't have input on the deals cut in Washington and continued to distance itself from the situation on Wednesday, noting that it sees no reason why it would face boycotts.
- Brent crude oil is up 0.4% at $63.90 a barrel and WTI crude is up 0.2% at $56.88 a barrel in midmorning trade in London. Both recoup only a small amount of their losses so far this week. Saxo Bank's Ole Hansen points to oil as having suffered from a cocktail of factors including the dissipation of Tropical Storm Barry and remarks from the Trump administration on potential talks with Iran and another setback in trade negotiations with China, softening supply fears and prolonging demand concerns. JBC Energy meanwhile, notes smaller-than-expected U.S. inventory draws as also contributing to this week's pricing pressure.
- The pound rises 0.4% against the dollar despite a warning from the U.K.'s Office for Budget Responsibility that economic risks are larger than they were two years ago. The OBR forecasts that a no-deal Brexit--an outcome that both U.K. prime ministerial candidates have signaled a willingness to pursue--would push the U.K. into a recession, with GDP falling 2.1% amid declining business confidence and higher trade barriers with the EU. In the case of a no deal, the OBR forecasts an additional GBP30 billion a year in borrowing from 2020-21 onward, and an additional 12% of GDP to net debt by 2023-4 compared with a March estimate, as tax receipts fall. Under the stress-test scenario, sterling would depreciate 10%, the OBR says.
- The Fed's latest "beige book" report of anecdotes from business contacts said difficulties in securing and renewing work visas added to firms' challenges in finding workers amid a tight labor market. "A number of contacts noted difficulties in securing and renewing H1B visas for specialized workers, and cited uncertainty about this as a problem," the New York Fed reported. The Philadelphia Fed, meanwhile, heard that "far fewer" temporary work visas had been awarded to local businesses than had been expected.
- Businesses appeared considerably more uneasy about US trade policy in the latest "beige book" reporting period, which ran from mid-May to early July. The word "tariffs" popped up more frequently than in the previous beige book, and the Boston Fed characterized trade policy as "the big story" of the latest reporting period. "Contacts said the US tariffs and foreign retaliation had weakened demand for their products," the Boston Fed reported. "One contact said the brief threat to impose 5% tariffs on Mexican goods significantly increased uncertainty because it meant that even with an agreement in place, new tariffs were still possible."

Jul 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices steadied after falling in the previous session when official data showed U.S. stockpiles of products like gasoline rose sharply last week, suggesting weak demand during the peak driving season.
- Gold prices pulled back from a two-week high to trade lower, as some investors took advantage of the last session's gain to book profits.
- Shanghai nickel prices rose as much as 6% to a one-year high, extending a rally for the metal into a ninth day as speculators continue to pile into the Shanghai Futures Exchange.
- Chicago soybean futures edged higher, after dropping earlier in the session to their lowest in more than a week on pressure from forecasts for cooler crop-friendly weather across the U.S. Midwest.
- The dollar slipped as risk aversion in the broader markets pushed benchmark U.S. yields to a nine-day low

- The Fed's latest "beige book" report of anecdotes from business contacts said difficulties in securing and renewing work visas added to firms' challenges in finding workers amid a tight labor market. "A number of contacts noted difficulties in securing and renewing H1B visas for specialized workers, and cited uncertainty about this as a problem," the New York Fed reported. The Philadelphia Fed, meanwhile, heard that "far fewer" temporary work visas had been awarded to local businesses than had been expected.
- Businesses appeared considerably more uneasy about US trade policy in the latest "beige book" reporting period, which ran from mid-May to early July. The word "tariffs" popped up more frequently than in the previous beige book, and the Boston Fed characterized trade policy as "the big story" of the latest reporting period. "Contacts said the US tariffs and foreign retaliation had weakened demand for their products," the Boston Fed reported. "One contact said the brief threat to impose 5% tariffs on Mexican goods significantly increased uncertainty because it meant that even with an agreement in place, new tariffs were still possible."
- Korean stocks finished lower on retreating tech shares. President Trump's downbeat comments on the outlook for a possible trade deal with China also dampened investor sentiment, says Seoul-based NH Investment & Securities analyst No Dong-kil. The benchmark Kospi slid 0.9% to close at 2072.92. Electronics stocks led the pullback amid lingering worries about Japan's export curbs on semiconductor and display materials to Korea, with tech giant Samsung Electronics and chipmaker SK Hynix down 1.7% and 2%, respectively.
- Controversial effort to build a censored search engine in China, dubbed "Dragonfly," a top executive told Congress Tuesday. "Yes, we have terminated that," Google policy head Karan Bhatia said in response to a question from the Senate Judiciary Committee. "I think that's news," responded Sen. Josh Hawley (R-Mo.). Dragonfly was a beacon for criticism inside and outside Google, but top brass including Chief Executive Sundar Pichai had repeatedly stopped short of declaring the program dead.
- August lean hog futures finish down 1.3% to 79.05 cents per pound. While movement of the futures contract was partially in reaction to indications out of the Trump Administration that negotiations of a trade deal with China are not close to fruition, the bigger issue is the spread between cash and future prices, says Mark Schultz of Northstar Commodity. As of Monday, hog carcass prices averaged $68.45 per hundredweight--or 68.45 cents per pound, more than 10 cents less than August futures. Therefore, futures have a lot of room to move down, Schultz says. "August [futures have] very little hope of going up," he adds. August live cattle futures, meanwhile, finish down 0.3% to $1.08225 per pound.
- The increased possibility of a recession, geopolitical risk and a decline in the price of used vehicles are all headwinds facing the US auto industry, S&P Global Ratings says. The agency sees a 3% decline in light vehicles sales in 2019, with a further decline seen to 2021. S&P says it doesn't anticipate these headwinds leading to any downgrades for auto makers or parts suppliers, but says "downgrade potential for the US automotive sector rose sharply in the second quarter." At the same time, S&P points out that low inflation and a weakening economic outlook may spur the Fed to lower interest rates, which could lead to lower financing costs.
- Oil prices began the day higher but tumbled just before the session ended, closing 3.3%, or $1.96, lower at $57.62/bbl after President Trump and Secretary of State Pompeo both signaled a ratcheting down of recent hostility between the US and Iran. Oil prices had been carrying a risk premium worth at least a couple dollars per barrel in recent weeks over the fear of some type of military confrontation between Iran and the US or its allies amid rising US sanctions over Iran's nuclear program. But Trump said Washington's not seeking regime change in Iran, and Pompeo later said the US also aims to negotiate a deal with Tehran regarding Iran missiles.
- Oil prices declined 4% after Donald Trump and Secretary of State Mike Pompeo said that negotiations with Iran were advancing over the Middle Eastern country's nuclear program. "A lot of progress has been made," Trump said. "They'd like to talk and we'll see what happens." The remarks, which were made during a cabinet meeting at the White House, were not detailed but signaled to energy traders that tensions with Iran may be defusing. Hostilities flared last month in the Strait of Hormuz, through which a large portion of the world's oil is shipped. US crude futures now trading down 3% to $57.76 while global benchmark Brent is off 2.9% $64.54.

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

- Oil prices rose after steep falls in the previous session, although U.S. crude trailed gains for international benchmark Brent after U.S. crude inventories fell less than expected.
- Gold prices edged lower, as the dollar firmed on robust U.S. retail sales data, while hopes of an interest rate cut by the Federal Reserve and broad uncertainties over trade between Washington and Beijing kept a lid on declines.
- London zinc prices fell, snapping a five-session gaining streak, after data showed the global zinc market deficit narrowed in May.
- Chicago corn and soybean futures slid for a third consecutive session as improved weather in parts of the U.S. Midwest boosted crop prospects.
- August lean hog futures finish down 1.3% to 79.05 cents per pound. While movement of the futures contract was partially in reaction to indications out of the Trump Administration that negotiations of a trade deal with China are not close to fruition, the bigger issue is the spread between cash and future prices, says Mark Schultz of Northstar Commodity. As of Monday, hog carcass prices averaged $68.45 per hundredweight--or 68.45 cents per pound, more than 10 cents less than August futures. Therefore, futures have a lot of room to move down, Schultz says. "August [futures have] very little hope of going up," he adds. August live cattle futures, meanwhile, finish down 0.3% to $1.08225 per pound.
- The increased possibility of a recession, geopolitical risk and a decline in the price of used vehicles are all headwinds facing the US auto industry, S&P Global Ratings says. The agency sees a 3% decline in light vehicles sales in 2019, with a further decline seen to 2021. S&P says it doesn't anticipate these headwinds leading to any downgrades for auto makers or parts suppliers, but says "downgrade potential for the US automotive sector rose sharply in the second quarter." At the same time, S&P points out that low inflation and a weakening economic outlook may spur the Fed to lower interest rates, which could lead to lower financing costs.
- Oil prices began the day higher but tumbled just before the session ended, closing 3.3%, or $1.96, lower at $57.62/bbl after President Trump and Secretary of State Pompeo both signaled a ratcheting down of recent hostility between the US and Iran. Oil prices had been carrying a risk premium worth at least a couple dollars per barrel in recent weeks over the fear of some type of military confrontation between Iran and the US or its allies amid rising US sanctions over Iran's nuclear program. But Trump said Washington's not seeking regime change in Iran, and Pompeo later said the US also aims to negotiate a deal with Tehran regarding Iran missiles.
- Oil prices declined 4% after Donald Trump and Secretary of State Mike Pompeo said that negotiations with Iran were advancing over the Middle Eastern country's nuclear program. "A lot of progress has been made," Trump said. "They'd like to talk and we'll see what happens." The remarks, which were made during a cabinet meeting at the White House, were not detailed but signaled to energy traders that tensions with Iran may be defusing. Hostilities flared last month in the Strait of Hormuz, through which a large portion of the world's oil is shipped. US crude futures now trading down 3% to $57.76 while global benchmark Brent is off 2.9% $64.54.

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

- Oil prices were steady after falling in the previous session as output in the U.S. Gulf of Mexico resumed after Hurricane Barry swept through over the weekend and as U.S. shale production is expected to rise to a record.
- Gold prices held steady as investors awaited U.S. retail sales data that could serve as an indicator of the strength of the world's largest economy amid lingering concerns over global economic slowdown.
- London copper prices were almost unchanged, hovering around a two-week high hit in the previous session after top consumer China reported positive industrial output and investment data.
- U.S. wheat futures eased to a four-session low, falling from a two-week high hit in the previous trading session, on the back of supply concerns and a post-rally adjustment.
- The pound struggled near a six-month low against the dollar, hampered by persistent worries over Brexit that, in turn, weighed on the euro.

- The proclamation by President Donald Trump that the US has "a long way to go," in working out a trade deal with China is one more negative pulling grains futures on the CBOT down, according to some traders. "Coming into today, the market was already on weak footing," says Don Roose of US Commodities, calling Trump's latest statements "more posturing" in an ongoing good cop-bad cop routine where USTR Robert Lighthizer plays the role of the "good cop." According to Roose, the real driver of the CBOT today is weather concerns. "We're encouraging people to keep an eye on the sky," says Roose. December corn is leading the charge, down 2.2% for the session.
- US benchmark oil prices erase modest gains and fall toward session lows, down 0.4% at $59.32/bbl after President Trump, talking to reporters, describes progress toward a US-China tariff pacts as a "long way to go," according to MarketWatch. Oil markets have grown increasingly concerned that the swirling uncertainty over the lack of a trade deal, and the continuation of costly tariffs, is causing economies around the world to suffer and is chipping away at global oil demand. Next up for oil markets is weekly US inventory data by trade group API, due at 4:30 pm ET.
- A trade war remains the number-one tail risk for investors but these concerns fell 20 basis points to 36%, according to Bank of America Merrill Lynch's monthly global fund manager survey. Concerns stemming from the trade conflict have topped the list of concerns for 15 of the past 17 surveys, says BAML. Investors are getting more worried over potential monetary policy mistakes by the U.S. Federal Reserve or the European Central Bank, or both. These concerns are now ranked number two in the list of concerns, having jumped 11 percentage points this month, BAML says.

Jul 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slipped after China posted its slowest quarterly economic growth in at least 27 years, reinforcing concerns about demand in the world's largest crude oil importer.
- Gold prices slipped, consolidating above $1,400 pivot, as key China data assuaged concerns about global economic slowdown and boosted appetite for riskier assets.
- Most industrial metals climbed on better-than-expected data from major consumer China, while nickel prices were boosted by worries that Indonesia will resume an ore export ban in 2022.
- U.S. corn futures rose as much as 1% on Monday to hit a five-year high as forecasts for hot, dry weather across a key North American growing region stoked fears that crops could face further damage.
- The Australian dollar reached a 10-day high on stronger-than-expected economic data from China, which some analysts saw as signalling that moves to revive spending in the world's second biggest economy are working.

- Uranium companies are commending the Trump administration's July 12 decision to not implement new trade restrictions on uranium imports. The administration said the imports don't impair US national security following the Commerce Department's investigation under Section 232 of the Trade Expansion Act. "The Section 232 investigation has created an 18 month period of uncertainty which has severely restricted activity in the uranium market," says Andre Liebenberg, CEO of uranium fund Yellow Cake, in a statement. "We view the decision that no new trade restrictions will be implemented at this stage as positive, and likely to support a return to more normal levels of activity." The administration says it will establish the U.S. Nuclear Fuel Working Group to look into challenges in domestic uranium production as a natural security issue.

- Brent crude oil is up 0.1% at $66.18 a barrel and WTI is flat at $60.21 a barrel. After heightened geopolitical tensions last week, renewed efforts at diplomacy between the UK and Iran may see calmer waters in the Strait of Hormuz. Elsewhere, weak Chinese economic data released overnight--showing Chinese growth is at its lowest since 1992--was partly responsible for lackluster oil price moves, according to OANDA's Craig Erlam. Investors will also watch the Gulf of Mexico, where Hurricane Barry had last shuttered more than two thirds of capacity in the region.

- Kit Juckes, a strategist at Societe Generale, says gold would be one of the main beneficiaries if President Trump takes action to weaken the dollar. "Resilient U.S. economic forecasts [are] holding the dollar up, and the question in our minds is only when, not if, it will fall significantly," he says. "If President Trump were to go beyond criticism of other countries' policies and act, the dollar would fall earlier and in a more disorderly fashion than we expect." In such a scenario, gold and the Japanese yen, both seen as haven assets, would rise sharply. Last month, Trump directed his ire at Mario Draghi when the ECB president's suggestion that a new round of monetary stimulus was on the way sent the euro down against the dollar.
- Although China's exports to the U.S. fell in June, exports to Southeast Asian countries rose, a possible sign that companies are reshipping goods to circumvent higher U.S. tariffs. China's exports to the U.S. fell 7.8% from a year earlier following a 4.2% decline in May, customs data show. Total exports decreased 1.3% reversing May's 1.1% growth. Bucking the trend, exports to Asean countries surged nearly 13% in June, extending May's 3.5% growth.
- Oil investors continue to watch out for the IEA report and for further news on Tropical Storm Barry, but attentions are also trained on the Persian Gulf, where British naval forces on Wednesday thwarted an Iranian attempt to seize a BP-run tanker. While the HMS Montrose secured the safety of the British Heritage, London-based shipping tracker Kpler says the Atlantic Pioneer is flagged as being at risk of detention in the Gulf. "The tanker appeared to have cancelled her crude loading at Ras Tanura as she was seen diverting away from Ras Tanura on July 11. Kpler expects her to wait for an escort from the HMS Montrose before sailing through the Straits of Hormuz," Kpler says.
- After months of public and private exhortations by President Trump and Vice President Pence to accelerate human space exploration, two senior NASA officials have been summarily sidelined. NASA administrator James Bridenstine, the focus of much of that White House frustration, has replaced William Gerstenmaier, a veteran manager who shepherded NASA's marquee rocket and spacecraft programs through various administrations, with the aim of transporting astronauts to the moon and eventually Mars. His assistant also was demoted to an advisory job. The moves follow White House orders to speed up human moon missions to 2024 from 2028, a goal about which certain career NASA officials are ambivalent.
- President Trump attacked China for not purchasing enough US agricultural products on Twitter today, although offering little in the way of a solution. "China is letting us down in that they have not been buying the agricultural products from our great farmers that they said they would. Hopefully they will start soon!" Trump said. Export sales reported by the USDA this morning were generally in the low-end of trader expectations, with soybeans following below that -- although China was announced as buying over 127,000 metric tons of US soybeans. In previous tweets, Trump has promised that China would be purchasing "large amounts of agricultural product" from US farmers.

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

- Oil prices rose, hovering near six-week highs, as U.S. oil producers in the Gulf of Mexico cut more than half their output in the face of a tropical storm and as tensions continued to simmer in the Middle East.
- Gold prices rose and were on track to post a weekly gain, consolidating above $1,400 as renewed Sino-U.S. trade tensions amid global growth jitters and prospects of an interest rate cut by the U.S. Federal Reserve stoked safe-haven demand.
- Shanghai nickel prices rose to near their highest since March, as investors bet on the potential demand for the metal in the electric vehicle (EV) battery sector.
- U.S. wheat futures edged lower, retreating from a near two-week high touched in the previous session, but the grain was poised to record its first weekly gain in a month following forecasts for lower global production.
- The dollar was steady, having regained some traction against its peers after stronger-than-expected U.S. inflation data tempered the prospect of an aggressive Federal Reserve interest rate cut later this month.

- Federal Reserve Chairman Jerome Powell reiterates his warning that Congress and the Trump administration should reach an agreement soon to raise the federal debt ceiling. "Any other outcome is unthinkable," he said. "We've always paid our bills. It simply much happen that Congress raise the debt ceiling." Powell said, "No one should assume" that the Fed or other government agencies would be able to step in and protect the economy from the damage of failing to raise the borrowing limit. The Treasury Department has said it could run out of room to keep paying its bills by late this summer.
- Senate Republicans praise Federal Reserve Chairman Jerome Powell during the Fed chief's appearance before the Senate Banking Committee, a subtle rebuke to President Trump's repeated attacks on the central bank and its boss. "I do think it's important that the Fed remain insulated from political pressure," says Sen. Pat Toomey, a Pennsylvania Republican. "I think you've done an outstanding job." Alabama Republican Richard Shelby also had praise for the way Powell has tackled his job. "We salute you for that," he says. Powell has said he would not step down from his post if Trump asked him to. The comments from senators suggest they would back him up.
- President Trump attacked China for not purchasing enough US agricultural products on Twitter today, although offering little in the way of a solution. "China is letting us down in that they have not been buying the agricultural products from our great farmers that they said they would. Hopefully they will start soon!" Trump said. Export sales reported by the USDA this morning were generally in the low-end of trader expectations, with soybeans following below that -- although China was announced as buying over 127,000 metric tons of US soybeans. In previous tweets, Trump has promised that China would be purchasing "large amounts of agricultural product" from US farmers.
- Shares of pharmacy-benefit managers, or PBMs, are buoyed by the Trump administration's announcement that it will withdraw a plan that would have curbed annual rebates drugmakers give middlemen in Medicare. The plan had been to redirect discounts toward patients instead of the rebates worked out between drugmakers and third parties that manage benefits for Medicare. The effort could have disrupted the US pharmaceutical industry, as PBMs are allowed to negotiate confidential rebates and discounts on many branded prescription products. Shares of Cigna rise 12%, while CVS Health gains 7.1% and UnitedHealth Group adds 4.4%.
- Brent crude oil is up 0.5% at $67.37 a barrel and WTI crude is up 0.5% at $60.74 a barrel. The increases extend the sharp gains both made Wednesday, with WTI hitting a seven-week high after bullish U.S. inventory figures. The Energy Information Administration confirmed a larger-than-expected drawdown cited by the American Petroleum Institute. Traders will be watching OPEC's monthly report and Middle East tensions, after three Iranian vessels tried to block the BP-run tanker British Heritage in the Strait of Hormuz on Wednesday, but were turned away by the presence of a U.K. warship. That followed Iranian officials' calls for retaliation after British naval forces seized an Iranian tanker off Gibraltar last week.
- Earnings of new graduates of for-profit colleges suffer most in a recession economy, according to research from economists at the Federal Reserve Bank of New York. For all workers who graduate into a weak economy, the average earnings penalty is about 10% compared to those who enter a booming economy. Grads of selective colleges experience no penalty, earning about 9% more than those who graduate from non-selective schools whether the economy is strong or not. But those with degrees from for-profit schools earn 8% less than grads from non-profit institutions even in good times, and they earn 16% less than the comparison group during recessions. Last month, the Education Dept. announced the repeal of the gainful employment rule which cracked down on for-profit schools whose students did not find decent jobs.
- St Louis Fed leader James Bullard said he's not surprised President Trump keeps banging away at the Fed in favor of low interest rates. The president "comes from the real estate world...He's very familiar and knowledgeable on interest rates because that's what he did." Bullard added "every real estate person I've ever met is in favor of lower interest rates."
- Fed Chairman Jerome Powell says it's essential Congress raise the federal borrowing limit in a timely way, adding it's unthinkable the US would stop paying its bills on time. Lawmakers have walked up to the debt limit deadline in the past but avoided crossing it. "I wouldn't be able to capture the range of possible negative outcomes from that," Powell says, adding he assumes and believes the borrowing limit will be raised. The Treasury Department has said it may run out of room to stop paying the government's bills on time in late summer unless Congress raises or suspends the ceiling.

Jul 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil futures hit a six-week high as a storm built in the Gulf of Mexico, threatening crude output, while an incident with a British tanker in the Middle East highlighted ongoing tensions in the region.
- Gold prices scaled a more than one-week peak, as the dollar slipped after dovish remarks from the U.S. Federal Reserve Chairman Jerome Powell boosted the case for an interest rate cut later this month.
- Copper extended gains for the second straight session, as dollar eased after dovish comments by U.S. Federal Reserve chair Jerome Powell reinforced rate cut bets.
- U.S. soybeans edged lower, falling from a 10-day high touched earlier in the session, as traders readied for a widely watched U.S. government report that is expected to lay bare the impact of recent adverse weather.

- Brent crude oil is up 0.5% at $67.37 a barrel and WTI crude is up 0.5% at $60.74 a barrel. The increases extend the sharp gains both made Wednesday, with WTI hitting a seven-week high after bullish U.S. inventory figures. The Energy Information Administration confirmed a larger-than-expected drawdown cited by the American Petroleum Institute. Traders will be watching OPEC's monthly report and Middle East tensions, after three Iranian vessels tried to block the BP-run tanker British Heritage in the Strait of Hormuz on Wednesday, but were turned away by the presence of a U.K. warship. That followed Iranian officials' calls for retaliation after British naval forces seized an Iranian tanker off Gibraltar last week.
- Earnings of new graduates of for-profit colleges suffer most in a recession economy, according to research from economists at the Federal Reserve Bank of New York. For all workers who graduate into a weak economy, the average earnings penalty is about 10% compared to those who enter a booming economy. Grads of selective colleges experience no penalty, earning about 9% more than those who graduate from non-selective schools whether the economy is strong or not. But those with degrees from for-profit schools earn 8% less than grads from non-profit institutions even in good times, and they earn 16% less than the comparison group during recessions. Last month, the Education Dept. announced the repeal of the gainful employment rule which cracked down on for-profit schools whose students did not find decent jobs.
- St Louis Fed leader James Bullard said he's not surprised President Trump keeps banging away at the Fed in favor of low interest rates. The president "comes from the real estate world...He's very familiar and knowledgeable on interest rates because that's what he did." Bullard added "every real estate person I've ever met is in favor of lower interest rates."
- Fed Chairman Jerome Powell says it's essential Congress raise the federal borrowing limit in a timely way, adding it's unthinkable the US would stop paying its bills on time. Lawmakers have walked up to the debt limit deadline in the past but avoided crossing it. "I wouldn't be able to capture the range of possible negative outcomes from that," Powell says, adding he assumes and believes the borrowing limit will be raised. The Treasury Department has said it may run out of room to stop paying the government's bills on time in late summer unless Congress raises or suspends the ceiling.
- Fed Chairman Jerome Powell reiterates yet again he wouldn't step down if President Trump asked him to resign. "The law clearly gives me a four-year term and I fully intend to serve it," Powell says in response to questions from House Financial Services Committee Chairwoman Maxine Waters, who quips, "I hope everybody heard that."
- Following the release of Fed Chairman Jerome Powell's testimony that some are calling more dovish than anticipated, stock futures have erased previous declines, putting S&P 500 and Dow futures up about 0.4%. The yield on the benchmark 10-year US Treasury note has fallen back to 2.046% after topping 2.1% earlier in the day.  Gold prices are also rallying as investors weigh the latest signs the Fed could cut rates in a few weeks.
- US stock futures reverse early losses to trade higher after the release of Federal Reserve Chairman Jerome Powell's prepared Congressional testimony where he says the economic outlook hasn't improved in recent weeks, an indication the central bank could be prepared to cut its benchmark short-term rate when officials meet later this month. The dollar weakens against major rivals and Treasury prices turn higher, with the 10-year yield recently falling back to 2.05%. S&P futures rise 7.25 points.
- Fed Chairman Jerome Powell flagged a risk in his testimony that inflation doesn't soon return to the Fed's 2% target. Inflation developments are especially important for the Fed. Price pressures have not picked up as projected by Fed officials when they raised interest rates last year. Rather than holding at its 2% target, inflation has softened this year. "There is a risk that weak inflation will be even more persistent than we currently anticipate," Powell said. That was a notable shift from two months ago, when Powell suggested recent inflation weakness was likely to be transitory.
- Fed Chairman Jerome Powell has avoided any direct confrontation with President Trump, who has offered unusually sustained and antagonistic commentary about the central bank's decisions. Trump has made clear he wants the Fed to cut rates. Powell opened his prepared testimony Wednesday by highlighting the importance of the central bank's ability to set policy free of direct political interference. "Congress has given us an important degree of independence so that we can effectively pursue our statutory goals based on objective analysis and data," he said.
- Industrial metals are rising on comments by White House economic adviser Larry Kudlow that trade talks with China "went well." Nickel rises 0.8% to $12,855 a ton, its highest level in almost three months, on the London Metal Exchange. Copper is up 1.1% at $5,884 a ton. Lead is steady after surging on Tuesday in response to news that Belgian-Swiss metals company Nyrstar had extended force majeure at its Port Pirie smelter until the final week of July. Most industrial metals have been under pressure recently amid concerns that the U.S. and China will fail to resolve their trade dispute.

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

- Oil prices rose, led by U.S. crude after an industry group reported that U.S. stockpiles fell for a fourth week in a row, alleviating concerns about oversupply amid global trade tensions.
- Gold prices eased as the dollar climbed higher on expectations of a less dovish U.S. Federal Reserve, ahead of a testimony from the its Chairman Jerome Powell.
- Nickel prices hit their highest in three months, following news that U.S. and Chinese trade officials marked a new round of talks with a "constructive" phone conversation.
- U.S. corn futures fell as much as 1% to hit a one-week low, pressured as forecasts of improved weather for U.S. crops eased fears of widespread yield losses.

- Fed Chairman Jerome Powell has avoided any direct confrontation with President Trump, who has offered unusually sustained and antagonistic commentary about the central bank's decisions. Trump has made clear he wants the Fed to cut rates. Powell opened his prepared testimony Wednesday by highlighting the importance of the central bank's ability to set policy free of direct political interference. "Congress has given us an important degree of independence so that we can effectively pursue our statutory goals based on objective analysis and data," he said.
- Industrial metals are rising on comments by White House economic adviser Larry Kudlow that trade talks with China "went well." Nickel rises 0.8% to $12,855 a ton, its highest level in almost three months, on the London Metal Exchange. Copper is up 1.1% at $5,884 a ton. Lead is steady after surging on Tuesday in response to news that Belgian-Swiss metals company Nyrstar had extended force majeure at its Port Pirie smelter until the final week of July. Most industrial metals have been under pressure recently amid concerns that the U.S. and China will fail to resolve their trade dispute.
- Fitch Ratings says that the risk of US tariffs on all imported cars and parts could shadow the global auto sector for the rest of 2019. European and Japanese car makers would the most vulnerable, while GM and Ford would see a slight advantage at best. Fitch points out that US auto makers are against the tariffs, because they could affect economies in other countries, denting overseas sales. BMW, Daimler and Jaguar Land Rover could see a big hit, while Japanese auto makers with strong manufacturing bases in the US would be affected to a lesser extent.

Jul 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil fell amid worries over the outlook for demand after the latest signs that international trade disputes have been dragging on the global economy, although the potential for conflicts in the Middle East offered support to prices.
- Gold prices fell as the dollar held near multi-week highs after investors reduced bets on an aggressive U.S. interest rate cut this month.
- Copper prices on the London Metal Exchange declined, poised for a third consecutive drop, on worries over lean demand for the ductile metal from top consumer China.
- U.S. soybeans edged lower, but losses were checked after data from the U.S. Department of Agriculture (USDA) showed that the condition of North American crops lagged behind market expectations, which led to supply-crunch fears.

Jul 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Crude prices were little changed as traders weighed geopolitical risks against the impact of the Sino-U.S. trade war on the global economy, although last week's better-than-expected U.S. jobs data offered some support.
- Gold prices inched lower following a steep fall in the previous session, as robust U.S. jobs report dashed hopes of an aggressive interest rate cut by the Federal Reserve later this month. 
- Copper prices fell on inventory pile-up and a steady dollar after strong U.S. jobs data tuned down hopes of an aggressive rate cut by the Federal Reserve.
- U.S. corn futures rose 1%, extending gains into a fourth consecutive session, as forecasts for hot, dry weather stoked fears about yield losses following recent unfavourable conditions.

- As more cities and states move to phase in $15 minimum wage standards, a new study by UC Berkeley economists finds that such policies have positive effects, including reduced household and childhood poverty levels, without evidence for the negative employment impacts often feared. The study's authors examined shifts that occurred after changes in minimum wages were enacted in about 750 counties in 45 US states between 2004 and 2016, and found that it would be possible to enact a national $15 minimum wage without creating adverse effects on employment, weeks worked or weekly hours among workers with a high school degree or less. Their study comes as a federal bill, the Raise the Wage Act of 2019, proposes to raise the federal minimum wage gradually from $7.25 today to $15 by 2024.
- The White House is working on an executive order that ensures the US pays the lowest prices in the world for pharmaceuticals, President Trump tells reporters. President Trump says the order will be a "favored nation clause" where the US will pay the lowest price paid by any other country. "They've taken advantage of this system for a long time, pharma," Trump says. The NASDAQ Biotechnology index down 1.2%; the S&P 500 Pharmaceuticals index off 0.9%.
- Industrial metals had a quiet day compared with gold, initially falling in response to the strong US jobs report but quickly bouncing back. Shortly after the close of open outcry, three-month copper futures on the LME are 0.3% lower at $5,897 a ton in electronic trading. Every other base metal is also down, bar nickel, which recovers some of its recent losses. Prices are being driven by the US-China dispute rather than the outlook for Federal Reserve policy, says Edward Meir, a consultant for INTL FCStone. On that front, investors appear pessimistic. After Presidents Trump and Xi agreed to resume formal negotiations last Saturday, only aluminum ends the week in the green.
- South African President Cyril Ramaphosa says the U.S. is jealous of Huawei's advancement into 5G mobile technologies and is using the trade tensions with Beijing to punish the Chinese company. "They are jealous that a Chinese company called Huawei has outstripped them," Ramaphosa said in a speech Friday at a Digital Economy Summit, referring to the U.S. "And because they have been outstripped they must now punish that one company and use it as a pawn in the fight that they have with China." He says that Africa's most developed economy will stick with Huawei technology: "We want to go to 5G and only this company, Huawei, can lead us to 5G."

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

- Crude oil prices fell as concerns over the outlook for global economic growth outweighed elevated tensions in the Middle East that could disrupt supply routes and send prices higher.
- Gold prices edged higher and were on track for a seventh consecutive weekly gain, as investors awaited U.S. employment data that could influence expectations about aggressive policy easing by the Federal Reserve.
- London copper prices eased and were heading for their first weekly fall in four, due to sluggish demand outlook and rising supplies.
- Malaysian palm oil futures rose, supported by a weaker ringgit, but trading remained range-bound.
- The dollar was firm but traders held off on making big bets ahead of the closely-watched U.S. non-farm jobs report that could influence the course of near-term Federal Reserve policy.

Jul 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched lower after solid gains the day before, pressured by data showing a smaller-than-expected decline in U.S. crude stockpiles.
- Gold prices inched up, supported by a decline in U.S. Treasury yields amid prospects of an interest rate cut by the Federal Reserve, while investors sought direction from upcoming U.S. non-farm payrolls data.
- Copper prices treaded water after a big inflow into the London Metal Exchange warehouses, but prices were cushioned by the planned trade talks between the United States and China.
- Chicago corn, soybean and wheat futures all settled higher on Wednesday on technical buying and as traders adjusted positions ahead of the Independence Day holiday.
- The dollar was on the back foot, trading near a one-week low versus the yen as falling Treasury yields fuelled expectations the U.S. Federal Reserve will cut interest rates this month for the first time in a decade.

- Former U.K. finance minister George Osborne has taken a surprise lead in the stakes to become the next head of the International Monetary Fund, says Betway. The bookmaker says Osborne is now the 5/2 favorite to take over from Christine Lagarde, who has been nominated as the next President of the European Central Bank. As recently as Wednesday, Osborne was 25/1 to get the job, with the Governor of the Bank of England, Mark Carney, seen as the favorite but now 11/2, out from 7/2. "Reports suggest Osborne's serious about throwing his hat in the ring and that's seen his odds shorten dramatically," says Betway's Alan Alger.
- The dollar trades broadly flat due to the U.S. public holiday but could be vulnerable if U.S. non-farm payrolls data on Friday are weak. These numbers are "widely seen as the key determinant to either consolidate or undermine" expectations that the U.S. Federal Reserve will cut interest rates, says ING. Market participants will also keep a close eye on any new comment from U.S. President Donald Trump that hints at devaluing the dollar, the bank says. Trump on Wednesday tweeted that China and Europe were manipulating their currencies, and that the US should follow suit. EUR/USD is flat at 1.1282, USD/JPY flat at 107.83.
- Shares of companies that are deeply invested in the Affordable Care Act may come under pressure next week, as the Fifth Circuit Court of Appeals takes up a lower court's decision to strike down the federal health law. Among the companies with the biggest exposure are Molina and Centene, which both have been helped by the law's expansion of Medicaid and the creation of its individual-insurance exchanges. SVB Leerink estimates that around half of Molina's earnings and 40% of Centene's are tied to the law. Larger, diversified companies like UnitedHealth and CVS have little exposure, while the earnings risk to big hospital firms is also limited, the SVB Leerink analysts write.

Jul 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady after a steep fall in the previous session, supported by extended output cuts by OPEC and its allies despite concerns that a slowing global economy could crimp demand.
- Gold prices climbed over 1%, driven by strong safe haven sentiment as hopes of a quick end to the U.S.-China trade row faded and a new trade front in Europe deepened concerns over tepid economic growth.
- Shanghai tin prices slumped and were heading for a sixth consecutive daily drop as investors took out more short positions on the metal used in tin cans and lead-acid batteries, even as analysts said fundamentals had not changed.
- Chicago corn futures rose for a second session with prices underpinned by concerns over late-planted crops vulnerable to adverse weather.
- The dollar struggled for traction as fading hopes for any near-term Sino-U.S. trade deal revived safe-haven demand and drove U.S. bond yields to their lowest levels since late 2016.

- Vice President Mike Pence's spokeswoman tamps down any concerns over his abrupt change in schedule today. He had been set to fly to New Hampshire for an opioids event, but is now staying in Washington. Pence never left the city, spokeswoman Alyssa Farah says. "There was no 'emergency callback.' Something came up that required the VP to stay in DC," she tweets. White House officials say his change in plans wasn't health related, or national-security related.
- Although more US states are legalizing the recreational use of marijuana, they should be cautious about relying on taxes as a long-term fiscal solution, S&P Global Ratings says. While sales tax on legal marijuana ranges from 10% to 37%, the nine states looked at by S&P collected only 0.2% to 2.2% of their general fund revenues from those taxes. States looking to garner substantial revenue from marijuana taxation need to contend with the drug's black market, as well as the fact legalization could increase supply, while driving down prices. Another risk to consider is the possibility federal intervention could hamper revenue collections, S&P says.
- The U.S. and China will most likely reach some kind of resolution to their trade dispute by the middle of next year, says Nicolas Robin, a commodities fund manager at Columbia Threadneedle Investments. But he thinks investors, along with Beijing, may overestimate the extent to which President Trump requires a deal. "It's not necessarily an untenable position for Trump not to succeed on trade with China," Robin says. "He can sell to his constituents that he is the guy who is being tough on the Chinese, and if that's the case he doesn't need a deal."
- The uplift that commodity markets received from U.S. President Trump and Chinese President Xi's agreement to restart trade talks was fleeting. Copper is lower than it was before the meeting after falling for a second day on the LME. Nicolas Robin, a commodities portfolio manager at Columbia Threadneedle Investments, says investors are now looking for concrete progress. "The consensus in the market seems to be that they expect that we will get some resolution of the trade dispute sometime before the next presidential election in the U.S.," he says. "And I think it's also been the view of Beijing that Trump probably needed a trade deal more than Beijing does and that Beijing has the time."
- A top Oregon brewer with beers like Mirror Pond and Pacific Wonderland might seem like a reliable supporter of stricter state policies on climate change. But Bend-based Deschutes Brewery says it decided to cancel its membership with Oregon Business for Climate, a group fighting for a controversial cap-and-trade bill in the beaver state. "Deschutes Brewer loves our planet ... [but] we also believe in the importance of local business," says Deschutes' statement last week, which has drawn critics and calls for boycotts, but also support. Deschutes says it simply wants to be neutral on the House bill 2020. It follows coffee chain Dutch Bros. and Fort George Brewing in leaving the group over the bill.
- The Stoxx Europe 600 rises 0.2%, or 0.72 points, to 388.59 as trade optimism helps investors to shrug off fears about fresh U.S. tariffs on European goods. The DAX is flat and the CAC 40 climbs 0.1% after most major Asian indices rose. "European markets have picked up where they left off yesterday, opening higher after President Trump said new U.S.-China trade talks had already restarted," says Michael Hewson at CMC Markets. "Investors appear to be focusing on this for now and not on this morning's reports that the U.S. is set to impose new tariffs on EU goods in respect of its long-running dispute between Boeing and Airbus." Airbus shares drop 0.7%.
- The trade spat between the U.S. and China is one of the things standing in the way of a recovery for Malaysia's tech sector, AmBank says in downgrading the sector to neutral from overweight. Although the recent meeting between the presidents Trump and Xi at the G-20 meeting in Osaka led to the suspension of the Huawei ban, the Chinese company still hasn't been officially dropped from the U.S. blacklist, AmBank notes, adding that any optimism is offset by the lack of a timeline. AmBank says companies it covers say their customers are taking a wait-and-see approach, holding back on orders in fear of further tariffs. Its top picks in the sector are Malaysian Pacific Industries and QES.
- Bijan Zanganeh, Iran's oil minister and a close ally of Iranian president Hassan Rouhani, said Monday Iran would not talk to the US under pressure. If Washington stops oil sanctions on Iran, "they will see significant change in the environment," he said on the side of an OPEC meeting in Vienna, Austria.

Jul 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices drifted lower, as weak global data raised concerns about future demand for the commodity despite a positive boost from OPEC's decision to extend supply cuts until next March.
- Gold prices rose buoyed by a safe-haven sentiment emanating from weak global manufacturing data that hinted at an economic slowdown, a day after the metal declined more than 1% on expectations of a U.S.-China trade truce.
- Shanghai nickel prices slumped nearly 4% in early trade, tracking a steep fall in London in the previous session as investors chose to book profits. 
- The Australian dollar nursed wounds, a day after it posted its biggest one-day fall in more than two months ahead of an expected central bank easing while improved risk appetite supported the greenback.

- Morgan Stanley strategists say that while trade talks resume and new escalatory actions are on hold, the agreement between the US and China doesn't eliminate uncertainty. "Trade tensions will either continue to drag on macro fundamentals or get resolved with a push from weaker risk markets," they say. Until there are more concrete developments, Morgan Stanley says that the trade tensions will continue to weigh on corporate confidence. US stocks pare earlier gains, with the Dow up 0.2%, the S&P 500 adding 0.4% and the Nasdaq up 0.8%.
- Iraq has voiced support for Russia's role as the leader of the OPEC+ nations. Speaking in Vienna, Iraq Oil Minister Thamir Ghadhban praised the part Russia is playing. "Russia is leading the non-OPEC members because it is the biggest producer and so far it has proved to be very competent in doing so," Ghadhban said. The minister's vote of confidence follows concerns from some of the OPEC nations that Russia has too much influence on the cartel's decision making.
- The DJIA gains 0.8%, the S&P 500 adds 1% and the Nasdaq gains 1.5% after the US and China agree to get trade talks back on track. The US agreed to put off additional tariffs on Chinese goods indefinitely and China agreed will start buying large amounts of American farm products, President Trump said. Trump will also allow US sales to Huawei, sending chip makers higher. Among the top gainers of the S&P 500, Qorvo gains 5.2%, Micron Technology gains 5.7%, and Skyworks Solutions adds 7.3%.
- Negotiations over trade between the US and China may last for another three or four years, said Timothy Stratford, a former assistant US trade representative. At a World Economic Forum meeting in China on Monday, Stratford said that mixing trade policy and national security has complicated efforts to reach a deal because they are separate but interconnected issues "with different rationales and goals." China may wait until after the 2020 presidential elections in the US to conclude trade talks, he said, but Trump could also be more eager to do a deal if he thinks doing so is politically advantageous before the election next year. "Both sides are experiencing pain, because we are moving into sub-optimal territory," Stratford added.
- US stock futures rally to start the second half of the year as the US and China agree to get trade talks back on track. Overnight China's benchmark Shanghai Composite Index gained 2.2% despite a set of disappointing readings for Chinese economic activity. Technology stocks drove the early rise in European markets and US chip makers gain in premarket trading after specific concessions were given to companies that trade with Huawei. Oil prices rise back  toward $60 as Opec and its allies look set to extend output cuts longer than previously expected. The dollar strengthens, while Treasurys slip, with the 10-year yield rising to 2.02%. S&P futures rise 32.25 points.
- Agricultural markets have responded warily to U.S. President Donald Trump's statement that China had agreed to buy large amounts of U.S. farm products. "We don't have any clarity about what these agricultural purchases will entail," says Tracey Allen, an agricultural commodity strategist at J.P. Morgan Chase. The president gave no indication of what products the agreement would involve, or what size the purchases would be. "The market doesn't really have any clarity on which to trade right now," Allen adds. Soybeans are up 0.2% at $9.25 a bushel on the Chicago Board of Trade, corn is flat and wheat is down 0.5%.
- The U.S. Federal Reserve is more likely to lower interest rates by 0.25% at its rate decision in July, rather than by 0.5%, after the trade truce between Washington and Beijing at the G20 meeting, says Ian Samson, markets research analyst at Fidelity International. The downside risk of the U.S. imminently imposing tariffs on the remaining $300 billion of Chinese good imports has been removed for now, but tariff uncertainty will continue to have a dampening effect on capital expenditure in the U.S. and China, he adds.
- U.S.-China trade talks are back on, but business executives are cautious about how negotiations will pan out and Washington's latest approach to give a potential break for Chinese technology giant Huawei. President Trump  agreed to hold off on raising punitive tariffs against China and to let the U.S. continue selling to Huawei. Timothy Stratford, chairman of the American Chamber of Commerce in China and a lawyer at Covington & Burlington, questioned whether it was the right approach: "The U.S. and China are recalibrating their relationship in several different policy areas all at once," he said on the sidelines of the World Economic Forum in Dalian, China. "If you mix them together, then you start having incoherent policy which makes it very unpredictable."
- The pound falls 0.3% to its lowest in more than a week against the dollar, at $1.2653, according to FactSet, after President Trump said trade talks with China were back on track, boosting the dollar. This could leave sterling vulnerable to more falls if U.K. manufacturing PMI data at 0830 GMT are weak. Meanwhile, a better reading may have limited impact. Connor Campbell at Spreadex notes: "Considering the uniform response to this latest trade twist, it may be hard for the morning's PMIs to make themselves felt." The U.K. manufacturing PMI is expected to edge up to 50 in June from 49.4 in May, according to the consensus in a WSJ poll.
- The resumption of trade talks between the U.S. and China is likely to help equities and commodities, says BNP Paribas. Higher risk appetite will particularly boost industrial commodities, given the more positive outlook for the global economy and U.S.-China relations, says Harry Tchilinguirian, the French bank's head of commodity-market strategy. Base metals such as copper could benefit most, he says, since they are "highly leveraged to manufacturing activity and the world economy." Gold fell in response to the G20, but Tchilinguirian says it could move back towards its recent six-year highs if the U.S. Federal Reserve cuts rates on July 31.
- Investors are cheering the U.S.-China ceasefire but the timing of a bilateral trade deal, if there is one, remains uncertain. As a final deal would require a face-to-face meeting, the next potential event for a such a high-level meeting could be the APEC summit in Chile in November or a state visit in Washington in 2020-- the "deal-making" year for the Trump administration, Citi economist Cesar Rojas says. A lot can happen before that but the current truce should last through the end of 2019, consistent with the U.S. Trade Representative's decision to suspend its Section 301 complaint again China at the WTO until Dec 31, he says.
- A comprehensive trade truce between the U.S. and China is likely to remain elusive, says Westpac. Talks fell apart in May when China allegedly backtracked on substantial commitments including changes to local laws that would enshrine protections for U.S. intellectual property and end forced technology transfers. Two months later, it is still not clear if the environment is any more favorable for such changes to be agreed upon, Westpac says. But, Trump backing down to both China and U.S. tech firms over sales to Huawei is a mild surprise that should add support to tech-sensitive Asian equities, it says.

Jul 01 - Market High from Trump-Xi Trade Truce May Not Last (WSJ DJ Reuters)
- Oil prices rose more than $1 a barrel after Saudi Arabia, Russia and Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting in Vienna.
- Gold prices fell more than 1% to their lowest in more than a week, as the dollar strengthened and investors opted for riskier assets after the United States and China agreed to restart trade talks. 
- Copper rallied to its highest in six weeks, after the United States and China agreed to restart trade talks, reducing tensions between the world's two largest economies that have been threatening global growth and demand for metals.
- Chicago soybean futures rose for a second session to a one-year high as a thaw in U.S.-China trade relations following talks between the two nations underpinned the market.
- The yuan gained and the safe-haven yen slid against the dollar as appetite for risk-sensitive currencies improved after the United States and China agreed to restart their troubled trade talks.

- The Fourth of July fireworks will come a few days early this year for traders.
- A number of assets, from tech stocks to commodities, are likely to react positively on Monday to the outcome of this weekend's trade talks between President Trump and Chinese President Xi Jinping. Financial markets may not be quite as exuberant in coming days and weeks, though, as investors digest the longer-term implications of the meeting.
- The most obvious winners from the summit's aftermath will be U.S. technology companies with direct or indirect exposure to embattled Chinese telecom giant Huawei Technologies Co. In remarks following the meeting, Mr. Trump said that U.S. companies would be able to sell equipment to Huawei that has "not a great national-emergency problem with it." Though the U.S. and other western nations may forgo buying allegedly compromised Huawei equipment, software and chip companies may keep supplying it. Expect the likes of Qualcomm, Intel, Nvidia, Advanced Micro Devices and Broadcom to rally sharply.
- Another leg of the deal involves U.S. agricultural products. Mr. Trump said the Chinese had agreed to buy "tremendous amounts of food" and that "we're going to give them a list." The U.S. Department of Agriculture noted that China made a massive purchase of U.S. soybeans a day before the meeting. Expect futures markets to get a jolt with some benefit to companies such as Deere & Co. and The Mosaic Co. that supply them.
- Stocks overall are likely to rise on the benign outcome of the talks. The question, though, is whether the gains will last, even for the sectors most likely to benefit. U.S. equity markets just closed out their best June in over 60 years and their best first half in over 20 largely on expectations that the Federal Reserve is set to come to the rescue with rate cuts. June began with a surprisingly weak U.S. payrolls number that, coupled with trade concerns and a slew of tepid U.S. manufacturing reports, has made a July rate cut a virtual certainty based on futures bets.
- The tail may be wagging the dog, though -- markets seem to care more about a dovish Fed than the reasons for it. Even following the catharsis from this weekend's trade talks, it would still take a dramatically stronger June jobs figure this Friday to tip the scales in favor of standing pat at the Fed's July meeting. Reduced tensions could certainly alter the prospects for another cut later in 2019, though.
- Furthermore, recent signs of manufacturing weakness can't all be chalked up to China uncertainty. There has been a real slowdown already. The sharply inverted bond yield curve of recent months typically has presaged a recession, not just concern over a single disruptive issue on the horizon.
- Even chip stocks and agricultural commodities could give back gains. The Philadelphia Semiconductor Index is up by nearly 28% this year despite the Huawei tensions amid mixed news such as weakness in data-center demand. In the longer run, U.S. threats to cripple telecommunication equipment companies ZTE and Huawei have given China a strong incentive to become self-sufficient in key technologies, which could ultimately hurt the business prospects of U.S. tech companies.
- U.S. agricultural-equipment and service firms will welcome the reprieve with China, but the Farm Belt's buying power has taken a hit recently from other concerns such as flooding. And agricultural commodities are fungible, meaning that a shift in Chinese buying to U.S. suppliers doesn't mean an increase in overall demand world-wide. Indeed, the knock-on effects of China's current swine-fever scare could depress demand for corn and soy globally.
- Finally, tariffs on a quarter trillion of Chinese goods remain in place and those on an additional $325 billion aren't off the table. The most fundamental issues such as intellectual property protection remain unresolved. This means existing frictions and general uncertainty will keep acting as sand in the gears of global growth.

Jun 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices eased in a cautious market, as traders eyed a scheduled meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit and next week's OPEC meeting.
- Gold prices jumped, heading for their best month in three-years, as uncertainty loomed over whether highly anticipated trade talks between China and the United States would yield any progress in ending a year-long trade dispute.
- Copper prices marked time but were on track for their weakest quarterly performance since the end of 2015, weighed down by demand fears from the U.S.-China trade war.
- U.S. corn futures held steady as traders awaited a widely watched U.S. government report, though the grain was headed for a monthly gain of 3% amid concerns that North American production could be hit by recent adverse weather.
- The dollar trod water early as investors awaited a crucial meeting between the leaders of the United States and China at a Group of 20 summit over the weekend for any signs of progress to end their heated trade war

- As a number of analysts have said both Trump and Xi have reasons to be patient on striking a trade deal, some have also said maybe the Chinese president waits for the next one if Xi doesn't think Trump wins re-election next year. That includes Shane Oliver, chief economist at AMP Capital. Meanwhile, he thinks successful negotiations would entail something like the US removing all tariffs if China passes into law agreed changes to protect intellectual property and prevent forced technology transfer.
- The FTSE 100 Index gains 0.1%, or 6.85 points, to 7423.24 as traders remain wary ahead of the G20 meeting. Airlines rise on bargain-hunting and the prospect of lower fuel costs as the price of a barrel of Brent crude edges 0.7% lower to $66.05. EasyJet is up 4.85% and International Airlines Group gains 1.65%. "Upward progress has been almost absent this week, as the excitement of last week and the shift to dovish stances by Mario Draghi and the Federal Reserve have given way to nervousness about the outlook for a U.S.-China deal," says IG's Chris Beauchamp.
- World trade should decline in the next three months, mainly driven by significant losses for both air and containerized ocean trade, according to the DHL Global Trade Barometer. Although it should only be a slight contraction, it clearly illustrates "why trade disputes create no winners," says Tim Scharwath, CEO of DHL global forwarding, freight. However, amid rising U.S.-Chinese tensions, "the slightly negative outlook for global trade for the third quarter of 2019 does not come as a complete surprise," Scharwath says .
- Both Trump and Xi may not be in a hurry to push through a trade deal as they each may gain from a delay, says Natixis markets strategist Esty Dwek. With US equities back near all-time highs and the economy still solid, the cost of a no deal for Trump remains small, Dwek notes ahead of the G-20 summit in Tokyo and the presidents' planned meeting. Many expect them to agree to resume trade talks which broke off last month. Meanwhile, Dwek says that with a now-dovish Fed, Trump's safety net remains intact and being "tough on China" may be a good political move. At the same time, she notes Xi can't making a deal where only China is making concessions. He can also afford to be patient while adding to stimulus efforts.

Jun 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil fell, erasing some of the previous session's strong gains, as traders await the G20 summit in Japan and a meeting of OPEC and other oil producers to decide on an extension of output cuts.
- Gold prices inched lower following a steep fall in the previous session, as investors waited on any Sino-U.S. trade developments later this week, while bulls rolled back expectations of big U.S. interest rate cuts. 
- Copper ticked up but in a tight range as investors were cautious ahead of a weekend meeting between U.S. and Chinese presidents on their prolonged trade dispute.
- Chicago wheat futures rose for a second session with prices supported by hot weather in Europe and lower-than-expected planting in Canada.
- The dollar edged up to a one-week high against the safe-haven yen, as some of the jitters ahead of the G20 summit in Japan eased amid hopes for progress there in resolving the Sino-U.S. trade war.

- It's too much of a stretch to attribute weakness in REIT share prices today to possible legislation that could rein in tax benefits investors currently enjoy, says Ron Kuykendall, Nareit vice president of media and relations. REITs' current weakness could be more attributed to jumps in Treasury yields. Hawaii's legislators recently passed a bill that will tax REITs on revenue earned in the state, and while the governor has said he would veto the measure, other states where the political climate is leaning towards higher taxes may propose similar bills.
- REITs take a hit, in part on concerns the tax benefits investors currently enjoy could get reined in. Hawaii's legislators have passed a bill that will eliminate the corporate income-tax deduction on dividends paid to shareholders by REITs for the portion of revenue derived from Hawaii. Governor David Ige has announced his intent to veto the bill as he said this discourages real-estate investment, but he has until early July to do so and legislators could override his veto. "The larger and more material concern is this legislation might embolden other 'blue states', where REIT investment is much larger (e.g., California, New York, Massachusetts, Virginia, Maryland), to pursue similar legislation and chip away at the tax benefit afforded to REITs," Wells Fargo Securities says. The S&P real-estate sector is off 1.3% while the broader index is up 0.1%.
- The DJIA and the S&P 500 each gain 0.2% and the Nasdaq Composite rises 0.8% amid hopes for a US-China trade deal. US Treasury Secretary Steven Mnuchin says in a CNBC interview there's a path to complete a trade deal between the two countries. Meanwhile, Micron Technology gains more than 12% after the chip maker reported better-than-expected third-quarter results and said it resumed shipments to Huawei.
- Markets are hoping for a friendly meeting between U.S. President Trump and Chinese President Xi Jinping at the G-20 meeting in Japan later this week and "the chances are not bad," says Frank Haeusler, chief strategist at Vontobel Asset Management. Trump has less time than Xi to resolve the dispute since he aims for re-election next year, and "it is therefore important for him to present a success in the trade dispute between the U.S. and China," the strategist says. The most likely scenario is that Trump and Xi agree to resume negotiations and potentially freeze the status quo on tariffs between the U.S. and China for a limited period of time, except for car tariffs given their global nature.
- A dispute between Switzerland and the EU could make it harder to trade Swiss stocks outside of Switzerland if an EU-imposed deadline passes Sunday without a deal. But this shouldn't affect the Swiss franc's safe-haven status, say analysts at Capital Economics. "Despite the spat with the EU, we expect the franc to rise further against the euro by the end of the year as global trade and geopolitical tensions persist and the ECB loosens policy," the analysts write. EUR/CHF down 0.1% at 1.1085 francs.
- "The most-likely outcome" of the Trump-Xi meeting is just another "ceasefire and renewed negotiations," says JPMorgan, not "a new 'framework' deal," says JPMorgan. "On the positive side, they could announce that they are going to stick to the previous framework and iron out the remaining differences soon." It adds that if Trump both wants a strong economy going into his re-election campaign and look tough on China, that "would almost necessarily mean avoiding" putting tariffs on the rest of Chinese exports to the US. As such, JPMorgan says timing on a deal may wait for another 3 or so months as Trump may see "some room to stall or even escalate the issue."

Jun 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose more than 1% to their highest in nearly a month as industry data showed U.S. crude stockpiles fell more than expected, underpinning a market already buoyed by worries over a potential U.S.-Iran conflict.
- Gold prices slipped more than 1% moving away from a six-year peak hit on the previous day, as U.S. Federal Reserve officials played down expectations of aggressive rate cuts, while investors locked in profits following a strong rally.
- London copper fell from a five-week high as long investors took profits from recent gains, while prices were also pressured by a stronger dollar after comments from the U.S. Federal Reserve chairman diminished dovish enthusiasm.
- Chicago corn and soybean futures slid with prices weighed down by forecasts of dry weather in parts of the U.S. Midwest, lifting hopes of an improved crop condition.

- Mark Calabria, head of the Federal Housing Finance Agency, has been talking about trying to get Fannie Mae and Freddie Mac out of government oversight. Not all bond investors are pleased. Growing concerns about whether the two mortgage giants will continue to have an explicit government guarantee has weighed on their mortgage-backed securities in recent weeks. Ginnie Mae mortgage-backed securities with a 3.5% coupon, which have no risk of losing their government guarantee, traded as much as a penny on the dollar higher in price than comparable securities that include Fannie Mae mortgages last week, the most since October, Tradeweb data show. At the beginning of June, that gap was closer to four-fifths of a penny. That price spread translates to about 0.05 percentage point higher interest rates for
borrowers in loans backed by Fannie and Freddie.
- Oil prices reverse modest declines to turn slightly higher after a tweet from President Trump in which he threatens to obliterate Iran if it attacks "anything American." That appears to be a change from earlier statements warning Iran against any attack that would result in the death of an American. Trump adds that an earlier comment from Iran, in which President Rouhani called new US sanctions on Iran "outrageous and stupid" among other things, was "very ignorant and insulting." WTI, which was down 0.4% before the comments, is now trading 0.2% higher at $57.99 as investors await US inventory data from trade group API at 4:30 pm ET.
- Investors in the multi-trillion-dollar market for Fannie Mae and Freddie Mac securities are already anxious about a Trump administration plan to overhaul the firms -- before the plan is even complete. That anxiety has translated into growing spreads between securities sold by Fannie and Ginnie Mae -- another government mortgage-guarantor -- and demonstrates one of the reasons Washington has repeatedly failed to end the decade-long conservatorship of Fannie and Freddie: doing so risks disrupting the housing market that comprises some 15% of the economy.
- Copper has gained throughout the day on the London Metal Exchange, indicating rising optimism that Presidents Trump and Xi will resolve or at least dial down their trade dispute at the G-20. "The current strength we're seeing in base metals suggests investors are gravitating towards a more positive view," says Edward Meir, a consultant to INTL FCStone. "We very well could see further strengthening in base metals heading into next week, should the two leaders leave Osaka relatively happy." Copper was up 1.3% at $6,040 a ton while zinc popped 2.1% to $2,542 a ton, having lagged most other industrial metals over the past month.
- A U.S.-U.A.E. economic policy dialogue touched on the often acrimonious issue of air traffic rights, since American, United, and Delta feel U.A.E carriers Emirates and Etihad are stealing traffic and want their rights curbed. The communique from the meeting argues for "a fair and equal opportunity to compete," in a pleasing phrase for the U.S. carriers, but also a commitment "to fully maintain all aspects of their Open Skies relationship", which will thrill the Middle East airlines. Emirates said it "commends the Trump Administration for reaffirming its full and unqualified commitment to the US-UAE Open Skies agreement."
- U.S. companies' resilience to mounting trade tensions between Washington and Beijing may fade soon, according to a report from S&P Global Ratings. "As the U.S.-China dispute escalates, its costs will pile up, leaving less room for near-term mitigation strategies and increasing its adverse credit effects," says the report. U.S. companies have so far been able to offset the impact of past tariffs on Chinese imports by passing on increased costs, diverting trade, and adjusting their supply chains, but as trade disputes intensify further so does credit risk, it says. U.S. President Donald Trump is expected to hold trade talks with his Chinese counterpart at the G20 summit starting this Friday.
- What started as a quiet morning for Asian equities didn't remain so for parts of the region. Amid some possible skittishness ahead of the G-20, Chinese stock indexes just entered the midday break down 2% while Hong Kong's main benchmark is 1.3% lower. Trump, according to Bloomberg, has brought up the possibility to confidants of ending a more-than-half-century defense pact with Japan; that helped boost the yen, and as a result push down the Nikkei 0.4%. Taiwan's benchmark is off 0.6%. Meanwhile, Indonesia's main stock index remains 0.5% higher and S&P 500 futures have turned down 0.2% as gold is now up 1% and above $1,430/troy ounce--its latest 6-year high.
- The yen has gained this morning, widely up some 0.15% versus majors, as Trump has apparently talked to confidants about withdrawing from a postwar defense treaty with Japan, according to Bloomberg. The yen has ticked higher recently on US-centered geopolitics involving Iran and China. An attempt to rejigger policy with Japan would send the safe-haven yen surging against the dollar. After falling as low as Y107.07, the greenback is at Y107.11, versus Y107.35 when markets opened in Tokyo this morning. Meanwhile, the Nikkei ends morning trading down 0.2% at 21241.28.
- Outdoor apparel company Columbia Sportswear warned that the Trump administration's proposed 25% tariffs on almost all Chinese imports would have a "detrimental impact." Katie Tangman, Columbia's director of global customs and trade, said in a testimony to federal trade officials that the products it brings in from China are highly specialized and tied to significant investments its made in tooling, machinery and personnel training. She said the cost to move its remaining production operations out of China, purchase new machinery and train a new workforce would be a minimum of $3 million and take about a year. Vietnam and China accounted for about 61% of Columbia's 2018 apparel, accessories and equipment production, according to its latest annual securities filing. "While we have taken steps to mitigate the cost of these tariffs, the proposal for increased punitive taxes on all products manufactured in China would have a significant detrimental impact here in the U.S.," CEO Tim Boyle said in a statement.
- The kiwi continues to gain as President Trump's criticism of the Fed and another round of weak manufacturing data out of the US hurt the dollar, ANZ says. Trump said the Fed "doesn't know what it is doing" and compared the US central bank to a "stubborn child" in a pair of tweets Monday. There is New Zealand monthly trade data on the slate this morning, but markets will mostly be looking forward to Fed Chairman Powell's speech tomorrow morning and then the RBNZ meeting to set the Official Cash Rate. The NZD/USD is at 0.6619 early on Tuesday, a two-week high.
- Some US companies with significant revenue exposure to China are more vulnerable to consumer boycotts, buying and selling restrictions or other non-tariff measures, S&P Global says. Vulnerable companies range from giants such as Apple, where China accounts for about 20% of total revenues, according to S&P, to smaller firms like tobacco company Pyxus International, which generates 14% of its revenues from China, according to S&P. "A resilient U.S. economy has helped corporates weather the U.S.-China dispute, but this support is now shakier due to weaker growth prospects," S&P says.
- Oil prices have recouped some of their losses following President Trump's comment that he will sign an executive order imposing "hard hitting" sanctions on Iran. Brent crude is down 1.1% at $63.74 a barrel while WTI is down 0.5% at $57.13. Spiraling tensions between the two countries have provided a bullish counterweight to sagging demand figures in recent weeks, injecting volatility into oil prices. With Brent down around 1.5% before the news, the market reaction so far appears to have been negligible. "A move of 1% either way at the moment is perfectly fair game--we've seen much larger moves," says Michael Tran, managing director of global energy strategy at RBC Capital Markets.

Jun 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Outdoor apparel company Columbia Sportswear warned that the Trump administration's proposed 25% tariffs on almost all Chinese imports would have a "detrimental impact." Katie Tangman, Columbia's director of global customs and trade, said in a testimony to federal trade officials that the products it brings in from China are highly specialized and tied to significant investments its made in tooling, machinery and personnel training. She said the cost to move its remaining production operations out of China, purchase new machinery and train a new workforce would be a minimum of $3 million and take about a year. Vietnam and China accounted for about 61% of Columbia's 2018 apparel, accessories and equipment production, according to its latest annual securities filing. "While we have taken steps to mitigate the cost of these tariffs, the proposal for increased punitive taxes on all products manufactured in China would have a significant detrimental impact here in the U.S.," CEO Tim Boyle said in a statement.
- The kiwi continues to gain as President Trump's criticism of the Fed and another round of weak manufacturing data out of the US hurt the dollar, ANZ says. Trump said the Fed "doesn't know what it is doing" and compared the US central bank to a "stubborn child" in a pair of tweets Monday. There is New Zealand monthly trade data on the slate this morning, but markets will mostly be looking forward to Fed Chairman Powell's speech tomorrow morning and then the RBNZ meeting to set the Official Cash Rate. The NZD/USD is at 0.6619 early on Tuesday, a two-week high.
- Some US companies with significant revenue exposure to China are more vulnerable to consumer boycotts, buying and selling restrictions or other non-tariff measures, S&P Global says. Vulnerable companies range from giants such as Apple, where China accounts for about 20% of total revenues, according to S&P, to smaller firms like tobacco company Pyxus International, which generates 14% of its revenues from China, according to S&P. "A resilient U.S. economy has helped corporates weather the U.S.-China dispute, but this support is now shakier due to weaker growth prospects," S&P says.
- Oil prices have recouped some of their losses following President Trump's comment that he will sign an executive order imposing "hard hitting" sanctions on Iran. Brent crude is down 1.1% at $63.74 a barrel while WTI is down 0.5% at $57.13. Spiraling tensions between the two countries have provided a bullish counterweight to sagging demand figures in recent weeks, injecting volatility into oil prices. With Brent down around 1.5% before the news, the market reaction so far appears to have been negligible. "A move of 1% either way at the moment is perfectly fair game--we've seen much larger moves," says Michael Tran, managing director of global energy strategy at RBC Capital Markets.
- US companies are going to continue diverting supply chains away from China, S&P Global says. The planned 25% tariffs on all Chinese imports will make it too difficult to continue passing on costs to consumers and companies may need to absorb a bigger share of the costs. The tariffs will put pressure on profits and amplify uncertainty due to the difficulty of replicating China's well-developed and integrated technology supply chain elsewhere. "All in all, companies have been able to mitigate the impact of past tariffs by passing on increased costs, diverting trade, and adjusting their supply chains," S&P said. "But as the U.S.-China dispute escalates, its costs will pile up, leaving less room for near-term mitigation strategies and increasing its adverse credit effects."
- Trump administration officials provide only limited detail about an executive order expected to be released today that will move toward requiring greater disclosure of the health-care prices negotiated between hospitals and health insurers. In a call with reporters, officials left open the option that the disclosures could be done in an aggregated form, and said the plan will be worked out through regulatory rulemaking. Aggregated rates would have a far smaller effect on local market dynamics as insurers and hospitals still wouldn't get clarity on their rivals' secret rates. However, the order is also going to include language about greater access to de-identified claims data.
- As NASA struggles to fund its Orion crew capsule, European aerospace industry officials are fretting US officials won't make binding, long-term-commitments to buy power modules for half a dozen or more of the spacecraft from across the Atlantic. Such a multimission contract rather than individual purchases, the Europeans say, would lower costs and enhance efficiencies. But NASA and Lockheed Martin, Orion's prime contractor, have maintained that budget uncertainties and US legal constraints preclude the arrangement. Meanwhile, Lockheed Martin is revamping manufacturing, reducing labor hours and using other cost-saving techniques to cut costs to produce Orion.
- Options investors are optimistic about the outcome of the G-20 summit on Friday and Saturday, where President Trump and Chinese President Xi have agreed to meet and discuss trade. Many investors are looking to the summit to see whether two of the biggest global economies will reach a truce on tariffs and trade, matters that have roiled markets in recent months. They have been placing bullish options bets on stocks across the world ahead of the meeting, with a particular focus on Chinese equities, according to Credit Suisse. As a result, an options measure called skew, which measures the cost of bearish options versus bullish options, has fallen to a one-year low on the iShares China Large-Cap Exchange-Traded Fund, known as FXI. Investors have also bought options that pay out if other major US indices continue to rise, according to the firm.
- The opposition candidate secured victory in the re-run of Istanbul's mayoral election, but this is unlikely to result in a favorable shift in economic policymaking in Turkey, says Capital Economics. "Politically at least, the result is a blow for President Erdogan," it says. Major risks still lie ahead, including "the threat that the US imposes sanctions over Turkey's purchase of a Russian missile defence system." Investors are likely pleased that the election has gone smoothly, it says. USD/TRY trades 0.4% lower at 5.7985 after the lira rallied as much as 1%.
- Grains futures are rising pre-market as traders are position ahead of Friday's crop acreage report, as well as the G-20 Summit in Japan this week -- where President Trump and Chinese President Xi are planning to meet to discuss trade between the two nations. Although the market is hopeful for some of resolution to come out of the meeting, few traders believe that will be the case. "No substantial progress is expected to be made," says Karl Setzer of AgriVisor. Wheat is leading the way up today, by 1.6% -- while corn is up 1% and soybeans are up 0.8%.
- The trade dispute between the U.S. and China is overshadowing almost every other piece of news in the industrial-metal market ahead of President Donald Trump's G-20 meeting with President Xi, says Citigroup strategist Oliver Nugent. "People are trading off the U.S.-China trade conflict," Nugent says, suggesting the strike at Chile's Chuquicamata mine is unlikely to "move the needle" on the London Metal Exchange. Though the walkout will exacerbate a shortage of copper concentrate, he adds, the market for refined copper is slack because buyers are reluctant to stock up on the metal until the U.S. and China reach a trade deal. Three-month copper futures are down 0.3% at $5,939 a ton on the LME.

Jun 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices climbed as tensions remain high between Iran and the United States, with U.S. Secretary of State Mike Pompeo saying "significant" sanctions on Tehran would be announced.
- Gold prices advanced, hovering near a six-year high touched in the previous session, as dovish signals from major central banks and heightened tensions between the United States and Iran boosted demand for the safe-haven metal.
- London copper prices held steady, hovering just below a near one-month high hit last week as mine disruption in top producer Chile stoked supply concerns, amid escalating U.S.-Iran tensions.
- Chicago wheat futures slid for a second session on Monday, with prices under pressure from expectations of abundant global supplies in the coming season amid near record production in the Black Sea region.
- The euro advanced to a three-month high against the dollar, as bearish bets on the U.S. currency remained solid after the Federal Reserve signalled last week it could soon cut interest rates.

- Washington has finally passed financial guardrails for dealing in certain kinds of swaps, a decade after unregulated derivatives helped inflame the financial crisis. The rules govern the levels of capital and margin that must be held by swap dealers whose trades are governed by the Securities and Exchange  Commission. Oversight of swaps is split between the SEC, CFTC and banking regulators. The SEC's rules, announced Friday, affect only some types of swaps
and firms that are not classified as banks.
- A trade association urges the US Trade Representative to avoid imposing additional 25% tariffs on $300B of goods from China, saying "American consumers shouldn't be caught in the crosshairs." The National Retail Federation said it was supportive of "efforts to achieve better trade deals," but added "It's time to reevaluate a strategy based solely on tariffs and work with our allies to put international pressure on China." The NRF also said a new report it commissioned estimated US consumers would pay "$4.4 billion more each year for apparel, $2.5 billion more for footwear, $3.7 billion more for toys, and $1.6 billion more for household appliances if the administration proceeds with the additional tariffs."
- The trade conflict can also be interpreted as the U.S. not wanting to incur yet more foreign debt in the future, and for Germany, this would mean that fewer goods and services could be exported, says Edgar Walk, chief economist at Metzler Asset Management. The goods and services unsold abroad would then have to be used domestically in order to avoid a prolonged economic downturn, he says. To do this, the German state would either have to create a very positive investment climate for private companies or use the goods and services itself with the help of rising debt, ideally as an investment.

Jun 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices reversed earlier gains but benchmark Brent crude was still set for its first weekly gain in five weeks amid rising tensions in the Middle East and on hopes for a drop in U.S. interest rates that may stimulate global growth.
- Gold jumped more than 1.5%, breaking above $1,400 for the first time since September 2013, as hints of a rate cut from the U.S. Federal Reserve took a toll on the greenback and U.S. Treasury yields.
- London copper prices were flat in early Asian trade, holding on to gains made after the United States and top metals consumer China agreed to restart trade talks and amid signs the Federal Reserve may further cut interest rates this year.
- U.S. corn futures edged up, moving towards their highest in nearly five years as rains across a key producing region stoked fears farmers would be prevented from completing their full planting plans.
- The dollar struggled to get on the front foot, and was poised for a weekly loss against major currencies after the U.S. Federal Reserve joined global peers with plans to cut interest rates to support flagging economic growth.

- Taiwan's Foxconn assembles Apple products including iPhones in China, so it's come under the spotlight as the US has proposed to slap tariffs on made-in-China smartphones, tablets and laptops. Founder Terry Gou, who is stepping down as chairman to mount a presidential campaign on the island, said at today's annual meeting he is no longer in a position to answer issues about the company formally known as Hon Hai. But from the perspective of Taiwan, "I call on Apple to come to Taiwan." He thinks that's highly likely to happen. Gou also said he will reach out to Facebook CEO Mark Zuckerberg about bringing crytocurrency-related technology to Taiwan.
- Canada Prime Minister Justin Trudeau says he had a constructive meeting with House Speaker Nancy Pelosi and other congressional leaders in Washington on issues related to Congress ratifying a revised Nafta. Speaking to Canadian reporters, Trudeau rules out the possibility of reopening the trade pact to satisfy concerns from Congress. "We are concerned any reopening could lead to not just to further lengthy negotiations ... but a worse outcome for Canadians." He adds Ottawa remains "alert to potential challenges" on US ratification of the trade deal, which took over a year to renegotiate among Canadian, US and Mexican officials.
- Merck Chief Executive Kenneth Frazier says the cost of prescription drugs will fall if the Trump administration's proposal to curb billions of dollars in annual rebates that drugmakers give middlemen in Medicare takes effect. "I think list prices would go down," Frazier says while speaking to reporters during the company's investor day in New York. Currently, pharmacy-benefit managers negotiate confidential rebates and discounts on many branded prescription drugs. Those deals aren't always passed along to customers at pharmacies, and the new regulation could mean rebates get reviewed under anti-kickback statutes.
- With Democratic Party debates starting next week, the buildup to the US presidential election over the next 18 months poses a risk to markets, says Evan Brown, head of multi-asset strategy at UBS Asset Management, in a roundtable discussion about the firm's mid-year outlook. "A lot of candidates tend to move to extremes of their party," Brown says. "And before moving ultimately to the center in the general elections, we could hear a lot of policy recommendations that would suggest meaningful changes to the US economy." The 2017 tax cuts, for instance, could be in question for reversal, Brown says.
- A proposed rollback of US fuel-efficiency standards set under the Obama Administration will cost drivers an average of $3,300 more in ownership expenses, said David Friedman, a vice president at Consumer Reports in testimony submitted to a subcommittee hearing. The Trump administration seeks to freeze the fuel economy targets set by the federal government for auto makers at 2020 levels, breaking with a 2011 deal that would have raised the efficiency standard by 5% a year to 54.5 miles per gallon by 2025. Consumer advocates warn the rollback will cost consumers more at the pump by encouraging auto makers to build vehicles that aren't as fuel efficient as they would have to be under the tougher regulations. Car companies worry the proposed rollback, which would likely be challenged in court by California and other states, will prolong uncertainty over future rules for their models.
- Russia, Kazakhstan, Nigeria and Gabon are likely to gain in the short run from the U.S.-Iranian tensions, says Charlie Robertson, global chief economist at emerging-market focused investment bank Renaissance Capital. "Their oil exports won't be affected by tensions in the Gulf, but the oil price will rise." More broadly, though, the flareup could spell trouble for the world economy. In a worst case scenario, Robertson says, escalating tensions push oil prices higher "at a time when the global economy is already fragile." It would be difficult for the Federal Reserve and European Central Bank to respond to this stagflationary combination of rising inflation and slowing growth, he adds.
- Prices for most energy commodities, including crude oil, gasoline and diesel, are up sharply after Iran shot down a US drone. But natural gas prices are a clear exception, dropping 3.6% late in the morning to a three-year low of $2.195/mmBtu. The move suggests even as natural gas is becoming a global market amid the booming business of liquefied natural-gas exports, prices are still less affected by geopolitics and more closely tied to domestic supply and demand. US gas production climbed 11% in 2018 to 10 billion cubic feet per day, marking the largest annual rise on record, and output has continued to climb this year. Meanwhile, demand has been weak recently as mild weather curbs consumption.
- Apple says the proposed tariffs on $300 billion in imports from China would limit its contributions to the US economy and impair its ability to compete worldwide. In a letter to the US Trade Representative, the company says the tariff list covers all of Apple's major products, including iPhone, iPad, Mac, AirPods and AppleTV, as well as the parts and batteries used to repair products in the US. The proposed tariffs also cover accessories Apple makes for these devices, such as monitors and keyboards. It says the Chinese producers Apple competes with in global markets don't have a significant presence in the US market and wouldn't be hurt by US tariffs, giving them a competitive advantage. "We urge you not to proceed with these tariffs," Apple's letter, which was dated Monday, says.

Jun 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose nearly 2% on signs of improving demand in the United States, the world's biggest crude consumer, and as OPEC and other producers finally agreed to a date for a meeting to discuss output cuts.
- Gold prices surged as much as 1.8% to their highest in more than five years after the U.S. Federal Reserve signalled possible interest rate cuts later this year, sending the dollar and U.S. Treasury yields lower.
- London copper and nickel prices climbed to a more than three-week high on a weaker U.S. dollar as investors took Federal Reserve's comments as a sign of possible interest rate cuts later this year.
- Chicago corn futures slid to a one-week low, falling for a third consecutive session, as prices were pressured by fund selling although planting delays provided a floor under the market.

- La-Z-Boy gains more than 8% after the company said it plans to continue raising its prices in response to additional US tariffs on certain Chinese goods. China accounts for nearly all of the company's leather cut-and-sewn sets and fabrics and 25% of its casegoods, according its latest annual filing. "Since raising our prices in response to the initial round of Chinese tariffs, we have not seen a significant change in buying patterns," CEO Kurt Darrow says
on a conference call. "We continue to believe we are more competitively positioned than many in the furniture industry based on our US upholstery manufacturing footprint."
- Fed Chairman Jerome Powell says sealing a deal with China on a trade pact wouldn't necessarily remove the possibility of future interest-rate cuts. "News about trade has been an important driver of sentiment in the inter-meeting period, but we're also looking at global growth," he says. "We're not exclusively focused on one event or one piece of data." He notes recent US economic data, particularly on consumer spending, have been positive.
- Fed Chairman Jerome Powell was asked in his press conference what he would do if President Trump attacked him for not lowering rates. Trump has hinted he's considered trying to demote Powell for not cutting rates, and he's expressed lots of anger about the current level of rates, believing the economy would be doing better if rates were lower. "I think the law is clear I have a four year term and a fully intend to serve it," Powell says, suggesting that if Trump comes for him, there could be some real trouble ahead.
- Winnebago Industries executives tell investors on a call tariffs on Chinese imports could raise input costs in 2020 by tens of millions of dollars or more. CFO Bryan Hughes says the company will try to mitigate costs with suppliers and negotiate prices with vendors. CEO Michael Happe says it will be difficult for Winnebago to raise prices to offset the higher costs. "We have reached some of the outer limits of pricing elasticity in terms of asking for a premium," Happe says. "And so, our potential price is probably more limited today than it was you know two years ago because of that." The company's revenue fell 5.9% to $528.9 million.
- Copper shed some of Tuesday's gains in calm morning trading on the LME, slipping 0.4% to $5,932 a ton. Geordie Wilkes, head of research at brokerage Sucden Financial, expects base metals not to fall much further ahead of the Federal Reserve's interest-rate decision. But he says investors shouldn't pin too much hope on news that Presidents Trump and Xi will meet at the G-20 in Japan, which sparked a steep rise in prices on Tuesday. Wilkes notes that President Trump agreed to delay tariffs after meeting his counterpart after last year's G-20 in Buenos Aires, only for tensions to re-erupt. "There's a long way to go," Wilkes says.
- US stocks rise as President Trump's tweet that he had a good phone conversation with China's President Xi and was looking forward to their meeting later this month lifts hope for a trade deal. The Dow gains 1.4% to 26465, the S&P rises 1% to 2917 and the Nasdaq adds 1.4% to 7953. Industrials and tech stocks rise the most, with Boeing up 5.4% and Apple gaining 2.4%. Dovish comments and stimulus signals from ECB President Draghi also boosted stocks, as traders hope for a similar sentiment from the US Fed. Treasury yields fall to 2.057% as rate-cut bets become more popular.

Jun 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices extended gains after rising in the previous session on rekindled hopes for a U.S.-China trade deal and on the potential for conflict between the U.S. and Iran in the Middle East after tanker attacks there last week.
- Gold traded almost steady as investors awaited the U.S. Federal Reserve's monetary policy decision later in the day, while expectations of an improvement in trade relationship between the United States and China dented the metal's appeal.
- Base metals futures in Shanghai rose as hopes grew for a resolution to the prolonged U.S.-China trade war after U.S. President Donald Trump said talks would resume later this month after a recent hiatus.
- Chicago corn futures slid for a second session as U.S. farmers race to finish planting, which has been delayed by excessive rains and flooding across the U.S. Midwest.
- The dollar held near a two-week high early ahead of the Federal Reserve's closely-watched policy decision later in the day, supported by a surprisingly dovish European Central Bank and bearish eurozone economic data.

- The strong market reaction to the upcoming US-China meeting at the G-20 summit shows how much some analysts are still hoping for a resolution to the monthslong tariff fight, with the PHLX Semiconductor Index now up 4% and most-active Comex copper futures rallying 2%. Shares of companies reliant on Chinese demand and trade flows including Apple and Deere are up about 3%.
- The DJIA gains 1.3%, the S&P 500 adding 1.3% and the Nasdaq Composite climbing 1.9%. Stocks rise after President Trump tweets that he had a "very good" phone conversation with Chinese President Xi Jinping and the two will have an extended meeting next week at the G-20 summit in Japan. Nvidia shares gain 5.6%, leading the S&P 500. Swedish truck maker Volvo AB said it signed an agreement with the chip maker to jointly develop an advanced artificial-intelligence platform for autonomous commercial vehicles and machines. Meanwhile, Facebook gains 1.3% after announcing its formal plans to launch a cryptocurrency called Libra.
- US oil prices shot up 2.7% to $53.33 after trading flat in the early morning as President Trump tweets about "very good telephone conversation with President Xi of China." The two leaders are scheduled to meet next week at the G-20 meeting in Japan amid trade tensions between the US and China. Move in crude lifts US oil producers. Oasis (OAS) up 6.9%, Whiting (WLL) rises 6.5% and Continental (CLR) climbs 5.4%. WTI's gain pares spread between US and international benchmark Brent, which is up 1.5% at $61.82.
- Stocks, bond yields and commodities are rising after President Trump tweets that he had a phone conversation with Chinese President Xi Jinping and the two will be meeting next week at the G-20 summit in Japan. The S&P 500 and Dow industrials add 1.3%, the 10-year U.S. Treasury yield is up to 2.066% after dropping below 2.03% earlier in the day and US crude-oil futures surge 2.3% to pare some of their recent slide.

Jun 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were falling for a second day, after more signs that global economic growth is being hit by U.S.-China trade tensions, although losses were limited amid tensions in the Middle East after tanker attacks last week.
- Gold prices edged higher as the dollar pulled back from multi-week highs ahead of the U.S. Federal Reserve's two-day monetary policy meeting.
- London copper prices held steady as investors waited for news from the U.S. Federal Reserve's interest rate meeting, while concerns over a mine strike in top copper producer Chile offset weak U.S. economic data.
- The British pound languished near this year's low on rising worries Boris Johnson, the front-runner to replace UK Prime Minister Theresa May, could put Britain on a path towards a dreaded no-deal Brexit.

- Investors interested in sukuk bonds--the debt instruments that comply with Islamic law--likely won't see much growth in the market this year, S&P Global Ratings says. Despite a relatively strong start to issuance this year, the ratings agency predicts about $115B in sukuk bond deals in 2019, which would represent the same dollar value issued in 2018. Among the issues holding back the market: geopolitical tensions in the Middle East and the continuing preference among borrowers in the Gulf region for conventional bonds. Higher oil prices could also dampen the need for financing and demand for sukuk bonds, the ratings agency says.
- Lockheed Martin is the only big defense contractor in negative territory, sliding a bit after another broadside from President Trump, this time over plans to shutter a Sikorsky helicopter plant in Pennsylvania that employs more than 400. CEO Marillyn Hewson says she talked to Trump and agreed to explore options for the plant, which is building some of the new presidential helicopter fleet. This year's official White House Christmas Ornament is a replica of a Sikorsky chopper. Sikorsky shed around 5% of its workforce last year.
- JPMorgan cut iPhone shipment expectations 4% for the remainder of the year because of rising trade tensions between the US and China. It now expects calendar-year shipments of 183 million, down from 185 million. Much of the decrease will stem from softening iPhone demand in China. The firm says Apple could benefit in the rest of Asia from the US crackdown on Huawei, which could create an opportunity for it to sell more iPhones in the region outside China. It also says that investors continue to underestimate the potential of Apple's services business. It projects the business could add $60 billion in revenue by increasing the number of subscriptions to one per device from its current level of one subscription for about a quarter of all Apple devices.
- Mexico's economic growth will fall to 1.2% in 2019 from 2% in 2018, due in part to unpredictable policy making by the new government of Andres Manuel Lopez Obrador, says Moody's. Concern about government decision making is undermining prospects for Mexico's medium term economic growth and fiscal outlook, it adds. The debt rating service pointed to the October decision of then president elect Lopez Obrador to cancel the construction of a partly built $13B Mexico City airport after an informal, much questioned referendum, as a prime cause of investor concern. Moody's said Mexico faced a "challenging year" due to lower growth, changes to energy policy and especially the outlook for highly indebted state oil company Pemex.

Jun 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose after U.S. Secretary of State Mike Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East, as tensions mounted following attacks on tankers last week.
- Gold prices steadied after retreating from a 14-month peak in the previous session, as the dollar strengthened on back of strong U.S. retail sales report, while investors await U.S. Federal Reserve meeting this week.
- Nickel prices advanced on the London Metal Exchange as mining disruptions in key producer Indonesia sparked concerns about supply of the input material for stainless steel.
- Chicago corn futures climbed more than 2% to a five-year top as more rains and flooding in parts of the U.S. Midwest are likely to curb output in the world's biggest producer of the grain.

- US building-products manufacturers could see their margins threatened by increased tariffs on Chinese goods, Fitch says. The company says "margins are likely to continue to be pressured during the latter part of this year and into 2020 due to the increase in the List 3 Section 301 tariff rate to 25% from 10% on $200 billion of Chinese imports in May." Companies in the sector may try to pass tariff increases on to customers, Fitch says, adding "Companies with strong brands, small-ticket product portfolios and a product mix geared towards value items will have the most success in passing along costs."
- ING expects China to step up fiscal stimulus in a bid merely to stabilize its economy rather than in the pursuit of increased growth. Recent data signals a deterioration in Chinese economic activity due to the effects of a technology war and U.S. tariffs' damage to exports via supply chains, the bank says. Chinese manufacturing growth figures in May pointed to similar growth lows as seen in the global financial crisis in 2008-2009, according to ING. This is reflected in May's industrial production data, which grew 5.0% compared with the same month a year ago, and down from 5.4% in April, ING adds.
- Throughout the year, investors have debated whether sliding stock prices might pressure Washington to reach a trade deal with Beijing. But few are convinced US markets are anywhere close to where they'd have to be for such a scenario to unfold. 24% of investors surveyed by Bank of America say President Trump would expect the Fed to cut rates rather than give into China's demands. Another 24% believe the S&P 500 would have to slide below 2200--more than 20% below where it closed Thursday--before there's an extra incentive to strike a deal. "A significant share of investors see the Trump put as being struck extremely far out of the money, seeing either no level at which Trump capitulates, or seeing no incentive before a 30% correction," Bank of America says.
- A survey by startup Teamblind, which operates the workplace community app Blind, found that Chinese workers in the U.S. are feeling insecure due to the tense US-China relations following the trade war, says Kyum Kim, co-founder and head of U.S. operations for the South Korean company. The app allows workers to anonymously chat with co-workers as well as employees at other companies such as Google, Amazon and Microsoft. "Chinese nationals were actually feeling threatened by the trade war, especially in hardware companies like Qualcomm," Kim says at WSJ's Tech D.Live conference.
- China's crucial property market, the only bright spot in the country's economy through April, has started cooling as well. That will create new headaches for Beijing, says Macquarie economist Larry Hu. "What's a thorny issue for policymakers now is that their previous stimulus measures have failed to lift infrastructure investment.". Still, he doesn't think economic conditions are bad enough for China to roll out further stimulus. The data, though, may mean a 2019 trade deal with the US looks more possible as America's economy is also slowing. "Both sides should feel more pressed to make a deal."
- The FTSE 100 is expected to open 12 points higher at 7380, London Capital Group says, with heavyweight oil stocks helped by oil prices remaining firm after this week's attacks on two oil tankers in the Gulf of Oman. Reports that U.S. President Trump still wants to meet Chinese President Xi at the G20 later this month raises the prospect that China trade talks will progress, although concerns about political and economic uncertainty linger. With little on the day's economic or corporate calendar, focus may center on the pound, which remains weak despite a brief rise after former U.K. foreign secretary Boris Johnson emphatically won the first round of voting to select the next Conservative Party leader.
- Lumber futures on the CME are continuing their quick rise, with the contract posting a gain for the sixth day in a row to $373.80 per 1,000 board feet, up 5.4% from the previous day. Since the rally began June 6, the lumber price has risen nearly 20%, partially in reaction to news of new capacity curtailments in British Columbia earlier this week. Driving today's run is a continued reaction to the latest round of curtailments, says Shawn Church of Random Lengths.

Jun 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil rose for a second day, extending sharp gains following attacks on two oil tankers in the Gulf of Oman that stoked concerns of reduced crude flows through one of the world's key shipping routes.
- Gold prices rose, moving closer to their 14-month high hit last week, as trade and political turmoil, along with U.S. interest rate cut expectations propped up the precious metal.
- The dollar trod water and was set to show a weekly rise as investor focus turned to next week's Federal Reserve meeting for hints on a possible rate cut in light of rising risks to trade and global growth.
- Nickel prices jumped to two-week highs as flooding in Indonesia, a major producer and exporter of the metal, sparked fears of supply disruptions.
- Chicago corn futures rose to a four-year high and were poised to finish the week with a gain of almost 7% as more rains in parts of the U.S. Midwest threaten to stall planting

- China's crucial property market, the only bright spot in the country's economy through April, has started cooling as well. That will create new headaches for Beijing, says Macquarie economist Larry Hu. "What's a thorny issue for policymakers now is that their previous stimulus measures have failed to lift infrastructure investment.". Still, he doesn't think economic conditions are bad enough for China to roll out further stimulus. The data, though, may mean a 2019 trade deal with the US looks more possible as America's economy is also slowing. "Both sides should feel more pressed to make a deal."
- The FTSE 100 is expected to open 12 points higher at 7380, London Capital Group says, with heavyweight oil stocks helped by oil prices remaining firm after this week's attacks on two oil tankers in the Gulf of Oman. Reports that U.S. President Trump still wants to meet Chinese President Xi at the G20 later this month raises the prospect that China trade talks will progress, although concerns about political and economic uncertainty linger. With little on the day's economic or corporate calendar, focus may center on the pound, which remains weak despite a brief rise after former U.K. foreign secretary Boris Johnson emphatically won the first round of voting to select the next Conservative Party leader.
- Lumber futures on the CME are continuing their quick rise, with the contract posting a gain for the sixth day in a row to $373.80 per 1,000 board feet, up 5.4% from the previous day. Since the rally began June 6, the lumber price has risen nearly 20%, partially in reaction to news of new capacity curtailments in British Columbia earlier this week. Driving today's run is a continued reaction to the latest round of curtailments, says Shawn Church of Random Lengths.
- A pair of senior Chinese officials Thursday credited American leadership in finance as an inspiration for their country's progress in the sector. When American bankers visited China 15 years ago, local bankers literally laughed off their advice, says Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission. But today, those ideas have helped Chinese banks to secure high returns on capital, he adds. And in 1986, former leader Deng Xiaoping paid his respects to the New York Stock Exchange with the gift of a historic Chinese stock certificate, setting the stage for Shanghai to relaunch stock trading four years later that helped the country's reform and opening up strategy, recalled Shanghai Party Secretary Li Qiang.

Jun 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, recouping some of the losses from sharp declines in the previous session, when crude fell as much as 4% on continued increases in U.S. crude stockpiles and concerns about lower demand growth.
- Gold prices advanced as demand for the safe-haven metal rose on expectations of an interest rate cut by the U.S. Federal Reserve following soft inflation data, and on escalating trade tensions between the world's top two economies. 
- The yen gained broadly as risk appetite ebbed in the broader markets and lifted the safe-haven Japanese currency, while the dollar held the bulk of its gains against other major currencies after rebounding from 11-week lows.
- Industrial metals declined amid a lack of progress in resolving the U.S.-China trade dispute and weak data from top metals consumer China.
- Chicago corn rose 1.2% to a one-week high, while soybeans gained for a fourth consecutive session as forecasts of more rains in the U.S. Midwest threatened to stall planting.

- Raytheon is the biggest beneficiary of the White House's emergency declaration on arms sales to Saudi Arabia, the UAE and other Middle East allies, and signs are that previously-blocked shipments are on the move. Raytheon accounts for almost $3B of the $8.1B in sales held up by Congress, and a senior State Dept. official says at a House hearing that previously-manufactured and "off-the-shelf" arms are being shipped. Raytheon's contribution includes 120K smart bomb kits, and the company had previously been unable book anything beyond advance payments. Analysts say its 2019 cash flow guidance had assumed the sales would have remained frozen all year. Shares fall 1.4% to $175.11.
- After a fresh jump, the 10th in 11 days, front-month gold futures are within 1.5% of hitting a new 14-month high. Harry Tchilinguirian, head of commodities research at BNP Paribas, thinks they're unlikely to get much closer and could fall back to $1,300 within a week. Flows into exchange-traded funds show that investors sought the safety of gold when President Trump appeared to open up a second trade front with Mexico, but that they haven't done so in response to the escalation in tensions with China. Now that the tariffs on Mexico have been avoided, Tchilinguirian expects that investors will go back to seeing the dollar as the "ultimate safe haven," boosting the greenback and hurting gold.
- The foreign exchange derivatives market points to "complacency" around trade tensions between Washington and Beijing, says Bank of America Merrill Lynch, which expects volatility to rise. "We would expect markets to get more concerned about negative outcomes as the G20 meeting approaches, potentially triggering a riskoff," says BAML analyst Athanasios Vamvakidis. He expects a rates or equities selloff and higher FX volatility before and after the G20 meeting at the end of June. The investment bank has taken the view that "things will get worse before/if they get better." As a result, BAML is also short EUR/JPY and USD/JPY.
- EUR/USD could rise after U.S. inflation data at 1230 GMT, says Danske Bank, flagging "a possibility of a weaker figure." EUR/USD, which is last flat at 1.1336 but close to its strongest since late March, "has become more sensitive to U.S. data," given uncertainty around pricing expectations for U.S. Federal Reserve interest rate decisions, it says. Comments from U.S. President Donald Trump claiming the euro was too weak "temporarily roiled" EUR/USD on Tuesday, but Danske Bank says Trump "has little leverage," with EUR/USD driven by U.S. and eurozone central bank policy. Moreover, if Trump were to impose tariffs on Europe's car industry the euro would likely fall, it says.
- Following a meeting last week between China's top economic-planning body and experts, Beijing has launched surveys across provinces to optimize its control over rare-earth minerals. Everbright Sun Hung Kai Financial says the timing shows China, the world's biggest supplier of them, probably wants to raise concerns at US firms regarding supply amid the countries' trade row.

Jun 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell nearly 2%, weighed down by a weaker demand outlook and a rise in U.S. crude inventories despite growing expectations of ongoing OPEC-led supply cuts.
- Gold prices rose after hitting a one-week low in the previous session, as worries over U.S.-China trade war flared up, curbing risk appetite and increasing the appeal of safe-haven bullion.
- The dollar hovered near an 11-week low against its peers, weighed by expectations the U.S. Federal Reserve could cut interest rates some time in the next few months.
- Copper prices rose on hopes that top consumer China would increase spending for metal-intensive infrastructure projects, but a festering trade war between Beijing and Washington curbed further gains.
- Chicago corn futures ticked lower as the market took a breather after climbing nearly 3% in the last session on a forecast of a larger-than-expected reduction in U.S. yields.

- Following a meeting last week between China's top economic-planning body and experts, Beijing has launched surveys across provinces to optimize its control over rare-earth minerals. Everbright Sun Hung Kai Financial says the timing shows China, the world's biggest supplier of them, probably wants to raise concerns at US firms regarding supply amid the countries' trade row.
- Acting Chief of Staff Mick Mulvaney says discussions have begun to address government funding for the next two years, adding that he spoke to Senate Majority Leader Mitch McConnell on the subject earlier in the day. "No one is interested in a government shutdown," he says in an interview at a WSJ CFO Network event in Washington. "Yes you can have an accidental shutdown but it's unlikely. I do not see that in the future." He says discussions over a "clean debt ceiling" are also ongoing, adding "I don't foresee it being a very dramatic event this year."
- Several environmental groups sue to stop rule changes from the Trump administration to give offshore oil and gas drillers a freer hand in meeting federal safety requirements. An arm of the Interior Department approved changes last month to regulations known as the "well control rule," adopted by the Obama administration in 2016 several years after the deadly Deepwater Horizon explosion and oil spill. The administration says giving drillers more flexibility would help them save money and have more options for ensuring safety, but environmentalists say the move actually eliminates vital provisions to protect the environment and workers. Interior and its leaders rushed through the changes without sufficient rationale, required disclosures or public comment in some cases, and without fully considering environmental effects of the changes, says the suit filed by attorneys from the group Earthjustice.
- Former US Secretary of the Interior Ryan Zinke is joining a pipeline distributor as an adviser. Cressman Tubular, a distributor of tubing, casing, and line pipe, said Zinke will advise on oil and gas pipeline supply chain management. The Dallas-based company was founded by Art Cressman, who is friends with Zinke, according to the company.
- Senate Democratic Leader Chuck Schumer is criticizing the White House after its budget director asked Congress to delay by 2 years a ban on federal contractors and grant recipients doing business with Huawei Technologies Co. The Wall Street Journal broke news of the request on Sunday, citing a White House letter that described compliance difficulties especially among grant recipients in rural areas. "I plan on strenuously opposing approval of the delay," Mr. Schumer said.
- National Security Adviser John Bolton said US tariffs and the threat of more to come have had an "enormous" impact on China and says Beijing was "shocked" by President Trump's move to impose them. In an interview at the WSJ CFO Network event in Washington, Bolton also says it is "entirely possible" there will be another summit with North Korea. "We're ready when they are," he says.
- The prospects of a trade deal between the U.S. and China are "highly uncertain" and there's a 50% chance of the trade talks breaking down, Danske Bank's Jakob Ekholdt Christensen, head of international macro and emerging market research, says in a webinar. Danske, nevertheless, still expects the two countries to reach an agreement in the second half of the year. Economic momentum is still declining, market sentiment will weaken, and the two sides will be sensitive to that, he says.

Jun 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose in line with firmer financial markets and bolstered by expectations that producer goup OPEC and its allies will keep withholding supply.
- Gold held steady after posting its biggest one-day percentage fall in two months in the previous session, as Washington's fresh trade threats against China eclipsed investor optimism spurred by a U.S.-Mexico deal.
- The yen eased as investors' risk appetite ticked up after the United States shelved plans to impose tariffs on Mexico, though fresh U.S. trade threats against China tempered overall market sentiment.
- Prices for industrial metals were mostly higher in Asian trading, with copper prices hitting the highest in almost two weeks on expectations that China's appetite for the commodity could grow.
- Chicago corn futures lost ground as U.S. farmers made progress in seeding the crop, although concerns over lower yields from late-planted crop limited losses.

Jun 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose after Saudi Arabia said producer club OPEC and Russia should keep supplies restricted at current levels, and in relief that the United States withdrew a tariff threat against Mexico, removing a cloud over the global economy.
- Gold prices retreated from a 14-month peak after an agreement between the United States and Mexico to avert a tariff war crimped safe-haven demand for the yellow metal.
- The Mexican peso jumped against the dollar after the United States and Mexico struck a migration deal late last week to avert a tariff war, providing some much-needed relief to fragile market sentiment.
- Copper prices rose in early Asian trading following eight straight weekly losses, after Washington struck a deal to avert a tariff war with Mexico, boosting sentiment on trade and helping ease concerns about a global slowdown.
- Chicago corn futures slid for a second straight session, with prices falling nearly 1% as U.S. farmers are expected to get a window of dry weather this week to push on with planting.

- US stocks rise after the White House dropped its threat to hit Mexico with tariffs on billions of dollars of goods. The DJIA gains 0.7%, the S&P 500 rises 0.8% and the Nasdaq Composite adds 1.6%. Meanwhile, United Technologies falls 2.3% and military contractor Raytheon gains 2.2% after the two companies agreed to merge in an all-stock deal that will create the world's second largest aerospace-and-defense company by sales.
- Political implications are key for the US and China as both Trump and Xi have constituencies to play to. The presidents "will likely want to agree to a resolution, but without being seen to have made too many concessions," notes Virginie Maisonneuve, chief investment officer at Eastspring, the Asian asset-management arm of Prudential PLC. Ahead of next-year's re-election Trump will "need a strong US economy to quell Republican backlash in agricultural districts" while China "needs a trade deal to help maintain its above-6% economic growth next year so as to deliver its 10-year goal of doubling the per-capita income in both rural and urban populations by 2020," she adds. Meanwhile, 2019 marks 70 years since the Communists came to power, and Beijing "is unlikely to budge an inch."
- Asian equities are up to start the week in part due to the US deal on tariffs with Mexico. But while "the auto industry might have dodged a bullet...it's not emerging completely unscathed," says Ivan Drury of auto-information firm Edmunds. "In many ways, this situation underscores how rocky international production can be under the [Trump] administration, and manufacturers can no longer assume that any trade agreements are sacred." He adds that "so as long as the threat of tariffs looms, [automakers] need to be ready to contend with a big potential hit to their bottom line." Japanese producers, among late May's biggest decliners in Asia from Trump's tariff threat, are widely up about 1.5%, slightly outpacing the country's broader market.
- The Mexican peso has seen a big initial jump after a deal with the US not to have tariffs on Mexican exports. The dollar is down 1.6% at MXN19.30, versus MXN19.14 before Trump made his initial tariffs threat at the end of May. The peso fell as much as 3.7% in the days after he rolled out the planned tariffs, hitting levels not seen since December, before rebounding some amid last week's negotiations.

- In one negative sign for analysts bracing for a slowdown in US growth, hiring was little changed in several sectors such as mining, construction and manufacturing that could take a hit from heightened trade tensions. Recent estimates of US factory activity have also fallen. Bright spots for hiring last month were health care and professional and business services.
- Oil prices are rallying in tandem with stock markets, after President Trump said progress was being made in border-security talks with Mexico. The president's threat to impose new tariffs on Mexico late last week sent energy prices into a tailspin, partly because the U.S. is a major importer of Mexican crude. Investors and traders are also focusing on the upcoming meeting of OPEC and its allies, and in particular on whether Russia is likely to sign up to an extension of output cuts first agreed on late last year. "Given the recent downward pressure on the flat price and concerns over the macro picture, we do believe that it is likely OPEC+ continue with the deal through until the end of this year," says Warren Patterson of ING. Brent rose 1.8% to $62.28 a barrel, and WTI was up 1.7% at $53.50.
- Mexican President Andres Manuel Lopez Obrador has so far responded cautiously to President Trump's threat of tariffs, calling for friendship and talks. But if Trump goes ahead, the Mexican nationalist might get tougher. He has already called for a mass rally on Saturday to defend Mexico's dignity (and call for friendship.) Andrew Selee, of the Migration Policy Institute, says AMLO is playing nice, but tariffs could be a game changer. "He is saying we want conciliation, but don't push me too far," Selee says.
- Spotify lands an agreement with President Barack Obama and Michelle Obama's production company in which Higher Ground will produce podcasts exclusive to the streaming service. The partnership comes after Spotify recently acquired a trio of podcasting companies for around $400M--part of a plan to spend as much as $500M total on such deals this year. Financial terms of the multi-year agreement with Higher Ground Audio--an expansion of the production company overseeing the move into podcasts--were not disclosed. Spotify is expanding into podcasting in an effort to keep users more engaged, take listenership from radio and increase margins as podcast content is cheaper than music. It's also where the company is seeking to differentiate from other services with exclusive content. "We are thrilled that not only will the Obamas be producing content, but that they will be lending their voices to this effort," said Spotify content chief Dawn Ostroff.

Jun 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)
- Younger adults cite climate change as society's foremost challenge, far outweighing other issues, according to a survey. Asked to identify their top personal worry, thousands of millennial and Gen Z adults chose climate change, natural disasters and protecting the environment. The No. 2 concern of millennials was income inequality, followed by unemployment and crime and personal safety. The results appear in Deloitte's Global Millennial Survey, an annual window into the thinking of younger adults. The firm surveyed more than 13,000 millennials and 3,000 members of Gen Z.
- The head of the medical-device industry's main trade group sends a letter to the US Trade Representative opposing the planned tariffs on imports from Mexico. Advamed CEO Scott Whitaker asks in letter to Robert Lighthizer for an extension of negotiations to avert the tariffs. But if tariffs are imposed, Advamed says "medical products that save and extend lives should be exempted from this action." Advamed, whose members include Medtronic and Johnson & Johnson, estimates the US imported more than $12.6B in medical technology from Mexico last year. Group says components and products cross the border multiple times with high-value manufacturing often performed in the US. The US and Mexico are negotiating an agreement on border security that may avoid the tariffs, but for now the plan is for them to take effect Monday.
- If President Trump follows through with his tariff threats on Mexican imports, US refiners that are large buyers of Mexican heavy crude oil known as Maya may eventually seek alternatives, says Lenny Rodriguez at S&P Global Platts Analytics. He says Mexico crude exports to US refiners averaged 665k bpd last year. "A 5% tariff would imply an increase of roughly $3/bbl to the Maya price in June," Rodriguez says. While that might be manageable, the escalation of tariffs Trump has threatened could eventually make the price too high, and refiners would likely "nominate minimum contractual volumes or even request alternative destinations or cancellations in order to find more competitive alternatives."
- El Pollo Loco says that tariffs on Mexican goods could impact margins by 0.3%, but executives would look to offset the crunch through possible price increases and menu changes. The chicken chain could explore removing specials focused on avocado, executives tell investors at Baird's 2019 Global Consumer, Technology & Services Conference. Avocados form up to 5% of the chain's commodities.
- In one negative sign for analysts bracing for a slowdown in US growth, hiring was little changed in several sectors such as mining, construction and manufacturing that could take a hit from heightened trade tensions. Recent estimates of US factory activity have also fallen. Bright spots for hiring last month were health care and professional and business services.
- Oil prices are rallying in tandem with stock markets, after President Trump said progress was being made in border-security talks with Mexico. The president's threat to impose new tariffs on Mexico late last week sent energy prices into a tailspin, partly because the U.S. is a major importer of Mexican crude. Investors and traders are also focusing on the upcoming meeting of OPEC and its allies, and in particular on whether Russia is likely to sign up to an extension of output cuts first agreed on late last year. "Given the recent downward pressure on the flat price and concerns over the macro picture, we do believe that it is likely OPEC+ continue with the deal through until the end of this year," says Warren Patterson of ING. Brent rose 1.8% to $62.28 a barrel, and WTI was up 1.7% at $53.50.

Jun 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose more than 1%, climbing further away from five-month lows hit earlier in the week after a report that Washington could postpone trade tariffs on Mexico and amid signs that OPEC and other producers may extend their supply cuts.
- Gold prices eased, but were headed for their best week this year supported by expectations of an interest rate cut by Federal Reserve and heightened global trade conflicts, while investors await U.S. jobs report due later in the session.
- The dollar was set for its worst week since March as it trod water ahead U.S. jobs data that is seen supporting chances of a U.S. interest rate cut, while the euro held gains made after a less dovish than expected central bank policy review.
- Copper prices on the London Metal Exchange (LME) rose as the U.S. dollar weakened, while the metal looked set for a weekly gain for the first time in eight weeks.
- Chicago wheat futures slid 1%, but the market was poised for their fourth weekly gain as lack of rain in parts of Russia is likely to reduce yields in the world's top exporter of the grain.

- Union Pacific CEO Lance Fritz says the Trump administration's threat of tariffs on Mexico could jeopardize passage of the US-Mexico-Canada trade agreement. Fritz, head of a railroad that gets about 12% of freight revenue from Mexico, acknowledges the immigration problem President Trump is aiming to address but thinks that should be tackled without the punitive tariffs, which he says will raise prices for American families. Fritz, in a post on Union Pacific's website, says the government should overhaul immigration policy, "while remaining focused on finalizing the USMCA as soon as possible to harness the full potential of the North American trading relationship."
- With negotiations with Mexico continuing into a second day in Washington, traders appear to be nervous the deal will fall through--which would be bad news for traders, as a tariff on Mexican goods into the US would likely be met with retaliatory tariffs on US goods, including pork. WSJ reports President Trump described the negotiations as having made progress, but needing to make more. July hog futures on the CME are down 1.2%. Meanwhile, August cattle futures fall 0.1%.
- Mammoth Energy's social reputation comes under scrutiny as its subsidiary Cobra Energy faces a federal probe for alleged overcharged services during its disaster relief operations in Puerto Rico. Overpricing issues are a common business ethics' sub-aspect within a company's governance practices when rating from an ESG perspective. The fact that this alleged overpricing is linked to a natural disaster may worsen the group's brand reputation. So far, Cobra Energy has billed an overall $1.4B to the Federal Emergency Management Agency, out of which $903M have already been reimbursed.
- The U.S. statistics overstated its total trade deficit with China, says China's Ministry of Commerce in a latest research report. The actual trade deficit with China, after adding U.S. service trade surplus, should stand at $153.6 billion in 2018, which is only 37% of deficit announced by the U.S. government, the ministry says. Trade between the two countries is beneficial for both in terms of employment and profits for companies, it says.
- Bank of Singapore has given up the bull case on high-yield debt in both developed and emerging markets, citing "heightened trade risk and growth headwinds." That after the bank turned neutral on stocks on May 8, before much of last month's selling. However, since then, there have been indications that Trump "intends to systematically wield trade barriers as a tool for foreign policy, which bodes ill for global trade and also weakens the chances of a US-China trade agreement over the near term."
- The cancellation of cruise line service to Cuba and of a general "people-to-people" license permitting Americans to travel to the island will affect nearly 800,000 passenger bookings, industry group Cruise Line International Association said Wednesday. "The new rules effectively make it illegal to cruise to Cuba from the United States," CLIA said. "We are genuinely sorry for all cruise line guests who were looking forward to their previously booked itineraries to Cuba." The US also banned yachts, sailboat travel as well as private aircraft from flying to the island. The US said the moves are meant to pressure the Cuban government to drop its support for Venezuela's beleaguered Maduro government, which the US wants to oust.

Jun 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices steadied after falling to near 5-month lows in the previous session, but sentiment remained weak as markets are under pressure from rising U.S. supply and a stalling economy.
- Gold prices were stable, hovering below the 15-week high hit in the previous session, supported by trade worries and a possible U.S. rate cut, even as some investors locked in profits in bullion after a recent rally.
- The yen edged up versus the dollar as sentiment soured over U.S.-Mexico talks on tariffs and immigration, fuelling broader concerns about global trade hostilities and raising appetite for safe-haven currencies.
- Shanghai copper plunged to a two-year low, tracking weakness in London's overnight session, due to mounting concerns about slowing global growth and weak metals demand amid rising trade tensions.
- Chicago wheat futures bounced back, following two days of deep losses, with support from dry weather that is expected to reduce yields in Australia and parts of the Black Sea region.

- Bank of Singapore has given up the bull case on high-yield debt in both developed and emerging markets, citing "heightened trade risk and growth headwinds." That after the bank turned neutral on stocks on May 8, before much of last month's selling. However, since then, there have been indications that Trump "intends to systematically wield trade barriers as a tool for foreign policy, which bodes ill for global trade and also weakens the chances of a US-China trade agreement over the near term."
- The cancellation of cruise line service to Cuba and of a general "people-to-people" license permitting Americans to travel to the island will affect nearly 800,000 passenger bookings, industry group Cruise Line International Association said Wednesday. "The new rules effectively make it illegal to cruise to Cuba from the United States," CLIA said. "We are genuinely sorry for all cruise line guests who were looking forward to their previously booked itineraries to Cuba." The US also banned yachts, sailboat travel as well as private aircraft from flying to the island. The US said the moves are meant to pressure the Cuban government to drop its support for Venezuela's beleaguered Maduro government, which the US wants to oust.
- The WSJ Dollar Index pares early losses and is up 0.2% to 90.46. The US dollar rose after the Federal Reserve's latest beige-book report suggested the renewal of trade tensions with China hasn't had a significant effect on American manufacturers. The yield on the 10-year Treasury note also gave back some of its losses from earlier in the day. Higher Treasury yields can make the dollar more attractive to income-seeking investors around the world.
- Former Secretary of State Rex Tillerson says he supports the trade objectives of President Donald Trump's administration, but may not support its tactical approach in all cases. "The trade situation around the world needed to be addressed," Tillerson, a former Exxon Mobil chief executive, says at an energy conference in Houston. But he adds he has concerns about moving to bilateral discussions to the possible detriment of multilateral alliances. "It is important as Americans to remember that our greatest strength and the most important element to our national security has been that we are a nation that has many allies and friends," Tillerson says.
- Former Secretary of State Rex Tillerson President Trump's chances of re-election in 2020 depend on the kind of campaign he runs. "If the president would focus on the economy and the way the economy has performed and all the steps around deregulation that have been put in place, the tax reform, then I think he could run on a very positive message," Tillerson, a former Exxon Mobil CEO, says at an energy conference in Houston. "I don't know if that's what he plans to do."
- The Trump administration's planned new tariffs on imports from Mexico could hit surgical-robot maker Intuitive Surgical, RBC Capital Markets says. A majority of the products in Intuitive's biggest unit, instruments and accessories, are made at a plant in Mexicali, and RBC estimates about 45% to 53% of the unit's revenues are exposed to the planned tariffs. Intuitive has about three months of inventory to mitigate near-term impact, but if the tariffs are in place longer-term, Intuitive "may need to look at moving some of its... manufacturing to the U.S.," RBC says. The US plans to impose the tariffs next week unless a deal is reached to avert them. Intuitive Surgical shares rise 2%.
- Shares of the biggest US cruise companies are sinking after new restrictions from the Trump administration on US travel to Cuba forced them to reroute already-planned trips to the island. Carnival, Royal Caribbean and Norwegian have all talked about travel to Cuba as a small but growing revenue stream. The number of arrivals to Cuba from US cruise ships increased 29% last year to around 800,000 passengers. Carnival says it will no longer sail to Cuba, while Royal Caribbean and Norwegian say they're adjusting itineraries of sailings that were set to stop in Cuba. Carninval and Royal Caribbean fall more than 2% and Norwegian is off 4.1%.
- Rep. Jan Schakowsky (D., Ill.) says House Democrats want proposed data privacy legislation ready by the time Congress recesses in August. A senior Democrat on the House Energy and Commerce Committee, she said the bill could include more funding and "relatively broad" authority for regulators, anti-discrimination provisions, individual rights to privacy, and the right for consumers to take legal action. She said she is "in principle" open to preempting state laws, a Republican priority. The divided Congress faces an uphill battle to send legislation to the president's desk before the 2020 election.
- Grains futures on the CBOT began trading this morning lower as traders get conflicting signals from the Trump Administration on Mexican tariffs, which are supposed to be enacted June 10th. In a tweet this morning, CNN anchor Jim Sciutto said he was told by White House trade advisor Peter Navarro that "we believe that these tariffs may not have to go into effect." This runs somewhat counter to Trump's tweet last night, in which his threat of tariffs were "no bluff." July corn futures are down 1.7%, wheat is down 2.3% and soybeans are down 0.8%.
- Futures for corn, soybeans and wheat continued to sink in overnight trading on the CBOT last night, as traders are profit-taking on the recent upticks of these contracts and tariffs on Mexican goods -- along with retaliatory tariffs being issued on US goods including agriculture -- look more likely to be implemented by President Trump. Wheat led the way down 2.6%, with corn down 1.7% and soybeans down 0.8%. On Twitter, Trump maintained his bellicose rhetoric against Mexico last night, while also lashing out against Democrat leaders accusing him of "bluffing" in his tariff threats.
- Copper prices slipped in early European trading on the London Metal Exchange, putting them down 0.2% for the day at $5,882 a ton. Most other industrial metals remain marginally higher, having suffered in recent weeks as tensions flared between the U.S. and China and manufacturing data continued to disappoint. Bernard Dahdah, an analyst at Natixis, says prices have probably found a floor and should find support from supply shortages. He thinks the Trump administration will attempt to support the U.S. economy heading into 2020, which should also help metals, but questions whether Beijing will agree to a trade deal ahead of the election as it "might prefer to deal with a different president."

Jun 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices resumed their slide, dragged down by an unexpected gain in U.S. inventories and comments from the head of Russian state oil producer Rosneft questioning the point of a deal with OPEC to withhold supplies.
- Gold prices edged higher, holding near the three-month high it touched in the previous session, as the dollar weakened on rising prospects of a rate cut by the U.S. Federal Reserve.
- Copper prices rose to near their one-week highs as the U.S. dollar weakened on dovish comments from the Federal Reserve amid rising risks to trade and global growth.
- U.S. wheat futures fell as much as 2% as fears eased about the potential for widespread crop damage after recent heavy rains, pushing prices to a near one-week low.

- The Cuba travel ban will likely mean a 0.5% to 1.5% hit to cruise lines' EPS for FY19 as they work to reschedule routes, compensate guests and brace for reduced demand for Caribbean sailings, Bernstein says. Logistical costs are expected to be "relatively immaterial" since cruise lines are used to rearranging schedules quickly given their expertise with hurricane season, Bernstein says. "Many itinerary changes resulting from a Cuban travel ban will be as simple as swapping Havana for another port in the Caribbean," Bernstein says. For guests already booked on Cuban cruises, cruise lines will likely offer credit on future cruises, such as the standard 25% discount, if the companies have to find an alternative port, Bernstein says.
- The Trump administration's new Cuba travel restrictions could hurt the bottom lines of the top three US cruise operators, potentially keeping cruise lines from being able to sell sailings to the island nation, Wells Fargo says. Cuba accounts for 1% of Carnival's global capacity allocation, 4% for Norwegian and about 2.5% for Royal Caribbean, Wells Fargo finds. The estimated annual EPS effect of a travel ban on Carnival would be about 4c-8c, 12c-28c for Norwegian and 19c-45c for Royal Caribbean, according to the firm. Carnival gains 0.7%, Royal Caribbean falls 1% and Norwegian declines 2.2%.
- A surge in sentiment among US farmers after President Trump's election victory in November 2016 has all but disappeared, the monthly Purdue University/CME Group Ag Economy Barometer finds. The indicator, based on a survey of 400 US agricultural producers, fell 14 points to a reading of 101 in May--the lowest level since October 2016. The barometer is down 42 points, or 29%, since the start of the year, as farmers contend with a wet planting season and uncertainty brought on by the ongoing trade dispute with China.
- Cracker Barrel Old Country Store says its feeling the impact of tariffs on goods from China, with a third of its retail products coming from the country. The Southern-themed restaurant chain tells investors in 3Q earnings that it's looking for alternative sources from different countries for items such as stationery, furniture and decor, and working with existing vendors to share the cost. It's also increasing prices in some cases. "We've had some impact from the tariffs in this fiscal year," CFO Jill Golder says. "That remains a concern for us."
- One unusual development that has emerged out of the US and China's trade spat: Treasury yields and cross-asset volatility have both fallen. Typically, Treasury yields fall--pushing prices higher--when investors are more skittish about the growth outlook. In turn, riskier assets like stocks and commodities often suffer more volatility as investors try to price in the expected decline in growth. But this year, the benchmark 10-year US Treasury yield has fallen to 2.143% after rising above 3% in 2018 and the Cboe Volatility Index has held onto a 32% decline for the year. "Rates and volatility seem to be describing different worlds," UBS says. Don't expect that disconnect to last: the correlation "between rates and volatility may now be ending, just as trade war risks to growth are rising," UBS adds.
- Tiffany says a drop in sales to Chinese tourists in the Americas contributed to sales declines in the region. Sales to tourists in the Americas were down 25% in the latest quarter, compared with the same period a year ago "with sharper declines among Chinese tourists," Tiffany CEO Alessandro Bogliolo tells analysts on a conference call. China warned its citizens about traveling to the US, citing a rise in gun violence and shootings as tensions between the two countries intensify over trade tariffs.
- The volume of Iranian crude loaded onto ships dropped by more than a third in May to 780,000 barrels a day, data firm Kpler says. The fall in crude loadings coincided with the tightening of U.S. sanctions, after waivers granted to eight countries were removed on May 2, preventing them from buying Iranian crude. More than 90% of the crude loaded onto ships in May is still floating without a set port of discharge, Kpler says. "With imports down in China, India and Turkey, clearly Iran is struggling to find buyers in this current market environment," says Alex Booth, head of market analysis at Kpler. The decrease in loadings also corresponded with an increase in onshore oil storage of 8.4 million barrels, says Kpler.
- The Australian dollar remains unaffected by reports the Trump Administration was considering imposing tariffs on imports from Australia, particularly aluminum, but decided against the move on the advice of military officials and the U.S. State Department. In the year to March 2019, aluminum (ores, concentrates and alumina) was Australia's 7th largest export, accounting for 3.4% of Australia's merchandise exports. Australia has been exempted from U.S. tariffs on aluminum since the government was granted an exception in 2017. Australia's total aluminum exports have subsequently surged, with aluminum exports to the U.S. increasing exponentially.

Jun 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as an economic slowdown starts to dent energy demand, but markets won some support after Saudi Arabia said a consensus was emerging with other producers about extending supply cuts.
- Gold prices held steady, hovering near a three-month high hit in the previous session, as global slowdown worries driven by trade conflicts amid expectations of a U.S. interest rate cut stoked investors towards the safe-haven bullion.
- The dollar struggled to shake off a harsh overnight session, slipping to a five-month low against the yen, hurt by a sharp slide in U.S. Treasury yields thanks to rising bets for a near-term rate cut by the Federal Reserve.
- Industrial metals traded in a tight range as investors continued to be worried about demand for metals as well as global growth, amid a lack of progress in the prolonged U.S.-China trade war and weak manufacturing data from the world's top economies. 
- Chicago corn futures rose more than 2%, climbing back near last week's three-year high after the U.S. Department of Agriculture reported that planting was well behind the average pace for this time of year.

- July lean hog futures are continuing to decline this week, with the contract down 2.1% on the CME. The main reason for today's decline continues to be last week's tweet by President Trump threatening to levy a 5% on Mexican imports starting June 10 "until such time as illegal migrants coming through Mexico and into our country stop." Mexico is one of the biggest consumers of US pork, and traders believe that this fight may linger for a long time, similar to the ongoing US-China trade dispute. "(This) has some going 'uh-oh, look what happened last time,'" says Steve Wagner with CHS Hedging. Live cattle futures are only marginally up today, by 0.2%.
- Economists polled in May by the Bank of Mexico lowered their median estimate for GDP growth this year to 1.35% from 1.5% in the April survey -- and the central bank points out in a footnote that the 39 responses were received before midday on May 30 (therefore they don't include possible effects of Trump's threat to slap tariffs on all imports from Mexico starting June 10). The median inflation forecast for 2019 edged up to 3.75% from 3.66% previously, and none of the analysts considered now is a good time for companies to invest--down from 5% in April's survey. The Bank of Mexico lowered its own 2019 GDP forecast last week to 1.3% from 1.6%, citing the unexpected 0.2% contraction in 1Q.
- Chipotle Mexican Grill says new tariffs on Mexican goods could result in a $15M increase in costs this year, reducing the burrito-makers margins by 20 to 30 basis points. The fast-casual chain could pass along the levies through prices increases if they stuck around, such as a nickel price bump on a burrito, CFO Jack Hartung says. Chipotle buys avocados in bulk, including from Mexico, and hopes to avoid substituting processed versions of the fruit for fresh ones, Hartung says. "We are committed to our brand purpose and upholding our food with integrity principles," he says. President Trump has proposed a 5% tariff on Mexican imports beginning this month. Chipotle shares fall 1.5%.
- AT&T's media headaches return Monday as President Trump tweets two messages critical of CNN, the news service it acquired last year through the takeover of Time Warner. "I believe that if people stoped using or subscribing to @ ATT, they would be forced to make big changes at @ CNN," the president wrote on Twitter during his visit to the UK, where he said rival Fox News is unavailable. Trump's dislike for CNN was always in the background of a bruising antitrust case over the Time Warner deal last year, a legal challenge the administration ultimately lost.
- Oil prices have recently been dragged lower by a perfect storm of demand concerns and macroeconomic uncertainty, ahead of a meeting of OPEC and its allies later this month. Last week's statement from the White House that some countries could retain waivers to buy Iranian oil has only muddied the waters further, says Shin Kim, head of supply and production analytics at S&P Global Platts. "It was already going to be difficult to support oil prices, but now with no clarity on Iran, OPEC will have to figure it out," she says. With most of OPEC's unofficial allies already dealing with declining production, June's meeting will "be all about what the Saudis decide," Kim says.
- After ending May at their lowest levels since mid-February, the dominating factor behind oil futures' weakness is "concerns about the global economy fueled by" Trump's trade policy, notes JBC Energy. It adds the reaction "is somewhat at odds with physical-crude-market developments, which remain generally strong" as supply risks persist in Russia, Venezuela and Libya while sanctions stymie Iranian selling. August Brent futures are back near session lows in falling 1.7% to $60.93/barrel. July WTI is off 1.1% at $52.92.

Jun 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell more than 1%, extending losses of over 3% from Friday, when crude markets slipped to their biggest monthly losses in six months amid stalling demand and as trade wars fanned fears of a global economic slowdown.
- Gold prices rose to their highest in more than two months as heightened Sino-U.S. trade tensions and Washington's threat of tariffs on Mexico stoked worries of a global recession and drove investors to seek refuge in safe-haven bullion.
- The yen brushed a more than four-month high against the dollar and the Swiss franc rose as U.S. President Donald Trump's hard stance on trade broadened to countries beyond China, stoking investor demand for safe-haven assets.
- Copper prices on the Shanghai Futures Exchange (ShFE) dropped to their lowest in two years, as weak Chinese factory data and a U.S. threat to impose tariffs on Mexican goods sparked fears of weaker global growth and demand for metals.
- Chicago wheat futures bounced back with prices supported by crop-damaging heavy rains in parts of the U.S. grain belt and dryness in the Black Sea region.

- Trump's threat to impose escalating tariffs on Mexico piles yet more trade fears onto the market and sends US stocks lower, capping off a tough month. The Dow falls 1.4% to 24815, the S&P 500 declines 1.3% to 2752 and the Nasdaq slides 1.5% to 7453. Friday's losses close the book on the only losing month for 2019 with the Dow and S&P more than 6% lower and the Nasdaq off nearly 8%. Oil prices fall another 5.5% to $53.50, their lowest level since February and making May the worst month since November with a 16% loss. GM, for which Mexican-built vehicles make up more than a fifth of domestic sales, falls 4.3%. Corona brewer Constellation Brands declines 5.8%. Gap sinks 9.3% after missing earnings expectations and cutting its outlook. The US jobs report is scheduled for next Friday.
- Argentina's vulnerability to swings in the global economy was on display again Friday as its country risk, based on the price of credit-default swaps, increased after President Donald Trump threatened to hit all Mexican imports with tariffs. Argentina's country risk reached 985 basis points Friday, up from 941 points yesterday, according to local media. That is close to last month's high when Argentina was hit by volatility when investors became spooked by the release of polls showing that left-wing populists had a good shot at defeating business-friendly President Mauricio Macri in October's election.
- The $790M iShares MSCI Mexico exchange-traded fund falls 3.9% in heavy trading after President Trump threatened to impose escalating trade tariffs. Trump said late Thursday the US would impose the tariffs starting June 10 unless the country takes action to deter the flow of Central American migrants crossing into the US. More than 5M shares of the ETF traded by mid-afternoon Friday. Volume in the fund often spikes in response to administration policies, and hit a then-record high of 17.6M shares after Trump's surprise election win in 2016.
- "The shock news that President Donald Trump will impose tariffs on all imports from Mexico comes amid mounting evidence that the economy has already lost considerable momentum," says Paul Ashworth, chief US economist of Capital Economics. "The May employment report and ISM activity surveys should help to confirm or refute that narrative, but attention next week will now be firmly focused on trade." Ashworth says that the market will also pay attention to any further details from the White House on the proposed tariffs, while the Fed's two-day meeting will likely take a back seat.
- Glassdoor says while public sentiment toward LGBTQ individuals may have improved broadly in recent decades, the workplace is still lagging. Glassdoor, citing a Harris Poll survey, says more than half of LGBTQ employees say they've witnessed or experienced anti-LGBTQ comments by coworkers. Another 47% say they believed being out at work could hurt their career, including possibly losing their jobs or prompting them to be passed over for promotion or key projects. Perhaps as a consequence, 43% of respondents said they weren't fully out in their workplace. When job searching, LGBTQ employees say a supportive work environment is key, with another 68% of respondents saying their current firms could be doing more to support them and their allies at work.
- US refiners will press the Trump Administration next week for an exemption on crude oil imports from Mexico after President Trump threatened to impose escalating tariffs on the country, according to people familiar with the matter. Trump's announcement of a 5% tariff on imports from Mexico caught the refining industry by surprise, the people said, and has sparked serious concerns. US refiners on the Gulf Coast are configured to process heavier grades of crude, including from Mexico, which accounted for the third-highest share of crude exports to the US last year.
- Electric motor specialist Regal Beloit moved one of its manufacturing lines from China in an effort to mitigate the mounting effect of tariffs. The problem is it moved the motor production to Mexico, now in the crosshairs of the US administration's latest tariff assault. The Wisconsin-based company already derives around a third of its output from Mexico, and the same from its US operations. "It's very impactful for us in terms of our ability to now produce that product in Mexico and no longer have the impact of the tariffs of those same products," CFO Rob Rehard said at an investor conference last month.
- US Foods says it does source some of its fresh produce from Mexico, but hopes to stave off the effect of any tariffs placed on Mexican imports through domestic sources this summer and hashing out any changes with clients. "We work directly with our customers to mitigate these impacts," a spokeswoman for the US's second largest broadline distributor says. US Foods falls 3.9% to $34.47.
- US and Mexican produce growers, distributors and retailers are alarmed by threats of new tariffs on imports from Mexico, and it throws a wrench into talks for a new North American trade deal, says Richard Owen, of the Produce Marketing Association trade group. Consumers have come to be used to having mangos, avocados and tomatoes year round. Mexico is a big part of being a solution for that," Owen says as he returned Friday from a summit in Mexico with hundreds of producers who have been increasingly optimistic about a new Nafta. "We are getting calls from our members about what can be done to get things back on track."
- US tariffs on Mexico could depress profit margins at complex American oil refineries, says Ryan Fitzmaurice, energy strategist at Rabobank. US Gulf Coast refineries are heavily reliant on Mexico's heavy crude grades, and that dependence has grown since Washington imposed an oil embargo on Venezuela earlier this year. "There are very few alternatives in the short term for heavy barrels given refiners are prohibited from importing any Venezuelan crude and Canada currently lacks the infrastructure to meaningfully increase supplies to the US," Fitzmaurice says. "We expect US refiners will be forced to pay up for the heavy barrels if the tariffs do in fact go into place."
- Shares in BBVA took a hit on Friday after President Trump threatened to impose escalating tariffs on Mexico. The Spanish bank has significant operations in Mexico. "Evidently, the market is implying additional second-order effects," Citi says, such as further tariffs, GDP slowdown, asset quality deterioration. Shares in the Spanish bank trade 3.7% lower at EUR4.89.
- The decision by the Trump administration to lift restrictions on selling gasoline blended with up to 15% corn-based ethanol is expected to have a bullish effect on corn prices, as the ability to sell the gasoline blend year-round is expected to boost corn consumption by ethanol producers. The decision was lauded by the agriculture industry. "After years of declining farm income, opening up markets to additional fuel choices for consumers helps create new demand that farmers desperately need," says Zippy Duvall, head of the American Farm Bureau Federation. Despite the news, corn is trading down 1% on the CBOT in reaction to the threat of tariffs on Mexican goods by President Trump.

May 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell and were on track for their biggest monthly fall since November as trade conflicts spread and U.S. crude output returned to record levels.
- Gold prices rose, heading towards their first monthly gain since January on increased safe-haven demand, after U.S. President Donald Trump vowed to levy tariffs on all Mexican imports, ratcheting up concerns of a global economic slowdown.
- London copper prices edged up on supply concerns, but were still on track for a third consecutive month of declines on a weaker demand outlook as global trade tensions rise.
- Chicago corn futures lost ground, but the market is set for its biggest monthly gain since 2015 as historic planting delays in the United States drove prices higher.
- The Mexican peso sank to three-month lows against the dollar after Washington unexpectedly said it will slap tariffs on all goods coming from its southern neighbour.

- While safe havens--including gold--rallied in Asian trading today after Trump threatened Mexico with immigration-prompted tariffs and oil falling more than 1%, a majority of Asia's stock markets have risen today. That contrasts with the early weakness seen as European equities have just started trading and as S&P 500 futures are down 0.9%. One exception was Japan, whose major automakers have noted operations in Mexico. Their shares slipped 3-7%, which with the yen's gains helped put the Nikkei down 1.6% and cap its worst month of the year. Many in the region--and globally--have seen May to be 2019's weakest timeframe after big start-of-year gains. But Down Under equities rose some 1% this month. Today, Indonesia, the Philippines and Taiwan are all up more than 1%.
- As safe havens rallied in Asia after Trump threatened Mexico with fresh tariffs, ING notes while such a move would likely have "less of a global spillover in comparison to the US-China trade dispute, it is nonetheless a negative for risk sentiment as it shows" Trump isn't "afraid of a multifront trade war." The yen was by far the strongest currency in Asia, widely rising 0.6% versus other majors. It reached its strongest level in 4 months versus the greenback at Y108.86. Meanwhile, the Mexican peso hit a 5-month low, with the dollar climbing to MXN19.64.
- The FTSE 100 is expected to open 33 points lower at 7185, according to London Capital Group, after President Trump threatens to impose tariffs on Mexican goods from June 10 unless Mexico brings illegal immigration under control. This follows China threatening retaliation against U.S. tariffs by restricting trade in rare earth minerals. Meanwhile, data highlights concerns about a slowing Chinese economy as Chinese manufacturing PMI slipped into contraction. "European and U.S. futures are set for a negative open as the bad news kept on rolling," says Jasper Lawler, analyst at LCG.
- If Trump makes good on his threat of tariffs on Mexico, most Japanese car companies will decide "to pay the burden" initially, says Hiroki Shimazu, chief strategist at MCP Asset Management in Tokyo. Also, the producers may decide not to pass on the cost to US car buyers. "That's what the reaction is from the stock market today," he adds, referring to the wide 2-3% declines in the sector, though Mazda has skidded 6.5% to levels not seen since the start of 2013. The auto swoon, and gains in the yen, have the Nikkei down 0.7% at 20800 despite advances in much of Asia.
- Trade worries have hit already-weak Singapore stocks, following Trump's threat of tariffs on Mexico over immigration. The Straits Times Index is down 0.8% at 3117, continuing to hit levels seen at the start of 2019. Banks are again sliding, with OCBC down 1.1%. Meanwhile, rigbuilder Sembcorp Marine drops 1.4% on the past day's skid in oil prices.
- Trump's latest trade broadside against Mexico has hit shares of Japanese automakers, which have significant production operations there. The tariff threat in the wake of thousands of Central Americans passing through Mexico and seeking US asylum has sent the big 3 of Toyota, Honda and Nissan down 2-4% while Mazda--which makes the popular Mazda 3 for the US there--has slumped 6.5%. Trump's threat is "very bad news" for Japan automakers amid their moves to increase production in Mexico, says Toshiyuki Suzuki, market economist at MUFG Bank. The Nikkei is down 0.9% while other Asia Pacific markets are modestly lower. Meanwhile, the yen has jumped. The dollar is down to Y109.30 from Y109.61 in late New York trade Thursday.
- Oil prices are down more than 1% in Asian trading as Trump has stoked fresh worries about global trade. Citing the rising number of Central American people seeking asylum at the southern border, the Trump administration has announced 5% tariff on Mexican imports beginning June 10 which would gradually increase to 25% by October. That's hit risk assets generally while the yen and Treasurys rally anew (the 10-year yield is down to 2.18%). After skidding nearly 4% in Wednesday's trading to hit 2 1/2-month lows amid another underwhelming US inventory report, July WTI is down 1.6% at $55.70/barrel and August Brent has dropped 1.3% to $64.50.
- The Mexican peso has skidded nearly 2% within the past hour, hitting levels last seen in March versus the dollar, after Trump threatened rising tariffs--starting at 5% on June 10--in the wake of continued flows of asylum-seeking Central American families through Mexico. The pronouncement came just as Mexican officials delivered the agreed-to Nafta revamp to the country's Senate for ratification. The dollar has jumped to MXN19.50 after finishing active trading in Mexico City at MXN19.14. There has been no immediate response from the Mexican government on Trump's threat.
- Iranian crude exports plunged in May after the U.S. withdrew sanctions waivers, says Edward Bell, analyst at Dubai-based Emirates NBD bank. Iran's exports fell to around 400,000 barrels a day in May, says Mr. Bell. "Iran was exporting as much as 2.5 million barrels a day as recently as April last year so the utter collapse in exports will help to keep a floor under crude prices as other producers have yet to step in to replace the scale of the decline."

May 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose after a bigger-than-expected decline in U.S. crude inventories, although concerns that the U.S.-China trade war will trigger an economic downturn kept a lid on gains.
- Gold prices inched down as bonds rallied and the dollar hovered near a two-year high, offsetting the support from an increasingly bitter Sino-U.S. trade dispute that rekindled doubts about global economic growth.
- Copper prices on the London Metal Exchange (LME) edged up from a five-month low, supported by better China demand and a possible supply disruption, but gains were limited as the Sino-U.S. trade dispute showed few signs of abating.
- Chicago corn eased for a second session, taking a breather after climbing to a three-year high in the previous session although losses were checked by concerns over more rains further delaying U.S. planting.

- Iranian crude exports plunged in May after the U.S. withdrew sanctions waivers, says Edward Bell, analyst at Dubai-based Emirates NBD bank. Iran's exports fell to around 400,000 barrels a day in May, says Mr. Bell. "Iran was exporting as much as 2.5 million barrels a day as recently as April last year so the utter collapse in exports will help to keep a floor under crude prices as other producers have yet to step in to replace the scale of the decline."
- Pundits have been talking about a wide range of potential outcomes from the global economy from the US-China trade fight and geopolitical risks generally. Merrill Lynch thinks for now that the end result will be a combination of growth picking up in some parts and staying at current pace elsewhere "as geopolitical risk weighs on growth but financial conditions remain attractive." That as "both China and [the] US need a rising 'growth story' as the US election cycle gets closer and China's domestic economy needs support," the investment bank adds. "A further drawdown in the equity markets, mixed with visible evidence of the 'trade war' negatively impacting growth in the US and China, could prompt both sides to agree to meet and rework a trade deal."
- Raw sugar prices hit a two-week high in New York, rising more than 2% earlier in the session. Robin Shaw, a sugar specialist at London-based broker Marex Spectron, says two factors suggest prices can rise further. The enormous net short position built up by nonindex funds means that "when they buy back, they will almost certainly start a bull trend." Second, high demand for ethanol in Brazil means the country has produced 1.5M tons less sugar than at the same stage of last year's season. Against these, Prime Minister Narendra Modi's victory in the Indian election "probably points to a continuation of the existing support for the cane industry," which has contributed to the recent global slump in prices.
- SNC-Lavalin falls 4.6% in the immediate aftermath of a Quebec judge ruling that there was enough evidence to proceed with bribery-and-fraud charges against the engineering and construction company. Shares were trading in Toronto in the C$23.90 range as of 11:15 am ET. The stock closed in Toronto Tuesday at C$24.80, and then at C$24.40 at 10:30 am ET, or around the same time Judge Claude Leblond of Quebec Court issued his decision. Shares in SNC-Lavalin are now trading at their lowest levels since 2005, and are down by over a third since February, when allegations first surfaced that the Liberal government tried to interfere in company's criminal trial.

May 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell on concerns the Sino-U.S. trade war could trigger a global economic downturn, but relatively tight supply amid OPEC output cuts and political tensions in the Middle East offered some support.
- Gold prices steadied, as global economic concerns dented risk appetite but a strong dollar capped gains as it competed to get preference over bullion as a safe-haven bet.
- Industrial metals fell on worries about the global growth outlook amid an extended trade war between China and the United States that has showed no sign of letting up.
- Chicago corn futures rose as much as 4% to their highest since 2016 after a U.S. government report showed planting across the Midwest lagging way behind the average pace for the time of year.

- Might income inequality be something monetary policy gets pulled into along with national governments? "Developed-market central banks are underestimating the impact populism could have if monetary policy does not take into account income inequality, and fast," contends Salman Ahmed, chief investment strategist at Lombard Odier Investment Managers in Switzerland. The ascent of populism in the U.S. and Europe the past few years "will likely have long-term implications for western political and economic order, which central banks are not immune from," he adds. Ahmed points to the Fed's quick turn away from hawkishness this year, a shift which "came against a backdrop of intense presidential pressure, despite the Fed protesting its independence." Overall, "in today's populist era, central-bank policy in liberal democracies needs to incorporate consideration of inequality-driven anger."
- Canadian lawmakers pass by a wide margin a motion that kicks off the legislative process toward ratification of the renegotiated North American trade pact. The motion passes 255-47, with the governing Liberals and the main opposition, the Conservatives, voting in favor. Now it is a question of timing, and how long a bill, once introduced, takes to clear all parliamentary hurdles before implementation. Canada's parliament is scheduled to end for the summer recess and pre-election planning in late June, although lawmakers could return either in July or August if a vote was required. Canadian officials say it's their wish to ratify in tandem with the US and Mexico.
- Canada's envoy in Washington, David MacNaughton, tells reporters in Ottawa he believes "there's a reasonable chance" Congress will approve the revised Nafta trade deal before start of summer recess at end of July. He reiterated comments from Foreign Minister Chrystia Freeland that Ottawa wants to be in a position to ratify the renegotiated trade pact at the same time as the US and Mexico. Canada lawmakers are scheduled to vote later Tuesday on a motion that begins the trade deal's ratification process. That motion is widely expected to pass, although the government has yet to say when ratification legislation would be introduced in the legislature.
- US government bond prices rose, pushing yields lower, on signs that chances of a resolution to increased trade tensions between the US and China are becoming increasingly elusive. Investors flocked to the safety of government bonds, pushing German 10-year yields further into negative territory, as tensions flared within the European Union about Italy's unwillingness to reduce its debt. At the same time in the U.K., Prime Minister Theresa May is set to step down early next month after she was unable to reach an agreement on Brexit that satisfies UK legislators and the EU. The yield on the benchmark 10-year Treasury note fell to a recent 2.290% from 2.327% Friday.
- The greenback has reached session highs versus the Singapore dollar in late Asian trading, with Maybank noting that Trump's comment about the US being "not ready" to cut a trade deal with China put pressure on trade-linked currencies besides weighing on the yuan. "Notwithstanding the modest pullback from its recent top of S$1.38 last week, USD/SGD has risen by around 1.7% since early April with markets pricing in increased likelihood of prolonged Sino-US negotiations," the broker adds. It puts support at S$1.3710 and resistance at S$1.38. The greenback is up 0.2% at S$1.3780.

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

- Brent crude oil prices rose above $70 per barrel as supply cuts led by producer club OPEC and U.S. sanctions on fuel exports from Iran and Venezuela outweighed concerns about an economic slowdown.
- Gold prices inched lower, dropping for the first time in four sessions, as the dollar rebounded from multi-week lows amid simmering Sino-U.S. trade tensions and as bullion failed to surpass a strong technical resistance.
- Zinc prices rose for a second session in London and Shanghai, extending a recovery from an earlier sell-off as investors worried about low inventory levels for the metal used to galvanise steel.
- Chicago corn futures rose more than 2%, climbing to a near 2-year high as forecasts for heavy rains across key U.S. growing areas threatened to further delay planting.

- Stock prices in London are seen opening higher on Tuesday tracking gains in Asian equity markets overnight, with UK and US markets closed on Monday for public holidays. IG futures indicate the FTSE 100 index is to open up 34.37 points at 7,312.10. The blue-chip index closed up 46.69 points, or 0.7%, at 7,277.73 on Friday.
- The Japanese Nikkei 225 index is up 0.5%. In China, the Shanghai Composite is up 1.1%, while the Hang Seng index in Hong Kong is up 0.7%. At a news conference in Tokyo on Monday, US President Donald Trump avoided remarks that could increase tensions about US trade issues with Japan and instead, praised the strong bilateral ties between the two countries, boosting investor sentiment.
- However, Trump also said the US was "not ready" to make a trade deal with China.
"Asian markets climbed cautiously higher overnight in thin trading volumes after market closures in the US and the UK on Monday for public holidays. Trump's comment that the US was not ready to make a trade deal with China had little impact on the market. Investors are waiting for fresh cues as trade tensions and weaker economic data have driven stocks over the past few weeks. The markets are pausing for breath from the trade tensions story but this should change as we move towards the G20 where hopes of a resolution should intensify," said London Capital Group's Jasper Lawler.
- In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.4%, and the S&P 500 and Nasdaq Composite both up 0.1%. Financial markets in the US were closed on Monday for Memorial Day.
- The pound was quoted at USD1.2677 early Tuesday, marginally lower than USD1.2687 at the London equities close Friday. Labour and the Conservatives' Brexit policies were dealt a hammer blow by voters in a terrible night for both parties in the European elections. The Brexit Party and the Liberal Democrats triumphed, but the scale of disaster for the main parties was laid bare as the final results for Great Britain were announced. The Tories secured just 9.1% of the vote - their worst ever national election share - while Labour finished on 14.1%, with voters split between the clear Brexit alternatives offered by Nigel Farage's new party and the pro-EU Liberal Democrats. Just four Conservatives were elected in England, Scotland and Wales, while the Brexit Party had 29 seats, overtaking the 24 MEPs that Farage's former party Ukip sent to the European Parliament in 2014. The Lib Dems, reduced to just a single MEP in 2014, were on 16 after their best ever European results. UK Prime Minister Theresa May said it was a "very disappointing night" for the Conservatives.

May 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, extending losses from last week when crude dropped the most this year on concerns the Sino-U.S. trade war could trigger a broad economic slowdown, although OPEC's supply cuts provided some support.
- Gold prices rose as fears of a protracted U.S.-China trade war hurt risk sentiment, while poor economic data from the United States bolstered bets of a U.S. Federal Reserve rate cut.
- Shanghai aluminium rose over 1% to a more than one-week high after a Chinese firm halted production at a smelting unit following a fire that broke out over the weekend.
- U.S. corn futures scaled to their highest in a year on Friday as soggy U.S. Midwest field conditions and forecasts for unrelenting rain across the region heightened concerns that farmers may be unable to plant a sizable portion of the crop.
- The euro held firm in trade after pro-European Union parties withstood more fragmentation than before to hold on to two-thirds of seats in the EU parliament elections, limiting gains in nationalist opponents.

- Japanese stocks are pointing toward a modestly higher following Friday's uptick in the US. Nikkei futures opened up 80 points at 21180 on SGX, though the dollar is at Y109.39, compared with Y109.61 when Tokyo stock-market trading ended the week. Today's action comes as Trump remains in Japan, possibly advancing his trade agenda.

May 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices recouped more than 1% but were on track for their biggest weekly loss this year after swelling inventories and jitters over an economic slowdown led to big falls earlier in the week.
- Gold prices held steady after rising above $1,280 in the previous session as weak U.S. data pushed the dollar off 2-year highs and reignited hopes of a rate cut by the Federal Reserve this year.
- Copper rebounded from its lowest since Jan. 14 hit in the previous session, as the U.S. dollar eased, but was heading for its sixth straight week of losses on a prolonged U.S.-China trade war.
- Chicago corn futures rose with the market gaining for nine out of 10 sessions as prices were underpinned by planting delays across the U.S. Midwest.

- The U.S.-China trade conflict isn't the only thing holding back industrial metals, which extend their recent slide inEuropean morning trade. "The market is generally suffering from a very, very material macro-level weakness that is on some level damaging demand," says a trader at a London-based broker. "The market is in a bit of a miserable place right now." In the eurozone, for example, manufacturing activity is on course to fall for a fourth straight month according to the flash PMI from IHS Markit. The consequence: even a trade deal between Presidents Trump and Xi might not be enough to prompt a meaningful rally in prices.
- There's been a change of tone in China's state-controlled media, says Bank of Singapore, and it could be concerning for trade tensions with the US. "China had previously censored out mentions of the trade war...but in the aftermath of the latest tariff hikes has used official mouthpieces to deliver worryingly nationalistic anti-US messages." The firm says officials "could be drumming up popular support for a more hardline position and are preparing to hunker down for a long-drawn conflict." Bank of Singapore now sees a 1/3rd chance of trade talks breaking down. But even if they don't, it says that while a deal by late June's G20 meeting "cannot be ruled out, we would caution against excessive optimism at this juncture."
- Congressional discussions over extending lapsed tax breaks may expand to include breaks expiring at the end of 2019, said Rep. Richard Neal (D., Mass.), chairman of the House Ways and Means Committee. Breaks scheduled to lapse include provisions helping brewers and companies offering family leave. Neal also said that he's considering expansions of the earned-income tax credit and a tax credit for child and dependent care costs to the extension of breaks, which mostly benefit businesses. Any action is weeks away at the soonest.
- Oil prices slide further, and are on track for a seven-week closing low after the EIA reported US crude-oil inventories surged to a 22-month high of 477M barrels. The glut could suggest OPEC production cuts, Iran sanctions and other market-tightening issues that have elevated prices for most of 2019 may be having less of an effect than previously thought. Then again, the surge in inventories may bullishly help convince OPEC it needs to keep production cuts in place when the group meets next month. WTI was recently down 3.3% at $61.03, just below a May 13 closing low of $61.04. The next-lowest close after that is $60.14 on March 29.
- Intel shareholders shoot down a proposal that would require the company to disclose any anticipated political contributions, and the reason for them, made by the Intel Political Action Committee. The proposal also calls for a shareholder vote to approve any contributions made by IPAC. The resolution was brought by NorthStar Asset Management, which said in a letter earlier this month that it was concerned about contributions made by IPAC to Rep. Steve King (R., Iowa). Only 6% of shareholders voted for the proposal, according to FactSet. IPAC made more than $1M in political contributions in 2018, according to OpenSecrets.org. The PAC was created in 1980 to allow company employees to support candidates whose legislative goals align with Intel's public policy priorities, according to its website.
- Goldman Sachs sees only a one-in-five chance of US auto tariffs being imposed on Europe with subsequent EU retaliation. If that happens, Germany stands to lose the most from auto tariffs, directly through car sales and parts, and indirectly through the knock-on impact on other industries, say Goldman Sachs' analysts. Assuming that a 25% tariff on German cars would lower exports by the same proportion, the hit would be 0.2% of German gross domestic product, they say. U.S. President Donald Trump announced a six-month delay to the decision on whether to impose the tariffs and Goldman Sachs' baseline is that auto tariffs will ultimately be avoided.
- China could use its exports of rare-earth metals to the U.S. as a source of leverage in the trade dispute, says John Meyer of SP Angel. Meyer points to an article in China's Global Times arguing that rare earths are vital to U.S. military technology and that "China controls the vast majority of the world's supply." The article, published May 16, suggested Beijing could raise the price of rare earths "in response to higher tariffs on Chinese products." Meyer says the possibility of rare earths being "weaponized" in this way is behind a 6.4% rise in the VanEck Vectors Rare Earth/Strategic Metals ETF this month. The ETF invests in shares of companies such as China Northern Rare Earth Group High-Tech, which produces and sells rare earths according to a Bloomberg profile.

May 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dropped, extending falls from the previous session amid surging U.S. crude inventories and weak demand from refineries.
- Gold prices were steady, as simmering Sino-U.S. trade tensions underpinned the dollar, while bullion investors looked for a direction after the minutes of the U.S. Federal Reserve meeting indicated that rates will remain steady.
- Copper prices in both London and Shanghai fell to their multi-month lows amid an unresolved Sino-U.S. trade tension and after Chinese President Xi Jinping warned of difficult times ahead.
- Chicago wheat futures slid for a second session with pressure from expectations of bumper production across much of northern hemisphere.

- Intel shareholders shoot down a proposal that would require the company to disclose any anticipated political contributions, and the reason for them, made by the Intel Political Action Committee. The proposal also calls for a shareholder vote to approve any contributions made by IPAC. The resolution was brought by NorthStar Asset Management, which said in a letter earlier this month that it was concerned about contributions made by IPAC to Rep. Steve King (R., Iowa). Only 6% of shareholders voted for the proposal, according to FactSet. IPAC made more than $1M in political contributions in 2018, according to OpenSecrets.org. The PAC was created in 1980 to allow company employees to support candidates whose legislative goals align with Intel's public policy priorities, according to its website.
- Goldman Sachs sees only a one-in-five chance of US auto tariffs being imposed on Europe with subsequent EU retaliation. If that happens, Germany stands to lose the most from auto tariffs, directly through car sales and parts, and indirectly through the knock-on impact on other industries, say Goldman Sachs' analysts. Assuming that a 25% tariff on German cars would lower exports by the same proportion, the hit would be 0.2% of German gross domestic product, they say. U.S. President Donald Trump announced a six-month delay to the decision on whether to impose the tariffs and Goldman Sachs' baseline is that auto tariffs will ultimately be avoided.
- China could use its exports of rare-earth metals to the U.S. as a source of leverage in the trade dispute, says John Meyer of SP Angel. Meyer points to an article in China's Global Times arguing that rare earths are vital to U.S. military technology and that "China controls the vast majority of the world's supply." The article, published May 16, suggested Beijing could raise the price of rare earths "in response to higher tariffs on Chinese products." Meyer says the possibility of rare earths being "weaponized" in this way is behind a 6.4% rise in the VanEck Vectors Rare Earth/Strategic Metals ETF this month. The ETF invests in shares of companies such as China Northern Rare Earth Group High-Tech, which produces and sells rare earths according to a Bloomberg profile.
- Moderate losses in inflation-linked bonds on the back of falling inflation expectations in the eurozone and U.S. in the past few weeks have accentuated the relative weakness of inflation-linked bonds in the eurozone year-to-date, keeping their performance below that of the overall eurozone government bond market, says LBBW. Measured by the iBoxx euro sovereign inflation-linked index, euro linkers have achieved a 1% gain year-to-date, compared with the 2.7% performance of the overall eurozone government bond market, says senior fixed income analyst Elmar Voelker. "After a short recovery in April, long-term inflation expectations in the eurozone, measured by the 10-year inflation swap rate, have again slipped below 1.20% in the wake of the aggravating political tensions between the U.S. and China," Voelker says.

May 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell after industry data showed an increase in U.S. crude inventories and as Saudi Arabia pledged to keep markets balanced.
- Gold edged lower to hover near a two-week low, as a stronger dollar and signs of easing Sino-U.S. friction dented demand for bullion ahead of the minutes from U.S. Federal Reserve's latest meeting.
- London copper prices struggled to firm up from near four-month lows, as concerns of supply disruptions due to a blockade at MMG Ltd's 1208.HK Las Bambas mine in Peru were offset by U.S.-China trade tensions.
- Chicago corn futures rose for an eighth straight session as U.S. farmers are unlikely to finish planting this year following excessive rains, resulting in tighter world supplies.

- Sterling rises on unconfirmed reports that U.K. Prime Minister Theresa May has discussed with members of her government allowing parliament to have a free vote on holding a second referendum on whether Britain should leave the EU, though she then backed down due to opposition from pro-Brexit ministers. The pound's rise comes just before May is due to give a speech giving details of a new Brexit deal to be put to MPs. GBP/USD is last up 0.3% at 1.2769. EUR/GBP is down 0.3% at 0.8751.
- J.C. Penney CEO Jill Soltau says tariffs the Trump administration has implemented on Chinese imports so far haven't had much of an effect on the retailer. But another round of tariffs that would place a 25% tariff on another $300B of Chinese goods would have a "more meaningful impact," on the private-label and national brands that Penney sells, she tells analysts on a call about the company's latest results. Soltau says the company has for the past few years worked to diversify the countries it sources from, resulting in lower exposure to China than industry averages.
- Nomura Instinet analysts say that the temporary general license allowing transactions with Huawei offers some reprieve to US chip companies that Huawei has been purchasing components from. "Nevertheless, we continue to think the outstanding action against Huawei still creates uncertainty and risk for the chip industry in general, and we remain cautious on the chip sector," analysts say. Qualcomm gains 3.2% premarket, leading semiconductor companies higher. Nvidia adds 1.5%, Advanced Micro Devices gains 1.8% and Intel rises 1.4%.
- If increased Chinese tariffs on US goods imposed in retaliation of America's hike take place on June 1 as planned, UniCredit expects the US to proceed with putting new tariffs on China's remaining exports. "Such action would likely force USD/CNY higher to 6.95-7.00" with the PBoC daily fixes of the trading range "only likely to smooth the move." The bank sees the dollar reaching CNY6.98 by midyear before a 2H pullback to CNY6.85 as it assumes "additional tariffs are eventually averted." The dollar is slightly lower versus yesterday's 4:30pm onshore close at CNY6.9111.
- As the US-China trade fight "is increasingly showing signs of becoming a tech war," highlighted by the late-week move to tighten exports to Chinese telecom-equipment heavyweight Huawei, there's going to be collateral damage globally, says Seema Shah at Principal Global Investors. The White House's determination "to paralyze China's aspirations to become a technology superpower is clear when you consider that its actions against Huawei are not only damaging to China's technology sector" but America's as well. Segments including hardware "have significant exposure to China," with many large chipmakers generating more than 1/3 of sales from China, she notes. "For a few, that number is closer to 60%."

May 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose on escalating U.S.-Iran tensions and amid expectations that producer club OPEC will continue to withhold supply this year.
- Gold eased after touching a more than two-week low in the previous session, as increasing bets that the U.S. Federal Reserve will not cut interest rates this year boosted the dollar which usurped bullion's safe-haven appeal.
- Prices of copper and other industrial metals rose on the London Metal Exchange (LME) after the United States temporarily eased some trade restrictions on Chinese telecoms giant Huawei.
- Chicago corn futures rose for a seventh consecutive session, the longest rally in two years, as the pace of U.S. planting lags behind market expectations, stoking fears that farmers will be forced to abandon sowing.

- As the US-China trade fight "is increasingly showing signs of becoming a tech war," highlighted by the late-week move to tighten exports to Chinese telecom-equipment heavyweight Huawei, there's going to be collateral damage globally, says Seema Shah at Principal Global Investors. The White House's determination "to paralyze China's aspirations to become a technology superpower is clear when you consider that its actions against Huawei are not only damaging to China's technology sector" but America's as well. Segments including hardware "have significant exposure to China," with many large chipmakers generating more than 1/3 of sales from China, she notes. "For a few, that number is closer to 60%."
- Seeking to replenish pork supply as it battles against African swine fever -- an infectious disease which has led to the culling of an estimated 150M-200M hogs -- China appears to have chosen the European Union as its favored source for pork over the US. In the first quarter of the year, EU data shows that nations exported 454,216 metric tons of pork to China. This is up nearly 26% from the same time last year. Meanwhile, US exports to China are down in volume by 20% through the end of March. "Currently the US pork producer is getting royally ripped off due to the trade war with China," says Dennis Smith of Archer Financials. June hog futures on the CME rise 0.6%.
- Canada lifts roughly 16.6 billion Canadian dollars (about $12.4B) in tariffs it had imposed last year on US metals, food and consumer products. The tariffs had been in place since July 2018 and were introduced in retaliation for US duties on steel and aluminum from Canada. After the US announced Friday it had reached a deal with Canada and Mexico to eliminate metals tariffs on those two countries within two days, both countries said they would also lift reciprocal duties on US exports. The lifting of tariffs removes a key barrier to ratifying the new North American free trade agreement. Canada's foreign minister, Chrystia Freeland, told the Canadian Broadcasting Corp. on the weekend her government would move quickly to ratify the new trade deal.
- The Midwest premium, the cost for buyers on top of the price of the metal encompassing storage, freight, and delivery, could rise depending on US negotiations with Canada and Mexico regarding the drop of metal tariffs -- 10% on aluminum imports, 25% on steel. If the US replaces them with a quota system limiting the amount of metal imports instead, that could increase the already-high premiums. "I expect that the specifics of how the parties will enforce prevention of Non-North- American origin materials from coming in through Canada and Mexico, and/or if there will be some sort of quota, will determine the effect on (aluminum) premiums," one trader says. The premium is currently between 18.75 to 19.25 cents per pound over LME, according to price reporting agency Fastmarkets.
- Retaliatory tariffs on US agricultural products are no longer in place thanks to Friday's deal to lift the US tariffs on steel and aluminum imports. This was touted by President Trump on Twitter late last night. "Starting Monday, our great farmers can begin doing business again with Mexico and Canada," Trump said. "They have both taken the tariff penalties off of your great agricultural product. Please be sure that you are treated fairly." Grains futures on the CBOT are uniformly higher in pre-market trading this morning, and are expected to remain lifted throughout the day. While the return of accessibility to neighboring markets is good for grains sellers, traders will be looking for today's crop progress report to show  how large the delays on 2019/20 crop planting is.
- The Trump administration's 6-month delay on deciding whether to impose higher auto tariffs has put South Korea back in limbo as Seoul's repeated efforts to win an exemption have yet to pay off. Finance Minister Hong Nam-ki, at today's policy meeting, vowed to step up efforts further to convince US policymakers that South Korean automakers should be excluded if Trump slaps 25% tariffs on cars and car parts. Seoul has insisted it already made concessions on automotive trade under the revised free-trade deal which has taken effect. Announcing the delayed car-tariffs decision, the White House on Friday mentioned the South Korean case positively but fell short of promising Seoul an exemption
from future US auto tariffs, if any.

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

- Oil rose to multi-week highs after OPEC indicated it would probably maintain production cuts that have helped support prices this year, while tension continued to escalate in the Middle East.
- Gold steadied to trade near a two-week low hit in the previous session as strong U.S. economic data underpinned the dollar, boosting its safe-haven status over gold amid geopolitical and trade tensions.
- Benchmark copper on the London Metal Exchange was barely changed after a brief rebound from last week's slump, while Shanghai metals slipped as investors remained wary about the intensifying U.S.-China trade war.
- Chicago corn jumped to its highest since June, rising for a sixth session in a row as planting delays across parts of the U.S. Midwest underpinned the market.

- Asian markets sink as Trump further stokes trade war fears
Asian markets mostly fell Thursday as Donald Trump’s ban preventing US companies from using foreign telecoms equipment jolted investors who saw it as targeting Chinese providers and risking another flare-up in an already tense trade war.
The president insisted the executive order, which he based on national security grounds, was not aimed at any particular country, but it is the latest move in a row that has seen Washington raise concerns about the spying threat posed by China’s Huawei.
The Trump administration has for months tried to persuade allies not to allow China a role in building next-generation 5G mobile networks, warning that doing so would result in restrictions on sharing of information with the United States.
The announcement comes as trade tensions between the economic superpowers are rising after the US hiked tariffs on $200 billion of Chinese goods last week, to which Beijing retaliated.
“Earlier, the US Commerce Department had added Huawei to a list of entities that prohibits them from acquiring US-made technology and components without a government licence,” said OANDA senior market analyst Jeffrey Halley.
“If that’s not an escalation in trade tensions, then I don’t know what is.”

Fed rate-cut talk
Regional markets were mostly in negative territory in early trade. Hong Kong was down 0.3 percent, with ZTE, another Chinese telecoms equipment provider, shedding more than four percent. Shanghai was off 0.2 percent while Tokyo finished the morning down 0.6 percent.
Singapore retreated 0.3 percent, Seoul sank 0.7 percent and Manila shed 0.8 percent. Taipei was also off, though Sydney edged up slightly and Wellington put on 0.6 percent.
Asia had been given a positive lead from Wall Street and Europe, where investors were cheered by reports that the White House was planning to delay tariffs on auto imports while it pursues agreements with key trading partners.
Also Wednesday, US Treasury Secretary Steven Mnuchin repeated to senators his expectation that US officials would meet their Chinese counterparts in Beijing to continue their trade talks.
- The dollar fell against its major peers and most higher-yielding currencies, with speculation swirling that the Federal Reserve could cut interest rates to fend off the effects of the trade war and slowing economic growth. Such talk comes just months after some commentators had been predicting up to three hikes this year.
“Depending on how long this standoff with China lasts, that impacts growth for longer and might force the Fed’s hand,” Esty Dwek, at Natixis Investment Managers, told Bloomberg TV.
“I wouldn’t expect any big change in the short term, but the possibility of a cut much later in the year has risen.”

Key figures around 0230 GMT
Tokyo             – Nikkei 225: DOWN 0.6 percent at 21,055.61 (break)
Hong Kong      – Hang Seng: DOWN 0.3 percent at 28,193.24
Shanghai        – Composite: DOWN 0.2 percent at 2,934.09
Euro/dollar      - UP at $1.1208 from $1.1200 at 2050 GMT
Pound/dollar    - UP at $1.2848 from $1.2840
Dollar/yen       - DOWN at 109.42 yen from 109.58 yen
Oil                  – West Texas Intermediate: UP 26 cents at $62.28 per barrel
Oil                  – Brent Crude: UP 25 cents at $72.02 per barrel
New York        – Dow: UP 0.5 percent at 25,648.02 (close)
London           – FTSE 100: UP 0.8 percent at 7,296.95 (close)

- The global aluminum market is watching closely to see if the Trump Administration follows through with removing the Section 232 steel and aluminum tariffs on Canada and Mexico, which has been long called for by industry associations like the Aluminum Association. However, prices are showing little movement, with traders instead waiting until the Administration officially confirms such a removal. Until then, questions continue to swirl. "This afternoon saw reports that the US is poised to remove steel and Ali tariffs on Canada and Mexico, however it appears that the effective date for removing the tariffs is still outstanding," Marex Spectron says.
- Trade disputes are causing sharp falls in the Chinese yuan and are likely to keep the euro under pressure, especially as the latter is set to be stung by "electioneering ahead of the May 23-26 European elections," ING says. It says the offshore Chinese yuan is the "focal point" for U.S.-China trade tensions. The offshore yuan falls to a 200-day low of 6.9450 against the U.S. dollar "and were it to hit 7.00, alarm bells would ring even louder around the world," says ING. USD/CNH trades last flat at 6.9322. ING expects the euro to fall to $1.1130 and then towards $1.1110, from a current level of 1.1180.
- Political noise is becoming more relevant for rating actions, Dietmar Hornung, head of European sovereigns at Moody's Investors Service tells the audience at the agency's EM summit in London. And Turkey is the best example. Turkish president Recep Tayyip Erdogan has been suspected of meddling in the decisions of the Turkish central bank as his popularity drops amid a collapsing economy. He is re-running a mayoral election lost by his party on June 23. The perceived lack of central bank independence, Turkey's dependence on external financing and the lack of reforms to reverse that has eroded the credit worthiness of the country, Hornung says. Moody's has warned of a possible rating downgrade on Turkey.
- South Africa's recently re-elected president Cyril Ramaphosa's selection of members of the cabinet will be key to determine the prospects of much-needed policy reforms, says Matt Robinson, head of Middle East and Africa Sovereigns at Moody's Investors Service. Talking at the rating agency's EM Summit in London, he said credit challenges on the country are chronic, citing low growth, high debt levels, poorly managed leverage and weakening institutions. The lack of reforms addressing those issues will likely "add pressure on ratings from any shocks". South Africa's debt is predominantly denominated in local currency and longer-dated, he adds. The African country is just stepping out of technical recession.

May 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose again and were on track for the first weekly gains this month, as rising tensions in the Middle East stoked fears of supply disruptions.
- Gold fell, following its biggest one-day percentage loss in a month in the previous session, on a firmer dollar and increased investor appetite for riskier assets due to strong U.S. data and corporate results.
- Aluminium prices in London and Shanghai are set for solid weekly gains, as alumina refinery shutdowns in China raises production costs for the metal, but a gloomy global growth outlook put pressure on base metals prices.
- Chicago corn rose to its highest since late January, with the market set for its biggest weekly rally in four years as concerns over U.S. planting delays buoy the market.

- Oil prices continue to push higher due to rising stock markets and continued geopolitical tensions between the US and Iran, and that's helping to fuel so-called backwardation for Brent crude prices, when prices for delivery next month exceed prices for delivery several months from now. Brent's contract for June stands at $73.02/barrel versus just $69.30 for the December contract. This incentivizes traders to sell oil right away rather than putting it in storage, and thus creates a tighter market. WTI, the US benchmark, isn't seeing backwardation, with the front-month price of $63.24 similar to those six months out. This may reflect recent data showing bloated US crude inventories.
- Saudi Aramco's impressive financial health made investors put aside the relatively high environmental, social and governance (ESG) risk that the company carries, says David Staples, managing director of corporate finance at Moody's Investors Service at a conference hosted by the rating agency in London. The issuance offered investors a peek for the first time at the unlisted oil giant's financial statements, showing it to be the world's most profitable company, with net income of $111 billion last year. Borrowers are required to disclose that information when issuing bonds. The deal received bids worth more than $100 billion. Despite the strong demand some fund investors quizzed by Dow Jones Newswires after the deal said they had a tough time making the case to their superiors to justify risk exposure to ESG factors. The price of the bonds has weakened since.
- China is most likely diversifying its foreign asset holdings and not getting rid of U.S. Treasurys, says UBS Global Wealth Management. This comments come as market participants speculate about the possibility of China offloading U.S. government debt in response to rising U.S. tariffs on Chinese imports. In March, China sold $10 billion of U.S. Treasurys which sparked the current worry. In total, China owns $1.1 trillion in Treasurys, $200 billion below the peak in 2012. It's not in China's interest to sell U.S. debt "as it would decrease the value of its reserves," which China clearly doesn't want to, UBS WM says.
- President Trump has signed an executive order which could restrict the sale of equipment by Huawei and ZTE into the U.S., but much more serious is the move by the U.S. Department of Commerce to put Huawei and 70 of its affiliates on a blacklist which could forbid U.S. companies from doing business with it, says Liberum. "If this action by the Commerce Department were to be implemented, it would be positive for both Ericsson and Nokia." Any action to limit component supplies to Huawei increases the uncertainty on Huawei's ability to meet commitments significantly. This is likely to make more operators move some or all of their new equipment purchases to Ericsson or Nokia, Liberum adds. "We expect Ericsson to be the bigger beneficiary of any such move."

May 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose for a third straight session, as the risk of conflict in the Middle East stoked fears of supply disruptions, negating an unexpected rise in U.S. inventories.
- Gold steadied, consolidating in a tight range below the key $1,300 pivot, as Washington slapped sanctions on Chinese telecoms giant Huawei, souring optimism for a thaw in U.S-China trade tensions.
- Shanghai aluminium futures prices hit their highest since October 2018 on worries over a supply shortage, following a refinery shutdown in China - the world's top aluminium maker.
- Chicago corn futures gained 1.5%, rising for the fourth consecutive session as forecasts for more rain across key growing parts of the U.S. Midwest stoked fears of further planting delays.
- The euro and yen steadied against the dollar, after U.S. officials said President Donald Trump was expected to delay implementing tariffs on imported cars and parts by up to six months to give trade negotiators more time.

- "The US-China trade war has some similarities with the Brexit negotiations," says fund manager Fidelity International, as officials in both cases "are under pressure to announce a headline agreement, leaving the details to be worked out later. However, details are important when the stakes are so high, meaning investors hoping for a decisive resolution to the trade war could be in for a long wait."
- The FTSE 100 is expected to open 34 points lower at 7262, according to London Capital Group, after President Trump reignited fears of trade tensions by banning foreign telecoms equipment that could pose a security threat, effectively blocking China's Huawei. This is set to undo the more positive sentiment on Wednesday after Trump delayed tariffs on auto imports from the EU. "The President's almost haphazard approach of sounding optimistic over trade talks before turning confrontational is creating high levels of uncertainty and volatility," says Jasper Lawler at LCG. National Grid, Burberry and Thomas Cook are in focus after reporting earnings.
- ZTE's Hong Kong-listed shares dropped as much as 5.9% this morning on Trump's executive order which would let the US ban telecom gear from "foreign adversaries." The order targets ZTE as well as Huawei, which US national-security officials say pose a threat. ZTE shares are down 13% this month, cutting this year's pop to 47%, as US-China trade tensions have escalated. Meanwhile, Hong Kong-listed smartphone-lens maker Sunny Optical is down more than 4% as well. But Taiwan rival Largan is off just 1%.
- A new trade relief package for US farmers could total $15B to $20B, according to USDA Secretary Sonny Perdue, who said the agency is "expediting" development of the program at President Trump's direction. Like last year, the aid package would draw its funding from the Commodity Credit Corp., a Depression-era program designed to stabilize farm incomes, Mr. Perdue said, and may also include purchases of agricultural commodities for humanitarian purposes. "We're in the throes of constructing it," said Mr. Perdue, adding he's still hopeful the US and China can reach a mutually beneficial trade deal. Details of plan come as opposition to the ongoing trade spat mounts across the Farm Belt, where growers are facing a multiyear economic slump and devastating floods.
- Congressman Peter DeFazio of Oregon, the Democratic chairman of the House Transportation Committee, has served notice on Boeing and the FAA that he intends to dig deep and long to examine how the troubled 737 MAX fleet was approved to carry passengers. Rebuffed so far in gathering documents or statements from individuals, the lawmaker strongly criticized agency officials for initially failing to require pilots to be informed about an automated stall-prevention system. The design relies on cockpit crews serving as the only safety backup in the event of sensor malfunctions. "How the hell are you the redundancy if you don't know something" is even on the plane, the lawmaker said, referring to typical cockpit crews. "How did that get certified?" Additional hearings are planned, Boeing executives are expected to be similarly grilled and bipartisan support seems to be building behind proposed changes in FAA procedures assessing the safety of new plane models, aviation systems and aircraft parts.
- ADM CEO Juan Luciano says he's still holding out hope the US and China will resolve their yearlong trade battle--at least the tariffs--and if not, ADM's 2019 results might not improve upon 2018's. "I don't believe there is not going to be a deal," Luciano says at an investor conference. While he expects the tariffs will drop at some point, he says that "there's always going to be a latent conflict between the two countries," based on the size and competing priorities of the two economies. For ADM itself, "the more this is delayed, the probability becomes lower that 2019 will be better than 2018," Luciano says.
- Escalating trade tensions between the US and China prompt a strident letter from a key farm group to President Trump, urging swift resolution to ongoing disputes between the two nations. In his letter, Zippy Duvall, president of the American Farm Bureau Federation, warns Trump that tariffs are worsening a prolonged slump in the farm economy, including slashing US agricultural exports to China by $10B, or 50% last year. "Time is running out for many in agriculture," Duvall said, imploring the president to make a deal "to end the tariffs that are slashing our exports, destroying a once-promising market for agriculture, worsening the farm economy and contributing to high levels of stress and uncertainty for many farm and ranch families."
- Stocks turn positive after Treasury Secretary Steven Mnuchin said US negotiators are likely to go to Beijing soon, with the Dow gaining 0.4% and the S&P 500 adding 0.6%. Mnuchin, testifying before a Senate Appropriations subcommittee, said the administration is also making progress in resolving steel and aluminum tariffs that were applied to Canada and Mexico. Leading the S&P 500 higher is Progressive, which is up 5.1% after the insurance-holding company announced a better-than-expected underwriting margin.
- Shares of car makers and suppliers trade higher after the Trump administration decided to delay a decision on whether to impose tariffs on European car imports by six months. Volkswagen shares are up 3.7%, while German competitors BMW and Daimler trade 3.3% and 2.6% higher respectively. French auto-parts supplier Michelin is up 2%, while Germany's Continental and Schaeffler are 1.9% and 1.0% higher. The Stoxx Europe 600 Autos & Parts trades 1.6% higher.
- As a US-China trade deal remains elusive, federal-funds futures are suggesting investors are more convinced than ever that the Fed will lower rates multiple times in 2019. The market is pricing in a 24% chance of two rate cuts and 6.8% chance of three rate cuts by the end of the year, according to CME, up from 6.7% and 0.7% respectively a month ago. But some analysts caution the futures seem to paint a far more dire picture than overall economic data: the last time the Fed cut rates was in 2008, during the financial crisis. Growth has cooled this year, but not rolled over, says Jon Hill, a BMO Capital Markets analyst. "The market is overpricing the probability of a cut in the next few months, even if the direction of the move is definitely right," he says.
- Despite slapping tariffs on each other following a breakdown of negotiations last week, some analysts continue to hold out hope that a US-China trade deal will still be reached. Commerzbank analysts attribute a turnaround in grains futures partially to this hope. "(It) is being sparked by hopes that China and the US will not push their conflict to the limit, meaning that punitive tariffs will not be applied permanently on all goods in bilateral trading," the firm said. Others analysts are less optimistic. "Rhetoric surrounding continued trade talks is mixed, though it does appear both parties are willing to meet at June's G20 summit," says agricultural research firm AgResource, adding that the firm "just isn't sure what will change in the next round of talks."

May 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell after data showed a surprise rise in U.S. crude stockpiles and Chinese industrial output for April grew less than expected, but prices were supported by mounting tensions in the Middle East.
- Gold prices edged lower, retreating from a one-month peak hit in the previous session as optimism surrounding trade talks between Washington and Beijing soothed investor concerns, boosting global stocks and the dollar.
- Copper and most other base metals rose, as investors took a breather from a recent escalation between the United States and China, following comments from U.S. President Donald Trump that trade talks with Beijing had not collapsed.
- Chicago corn rose for a third consecutive session, notching its biggest 3-day gain since late November as concerns over planting delays in the U.S. Midwest underpinned the market.

- Despite trade conflicts, elections and other things, market volatility has been relatively contained globally. That shows investors appear to assume placid outcomes, and Macquarie wonders why. The investment bank looks back to this past January and February 2016, when what appeared to be a devastating buildup of volatility was disarmed as if by magic. Macquarie says in this world of excess capital that's unevenly distributed and can be frozen in niches,
things can be reversed by the right political or central-bank message to keep liquidity flowing. "Investors are fully in tune with the way politics look at the markets, as markets in turn look at politics, in a perpetual self-re-enforcing loop."
- Canadian Foreign Minister Chrystia Freeland will be in Washington on Wednesday to meet with US Trade Representative Robert Lighthizer and press for an end to steel and aluminum tariffs on Canada. Speaking to reporters in Toronto on Tuesday, Freeland said she expects to discuss the ratification process for the new North American free trade pact, relations with China -- including China's detention of two Canadians on national-security charges -- and US tariffs on Canadian steel and aluminum imports. "The lifting of the 232 [steel and aluminum] tariffs is very important for us," she said. Freeland also plans to meet with Republican Senator Chuck Grassley, who chairs the Senate Finance Committee and wrote in the Wall Street Journal last month that the new trade deal won't get through Congress unless metals tariffs on Canada and Mexico are lifted.
- While Jefferies economists anticipate increased tariffs would put downward pressure on inflation partly through lower commodity prices, analysts say tariffs expanding to products such as finished apparel and iPhones could weigh on consumer health. Jefferies highlights Capri Holdings as a beneficiary of recent consumer health, saying Jimmy Choo and Versace luxury brands have long-term pricing power, and should increasingly grow their global reach. Another stock highlight is Best Buy, and analysts say a stronger consumer would drive penetration of higher-margin services alongside consumer electronics product purchases. Capri Holdings gains 1.2% and Best Buy rises 1.6%
- A trade association representing toy and game companies says tariffs proposed by the Trump Administration would harm "American families, jobs, and businesses." The Toy Association says a proposed 25% tariff on $300B in Chinese imports, including children's toys, would ultimately be paid for by American families and companies. "The return of a dark tariff cloud threatening the toy and retail communities would sharply increase the cost of toys and
cause irreparable harm to companies of all sizes--particularly American small businesses," said Steve Pasierb, chief executive of the Toy Association. He also says "we support fair and free trade that protects American intellectual property, our workers, and businesses."
- Wedbush says the cost of making iPhones will go up by 2% to 3% based on current tariffs on some lithium batteries and other input materials. However, analysts say if the Trump administration decides to levy a tariff on an additional $325B of Chinese goods, expenses could rise by about 10% or more over time. Despite the continuing trade dispute, Wedbush encourages investors to stay the course because share prices are attractive going into a major iPhone product cycle. "Importantly, the services business which we assign a valuation of between $400B and $450B is relatively insulated from trade swirls and remains a key tenet of our bull thesis on the name," analysts say. Apple gains 2% to $189.42.
- Deere is trading higher with the broader market rally today but expect the bears to return soon. JPMorgan downgrades the farm equipment maker to underweight from neutral and slashes its price target to $132 from $154, citing "rapidly deteriorating fundamentals in US agriculture" that are likely to hold down farm-equipment purchases. Tariffs on US soybean exports have curbed demand for US beans, contributing to rising stocks on hand. Meanwhile, while wet, cold weather in much of the Midwest has delayed spring planting and that's likely to shrink crop yields this year. Deere gains 1% to $147.82.
- With the Brexit deadline being pushed down the road to Oct. 31, EUR/GBP will likely to governed mostly by the U.S.-China trade talks, says Jordan Rochester, Nomura's forex strategist. "The significant size of risk-off reallocation flows we are likely witnessing means that a currency's beta to risk is more important than the latest Brexit tweet or Conservative party headline." This isn't "good news for sterling longs," like Nomura, hence the bank is
exiting its short position on EUR/GBP, Rochester says. "Until we get clear signs of Brexit progress, we will reconsider our long sterling position, which yesterday we closed out of and wait for better levels to reconsider," he says. EUR/GBP is up by 0.2% at 0.8680.
- After years of drift in NASA's human exploration programs, President Trump and Vice President Pence have give the agency's chief specific orders to get to the moon. The public and private message, according to industry and government officials, is to return astronauts to the lunar surface in 2024 "by whatever means necessary." In the realm of space projects, that's a clear signal to the industry and Capitol Hill that private companies and commercial solutions could be the centerpiece. If long-standing NASA programs and legacy contractors take too long to ramp up projects, Pence has talked about switching to commercial options. For now, NASA chief James Bridenstine faces his biggest political and management test yet to balance those competing interests while accelerating the agency's overall effort.
- Canada has limited leverage in its pursuit to have US tariffs removed on its steel and aluminum, according to a panel on US-Canada relations at a foreign-policy conference in Ottawa. In the past, such as the original negotiation of Nafta, Canada could use its energy production as a lever to extract concessions from Washington, panelists say. But US emergence as an energy power has changed the game. "I am not sure Canada is ready for the long-haul trade row with the US on steel, aluminum," says Meredith Lilly, one of the panelists and a former Canada trade advisor. She adds Canadian officials need to rethink its approach on trade, and be less of a "boy scout" given the changes afoot.
- The USDA has reported a new sale of 2018/19 soybeans, with 180,000 metric tons being sent to an unknown destination. Because sales to an unknown destination are often sales to China, the news may indicate that US-China trade negotiations are still ongoing, even with the trade-off of tariffs seen between the two sides since Friday. Many traders were anticipating large cancellations of previously announced grains purchases by China in response to the breakdown of a trade deal on Friday. On Twitter this morning, President Trump said that "hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference." No concrete plans for such a bailout have been released.
- Oil prices recoup Monday's declines mid-morning in New York with WTI rising 1% to $61.67/bbl as geopolitics begins to move past fiery rhetoric and into actual military strikes, prompting concerns of an supply disruptions. "Geo-political risks to oil are at a new level," says Phil Flynn at Price Futures in Chicago. "Reports overnight of a drone attack on a major Saudi oil pipeline suggests that there are ongoing attacks on Saudi oil infrastructure... The
problem here is the risk of escalation. President Donald Trump has already warned Iran to not do this so there will be a response."
- Venezuela's opposition wrested control of Houston-based refiner Citgo from Venezuela's government relatively easily, but analysts say protecting it from creditors may be a bigger challenge. "They should be able to preserve Citgo ownership for now, [but] this will be difficult to sustain over the longer term, given a multitude of foreign creditors targeting Citgo," say analysts at Eurasia Group. Citgo owes a $71M interest payment on PDVSA 2020 bonds, and while the opposition signaled plans to pay using uncollected oil revenue in US escrow accounts, payment isn't a certainty. Eurasia says Trump could put a stay on all collector actions, like what was done in Iraq, but that he hasn't done so yet "suggests it is probably not forthcoming."

May 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were moving higher, though gains were checked amid an escalation in the trade war between the United States and China.
- Gold prices held steady near one-month highs as an escalation in Sino-U.S. trade war sent investors looking for safe-haven assets.
- U.S. corn futures rose as much as 2% as recent adverse weather delayed planting progress across North America, stoking fears that farmers will be forced to switch to alternative crops.
- China's offshore yuan and the Australian dollar found their footing again as broader sentiment stabilised after U.S. President Donald Trump said he expected Sino-U.S. trade negotiations to be successful.
- Copper prices rose on bargain buying with the metal having tumbled to a 15-month low in the previous session on escalated trade tensions between Beijing and Washington.

- Minneapolis Fed leader Neel Kashkari says the US "is in a very strong position" in its trade war with China. "Not only is our economy bigger, our economy is much less sensitive to trade. Trade is important to the US economy, but it's much more important to the Chinese economy, just as a share of its economy," Kashkari says in a CNBC interview. The official also tells CNBC when it comes to monetary policy, he is less apprehensive about the outlook now that his colleagues are no longer pushing for more rate increases.
- An international technical review panel that US aviation regulators hoped would quickly give a stamp of approval for putting Boeing 737 MAX jets back in the air could add further delays to returning the planes to commercial service as devising a software package has dragged on. The FAA has said the eight countries participating in the panel "will individually provide the FAA with findings regarding the adequacy of the certification process and any recommendations to approve the process." That effort is bound to stretch long past the time US regulators seek to approve Boeing's pending fix. The US has made it clear the panel, which includes Singapore, Brazil, China and Europe's primary aviation regulator, wouldn't have veto power over FAA determinations. But failure to quickly reach a consensus among panel members could make the FAA leery of acting on its own.
- Equity markets will be "the main channel" through which financial markets react to trade tensions between the U.S. and China, says TD Securities, after the U.S. ramped up tariffs on certain Chinese goods and China threatened retaliation. The euro could benefit, however, as emerging-market currencies are sold, the bank says, noting that the euro has been used to fund investments in these currencies. "The common currency has been a popular funder for EMFX exposure and we think the unwind of the latter should place intermittent upside on the EUR," TD says in a note. The Stoxx Europe 600 index falls 1.2%, while EUR/USD rises to its highest in nearly two weeks at 1.1264, according to FactSet.
- July cotton futures on the Intercontinental Exchange are continuing last week's downward momentum with a steep 4.2% fall in trading so far today, placing the contract at 65.58 cents per pound. This will be the sixth session in a row that the cotton contract has fallen, declining 12.8% in that time period. Ramped-up tensions in the US-China trade war, combined with indications of a large cotton crop this year, are fueling this downturn, according to Tyler Herrmann with RJO Futures. "From a technical standpoint the chart looks horrible and I don't see any reason to jump in front of this and try a shot at a long position," Herrmann says.
- New research from the New York Fed finds that when it comes to the economy, voters now are less polarized than they were at the time of the election of President Trump. "While Republican counties have remained more optimistic about government debt growth and future unemployment, expectations in Republican and Democratic counties have become essentially indistinguishable over the past year in terms of their expectations about changes in their financial situation, inflation, and the stock market," the report said. The New York Fed noted it will follow up on Tuesday with more on this key issue, as the 2020 presidential election looms back into view.
- Base metals trading on the London Metal Exchange are uniformly down day, with negative momentum stemming from the failure of the US and China in reaching a trade deal on Friday and the US and China raising tariffs. "It seems that the modest recovery we saw set in on Friday... following the end of the latest round of US/Chinese trade talks has fizzled in its entirety, leaving investors as confused as ever about the future course of events," said Edward Meir of INTL FCStone. Tin is recording the largest percentage drop among base metals today, with the 3-month contract down 1.7% to $19,300 per metric ton. Not far behind are lead and zinc, which are down 1.4%, and copper, which is down 1.3%.
- Grains futures on the CBOT are trading lower this morning, with the negative trend unlikely to let up with news of China raising tariffs up to 25% on $60B worth of US goods. The July soybean and corn contracts are both  down 1.6% in pre-market trading, while wheat is down 0.9%. For soybeans, the decline places the contract under the $8 per bushel range. China's raising of retaliatory tariffs comes in defiance of tweeted threats from President Trump, who warned China this morning not to retaliate. Also weighing down the contracts were lackluster statistics from Friday's WASDE report, which showed higher-than-expected US inventories for all three grains.
- In the wake of talks between the US and China ending without a deal on Friday and news this morning that China will raise tariffs on certain U.S. imports, trading on the CBOT is expected to be lower - particularly for soybeans, which is most closely tied into the back-and-forth between the two countries. "The trade continues to factor in the large carryout and the lack of a trade deal and the only reasonable conclusion for traders at this point is to continue to sell soybeans," says Tomm Pfitzenmaier of Summit Commodity Brokerage. President Trump was defiant on Twitter this morning, directing a tweet to Chinese President Xi stating "China will be hurt very badly if you don't make a deal because companies will be forced to leave China for other countries."
- Stock futures are coming under heavy selling pressure as messages from DC cast doubt on a clean resolution to the US and China's trade fight. President Trump said on Twitter early Monday that China would be "hurt very badly" if it didn't make a deal. The tweet follows another message Saturday, in which Trump said he loved "collecting BIG TARIFFS!" Analysts are watching retaliation from Beijing. S&P 500 futures are down 57 points.
- Although it's holding up relatively well, European credit markets could stay tense on Monday, says Commerzbank. On Friday, European bonds were in "no need to rush to extend the selloff," although credit default swaps widened slightly after tightening prior to that. This came as the U.S. increased the tariff rate on $200 billion of goods imported from China to 25%, in a sign of challenging discussions between the world's two largest economies to forge a trade deal, causing falls in U.S. equities. "The bearish spillover from across the pond came in absence of major trade headlines and offered another taste of how unpredictable market responses to ambiguous trade news remain for now," Commerzbank says.
- A number of major currencies are at the mercy of U.S.-China trade disputes. With the markets in a risk-off mood "there's no point looking for gains from" the Norwegian krone, Australian dollar, Swedish krona, New Zealand dollar or the Canadian dollar, says Kit Juckes, Societe Generale's macro strategist. "The only good news would be de-escalation of the President's twitter rhetoric," says Juckes referring to Donald Trump tweeting last week about increasing tariffs on China. The euro though could be under pressure. "The threat of trade conflict spreading to Europe and to auto exports must weigh on the euro." The euro is last flat at $1.1229.
- The selloff in metals has gone too far, says Citigroup. Macro strategists at the U.S. bank say the asset class has fallen in response to the flare-up in tensions between the U.S. and China. However, they say President Trump imposed steeper tariffs on Chinese goods in order to "cement concessions from China," and think the two sides are still likely to reach a deal in the second quarter. Base metals are down again today, led by a 1.1% fall for copper, which has now lost 6.5% over the past month.

May 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil futures were mixed, with U.S. crude edging lower, as investors and traders fretted over global economic growth prospects amid a standoff in Sino-U.S. trade talks.
- Gold prices dipped as Sino-U.S. trade tensions and uncertainty over a deal weighed on yuan, making the bullion expensive for buyers in world's largest consumer - China.
- Copper prices dropped, pressured by concerns over the outlook for the global economy and metals demand as Washington and Beijing struggled to salvage a deal to end a bitter trade war.
- Chicago soybean futures fell to their lowest in more than 10 years, pressured by concerns that an escalation in the trade war between Washington and Beijing would further hit U.S. exports of the oilseed.

- President Trump's tweets on new China tariffs will weigh on the kiwi at the start of this week, says Australia & New Zealand Banking Group. Trump has ordered staff to begin paperwork to impose levies on more than $300 billion worth of goods that China sells to the U.S. That order came as the U.S. raised punitive tariffs to 25%, from 10%, for $200 billion in goods leaving China on Friday and thereafter. The NZD/USD is at 0.6602 early in Asian trading on Monday, and ANZ see support at 0.6560 with resistance at 0.6670 on technical charts.
- President Trump confirms on Twitter that tariffs have been elevated to 25% for $200B in Chinese goods, and with a new tariff likely to be slapped on an additional $325B in goods, grains traders are now looking for the Administration to spearhead new aid to US farmers in an attempt to stave off the damage Chinese retaliation will bring. "Trump was active on Twitter this morning with one tweet suggesting there could be more government farm support in the pipeline," says Doug Bergman of RCM Alternatives. In a series of tweets this morning, Trump promised that the government would purchase agricultural products "in larger amounts than China ever did, and ship it to poor & starving countries in the form of humanitarian assistance."
- With the U.S. raising tariffs on Chinese imports on Friday, market participants are "underestimating the degree of additional disruption this latest round of surprise tariffs will cause the global economy," says George Saravelos, forex strategist at Deutsche Bank. With the smaller tariffs applied last year, China exports to the U.S. collapsed 30% and U.S. exports to China dropped 50%, says Saravelos. The currencies which are vulnerable to trade spats are those in Asia and Saravelos says the Japanese yen "is the best safe haven."
- Bank of America Merrill Lynch analysts say they still expect a trade deal from the US and China, and that the scenario of a full-blown trade war is very unlikely. "With the Fed clearly on hold, any near-term market pain will now be clearly attributable to the trade war," analysts say. "With election campaign season also approaching, another bout of market weakness should get the US-China deal over the finish line." However, analysts add that if this scenario does materialize, they would see downside risks to their current growth forecasts in many regions. US stock are poised to open lower as Dow futures lose 0.3% and S&P 500 futures lose 0.4%.
- The currency that could suffer the most from global trade disputes escalations is the Canadian dollar, according to Societe Generale. "The Canadian dollar is now probably the most at risk, since it has the highest yuan correlation within G10, but has recorded the smallest G10 volatility increase since mid-April, when the yuan started to fall." USD/CAD trades down 0.5% at 1.3404 on Friday. USD/CAD could rise to 1.40 if the Chinese yuan plunges and takes USD/CNY above 7 as China is not a local, but a global actor, and "contagion risks generated by fast yuan depreciation won't be limited to Asia," says SocGen. The volatility market implies a 52% probability that USD/CNY will touch 7 in the next quarter, SocGen adds. USD/CNY is currently at 6.8242.
- A flare-up in trade tensions between the US and China is straining this year's rally in emerging market currencies, but it's far from the only issue worrying investors. Even if a trade deal is reached, emerging markets will still have to contend with a persistently strong dollar, said Win Thin, global head of currency strategy at Brown Brothers Harriman. Comparatively high US interest rates have dulled the allure of emerging market currencies and will likely continue doing so, as many developing countries look to ease monetary policy, Thin said. "Even if we get a deal, it's not a magic wand for emerging market currencies," he said.
- The response from the European credit markets to the recent bout in volatility has been measured, according to LBBW's analysts comparing VDAX, which indicates the expected future volatility in the German blue chip stock index DAX, with high-yield non financial spreads. The recent largely unexpected escalation in the trade spat between the U.S. and China, with the U.S. more than doubling the tariff rate on $200 billion of imported Chinese goods to 25%, prompted stocks markets to plunge and credit spreads to soar. Yet compared to this year's risk asset rally, the market's response so far seems fairly measured, they say.
- The dollar typically acts as a safe-haven and rises during periods of heightened geopolitical risks, but it hasn't done so since the U.S. increased tariffs on Chinese imports. MUFG says this is because "the cyclical position of the U.S. economy relative to the rest of the world is not as clear-cut as last year when the first phase of escalation in the conflict took place." Investors are now likely to be much more concerned about the potential negative impact for the U.S .economy than they were last year, it says. "That is likely limiting the expected reaction of dollar appreciation." EUR/USD is last up 0.1% at 1.1229.
- The Japanese yen is flat Friday morning, but it is likely to be volatile going further into the day, UniCredit says. "The yen is expected to remain the cornerstone of market reactions" to the implications of President Trump's decision to raise tariffs on China, UniCredit says. The tariffs "are set to be the major driver for currencies, together with stock market reactions" and the yen is more often strongly correlated with the equity volatility gauge VIX, UniCredit adds. Overnight, the U.S. raised the tariff rate to 25% from 10% on $200 billion of Chinese imports. USD/JPY is at 109.90.
- Higher US tariffs on Chinese goods and a likely ensuing slowdown in China will dampen growth for other Asian export-dependent economies, says Moody's. The elevated US-China tensions could increasingly fragment the global trading framework and weaken the rules-based system that has underpinned global growth, particularly in Asia, it says in a report. The Trump administration today raised tariffs on Chinese goods from 10% to 25% even as negotiations for a trade deal continue. Moody's expects "a significant negative effect" on Chinese exports and particularly its targeted high-tech industry.
- Air Lease CEO John Plueger says the crisis surrounding the Boeing 737 MAX doesn't play into the broader global trade agenda. "Safety is safety," he says on 1Q call, adding he doesn't believe regulators in some countries will seek to delay approval of the MAX to fly again because of broader trade issues.
- New US sanctions on Iranian metals could push up the international price of iron ore but will have a limited impact on other commodities, Barclays says. With the iron-ore market "already reeling from supply shortfalls" after the Vale mine disaster in Brazil, any further reduction in supply could push prices further still, the bank says. Iran produces around 60 million tons of the metal, exporting a net 32 million tons. "In an iron-ore market already in 31 million ton deficit, a relatively small reduction in exports from Iran could have an outsized effect on the market and could imply upside risk to our $75/t full-year price forecast," Barclays says. The US imposed tariffs on Iranian industrial metals Wednesday after Tehran said it would roll back some of its commitments under the 2015 nuclear deal, from which President Trump withdrew last year.
- Grains analysts and traders in Chicago are split, not only in their appraisal of how President Trump has run the negotiations with China for a trade deal, but in what might happen if a deal isn't reached Friday and the Trump Administration institutes higher tariffs on $200B worth of goods. During a panel at the cmdtyExchange conference, John Newton of the American Farm Bureau praises Trump's tweets on Sunday as "maximum pressure," while others took what Alan Brugler of Brugler Marketing & Management deemed the "gloom and doom" position--that the possibility of a trade deal is now less likely than ever. Grains futures are down today, with July corn down 2.3%, soybeans down 1.6%, and wheat down 1.9%.

May 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices pared earlier gains following U.S. President Donald Trump's tariff increase on $200 billion worth of Chinese goods took effect, escalating the trade dispute between the world's two biggest economies and oil consumers.
- Gold prices edged higher, drawing support from increased trade tensions after U.S. President Donald Trump's tariff increase on $200 billion worth of Chinese goods took effect, putting the bullion on track for a weekly gain. 
- Prices of copper and most other industrial metals rose on hopes of easing Sino-U.S. trade tensions, which have been threatening economic growth, even as higher U.S. tariffs on more Chinese goods took effect.
- Chicago soybean futures ticked higher, but the market is set for a fifth consecutive weekly loss as the trade dispute between Washington and Beijing dragged prices lower.
- The dollar was steady against the safe-haven Japanese yen, taking in stride the hike in U.S. tariffs on Chinese goods that went into effect and awaiting resumption of talks between top officials of the world's two largest economies.

- Higher US tariffs on Chinese goods and a likely ensuing slowdown in China will dampen growth for other Asian export-dependent economies, says Moody's. The elevated US-China tensions could increasingly fragment the global trading framework and weaken the rules-based system that has underpinned global growth, particularly in Asia, it says in a report. The Trump administration today raised tariffs on Chinese goods from 10% to 25% even as negotiations for a trade deal continue. Moody's expects "a significant negative effect" on Chinese exports and particularly its targeted high-tech industry.
- Air Lease CEO John Plueger says the crisis surrounding the Boeing 737 MAX doesn't play into the broader global trade agenda. "Safety is safety," he says on 1Q call, adding he doesn't believe regulators in some countries will seek to delay approval of the MAX to fly again because of broader trade issues.
- New US sanctions on Iranian metals could push up the international price of iron ore but will have a limited impact on other commodities, Barclays says. With the iron-ore market "already reeling from supply shortfalls" after the Vale mine disaster in Brazil, any further reduction in supply could push prices further still, the bank says. Iran produces around 60 million tons of the metal, exporting a net 32 million tons. "In an iron-ore market already in 31 million ton deficit, a relatively small reduction in exports from Iran could have an outsized effect on the market and could imply upside risk to our $75/t full-year price forecast," Barclays says. The US imposed tariffs on Iranian industrial metals Wednesday after Tehran said it would roll back some of its commitments under the 2015 nuclear deal, from which President Trump withdrew last year.
- Grains analysts and traders in Chicago are split, not only in their appraisal of how President Trump has run the negotiations with China for a trade deal, but in what might happen if a deal isn't reached Friday and the Trump Administration institutes higher tariffs on $200B worth of goods. During a panel at the cmdtyExchange conference, John Newton of the American Farm Bureau praises Trump's tweets on Sunday as "maximum pressure," while others took what Alan Brugler of Brugler Marketing & Management deemed the "gloom and doom" position--that the possibility of a trade deal is now less likely than ever. Grains futures are down today, with July corn down 2.3%, soybeans down 1.6%, and wheat down 1.9%.
- Norwegian Cruise Line CEO Frank Del Rio says the cruise industry is "all in the same boat" in their hope the Trump administration finds a way to keep them from being able to sell sailings to Cuba. "We are all working together to try to maintain what we have," Del Rio tells analysts during a 1Q earnings conference call. "We just don't know at this point what we don't know. It is business as usual until it's not ... this is government at work, it's not business and so we just have to wait and see."
- Chinese investment into the US plummeted to $5B last year, a seven-year low, from $29B in 2017, according to a report Wednesday by Rhodium Group. That is because China clamped down on capital outflows and more of the US became off limits. The firm estimates $2.5B in Chinese acquisitions were abandoned because of concerns raised by the Committee on Foreign Investment in the US, a secretive Treasury-led panel that vets foreign investment for security risks. Last year "proved that the five-decade trend of closer engagement in US-China relations was not inexorable, and patterns propelled by powerful commercial logic can be stalled or reversed by policy," the firm observes.
- Every CEO this week, it seems, is getting asked about what new or higher US tariffs on Chinese imports will do to their business. On an earnings call, Keurig Dr Pepper's CEO says the next wave of tariffs would have a minimal effect on the K-Cup maker. "Less than $1 million," Bob Gamgort says. If the US adds tariffs on everything else coming from China that would likely raise prices on "everything in the consumer electronics world" but Gamgort says Keurig is diversifying its supply base and taking steps to mitigate. Keurig falls 3.1% after reporting weakness in its drinks-distribution business.
- To neutralize exposure to geopolitical risks, Adrian Owens, GAM Investments' currency and fixed income hedge fund manager, likes to buy currency pairs where both currencies are exposed to those risks. In case risks materialize, the net effect on the currency pair is minimal. For example, Owens likes to go long the Mexican peso versus the Russian ruble. If the U.S. does raise tariffs on Chinese imports Friday and trade tensions escalate, both the peso and the ruble will weaken, but not against each other. One can't prepare for "exogenous shocks" such as the collapse of the Lehman Brothers, but these types of trades help to minimize exposure to them, Owens says. "Historically, that's how we made our highest returns," he says.
- Threats of more U.S. tariffs on Chinese imports and the possibility of Chinese retaliation hasn't impacted the investment decisions of Adrian Owens, GAM Investments' currency and fixed income hedge fund manager. He says he isn't "betting on [Donald] Trump's tweets." Trump said on Twitter Sunday that he will raise tariffs on $200 billion of Chinese goods on Friday. Acting on Trump's tweets is "not a high quality trade," Owens says, adding that today the threat of tariffs is high and the next day is goes down again. "Risks are assymmetric," he says.
- When the U.S. raises tariffs on Chinese imports overnight, China could retaliate with futher tariffs on U.S. goods, but "a wide range of non-tariff measures that damage the U.S. could be more important," says George Saravelos, forex strategist at Deutsche Bank. One thing the Chinese could do is to weaken the yuan, he says. Offshore yuan versus dollar "moves have been fairly consistently in line with the weighted average tariffs imposed by the U.S. on Chinese imports." The onshore yuan "is already the world's most expensive currency in our valuation models and has plenty of room to fall against the yen, which is the world's second cheapest," Saravelos says.
- U.S. President Donald Trump's tweets on Sunday threatening to raise tariffs on $200 billion of Chinese imports "was not a bluff," says George Saravelos, a forex strategist at Deutsche Bank. He says it's certain that the U.S. government will be raising tariffs to 25% from 10% effective midnight Washington time today. The surprising escalation of U.S.-China trade tensions this week is "a material negative for the global economy" and the foreign exchange market is "unprepared" for that, Saravelos says.
- EUR/USD is holding on around the 1.12 level in spite of U.S.-China trade-related uncertainties. But if the Chinese yuan were to plunge on the back of these risks, sending USD/CNY above 7, then EUR/USD could fall below 1.11 and towards 1.10 as the safe-haven dollar stregthens, says Kit Juckes, macro strategist at Societe Generale. Juckes says the yuan is a key barometer of foreign exchange market stability. Its fall would signal an economic weakness in China and the Chinese economy is currently the driver of the global economy. He notes, however, that the biggest moves would be in emerging markets. EUR/USD is last flat at 1.1191 and USD/CNY rises 0.6% to 6.8212.

May 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dropped 1 percent amid concerns over the escalating trade battle between the United States and China, despite a surprise fall in U.S. crude stockpiles.
- Gold prices held steady ahead of Sino-U.S. trade negotiations, while demand for government bonds and Japanese yen and a key technical resistance limited gains for the safe-haven metal.
- Prices of industrial metals dropped, with copper hitting its lowest in nearly three months, as investors shied away from riskier assets amid mounting tensions ahead of crucial trade talks between the United States and China.
- Chicago corn slid 1 percent, falling for a second session as forecasts for dry weather next week in parts of the U.S. Midwest boosted hopes that farmers will be able to catch up on planting.
- The dollar hovered near a six-week low versus the yen, weighed down against the safe-haven Japanese peer as risk aversion gripped broader markets amid concerns the U.S.-China trade conflict could escalate.

- Fresh U.S. tariffs on Chinese imports will likely hurt Chinese exports, but also the country's imports, says ING. The escalation of trade tensions mean it is likely there will be more tariffs imposed on China's exports, and any retaliation from China will mean more expensive imported goods from the U.S. "So both China's exports and imports will be hit." Still, exports from China are likely to be hit the hardest, ING says. "If the trade dispute escalates further, we expect the U.S. to push even harder on its Western allies not to use China-made 5G products and parts, which will dampen China's future exports." This means China's trade deficit could rise further.
- U.S. equities have plunged in response to the possibility of higher U.S. tariffs on Chinese products as soon as this Friday, but the foreign exchange market has been left relatively stable, with the Japanese yen the only currency reacting. "Yesterday revealed that the forex markets are reluctant to draw strong conclusions from the gyrations in the equity markets...it is rather clear in the meantime that the yen is the safe haven of choice when risk sentiment weakens badly and that the U.S. dollar is rather neutral," Saxo Bank says. But things could change on Friday, when the U.S. could actually raise the tariffs. "A bad outcome this Friday in trade negotiations could lead to weak sentiment." This could result in "a quick and large policy response" from the Federal Reserve such as cutting interest rates, Saxo Bank adds.
- Market participants haven't fully priced in the risk of the U.S. increasing tariffs on Chinese imports to 25% from 10% this Friday into USD/CNY, despite it rising to a three-month high of 6.7836 on Wednesday, according to FactSet. However, investors in the offshore yuan have priced that risk in, UniCredit says, looking at the six-month USD/CNH risk reversals.
- The fact that USD/JPY has fallen to a six-week low of 109.89 Wednesday suggests "that caution remains predominant at the moment," with the U.S. expected to increase tariffs on $200 billion of Chinese imports on Friday, says UniCredit. Another safe-haven currency, the Swiss franc, has also increased slightly due to the U.S.-China trade talks worsening, but could strengthen further, UniCredit says, adding that EUR/CHF may "come under a little more pressure again over the coming weeks." The fall in EUR/CHF is also likely to be closely linked to the EU elections at the end of May, says UniCredit. USD/JPY is last down 0.1% at 110.09 and EUR/CHF falls 0.1% to 1.1400.
- The FTSE 100 Index drops 0.1%, or 5.88 points, to 7254.59 as political uncertainty and downbeat trading in world markets weigh on sentiment. The Dow Jones Industrial Average fell 473 points on Tuesday and Asia markets were all in the red. "Investors have been worried about U.S. President Donald Trump causing disruption again with trade tariffs, triggering several negative sessions on stock markets around many parts of the world," says Russ Mould at AJ Bell. ITV tops the blue-chip fallers, down 5% after the broadcaster forecast a 6% drop in total first-half advertising revenue following a weak first quarter.
- While rising geopolitical risks could generate an oil-price spike, they're unlikely to produce a "systemic shock" which could trigger a global recession, says Tina Fordham, chief political analyst at Citi. Key now is the US becoming the world's biggest oil producer, she notes.
- While stocks continue to sell off on the US-China trade dispute, Brendan Erne of Personal Capital tells WSJ that the good news is that China remains at the table. Erne says he expects this week's negotiations to progress enough to stave off Friday's scheduled tariff increase. "Trump doesn't want a massive trade war right before an election year," Erne says. Losses in trade-sensitive areas such as tech, industrials and materials weigh on stocks as the S&P and Dow each fall 2%. Erne says more volatility in equities could be expected depended on the outcome of the trade talks.

May 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose as U.S. sanctions against crude exporters Iran and Venezuela as well as ongoing supply cuts by producers have left markets relatively tight just as crude imports to China rose to a record for April.
- Gold prices rose to their highest in more than a week as renewed worries over U.S.-China trade dispute and its potential impact on global growth dented risk sentiment, stoking investors towards safe-haven assets.
- Shanghai base metals were mixed as the market remained volatile amid uncertainty over the outcome of U.S.-China trade talks this week, but London copper pulled away from lows touched in the previous session.
- Chicago soybeans rose for a second session, with focus on whether the latest round of talks between Washington and Beijing this week will be able to stop an escalation in a festering trade dispute between the two countries. Growing fears about the impact of a worsening U.S.-Sino trade conflict on global growth lifted the safe-haven Japanese yen to a six-week high against the dollar.

- Trump threats deliver 'gut punch' to market
The Dow Jones Industrial Average dropped more than 450 points Tuesday and had its worst performance since Jan. 3. The other two top gauges of U.S. stocks, the Standard & Poor's 500 and the Nasdaq, notched their sharpest declines since March 22.

Major U.S. stock indexes fell sharply for a second straight day after President Donald Trump threatened a huge increase in tariffs on Chinese goods in two tweets over the weekend. Investors, who had hoped trade negotiations this week would lead to a resolution of differences between the United States and China, questioned the progress of the talks after the surprise threat of new tariffs, which could take effect Friday.

"The Trump administration's doubling down on the China threats has been a gut punch to bulls," said Daniel Ives, managing director of equity research at Wedbush Securities. "Investors do not want to add risk going into trade talks this week, given the shot across the bow from the administration."

The dip came after a strong start for stocks in 2019. The longest bull market in U.S. history celebrated its 10th anniversary March 9. After its sharp, two-day decline, the Dow is still up more than 11% since the start of the year. Tuesday, the Dow Jones Industrial Average fell 473, or 1.79%, to end at 25,965, while the broader S&P 500 index lost 48 points, or 1.65%, to finish at 2,884. The tech-heavy Nasdaq dropped almost 160 points, or 1.96%, to finish at 7,964.

The stock declines started Monday after Trump called for 25% tariffs on $200 billion of Chinese imports previously taxed at 10% and on $325 billion of previously untaxed goods. The sell-off accelerated Tuesday after U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin reiterated the hikes would start Friday.

"We got that tweet, and it's 'hold your horses,' we're not going to get that trade deal that many people thought was in the cards," said Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California. Lighthizer and Mnuchin said the Chinese retreated on trade offers before this week's talks. The two countries were set to meet Wednesday to discuss trade, but that was delayed until Thursday after the tariff threat.

"The biggest threat to this market is the U.S.-China trade issues," Ives said. "If China and the U.S. dig in on trade, it's time to put on the hard hat because the market could go down another 10% plus."

The feud has increased costs on goods for consumers and businesses. This week is a reversal from last, when the S&P 500 hit a fresh high April30 and the Nasdaq closed at a new peak May 3.

May 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were mixed, pressured by concerns the escalating Sino-U.S. trade dispute could slow the global economy, while U.S. sanctions on crude exporters Iran and Venezuela helped keep the market on edge.
- Gold prices steadied as U.S. President Donald Trump's threat to hike tariffs on Chinese imports re-kindled trade tensions between the two countries and pushed investors to seek insurance in safe-haven assets.
- The Australian dollar sharply rose after the country's central bank held rates at a record low, dashing speculation it may ease policy following a below-par reading of inflation. 
- London base metals were mixed amid heightened trade tensions between the United States and China, but news that Beijing would still send a delegation to Washington this week for another round of negotiations provided some relief.
- Chicago soybean futures extended losses into an eighth session, pressured by intensifying trade tensions between Washington and Beijing.

- The NZD/USD trades a touch above 6-month lows at 0.6600 after President Trump's latest threat to raise tariffs on Chinese imports sparked a broad risk-off mood. Some respite came from headlines that the chief Chinese trade negotiator would travel to Washington this week for more talks. "But words and uncertainty matters," says Australia & New Zealand Banking Group. "Looking beyond the rhetoric, there has been a dramatic slowdown in global trade volumes this year." Global trade volumes fell 1% in the year to February, after growth of about 5% since 2017. "Continued trade uncertainty won't be helping that," the bank adds.
- The Trump administration expects to finalize new climate rules for power plants in June, the EPA says in a federal court filing. The filing is part of a federal case over the Obama administration's rules for power plants, the "Clean Power Plan," which was designed to shrink the amount of heat-trapping gases the power industry releases into the atmosphere. The Supreme Court delayed implementation of the policy while West Virginia and others sued to stop it, and EPA has to submit regular status updates as part of its promise to address the lawsuit. The Trump EPA is pushing a replacement that would vastly scale back federal authority, giving more power to the states and attempting to make it easier for coal-fired plants, the highest-emitters, to compete.
- Stocks erase much of their early losses as investors weigh upcoming US/China trade talks. The DJIA was off more than 450 points in early trading following threats from President Trump over the weekend to ramp-up tariffs, but reports this afternoon that the Chinese delegation is still planning to travel to the US eases some fears. DJIA ends down 66 points at 26438, the S&P down 13 to 2932 and the Nasdaq loses 40 to 8123. Shares subject to trade-related volatility, like industrials and materials came under the most pressure with Deere falling 4%. Semiconductors are also hit hard with Advanced Micro Devices and Micron each falling 2.8%.
- June livestock futures on the CME finished lower in the first trading day since President Trump's tweet Sunday threatening to hike tariffs on Chinese goods. Hog futures hit their limit of 3 cents per pound down early, finishing the day down 3.2% at 89.75 cents per pound. Meanwhile, live cattle futures finished down for the 11th consecutive session, closing down 1% at $1.12275 per pound. For cattle, traders expect the streak to soon end -- and for the contract to correct. "Look for price recovery," says Larry Hicks of CattleHedging.com, who anticipates a recovery to begin later this week. However, more bad news on the trade front could further delay any recovery.
- Wells Fargo Investment Institute strategists say that while President Trump's escalation of trade tensions between the US and China creates additional uncertainty, any extended weakness could be an attractive opportunity for investors. "If the two leaders are indeed acting to cement a positive outlook by hastening a trade deal, then the latest round of selling could be short-lived in risk markets," they say. "In that case, any backing down from the latest threats, or a trade deal, could create a buying opportunity in risk markets." WFII strategists add that they anticipate that the US and China are not walking away from a deal because of the opportunity and risk that a deal poses for each country's economy.
- If President Trump goes through with his threats to increase US tariffs on Chinese imports, some analysts believe the economy will suffer for it. Oxford Economics expects GDP to be 0.3 percent point lower than it would be otherwise if the tariffs are amplified, adding that if trade tensions escalate "the pace of US activity could slow to less than 2% by year-end." Meanwhile, Philadelphia Fed leader Patrick Harker warned Monday, without commenting directly on Trump's threats, that enhanced protectionism and tariffs aren't healthy for the economy over the long haul.
- US benchmark oil prices trim most of their sharp losses earlier in the session that came along with broad-market selling after President Trump threatened higher tariffs on Chinese imports and said China was trying to "renegotiate" a trade deal just as a final agreement seemed near. "Today's weakness is largely tied to the latest turn is US-China trade negotiations," says Robbie Fraser at Schneider Electric. "That adds to some recent bearishness from crude fundamentals as well, with US inventories, rig counts, and production levels all on the rise heading into the summer demand season." WTI was recently just 0.1% lower at $61.88/bbl.
- President Trump's latest comments on hiking tariffs on Chinese imports trigger new fears among investors, Citi says, including renewed concern about trade protectionism weighing on global growth and corporate earnings as sentiment had shifted into complacency. "A sharp selloff in Chinese equities suggests that the investment community had been pricing in a strong probability of a 'deal' getting done and that mindset now is in doubt," analysts say. However, they believe a trade agreement will be achieved since it is the best interest of both countries. "The President's negotiating tactics may be unconventional but the likelihood of some kind of deal is still higher than nothing getting done," they say.
- Equities and riskier currencies slide as U.S. President Donald Trump tweeted a threat to ramp up import tariffs on Chinese goods. However, it's uncertain that Trump will carry out the threats, which may be a policy of "brinkmanship," in which case markets could soon reverse course, says Mark McCormick, currency strategist at TD Securities. "Markets will remain on edge but also a relief rally looms if a deal gets done," he says, pointing to the stabilization of USD/JPY. USD/JPY is last down 0.2% at 110.90, having recovered from an earlier five-week low of 110.28. The Swedish krona is one currency to have fared badly in reaction to Trump's tweets, but TD favors buying dips in NOK/SEK.
- The Swedish krona drops to its weakest level in 10 years against the euro as investors shun risky assets, fearing the possible impact on the global economy of trade tensions resuming between the U.S. and China. The krona typically fares badly during periods of risk aversion. EUR/SEK rises more than 0.5% to a high of 10.7416, according to FactSet, its highest since mid-2009. President Donald Trump said in tweets on Sunday that he planned to increase taxes on $200 billion in Chinese imports to 25% from 10% starting Friday, and impose 25% tariffs "shortly" on a further $325 billion in Chinese goods. "The weekend headlines were a reminder that geopolitical tape bombs continually lurk beneath the surface," says Mark McCormick, currency strategist at TD Securities.
- Stocks are sliding as US-China trade tensions heat back up, with the Dow losing more than 360 points or 1.3% and the S&P 500 losing 1.2%. Ten of the index's 11 sectors are trading lower, while the defensive utilities group edges 0.2% higher. This morning's losses come after President Trump tweeted that tariffs on $200B worth of Chinese imports will rise to 25% on Friday and that an additional $325B worth of goods will get a 25% tariff. "Unless China walks away from the talks ... we do not expect an escalation of trade tensions into a trade war," Citi economists say.
- While Goldman Sachs economists think the odds of tariffs increasing on Friday are only 40%, they view Trump's escalation in tariff rhetoric as a net negative for retailers. "Many retailers had already been making changes in order to mitigate any potential impact from a move to 25%, but these efforts may have been put on hold given progression of trade talks -- the short lead time (less than a week) could pose problems as a result," the economists say. They add that the tariffs are particularly bad for areas such as furniture or retailers with fixed price points.

May 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices tumbled after U.S. President Donald Trump on Sunday said he would sharply hike tariffs on Chinese goods this week, risking the derailment of trade talks between the world's two biggest economies.
- Gold prices climbed after U.S. President Donald Trump threatened to raise tariffs on Chinese goods, escalating Sino-U.S. trade tensions, which prompted risk-off sentiment and boosted safe-haven assets.
- Shanghai base metal futures tumbled as the rhetoric in the trade dispute between United States and China escalated, raising concerns of a demand slowdown in China, the world's biggest metals consumer.
- The safe-haven yen climbed and the yuan slid after U.S. President Donald Trump threatened to raise tariffs on China, sending stocks and commodities into a tailspin.
- Chicago soybean futures dropped to their lowest in over seven months, extending declines into a seventh session amid expectations that a lack of U.S. corn planting due to delays in rain could fuel a shift to more soybean acreage.

- U.S. President Donald Trump's tweets threatening to increase tariffs on Chinese goods to 25% from 10% as soon as Friday, with the prospect of more goods to be targeted, sparks what Commerzbank describes as "risk-off" trades in currencies. This means the yen, "as the typical safe haven" jumps, causing USD/JPY to fall to a five-week low of 110.26. It last trades down 0.3% at 110.82. The Swiss franc also rises, with EUR/CHF down 0.1% at 1.1375. The Australian dollar is among the biggest fallers, given Australia's close links to China, with AUD/USD down 0.7%, while emerging market currencies drop.
- German government bonds, or Bunds, rise sharply as investors buy safe haven assets after U.S. President Donald Trump said in tweets on Sunday he planned to increase taxes on $200 billion in Chinese imports to 25% from 10% starting Friday. He also plans 25% tariffs "shortly" on a further $325 billion in Chinese goods. Bund yields, which move inversely to prices, fall 2.5 basis points to 0.004%, according to TradeWeb. "We could get some safe-haven buying of Bunds and Treasuries on the back of renewed trade uncertainty," says Danske Bank. However, Commerzbank sticks to its short Bund position after recent improved eurozone data, particularly inflation. "All factors considered we stick with our short bias in Bunds and recommend selling into strength," Commerzbank says.
- Asian stocks fell sharply today as Trump threatened to slap 25% tariffs on the more than $500 billion of Chinese exports to the US not at that rate. That punctured--at least temporarily--the five months of built-up hope that the countries would reach a wide-ranging trade deal. That could still happen, with some speculating Trump's missive is just a negotiating tactic ahead of this week's scheduled round of talks. But investors weren't laughing. Chinese equities plunged some 6-8% after a 5-day holiday, the worst day since early 2016 and erasing more of 1Q's big gains. Indexes in Singapore and Hong Kong have fallen more than 3%. Drops elsewhere in the region are around 1%, and S&P 500 futures continue to sport the near-2% declines seen throughout Asian trading.
- Trump's Sunday tweets threatening to put 25% tariff on China's more than $500 billion of annual exports to the US not already at that levy just might happen, says Bank of Singapore. But it adds the Twitter missives "recall similar hardball tactics when [Trump] was at the negotiating table with Canada and Mexico." The firm says in particular the possible 25% tariff on the more than $300 billion of Chinese exports not subject to any right now "sounds a little too extreme and smacks of a bluff. That said, while President Trump has clearly said that he wants to have a trade deal, we believe he could be inclined to walk away from a transparently weak deal that is not politically accretive for him, particularly ahead of his 2020 re-election campaign."
- Taiwan stocks were sharply lower throughout today's trading as US-China trade tensions were refueled by Trump threatening to sharply increase tariffs. The Taiex was among Asia's weaker indexes, closing down 1.8% at 10897.12 while logging its biggest decline in 5 months. Volume was moderate at NT$138 billion ($4.5 billion). Electronics firm Hon Hai slid 3.7%, undoing some of its recent strength, but lens maker Largan climbed 1.5% on strong April revenue. Among smaller stocks, capacitor maker Walsin shed 4% and PC makers fell some 3%. But financials generally outperformed and Realtek Semi rose a further 0.7%, hitting another record high.
- Beijing will probably strengthen policy stimulus if trade tensions with the US heighten anew, says UBS economists, predicting a return to more of an easing bias despite economic stabilization. They posit that additional stimulus measures could include more infrastructure spending, continued credit easing, a less-hawkish stance on the property sector and more RRR cuts. This morning's targeted reduction to banks' reserve ratios is an indication of such continued easing efforts, says UBS.
- With Australia's opposition Labor party looking likely to win next week's election, commodities consultancy Wood Mackenzie predicts higher costs for the resources, power and energy industries. That's because Labor plans to impose emissions targets on the 250 biggest carbon emitters. Wood Mackenzie estimates that for coal miners offsetting emissions will be up to US$10/ton of raw product. Similarly, it expects the cost will be material for Australia's 2 largest LNG producers, Chevron and Woodside.
- Down Under equities are down moderately following Trump's threat to sharply increase Chinese tariffs starting Friday, the broadside coming ahead of this week's planned round of trade talks. Aussie and New Zealand stocks for much of the past year have held up better than other markets when US-China trade tensions rise. New Zealand's NZX 50 is down 0.5% while Australia's ASX 200 is 0.4% lower in the opening minutes of trade there. But oil's 2% slide will pressure the Aussie benchmark as the day progresses. S&P 500 futures, meanwhile, are 1.5% lower after Friday's post-jobs jump. China returns today after a 5-day break while Japanese markets will reopen tomorrow. Markets in South Korea are also closed today for a holiday.
- Oil futures are down sharply from Friday's settlement, but are little moved in the first 2 hours of Asian trading from where they opened, as investors react to Trump's threat of sharply higher China tariffs as soon as Friday. The possibility of going to 25% from 10% on $200 billion of imports has for some raised fresh concerns about the likelihood of any trade deal as well as impact on the what's been an unexpected strength at the start of 2019 for major global economies. A slower economy generally means weaker demand for oil and its products. June WTI futures are down 2.1% at $60.63/barrel and July Brent has dropped 1.6% to $69.69.
- As New Zealand is the only Asia Pacific stock market open, reactions in equities to Trump threatening to boost tariffs on $200 billion of Chinese imports to 25% from 10% is largely limited to the futures market. S&P 500 futures are down 1.4% after earlier falling as much as 1.8% and the index hitting its latest record highs last week. Trump's threat "could unleash a sharp stock-market correction," Chris Rupkey, managing director and chief financial economist at MUFG, said in emailed comments. New Zealand's NZX 50, which has throughout the US-China trade tensions held up better than most stock benchmarks globally, is off 0.4%.

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

- Oil prices were set to fall for the week as surging U.S. output and an expected supply increase from the Organization of the Petroleum Exporting Countries (OPEC) weighed on markets.
- Gold prices hovered near a four-month low hit in the previous session, after the U.S. Federal Reserve dampened expectations of a rate cut in the near term, boosting the dollar and setting the bullion on course for a weekly drop.
- Copper prices and other industrial metals rebounded slightly in thin Labour Day holiday trade, with electric vehicle maker Tesla Inc expecting a global shortage for nickel and copper.
- Chicago soybean futures were on track for a fourth straight weekly loss as expectations of higher U.S. production and slowing demand in top buyer China dragged prices lower.
- Bitter irony that UK government support for Canada during Bombardier's bitter tariff battle with Boeing over the then-CSeries hinged on the role of the Belfast wing plant in the renamed Airbus A220. Now, Bombardier wants to offload the plant, which employs 3,500 and forms the centerpiece of Northern Ireland's aerospace cluster such as a variety of interiors facilities including one operated by United Technologies.
- As the battle for Libya's capital Tripoli intensifies, Citi forecasts the country's oil production could drop by 200,000 barrels a day to 1 million barrels a day this year. The firm attributes the somewhat conservative projection to President Trump's getting in touch with Libyan rebel leader Haftar, suggesting "the U.S. is taking a more active stance on Libya to prevent oil supply from being disrupted." If the conflict escalates, the country's oil production could drop by as much as 400,000 barrels a day, Citi says.
- Humana says it is ready to implement Medicare's new approach to drug rebates in 2020. CFO Brian Kane says on the company's earnings call that Humana prefers resolving the uncertainty around rebates sooner: "let's just go there and get it done." The shift will mean that drug rebates are supposed to flow to beneficiaries taking the affected drugs. Humana says it believes that the Trump administration is moving to ease the impact of the change, which the industry has generally argued will raise premiums for Medicare beneficiaries.
- Humana chooses to address "Medicare for All" legislation during its earnings call, flagging its opposition to universal government coverage proposals being discussed by some Democrats. The spotlight on such legislation has weighed on health-insurer stocks lately, and managed-care firms have taken different approaches to speaking out about it. Humana CEO Bruce Broussard strongly defends the role of his company in Medicare, its core business, saying it is improving health outcomes and slowing rising costs. He notes that a growing share of Medicare beneficiaries have chosen private Medicare Advantage plans and says Humana's partnerships "transcend party lines."

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

- Oil prices fell, pulled down by record U.S. crude production that led to a surge in stockpiles.
- Gold fell to its lowest in a little over one week, after comments from U.S. Federal Reserve Chairman Jerome Powell dashed hopes of a near-term rate cut, boosting the dollar and treasury yields.
- Most base metals except copper and zinc rose from a tumbling session in the previous day, with progress in the U.S.-China trade talks lending some support.
- U.S. corn futures rose to hit a five-week high as forecasts for further adverse weather stoked fears about potential yield losses.

- It could become troublesome for Turkey if people look to exchange more liras for foreign currencies as there is a lack of foreign money in the country, says Nomura's senior emerging market economist Inan Demir. Another potential risk is that the U.S. could announce sanctions against Turkey due to Turkey buying S400 missiles from Russia, says Demir. The last U.S. sanctions weren't significant and still pushed down the lira. If this time sanctions targeted Turkish banks for example, the plunge in lira could be even more significant, he says. Market participants are becoming more alert as the missiles acquisition is targeted for this summer, but risks aren't fully priced in, Demir adds. The lira is slightly higher, with USD/TRY down 0.3% at 5.9456.
- Oil prices add to earlier gains after Venezuelan opposition leader Juan Guaido issues an early-morning call for a military uprising to oust President Nicolas Maduro and the rest of his socialist government. In a speech sent over Twitter and other social media in which he's flanked by men in military garb, Guaido says some members of the military and police have already joined him to "recoup sovereignty" for Venezuela, and that they hope to do it in a non-violent way. "I call on all soldiers, our military family, to join us." Maduro's government responds, saying it aims to put down the "small" coup attempt. WTI was recently up 1.9% to $64.70/bbl.

May 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell after a report showed a rise in U.S. crude inventories, but global markets remained tense amid an intensifying political crisis in Venezuela, tightening U.S. sanctions on Iran, and ongoing OPEC supply cuts.
- Gold prices eased on overnight gains in U.S. equities, while a May Day lull gripped most of Asian markets ahead of a closely monitored Federal Reserve decision on the future trajectory of interest rates.
- Most London metal prices climbed, buoyed as talks aimed at ending a bitter trade war between China and the United states kicked off in Beijing.
- Chicago corn futures rose for a sixth consecutive session as excessive rains across key parts of the U.S. Midwest delayed planting.
- The euro climbed to a one-week high against the dollar on Tuesday after first-quarter economic growth figures in the euro zone beat market expectations, dispelling some pessimism over the economic bloc's common currency.

Apr 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped on expectations rising output from the United States and producer club OPEC would offset most of the shortfall expected from U.S. sanctions on Iran, but analysts said markets remained tight.
- Gold prices rose as lacklustre Chinese factory activity data sent Asian shares lower, rekindling concerns about the health of the global economy.
- Most industrial metals traded in a tight range after data showed growth in China's factory activity unexpectedly slowing in April, suggesting the economy is struggling to regain traction.
- Chicago wheat futures slid for a second session to a six-week low after the U.S. Department of Agriculture (USDA) rated the condition of the winter crop ahead of market expectations.
- The dollar held to tight ranges in holiday-thinned Asian trade, though its Australian counterpart eased as disappointing readings on Chinese manufacturing tempered hopes for a rapid rebound in global growth.

- Recent stability in the Chinese yuan "means the central bank manages the yuan movements in a narrow range," says ING. Onshore yuan depreciated 0.2% against the dollar in March, and so far has dropped 0.3% in April. These narrow ranges "are very different" from the movements observed in the first two months of 2019, when the yuan appreciated 2.45% against the dollar, the Dutch bank says. "We think the narrow range bound may not change even after there is a deal" between the U.S. and China, ING says, as "China will probably want market stability at the beginning of the trade deal, and not add more uncertainty when both sides begin with the implementation."
- After hitting a year-low last week, lumber futures on the CME have rallied on the back of new output curtailments announced by Canadian lumber producers Canfor and Interfor. Curtailments at these mills begin as soon as today, and with Canfor taking 100M board feet offline while Interfor is taking another 20M board feet off for the month of May. The curtailments, attributed to low prices, are expected to help buoy sagging futures. "We view the recent production curtailments as a positive for supply/demand dynamics which have been challenging for lumber producers in recent weeks," says Collin Mings with Raymond James. The July contract is up 2% to $350.70 per 1,000 board feet.
- With the FAA poised to conduct certification flights shortly for Boeing's proposed software fix affecting 737 MAX jets, officials sketch out various scenarios for resuming service in the US and elsewhere. The emerging consensus, according to government and industry officials involved in the deliberations, anticipates the aircraft likely returning first to the air in the US. Then, there could be delays of weeks of longer while certain foreign regulators  mull technical issues along with political considerations. Parties stress the schedule is fluid, and depends partly on how effectively the FAA and the plane maker manage to persuade regulators and politicians overseas that the proposed fix is acceptable -- both from a safety and public relations perspective. Carriers are considering their own strategies to allay passenger concerns.
- Oil prices continued to fall Monday morning on the back of President Trump's renewed pressure on OPEC to raise production and keep a ceiling on prices. Brent crude--the global benchmark--was trading down 1.26% at $70.73 a barrel on London's Intercontinental Exchange mid-morning. West Texas Intermediate futures were down 1.14% at $62.58 a barrel on the New York Mercantile Exchange. "I called up OPEC. You have got to bring them down," Mr. Trump said late last week. The comments came after oil prices had surged at the start of last week after the Trump administration announced it would not renew waivers for buyers of Iranian crude as part of its oil sanctions program on the country, an OPEC member.

Apr 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, extending a slump from Friday that ended weeks of rallying, after President Donald Trump demanded that producer club OPEC raise output to soften the impact of U.S. sanctions against Iran.
- Gold steadied, trading near a more-than one week high touched in the previous session, on increased bets that the U.S. Federal Reserve might cut interest rate this year after a recent data showed inflationary weakness.
- London copper prices dipped ahead of a holiday in China, while other metals were mixed amid surprisingly strong data on U.S. economic growth.
- Chicago corn rose for a fourth consecutive session to its highest in one week as the market was underpinned by rains delaying planting in key parts of the U.S. Midwest.
- The dollar dozed in a snug band as Japan kicked off a week of holidays, giving investors an extra excuse to idle ahead of a Federal Reserve policy meeting and a raft of global data including on U.S. core inflation and payrolls.

- Oil gives up all its hefty gains from earlier in the week after President Trump reportedly said he called OPEC and asked them to bring oil prices down. "Gasoline prices are coming down. I called up OPEC, I said you've got to bring them down. You've got to bring them down," Trump told reporters, according to Reuters. WTI surged to six-month high $66.30/bbl on Tuesday after the Trump administration said it was ending all sanctions-waivers on Iranian oil imports. It hopes Saudi Arabia and other OPEC producers will increase output to make up for fewer Iran barrels in the market. WTI was recently 3.4% lower at $62.97/bbl.
- Archer Daniels Midland CEO Juan Luciano is reading the body language of the grain giant's Chinese customers, and he says it's pointing toward a US-China resolution on trade disputes that have deeply cut into US agricultural exports to China. Some Chinese grain buyers are reducing soybean meal inventories in anticipation of having to buy more US beans later this year, Luciano says, and in other cases, Chinese importers are reviewing corn supply contract language with ADM. "That indicates they are getting ready for movement," Luciano says.
- In a strong dollar environment, GBP/USD could fall to 1.28, ING says. The reopening of the debate over Scottish independence, "which will feature heavily in this weekend's SNP [Scottish National Party] spring conference" should contribute to the small fall in sterling, ING says. "Whilst it sounds like a referendum won't be seen before 2021, if at all, renewed debate about the choice of currency for an independent Scotland will rekindle some of the uncertainty seen before the Sept. 2014 referendum." GBP/USD is last up 0.1% at 1.2908.

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

- Oil prices dipped on expectations that producer club OPEC will soon raise output to make up for a decline in exports from Iran following a hardening of sanctions on Tehran by the United States.
- Gold climbed, as signs of weak global growth rekindled investor interest in the safe-haven metal, keeping it on track for its first weekly gain in five, while a strong dollar ahead of the U.S. GDP data capped gains for the bullion.
- London copper prices rose from a one-month low touched in the previous session, buoyed as the U.S. dollar eased from a two-year high and supported by hopes of a U.S.-China trade deal.
- Chicago wheat lost ground with the market set for a third week of decline after an inter-governmental body increased its forecast for world supplies amid rising production in the Black Sea region.

- Novartis' higher concentration in pharma and in the U.S. may be good, but is also higher risk, says HSBC. The lender forecasts pharma will contribute about 84% to group revenues in the future, while more than half of group sales will come from the U.S. by 2025. With increased talk of healthcare reform in the U.S., Novartis is indeed concentrating its risk profile. To be sure, innovative and effective new-wave drugs could command high prices in the long run. But, HSBC cautions, for the formula to work, the R&D pipeline should be able to deliver such drugs on a sustained basis. "That is a feat that few pharma companies have ever achieved," warns HSBC's Steve McGarry. After the Alcon spin off, a potential Sandoz separation would further increase the reliance on pure pharma. Shares gain 1.2%.
- Caterpillar Chief Executive Jim Umpleby told analysts that his company and its largest customers are more cautious about capital spending plans given the uncertainties over trade disputes involving the US and other countries. Still, he and his customers are cautiously optimistic that they will be resolved. "It does put a fair amount of conservatism, I think, into all of our plans for capital spending," he said. "I would expect if, in fact, the trade tensions get resolved, that would be a positive for global economic and a positive for us."

Apr 25 - Trump's double pinch on Venezuela and Iran risks an oil market crunch (WSJ DJ Reuters)

- Oil prices were torn, supported by tightening sanctions against Iran announced this week and pressured by a surge in U.S. supply and concerns of an economic slowdown.
- Gold prices edged up as weak data from Germany and a dip in equities raised flags about the pace of global economic growth, while a firm dollar curbed further gains for the metal.
- Most base metals rose on hopes of a U.S.-China trade deal, with Shanghai aluminium hitting a near six-month peak on expectations of higher consumption and lower stocks.
- Chicago soybean futures edged higher after suffering losses for the last three sessions, triggered by dismal prospects for U.S. exports and abundant world supplies.
- Donald Trump's double strangulation of Iran and Venezuela is reducing spare capacity in the global oil markets to wafer-thin levels very fast. If anything goes wrong in the geopolitical cauldron of world energy over the next six months, we will discover whether Saudi Arabia really is capable of cranking up an extra 2m barrels a day of crude.
- What we learnt from the rare glimpse of Saudi Aramco's books this month is that the legendary Ghawar field is badly depleted. It cannot pump more that 3.8m barrels a day. This is a first-order shock. The company has always asserted with magisterial confidence that it can produce 5m barrels a day without difficulty.
- Jean-Louis Le Mee, from Westbeck Capital, says the physical oil markets are on fire. They are heading for a supply deficit of 1.3m barrels a day by the third quarter even if Opec matches every barrel of lost oil from Iran sanctions. "These numbers should have every investor worried," he said.
- Global spare capacity is arguably as low today as it was during the great oil shocks of the last half century. We are skating on thin ice.

- The immediate wild card is renewed fighting in Libya but other supply problems are stacking up fast. Draconian new rules on shipping fuel to lower sulphur emissions imply a surge in demand for variants of diesel.
- Bank of America says this will add 1.1m barrels a day in short-term crude demand over coming months. "We see a risk of $100 Brent by year-end," it said. The options markets are not priced for this so the theatrics could be spectacular.
- Libya is again on the cusp of full-blown civil war after the fateful march on Tripoli by general Khalifa Haftar, the mercurial Nasserist of Benghazi. The National Oil Corporation warns that a free-for-all by rival militias could cause a near total collapse in crude exports. The world could lose another 700,000 barrels a day.

- Brent crude has risen to a six-month high of $74.50, up 25pc from its average levels over the winter. It has not yet reached the pain threshold for Europe or emerging markets but it is getting close.
- Oil has of course been much higher in the past - $148 in 2008 - but the nominal price is not the macroeconomic variable that matters. Trouble starts earlier if crude is rising because of a negative supply shock. That is what we face today. The market is tightening despite a global manufacturing slump.
"The trade data looks quite ugly," said David Fyfe, chief economist at Argus Media. Air freight is down 4.7pc (14pc in Asia). Container freight is down 0.5pc. Mr Fyfe says world industrial production has dropped to a growth rate of 2pc, typically a recession threshold.

- The market narrative is that a fresh mini-cycle of global growth - driven by central bank capitulation, and akin to 2016 - is now under way. But UBS's instant "nowcast" tracker of global GDP shows a deterioration over the last four weeks, driven by slippage in emerging markets. Brazil and South Africa have fizzled. So has Japan.
- Nomura says the transmission channel for an oil spike is through developing economies. They have a higher energy-to-GDP ratio. Among the losers are Cambodia, Turkey, the Philippines, Ukraine, India, Pakistan, but also China, as well as Romania, Poland and Portugal within the EU.
- Some have subsidies built into their fiscal structure. Public accounts deteriorate as oil rises. So do current accounts. Governments have to jam on the breaks to defend their credit ratings and currencies. This is the amplification effect.
- The collective austerity is big enough to blow Europe off course. It is one reason why Germany remains stuck in the doldrums. The IFO index of business expectations fell to a three-year low of 95.2 in April. "Reports of a rebound are greatly exaggerated," said Iaroslav Shelepko from Barclays.
- The other reason is that the Chinese come-back story is overblown. Korea's bellwether shipments to China are down 12pc (y-on-y) so far in April. Investor euphoria over recent weeks smacks of late-cycle mass delusion. China's economy may be stabilising - at (true) growth rates of around 4.5pc - but there will be a credit-driven V-shaped boom this time.
- Some combined fiscal/credit stimulus is feeding through but has less than half the macro-impulse of 2016. The People's Bank is stubbornly refusing to blow another bubble. What we have is an incipient oil squeeze in conditions of wilting global growth.
- US petrol prices are nearing the neuralgic level of $3 a gallon. It is therefore surprising that Mr Trump chose to push for zero "waivers" on Iranian oil exports.
- Helima Croft, from RBC, said this could eliminate 800,000 barrels a day of global supply in short order. She called it the "ultimate high wire act" for Trump to do this when he is also ratcheting up sanctions against Venezuela's Maduro regime. Secretary of State Mike Pompeo had wanted sequential action: crush Caracas first, then crush Tehran.
- Doing both together could now go badly wrong. Maduro is digging in. The officer corps - stiffened by Russian troops - has not abandoned him as expected.
- Mr Trump faces a Syrian red line credibility problem if he lets the regime survive after calling for its overthrow. He is stuck with a long struggle and a de facto US blockade.
- RBC said exports could drop to zero by year-end. This is coming at a time when OECD inventories are back below their five-year average.
- Mr Trump seems assured that Opec will step into the breach quickly with extra supply. It may not do so. The Emirates oil minister, Suhail al Mazrouei, said Opec was badly burned by Mr Trump's bluster and retreat on Iranian waivers in November. They flooded the market too soon. Prices collapsed. "We will not do that again," he said. "We have learned the lesson."
- This time Opec is going to wait until Mr Trump is irreversibly committed and the market is as tight as a drum. The fiscal break-even price of oil for the Saudi regime is $88. That is the target.
- The deeper problem does not go away when Opec does finally match lost Iranian barrels. The more the Saudis produce, the more they erode the world's safety buffer.
- Westbeck's Mr Le Mee says global spare capacity will fall to 1.2m barrels a day by the third quarter. This will not be enough to cover demand even if nothing goes wrong, and a great deal is likely to go wrong.
- Mr Trump has taken the biggest economic gamble of his presidency. He has set in motion a potential oil crunch. The Chavistas and Ayatollahs may yet get the last laugh.
'The physical oil markets are on fire. They are heading for a supply deficit of 1.3m barrels a day by the third quarter'.

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

- Oil prices fell amid signs that global markets remain adequately supplied despite a jump to 2019 highs this week on Washington's push for tighter sanctions against Iran.
- Gold prices fell to hover around a four-month low touched in the previous session, as share markets rose and the dollar gained after strong U.S. housing data dampened concerns about an economic slowdown in the country.
- Industrial metals in Shanghai fell following declines in London overnight, while fears that China may ease its economic stimulus dampened sentiment.
- Chicago soybean futures edged higher as bargain buying lifted the market after rising South American production and slowing Chinese demand pushed the market to a five-month low in the previous session.

- Iran Threatens to Play “Trump” Card And Block Straits of Hormuz
Iran is obviously upset about President Donald Trump moving to prevent Iran from selling its own oil and has threatened to block the Straits of Hormuz if the United States moves to block all countries from buying Iranian crude. The only way the US could possibly enforce this is to cut off all offending countries from the SWIFT system that connects the global banking system, controlled by the US dollar and therefore by the US. However, doing so threatens whatever is left of dollar hegemony, and if the Iranians actually do decide to block the straits, through which 20% of global oil supply travels daily, the oil price will skyrocket and the US dollar will fall anyway. Meaning, taken together, this is a really risky move for the dollar, since China is involved, which has been busy building alternative oil contracts to bypass the dollar in the first place. They may be ready to get off the dollar standard by trading oil directly with Russia, and if they are, the dollar could be in for some serious trouble in the short term.

- US Arrests Another Chinese National for Allegedly Spying on General Electric
This is good timing for another round of trade talks between the US and China, not to mention the attempt to cut China off from importing Iranian crude oil. A former engineer and a Chinese businessman have been charged with economic espionage and conspiring to steal trade secrets from General Electric to benefit China. According to the indictment, Zheng stole proprietary data on GE’s turbine technology by encrypting the files on his computer and secretly embedding them into a digital photograph of the sunset before emailing the photograph to his personal email. Now that’s some sophisticated next level cryptographic stuff.

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

- Oil prices were near 2019 highs after Washington announced all Iran sanction waivers would end by May, pressuring importers to stop buying from Tehran.
- Gold prices steadied as strong equities provided a risk-conducive backdrop for investors, countering support from geopolitical concerns as Washington ends sanctions waivers on Iranian oil.
- Copper and nickel prices fell amid worries China may ease its stimulus measures after its economy showed some signs of recovery.
- Chicago wheat futures slid for a second session to a six-week low as improved conditions for the U.S. winter wheat crop and friendly weather in key exporting countries boosted the outlook for global supplies.
- The dollar edged up against a basket of key rivals, while the Canadian dollar was supported by rising crude oil prices due to U.S. plans to tighten a clampdown on Iranian oil exports from next month.

- Grains traders, who have been on the edge of their seats anticipating a final trade deal between the US and China, may have gotten a boost from last week's release of the Mueller Report -- which has pressured President Trumps' approval ratings according to some polls. "Amid the fallout from the Mueller Report and drop in the President Trump's approval rating, the pressure is building for a political win that would shift the obstruction of justice debate. This raises the chances for the US/China trade deal in May," AgResource says. Such a deal was previously expected to materialize in June, which would be over 3 months behind the original due date of March 1.
- It's the cannabis market-Mueller report connection investors have been looking for. Here's the thinking, as per Seaport Global Securities analysts: The special counsel's report didn't fully clear President Trump on obstruction of justice, and considering potential developments in other probes involving Mr. Trump's businesses, both Mr. Trump and Republicans generally have every incentive to secure the president another term, given limits on indicting sitting presidents. That's where cannabis legislation comes in, Seaport says. Mr. Trump and Republicans may not push ahead this year on legislation that would make it easier for U.S. financial institutions to work with cannabis-related businesses, or a separate proposal limiting federal law enforcement in cannabis-legal states; instead, Seaport says, those efforts
could move ahead in 2020 to maximize "voter goodwill" ahead of the election. Seaport says a recent poll showed two-thirds of all Americans back cannabis legalization--including half of registered Republicans.
- Steel Dynamics aims to drive imported steel out of Texas, Louisiana, Oklahoma and Arkansas with a new mill it plans to build in the Southwest. The company has yet to announce a location, though it's widely expected the new plant will be built in Texas. "We're going to gain a massive share of that import stream," CEO Mark Millett told analysts during a conference call. "I have no doubt of the ability of that mill to penetrate that market and pick up market share." Millett says the Southwest is underserved by domestic steel mills and the US tariff on imports has driven up the cost of foreign steel in the region. "We just have to get the thing up and running by 2021." Shares fall 0.4% to $33.90.

Apr 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- A decision by the World Trade Organization that China's tariff-rate quotas on American wheat, corn, and rice violates WTO rules is being praised by US officials as a huge victory for US farmers, eventually allowing them better access to the Chinese market. The decision is in response to an August 2017 request by the US for a committee to consider this issue. "Making sure our trading partners play by the rules is vital to providing our farmers the opportunity to export high-quality, American-grown products to the world," Agriculture Secretary Sonny Perdue says. "We will use every tool available to gain meaningful market access opportunities for US grains and other agricultural products."
- Online grocery shopping is an option now for food stamp recipients in New York, compliments of a USDA-backed pilot program. During the two-year test program, Amazon, Walmart and ShopRite will offer online purchasing to food stamp recipients in New York City or upstate New York, with additional retailers and states also expected to join the program, according to USDA. Recipients will be able to use their benefits to purchase certain food items, USDA says, but not to pay service of delivery fees. The pilot, authorized in the 2014 Farm Bill, comes as USDA takes fire from dozens of lawmakers opposing a USDA-proposed rule that seeks to limits states' ability to exempt certain adults from work requirements in exchange for food stamps.
- Canada says it would issue a decision about proceeding with the Trans Mountain pipeline expansion by June 18, or around the time the country's parliament disbands for the summer and political parties gear up for an election campaign in the fall. Canada's Liberal government bought the pipeline project from Kinder Morgan last year as the project's future was in jeopardy because of political uncertainty. However, construction on the project was halted after an appeals court annulled regulatory approval.
- The risk of material drug-price reductions under "Medicare for All" is extremely low, Citi says after pharma shares tanked on both sides of the Atlantic on the back of the Democrats' proposal. An anticipated measure from the Health & Human Services Department next January aimed at reducing co-pays also strengthens the probability of another term for President Trump, further reducing material risk to pricing, Citi says. Splits in the Democratic Party compound this. The bank recommends using the current weakness to build long-term positions in major pharma players, rating AZN, Sanofi and Novartis in the EU. It prefers Merck in the U.S., it says.Health-related stocks were among the biggest laggards in Europe and the U.S. on Wednesday.

Apr 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dropped as the impact of plentiful U.S. production offset a surprise decline in U.S. inventories, leaving international benchmark Brent retreating from a five-month high touched in the previous session.
- Gold fell to its lowest since end-December as indications that the global economy might not be as pain-stricken as previously feared prompted investors to take risks ahead of a slew of economic data. 
- Shanghai aluminium prices breached the psychological 14,000 yuan ($2,093.61) a tonne barrier for the first time in four and a half months overnight and extended gains on an improved outlook in top consumer China.
- U.S. soybean futures edged up to ease from a 2019-low touched the day before, but gains were checked by expectations of ample South American supply and fears swine fever outbreaks in China could hit demand for oilseeds there.
- The euro was steady after evidence of strength in China improved the outlook for the global economy, with the market looking next to European indicators to provide the currency with a further boost.

- Trade tensions have resumed the position of top 'tail risk'--an unlikely risk that is nonetheless on investors' radar--among fund managers in April, according to Bank of America Merrill Lynch's monthly survey. Investors cited trade tensions for the 10th time in 11 months in April as the top 'tail risk'. In March, a slowdown in China was investors' main concern, BAML says. The next biggest 'tail risk' for investors in April is monetary policy impotence, BAML says.
- Ford says the Lincoln Corsair small crossover SUV will be the luxury brand's first vehicle built in China, avoiding the 25% import tariff on cars. Lincoln has been growing fast in China by importing cars from the US. But last year, it suffered when China temporarily increased the import duty on US-built vehicles to 40% from 25%. Lincoln chief Joy Falotico tells WSJ on the sidelines of the New York auto show that Corsair production will begin later this year. Local manufacturing also will lower material costs and shield Lincoln from foreign-exchange fluctuations, she says. Ford is struggling to reverse heavy losses in China, which totaled around $1.5B last year. Ford is up 1.5% to $9.50.
- Healthcare stocks continue to trade lower, as the S&P 500 is led downward by UnitedHealth, down 3.8%, Anthem, 5.4% lower, and Cigna, off 3.2%. Raymond James says while UnitedHealth beat expectations and raised its 2019 EPS range yesterday, the stock wasn't immune to a sector-wide selloff analysts believe was caused by political rhetoric surrounding Medicare for All at an event hosted by Bernie Sanders. Raymond James maintains its buy rating and lowers its price target to $265 to reflect "the ongoing overhang of the healthcare reform debate and Medicare for All proposals," the firm says.
- The healthcare stock is reacting negatively to the prospect that Medicare for All may be becoming mainstream, analysts say. In the middle of UnitedHealth's earnings call Tuesday, Democratic presidential candidate Bernie Sanders tweeted that the "profit-driven health care system is hurting patients. We must pass Medicare for All and end the greed of insurance companies." The fear is some versions of Medicare for All are getting traction and that fear is moving from health insurers to service providers, Wells Fargo analyst Peter Costa tells WSJ. UNH closed 4% lower, competitor Anthem fell 6.8% and Cigna declined 7.8%.

Apr 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose for a second day on signs of strong demand from refineries in China, the world's second-largest crude user, amid tightening supply as producers curtail output and as oil inventories in the United States fell unexpectedly.
- Gold prices stayed below the key $1,280 level, near a four-month trough, as better-than-expected economic readings from China lifted Asian shares and sharpened risk appetite, denting the metal's safe-haven appeal.
- Copper and other base metals in London rose after China released data that showed its economy grew at a steady pace in the first quarter.
- Chicago wheat futures edged up, supported as investors looked for bargains after the market dropped to a one-month low in the last session on pressure from expectations of bumper production across the northern hemisphere.
- The Australian dollar shot to a two-month peak after data showed steady Chinese economic growth in the first quarter, helping Australia's currency shake off earlier losses.

- On its earnings call, UnitedHealth, which is typically circumspect in its political commentary, details opposition to "Medicare for All" and other universal-coverage policy ideas that have helped ding stock prices in the managed-care sector. CEO David Wichmann warns "wholesale disruption of American health care being discussed in some of these proposals would surely jeopardize the relationship people have with their doctors, destabilize the nation's health system, and limit the ability of clinicians to practice medicine at their best." Instead, he defends the current role of insurers and suggests universal coverage can happen through existing government and private approaches.
- Canada says it would appeal part of a ruling from the World Trade Organization issued last week dealing with the country's longstanding row with the US over softwood lumber. The WTO's panel ruled partly in favor of Canada, that the US didn't follow rules in calculating antidumping duties. Canada, though, is appealing a portion of the ruling in which the WTO sided with the US on the use of "zeroing" to calculate antidumping tariffs. Zeroing is a methodological approach that critics contend artificially inflates dumping margins. USTR Robert Lighthizer applauded the recent softwood ruling for "having the courage" to say that zeroing doesn't prohibit WTO rules.

Apr 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged down after a Russian minister said the nation and OPEC may boost crude output to fight the United States for market share, checking a recent rally driven by tighter global production.
- Gold prices slipped for a fourth straight session as recent upbeat economic data and signs that Washington and Beijing were making headway in a nearly year-long tariff skirmish boosted risk sentiment.
- Most industrial metals were trading in a tight range, as investors were cautious ahead of China's economic growth data to be released later this week.
- Chicago wheat futures slid for a second session, with prices under pressure from expectations of bumper production in Russia and the United States.
- The dollar edged up against a basket of its key rivals with investors erring on the side of caution as they looked for more concrete signs of stabilisation in the global economy.

- The confidence in the U.S. dollar may be undermined by U.S. President Donald Trump, says MUFG. As central bankers and economists around the world gathered in Washington, Trump once again criticized the Federal Reserve for raising interest rates last year. Trump tweeted adding that quantitative tightening "was a killer" and that GDP would have grown at 4% rather than 3%. "If growth in the U.S. slows further he [Trump] is likely to escalate his interference in Fed policy, and undermine confidence in the dollar," MUFG says. "The likelihood is that the political interference is going to intensify," MUFG adds. The dollar trades slightly lower with EUR/USD up 0.1% at 1.1317.
- The possibility of restrictions to European car imports into the U.S. carries the risk of further underperformance in the bonds of European auto companies against other cyclical industries such as construction, Commerzbank's Marco Stoeckle says. Not only that, it suggests "non-negligible" systematic implications. As trade negotiations between Washington and Beijing could be drawing to a close, Stoeckle says the focus of Donald Trump's
trade discussions could shift to the country's commercial relationship with Europe. This could see the fear of U.S. tariffs on imported EU cars take centre stage. iBoxx EUR corporate eligible senior debt by car makers trades at a asset swap spread of slightly over 90 basis points, wider than the equivalent bonds from construction firms and nonfinancial BBB-rated companies.

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

- Oil prices edged lower after international benchmark Brent hit a fresh five-month high in the previous session, but concerns over global supplies kept prices well supported.
- Gold prices fell to a more than one-week low, as stronger-than-expected data from China and a robust start to the U.S. earnings season soothed concerns about global economic slowdown, denting the appeal of bullion. 
- Copper prices rose, after data from China showed higher unwrought copper imports in March, while declining inventories, concerns over a supply deficit and hopes of a resolution to the U.S.-China trade row also lent support.
- U.S. corn futures edged higher, extending gains into a second straight session, as recent adverse weather conditions threatened delay in planting schedule.
- The yen hovered near its lowest level this year as more signs of stabilisation in the Chinese economy and an upbeat start to the U.S. earnings season prompted investors to abandon the safe-haven currency to seek higher returns elsewhere.

Apr 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were firm, supported by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on petroleum exporters Iran and Venezuela.
- Gold prices steadied, having posted their biggest daily decline in two weeks in the previous session after robust U.S. economic data lifted the dollar.
- London copper rebounded from two days of declines on a weaker U.S. dollar, while nickel contracts in both London and Shanghai fell despite analyst warnings of supply shortages.
- Chicago soybean and corn futures slid with both markets set for weekly declines, under pressure from disappointing U.S. weekly exports and ample global supplies.

- A tweak to USDA's data collection boosts the number of agricultural producers as the agency captures more women involved in running America's farms. USDA revised its regular 5-year probe into farm demographics and economics to better capture all people involved in decision-making on farms, making changes that bumped up the total number of American producers by 7% between 2012 and 2017. Most newly-identified producers are female, the USDA said, highlighting a 27% increase in female producers. The bump comes a month after the Trump administration in its draft budget proposed slashing USDA's funding by 15%, and as many in the agricultural industry worry about attracting younger generations back to farms during a trying financial period.
- President Barack Obama's top economic adviser isn't concerned about a rule change that would lift a restriction on President Trump -- and personnel in his administration -- from talking, or tweeting, about the jobs report moments after it's released. "The rule is outmoded in an era of massive amounts of internet and Twitter commentary the moment data is released," Jason Furman, President Obama's top economic adviser, said in an email to The Wall Street Journal. Furman said he's "not particularly worried that political officials will do too much to skew the interpretation of the data given that their views are always appropriately discounted."
- President Trump may no longer be encumbered from Tweeting (or talking) about major economic data the moment it's released, if a proposed regulatory change is made. The Office of Management and Budget released a proposal Thursday asking about eliminating a decades old precedent that barred the administration from commenting on the jobs report and other economic data for an hour after its release. In 2017, then-White House press secretary Sean Spicer took some heat for tweeting about the jobs report just 22 minutes after it was made public.
- Fed Up, a left leaning group that's long pressed the Fed to hold off on rate rises, is very against Herman Cain as a central bank governor. President Trump "has once again announced his intention to nominate an ideologue with a lengthy track record of bad economic projections to the country's most important economic policy making institution," the group said in a press release. "We cannot fill the Fed's Board of Governors with individuals whose political ideology and loyalties put them at odds with the crucial role of the Federal Reserve in achieving full employment," Fed
Up said.
- As Trump signed a pair of executive orders to overhaul some environmental permitting rules and limit shareholder resolutions on climate and environmental risks, he singled out the Constitution pipeline. That's 1 of several major transmission lines delayed for years by reviews delegated to states, and Trump said New York and others are abusing their authority in order to slow the boom in US oil-and-gas production. "To fully realize this economic potential, however, the United States needs infrastructure capable of safely and efficiently transporting these plentiful resources to end users," one of the 2 new orders says.
- A new paper from the Atlanta Fed helps confirm the notion that 2017's Republican-authored tax cuts, which have contributed to exploding deficits, brought partisan benefits. The paper explores how states that saw new limits on the ability to deduct state and local taxes fared. High local tax states tend to vote Democratic, and the paper finds evidence these states didn't fare as well under the new tax system. Republican leaning states got a 1.6% increase in lifetime spending due to the tax law, while Democrat-leaning states got a 1.3% bump. In the wealthiest 10% of households, Republican leaning households got a 2% increase, compared to 1.2% in Democrat-leaning states, the paper said.

Apr 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, pressured as U.S. crude stockpiles surged to their highest levels in almost 17 months amid record production and as economic concerns cast doubt over growth in demand for fuel.
- Gold edged lower, but was trading close to a two-week peak scaled in the last session as dovish U.S. and European central banks fanned concerns on economic slowdown and kept global bond yields and the dollar under pressure.
- London copper declined, as rising supply and risks of a global economic slowdown that could crimp metal demand cancelled out further progress in the trade talks between the United States and China, the world's biggest copper user.
- Chicago corn futures climbed for a second session as storms delayed planting in parts of the U.S. Midwest, although plentiful world supplies kept a lid on the market.

- As Trump signed a pair of executive orders to overhaul some environmental permitting rules and limit shareholder resolutions on climate and environmental risks, he singled out the Constitution pipeline. That's 1 of several major transmission lines delayed for years by reviews delegated to states, and Trump said New York and others are abusing their authority in order to slow the boom in US oil-and-gas production. "To fully realize this economic potential, however, the United States needs infrastructure capable of safely and efficiently transporting these plentiful resources to end users," one of the 2 new orders says.
- A new paper from the Atlanta Fed helps confirm the notion that 2017's Republican-authored tax cuts, which have contributed to exploding deficits, brought partisan benefits. The paper explores how states that saw new limits on the ability to deduct state and local taxes fared. High local tax states tend to vote Democratic, and the paper finds evidence these states didn't fare as well under the new tax system. Republican leaning states got a 1.6% increase in lifetime spending due to the tax law, while Democrat-leaning states got a 1.3% bump. In the wealthiest 10% of households, Republican leaning households got a 2% increase, compared to 1.2% in Democrat-leaning states, the paper said.
- Evercore ISI downgrades AmerisourceBergen to an in-line rating from outperform as the drug distributor grapples with slowing sales and profit growth at retail pharmacies, including its biggest customer Walgreens. Meanwhile, uncertainty looms around Amerisource's liability in ongoing opioid litigation and as it sees less benefit from high drug prices as the Trump administration prepares to crack down on rebates. "The near-term risks to terminal value are too great and in turn we await a period of clarity - may take a while," Evercore ISI says. Amerisource falls 5.5% while competitors Cardinal Health and McKesson both decline more than 1%.
- According to Donald Trump and others, the U.S. and China have made substantial progress in trade negotiations and analysts have said that a deal may be reached in the coming weeks. But "while the U.S. and China head towards a trade deal, it is unlikely to last for long as neither parties agree on their place within the global architecture," says Sebastien Galy, strategist at Nordea Investment. "Both see themselves as dominant." Any military conflict between the U.S. and China "would be very limited" and so "that leaves most of the conflict and cooperation to be decided by a series of temporary accords," he says.
- Nordic markets are tipped to open just lower Wednesday with IG calling the OMXS30 down 0.1% at around 1615. The risk market took a breather yesterday as equities were lower and bond yields declined, notes Danske Bank. Asian markets are also lower but mostly catching up with the decline in the U.S. and Europe, it adds. "Markets faced some headwinds from a new downbeat IMF outlook...the news of U.S. tariffs on $11 billion of EU goods, on Monday night, also weighed on risk sentiment." The ECB meeting, U.S. inflation, FOMC minutes and the EU meeting are due today. OMXS30 closed at 1616.56, OMXN40 at 1577.92 and OBX at 809.01.

Apr 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices moved little, supported by supply cuts by producer group OPEC and U.S. sanctions against oil exporters Iran and Venezuela, but pressured by expectations that an economic slowdown could soon dent fuel consumption.
- Gold prices inched down as the dollar firmed, but the metal remained near a two-week peak hit in the previous session as equities slipped on concerns over global growth and trade tensions between the United States and Europe.
- Copper eased from a one-week high hit the day before, pressured after the International Monetary Fund cut its global growth forecast and as the United States threatened to slap tariffs on hundreds of European goods.
- Chicago wheat futures fell for a fifth consecutive session, its worst losing streak since February, after a U.S. government report raised its estimate for world wheat inventories.
- The safe-haven yen remained in demand as investor caution prevailed due to fresh U.S.-Europe trade tensions and the International Monetary Fund's downgrade of its global economic outlook.

- Nordic markets are tipped to open just lower Wednesday with IG calling the OMXS30 down 0.1% at around 1615. The risk market took a breather yesterday as equities were lower and bond yields declined, notes Danske Bank. Asian markets are also lower but mostly catching up with the decline in the U.S. and Europe, it adds. "Markets faced some headwinds from a new downbeat IMF outlook...the news of U.S. tariffs on $11 billion of EU goods, on Monday night, also weighed on risk sentiment." The ECB meeting, U.S. inflation, FOMC minutes and the EU meeting are due today. OMXS30 closed at 1616.56, OMXN40 at 1577.92 and OBX at 809.01.
- The S&P breaks an eight-session winning streak as investors fret over the latest round of trade threats between the US and EU, while the IMF again cuts its world-wide economic growth forecast. DJIA slides 0.7% to 26150, the S&P falls 0.6% to 2878 and the Nasdaq declines 0.6% to 7909. Trade-sensitive Boeing and Caterpillar fall 1.5% and 2.5%, respectively. Utilities finish higher as investors seek defensive plays. Food and beverage companies are also a bright spot, with Monster Beverage up 3.1% and Campbell Soup 2.5% higher.
- World Trade Organization issued a split decision in ruling on complaint from Canada regarding US tariffs on its softwood lumber. A panel of WTO adjudicators upheld part of Canada's complaint, regarding antidumping duties the US slapped on softwood-lumber products, dealing with how the tariffs were calculated. However, the panel dismissed other complaints from Canada about the US methodology in calculating duties. The parties have up to 60 days to appeal. The complaint was filed in 2017, or soon after the Trump administration imposed a 20% of Canadian softwood lumber, used mostly in home construction. The tariffs have remained in place, and were not part of US-Canada talks toward a revamped Nafta. The US-Canada lumber dispute dates back decades.
- Anthony Roth, chief investment officer at Wilmington Trust, says the slowdown in the world economy forecast by the International Monetary Fund is not a major source of concern. "We're seeing a soft landing in global growth. That's in line with what we're seeing from the IMF, which has cut its forecasts to the low 3 percents. That's not a big deal in our opinion and is to be expected," Roth says, adding that "green shoots" in China's economy are a cause for optimism. The IMF today cut its forecast for global growth this year to 3.3% from 3.5% in January. Roth says Wilmington is overweight equities, the US and emerging markets but underweight Europe and Japan, where he sees significant economic and political strains.
- Major indexes are trading lower after the Trump administration released a list of some $11B worth of European goods it's considering placing tariffs on. The Dow falls 0.7%, the S&P 500 loses 0.5% and the Nasdaq declines 0.3%. "Both sides would be hurt by an escalating trade war, but again, the US has the edge with the stronger economy," says Arlan Suderman of INTL FCStone. "Europe's economy continues to struggle, and it can ill-afford any more stresses."
- Positive on how the U.S.-China trade talks will pan out? Investors could well use Apple as a proxy, says Dan Ives from U.S. investment bank Wedbush. Some 350 million iPhones could be upgraded in the next 12-18 months, he says, some 60 million-70 million of them in China. That's "why investors are so hypersensitive to any news on the U.S./China topic as it relates to Apple--especially with Huawei CFO backlash and demand doldrums a major worry in the region, as seen with the December earnings debacle." Wedbush has been bullish on Apple, whose shares have rebounded 27% to start the year outpacing the broader market.
- The U.S. on Monday announced an $11 billion list of tariffs it wants to impose on European goods and services in the long-running battle over subsidies to Airbus -- Europe has a counter-case against U.S. subsidies to Boeing. Citigroup says in a note "these tit-for-tat reactions are unlikely to materially change the market share (or profitability) for either party, though Airbus may end up selling a few less planes to the U.S. and a few more into Europe." Airbus shares down 1.8%.

Apr 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose to fresh 5-month highs as markets tightened amid OPEC-led supply cuts, U.S. sanctions against Iran and Venezuela, and escalating violence in Libya.
- Gold prices rose, hovering close to a more than one-week high touched in the previous session, as the dollar eased on weak U.S. economic data.
- Zinc prices fell on concerns that metal smelters may raise supply amid a surge in treatment charges while copper and other base metals climbed after the dollar declined.
- Chicago wheat prices slid 1 percent, dropping to their lowest since April 2 amid the improved condition of the U.S. winter crop and abundant world supplies.

- The price of gold is up 0.55% at $1,297.27 a troy ounce, although it remains close to its lowest level so far in 2019 after President Trump's criticism of Federal Reserve interest-rate policy in recent days. As well as calling for rate cuts, the president also advocated for quantitative easing, both of which would boost the U.S. dollar at gold's expense. Gold and the dollar tend to move in opposite directions. Elsewhere, China's central bank bought more gold--11.2 tons--for the fourth straight month in March, after not having done so for two years. Investors will be looking out for further White House remarks and any developments on trade and Brexit.

- Major indexes are trading lower after the Trump administration released a list of some $11B worth of European goods it's considering placing tariffs on. The Dow falls 0.7%, the S&P 500 loses 0.5% and the Nasdaq declines 0.3%. "Both sides would be hurt by an escalating trade war, but again, the US has the edge with the stronger economy," says Arlan Suderman of INTL FCStone. "Europe's economy continues to struggle, and it can ill-afford any more stresses."
- Positive on how the U.S.-China trade talks will pan out? Investors could well use Apple as a proxy, says Dan Ives from U.S. investment bank Wedbush. Some 350 million iPhones could be upgraded in the next 12-18 months, he says, some 60 million-70 million of them in China. That's "why investors are so hypersensitive to any news on the U.S./China topic as it relates to Apple--especially with Huawei CFO backlash and demand doldrums a major worry in the region, as seen with the December earnings debacle." Wedbush has been bullish on Apple, whose shares have rebounded 27% to start the year outpacing the broader market.
- The U.S. on Monday announced an $11 billion list of tariffs it wants to impose on European goods and services in the long-running battle over subsidies to Airbus -- Europe has a counter-case against U.S. subsidies to Boeing. Citigroup says in a note "these tit-for-tat reactions are unlikely to materially change the market share (or profitability) for either party, though Airbus may end up selling a few less planes to the U.S. and a few more into Europe." Airbus shares down 1.8%.
- A "free lunch" mentality has taken over both the right and left wings when it comes to fiscal-policy thinking, Bank of America's Ethan Harris says. "On the left, [modern monetary theory] is a recipe for runaway inflation," Harris says. "On the right, tax cuts have not come close to being revenue neutral" and have led to a huge increase in deficits. With the debate moving on from any sense of budget sustainability, it's now "harder to address the rising budget deficit and raises the risk of overheating."

Apr 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose to their highest level since November 2018, driven upwards by OPEC's ongoing supply cuts, U.S. sanctions against Iran and Venezuela, and strong U.S. jobs data.
- Gold prices rose to a one-week peak as the dollar edged lower, while investors awaited minutes of the U.S. Federal Reserve's March meeting later this week.
- London copper prices rose as much as 1 percent, snapping two days of declines as investors hoped for more stimulus measures in top metals consumer China and a key copper conference was set to begin in Chile.
- Chicago wheat futures slid for a third consecutive session with prices under pressure from improved outlook for the U.S. winter crop and ample world supplies.

Apr 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, with Brent slipping away from the $70 mark reached the previous day, pulled down by worries about progress in the U.S.-China trade talks.
- Gold slipped, but was trading above the 10-week low touched in the previous session, as the dollar rose against the yen on signs of progress in the U.S.-China trade dispute and strong U.S. economic data.
- Most London industrial metals rose, supported by news that the United States and China are edging closer to a trade deal after months of dispute.
- Chicago soybean futures edged lower but the market is poised for its biggest weekly gain since early January on expectations of a U.S.-China trade deal.

- If President Trump does nominate right-wing activist Stephen Moore and pizza executive and gold-standard enthusiast Herman Cain to the Fed, they could be around for quite some time. Of the two open Fed governor slots, one expires on Jan. 31, 2024, and the other expires on Jan. 31, 2030, the Fed says. Should either man make it to the Fed and stick it out, they could be exerting influence over monetary policy for years to come. If that happened, it would mark a change, as most Fed governors in recent years have tended to serve only a fraction of their terms. Regional Fed presidents have generally served for much longer tenures, and many have left only when faced with mandatory retirement.
- National Economic Council director Larry Kudlow says the Trump administration "will continue the process of auctioning off spectrum and letting the private companies run with it," an endorsement of "free market" policies that implicitly rebukes some Republican operatives' calls to allocate wireless airwaves differently. Kudlow's speech to a friendly crowd at wireless trade group CTIA's 5G summit in Washington will likely please the top cellphone carriers, which are always hungry for more licenses and are used to paying Uncle Sam to get them.
- While many investors are negative on international and emerging markets as trade disputes and growth concerns persist, David Kelly of JPM Asset Management says those areas will become more attractive in the case of a US-China trade resolution. Kelly says manufacturing stocks and emerging markets equities stand to substantially benefit from a deal with China as well as easing tensions between the two countries. "The growing expectation is that an agreement will be signed between the two," Kelly says. US stocks are trading mixed, with the Dow gaining 0.4% while the S&P 500 edges lower.
- The Trump administration is likely to finalize new rules for vehicle emissions in the "spring or early summer," EPA leader Andrew Wheeler says at the Washington Auto Show. The Trump administration has been planning to rollback higher vehicle efficiency mandates and eliminate California's power to set its own rules, moves California leaders have vowed they will sue to stop. Wheeler says he hopes to avoid years of uncertainty and, if there is a lawsuit, that it goes to court quickly. "Our goal, however, is still a 50-state solution," he says. "And I hope that when we come out with our final regulation, California takes a look at it, they see the underlying assumptions that we've made, they see the progress that we're making, and they realize that this is the best regulation for the country as a whole, and that they don't sue us."
- While speaking to reporters at the White House, President Donald Trump outlines how his administration now plans to deal with illegal immigration at the southern border. Trump says he will allow Mexico a "one year warning" to help with US concerns on illegal immigration, and if Mexico does not cooperate with the US, he will shut down the US-Mexican border and place tariffs on automobiles produced there. Such an approach would severely hurt the US pork industry because Mexico is America's biggest customer. Hogs are up 3.2%.
- President Trump has repeatedly lambasted the Fed for pursuing monetary policy tightening. So that's why a report from Axios he's getting ready to nominate former pizza executive Herman Cain to the Fed is hard to understand. Cain, who once served on the board of the Kansas City Fed, stands far from what Trump professes to want out of monetary policy. He wrote in a 2012 WSJ op-ed, amid a presidential campaign scuttled over sexual harassment accusations, that "the dollar should be defined...as a fixed quantity of gold." Gold-standard advocacy is about as hawkish as one can get and it also lies well outside of anything mainstream economists and current Fed officials think would be prudent. It remains to be seen if Cain would be willing to reverse his prior views in the way Stephen Moore, another possible Fed contender, has.
- President Trump's distaste for the Fed is unabated. In a tweet Thursday morning he said central bank policy actions have been "unnecessary and destructive" for the economy. At some level, the persistence of Trump's anger has faded into background noise for at least some central bankers. In remarks Wednesday evening, Minneapolis Fed leader Neel Kashkari said Trump can say whatever he wants about the Fed and its policy decisions. "My colleagues and I don't pay attention," to the president's views, Kashkari says.
- Farm groups are raising alarm over President Trump's threats to close the US-Mexico border, warning of calamity for agricultural producers already suffering from floods, trade conflicts and low prices. Closing the southern border would be "disastrous," according to The National Farmers Union, which said such a move would block exports to the nation's top trading partner by volume. Mexico bought nearly 38M tons of agricultural goods last year totaling $19B, according to USDA data. "While our members support border security, they are increasingly anxious about what 'closing the border' might mean for their farms and ranches," said American Farm Bureau Federation president Zippy Duvall. Farmers also worry a border closing would bar seasonal workers from jobs tending and harvesting this year's crops, exacerbating problems for the beleaguered agricultural sector.
- Cigna's plan to offer a way to cap patients' out-of-pocket costs for insulin gets only tepid support from Sen. Chuck Grassley (R., Iowa), who's conducting an investigation into the insulin prices. "Why couldn't this have been done years ago?" Grassley asks in a press release after Wednesday's close, adding it shouldn't take Congressional scrutiny to give consumers a fair price. He also notes he sent detailed inquiries on Tuesday to Cigna, CVS and UnitedHealth about the companies' financial relationships with insulin makers.

Apr 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were mixed, with Brent edging higher towards the psychologically important $70 level after easing in the previous session on data showing a surprise build in U.S. inventories.
- Gold gained, supported by an easing dollar as investors awaited progress on the ongoing Sino-U.S. trade negotiations after reports showed that both sides were nearing a deal.
- Zinc headed gains in most industrial metals on the Shanghai Futures Exchange (ShFE), as investors eyed ongoing trade talks between the world's top two economies.
- Chicago corn futures rose for a second session with prices supported by floods threatening to delay plantings in parts of the U.S. Midwest. 
- The yen eased and the euro held firm to the dollar as hopes of a trade deal between the United States and China lifted risk appetite globally, while the sterling gained after the UK parliament approved legislation to seek a Brexit delay.

- Cigna's plan to offer a way to cap patients' out-of-pocket costs for insulin gets only tepid support from Sen. Chuck Grassley (R., Iowa), who's conducting an investigation into the insulin prices. "Why couldn't this have been done years ago?" Grassley asks in a press release after Wednesday's close, adding it shouldn't take Congressional scrutiny to give consumers a fair price. He also notes he sent detailed inquiries on Tuesday to Cigna, CVS and UnitedHealth about the companies' financial relationships with insulin makers.
- As US-China negotiations continue, Stuart Kaiser of UBS tells WSJ tariffs and trade have taken a back seat to economic growth concerns in recent weeks. "In general we've seen the continuation of the easing of trade tensions," Kaiser says. "Lately markets have been more focused on economic growth than on trade headlines." In the case of growth rebounding in 2Q, Kaiser adds that US small-cap equities are attractive areas for investors that also show lower implied volatility.
- Canada Foreign Minister Chrystia Freeland said the best approach toward ratifying USMCA -- and one that Canada is prepared to follow -- is for all the trade pact's partners to move in a coordinated way. "That is the approach will be taking," said Freeland, when asked at media event about when Liberal government would introduce legislation to ratify and implement the trade deal. Last week, Freeland also tied Canadian ratification to the removal of US tariffs on Canadian-made steel and aluminum. Talks on a North American pact were finalized last fall, but none of the parties have ratified the deal. House Speaker Nancy Pelosi said this week the House won't consider a USMCA vote until after Mexico passes and puts in place labor law reforms.
- A report from Moody's says any government-led reforms which reduced the footprint of US government sponsored enterprises Fannie Mae and Freddie Mac would be credit negative for the companies. "If the market role of the GSEs is materially revised or diminished in the next several years, such a development could substantially change the competitive dynamics of housing finance," according to Moody's Senior Vice President Warren Kornfeld. Moody's says a recent presidential memorandum on federal housing finance reforms increased the possibility measures could be implemented without legislation, but added that the large number of stakeholders and uncertain impact means any changes over the next year or two will likely be modest.
- Agriculture futures on the CBOT are mostly higher with May wheat futures up 0.8% and corn futures up 0.5% despite President Donald Trump's reiterated threat to close the US-Mexican border if an immigration deal with Congress is not reached. "Congress must get together and immediately eliminate the loopholes at the border! If no action, (the) border, or large sections of (the) border, will close. This is a National Emergency!" implored Trump in a tweet this morning. Traders are banking on reports that Trump has backed off of these threats in private, but if he follows through it is expected to be very bearish for commodities overall.
- The Section 232 tariffs on steel and aluminum imports into the US signed into law last year by President Donald Trump have had little to no effect on curbing China's dominance of the world aluminum market via government subsidized production, according to Jean-Marc Germain, chief executive of aluminum producer Constellium NV. "Unfortunately, the tariffs have done nothing to stop China's market-distorting activities," says Germain, adding that the tariff did nothing to stop the Chinese government from providing subsidies allowing its aluminum production to grow 6% in 2018, even without being able to sell to US buyers. The Aluminum Association, of which Germain is a member, says that it hopes Trump addresses this issue with China during continuing negotiations for a trade deal this week.
- Bourses in Europe should open in the green Wednesday, supported by optimism over China, London Capital Group says. "Asian markets advanced to fresh seven-month highs overnight and European bourses look set to open higher amid further signs of recovery in China," it says. Renewed optimism over trade talks between China and the U.S. should also help, it adds.
- Risk assets have climbed the past half-hour as the FT reports that the US and China have gotten closer to a trade deal as talks are set to resume Wednesday in DC. The yen, which was rising as Japanese stock trading started, quickly reversed and is now lower on the day; the dollar is near Y111.50 versus a low of Y111.20. That's helped kickstart the country's equities, with the Nikkei up 0.8% and at session highs. Korea's Kospi has gone from flat to a 0.5% gain itself. S&P 500 futures have also moved to session highs, currently up 0.2%. Treasury yields have also climbed, currently at 2.50% versus 2.478% in late New York trading.

Apr 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose for a fourth day, with support from OPEC-led supply cuts and U.S. sanctions overshadowing an industry report showing an unexpected rise in U.S. inventories last week.
- Gold prices were steady as a weaker dollar offset pressure on the metal, which recovered from a four-week low in the previous session, while a rally in equities to multi-month highs capped bullion's safe-haven demand.
- Most London base metals advanced, after a senior U.S. official expressed optimism about progress in the scheduled trade talks with China this week, while positive China data also lent support.
- Chicago soybean futures gained for a third consecutive session, triggered by expectations of progress in trade talks between Washington and Beijing.
- The yen slipped and the Australian dollar rose as concerns over the U.S.-China tariff war receded further following a Financial Times report that the two sides have resolved most of the issues standing in the way of a trade deal.

- Fitch says it expects the US to raise the debt limit, despite difficulty with policy consensus. "The longest recorded federal government shutdown, at 35 days, ended with congressional agreement to fund the government through September 2019. President Trump's declaration of a national emergency in support of his bid for more resources for border security highlighted the difficulty in achieving policy consensus between the executive and both houses of Congress," Fitch says in affirming the US at 'AAA.' However, Fitch says it expects the debt limit to be raised before the so-called x date, when the Congressional Budget Office estimates the Treasury would exhaust its scope for extraordinary measures to finance itself without breaching the limit.
- June lean hog futures on the CME finish up 3.4% at 91.5 cents per pound, with the contract making up ground lost last week when expected Chinese pork buying did not materialize as strongly as anticipated. However, movement on the contract may be soon stymied again, with President Trump telling reporters in a press conference this afternoon that he would be willing to close the US-Mexican border if an immigration deal cannot be reached by Congress. Trump also acknowledged that such a closure would have a negative effect on the US economy. For pork, a border closure would deprive the US of its biggest customer. Through late March, 88,500 metric tons of US pork have been exported to Mexico this year. Meanwhile, cattle futures closed up 0.2%, at $1.19650 per pound.
- President Trump's threat to close the border with Mexico may threaten natural gas exports. "Potentially at risk from such a shutdown, in our view, is US natural gas exports to Mexico. According to the EIA, US exports of natural gas via pipeline hit 149B cubic feet in January 2019, up 23% from January 2017, and up almost 3x since January 2014," says Stewart Glickman at CFRA Research. "That amounts to almost 5 mcf/d of current pipeline exports. Factor in US LNG exports to Mexico as well (an extra 0.5 mcf/d), the combined 5.5 mcf/d totals a little more than 6% of US natural gas production, and could weigh on spot prices for producers."
- A USDA study concludes greenhouse-gas emissions from corn-based ethanol are 39% lower than those from regular gasoline. In addition, emissions from ethanol refined at natural gas-powered refineries are 43% lower than gasoline, the USDA says. Agriculture Secretary Sonny Perdue says the study supports the Trump Administration's push to make E15 gasoline--which includes higher ethanol content--available to consumers year-round. "I appreciate EPA Administrator Andrew Wheeler moving expeditiously to finalize the E-15 rule before the start of summer driving season," Perdue says. May corn futures on the CBOT are trading down 0.1%. If the rule change leads to higher ethanol demand, then it should be bullish for corn traders.
- While today's uptick in hog futures, currently up 2.6%, appears partly due to belief that the Chinese will still buy more US pork in reaction to African swine fever's damage to Chinese pork herds, it also may be partly due to traders doubting that President Trump will follow through with his threats to close the US-Mexican border. "There was more concern in yesterday's session over a potential closure of the border as Mexico is our largest pork customer, but it looks like traders are viewing that threat as less likely to materialize today," says independent analyst Dan Norcini. Trump has claimed on his Twitter feed there is a national emergency at the US-Mexican border, necessitating a border closure. "The wild card is Trump," Norcini says.

Apr 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose to fresh 2019 highs, supported by firm Chinese economic data that eased demand concerns, the possibility of more sanctions on Iran and further Venezuelan supply disruptions.
- Gold prices slipped to a more than three-week low as waning global economic slowdown concerns dented the precious metal's safe-haven appeal and lifted equities to multi-month highs.
- Copper fell for a second session on signs a protest at a Peruvian mine may end, easing supply concerns, and as the U.S. dollar rose. Other London metals markets fell except for nickel.
- Chicago corn futures rose for a second straight session, with planting delays in several key U.S. growing areas underpinning prices, although ample global supplies kept a lid on the market.

- A possible introduction of U.S. sanctions on Russia through the Chemical and Biological Weapons Act would be "much less damaging" to the Russian ruble than if the U.S. introduces sanctions under new version of the Defending American Security from Kremlin Aggression Act, introduced mid-February, according to Nomura's EM forex strategist Henrik Gullberg. The DASKAA bill "is much wider" and targets Russian banks, the country's cyber sector, new sovereign debt and individuals deemed to "facilitate illicit and corrupt activities, directly or indirectly, on behalf of [Russian President Vladimir] Putin," as well as proposing strict measures on Russia's oil and gas sector. However, the new bill "is likely to be slow moving."
- Despite evidence that the severity of African swine fever in China has only increased in the past month, lean hog futures on the CME fell 8.8% last week. One possible reason for the futures' weakness can be traced to President Trump's increasing calls to shut down the US-Mexican border, which would make US pork producers unable to sell to its biggest customer. "Our detention areas are maxed out & we will take no more illegals," Trump said in a tweet Saturday. "Next step is to close the border!" For US livestock traders, Trump's call for a closed border is a bridge too far. "For a solid year the administration has been picking a fight with our large pork customers, Mexico and China. Enough," says Dennis Smith of Archer Financials.
- The Russian ruble is likely to weaken in the coming six months, says ING, which sees USD/RUB trading at 67 into late summer. On Monday, USD/RUB rose to a three-week high of 66.02, adding to losses on the back of reports that the U.S. may introduce a second tranche of sanctions on Russia in response to last year's chemical poisoning of the Skripals in the U.K. These sanctions would be introduced under the Chemical and Biological Weapons Act and could focus more on broader trade links and U.S. bank financing to the Russian government. USD/RUB has since pared gains and is last down 0.3% at 65.54.

Apr 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, adding to gains in the first quarter when the major benchmarks posted their biggest increases in nearly a decade, as concerns about supplies outweigh fears of a slowing global economy.
- Gold prices inched up as the dollar backed off three-week highs, but gains in the metal were limited as equities rose on signs of progress in the Sino-U.S. trade talks and upbeat Chinese economic data. 
- Nickel rose, leading gains in the overall base metals markets, after data showed that stimulus measures in China, the world's biggest nickel consumer, are boosting the economy and as U.S. China trade talks are making progress.
- U.S. corn edged higher after suffering its biggest one-day drop in nearly three years in the previous session on pressure from plentiful supplies.
- A surprise improvement in Chinese factory activity supported the yuan and Australian dollar, and provided a broader boost to investors' risk appetite, giving the dollar a lift against the safe-haven yen.

- All three major stock indexes are trading higher as the S&P 500 is poised to finish the quarter with its best gains since 2009. The Dow gains 0.5%, the S&P 500 gains 0.5% and the Nasdaq gains 0.7%, with tech stocks leading the way. Advanced Micro Devices adds 1.8%, Micron Technology gains 5% and Intel rises 1.2%. Meanwhile, trade talks between the US and China are ongoing as market participants weigh uncertainty over tariffs and Brexit.
- Oil prices tick up Friday morning, shrugging off the latest tweet from President Trump calling for OPEC to raise production in order to keep a lid on prices. Brent crude, the global oil benchmark, was trading up 0.3% at $68.05 a barrel on London's Intercontinental Exchange early morning. West Texas Intermediate futures, the U.S. oil standard, were up 0.61% at $59.66 on the New York Mercantile Exchange. "Very important that OPEC increase the flow of Oil. World Markets are fragile, price of OIL getting too high. Thank you!" Mr. Trump wrote on Twitter Thursday afternoon, initially sending prices south. But Warren Patterson, head of commodity strategy at ING Bank, said he expects OPEC and its production allies "will largely ignore these calls from the U.S. president and will remain committed to returning the market to balance."
- Oil futures are higher in Asian trading after finishing little changed in Thursday's global selling as the market is about to end its best quarter since early this decade in surging more than 25%. Of course, that's after the worst quarter in years in 4Q and crude remains more than 20% below last year's high. Crude fell in European trading Thursday before rebounding in U.S. action amid Trump's latest tweet to OPEC members to pump more. After the huge down then up the past two quarters, chances are 2Q is going to be much-more sanguine. May WTI is up 0.4% at $59.51 and June Brent is 0.3% higher at $67.31.
- News President Trump plans to name right-wing activist Stephen Moore to become a Fed governor has drawn nearly universal criticism from both left-leaning and conservative economists. Some have made the case, however, that however problematic Moore's views and relationship to facts might be, he would be just one of many Fed officials. In a Twitter thread, William Luther, a professor at Florida Atlantic University and an associate of the libertarian Cato Institute, warns Moore would have more power than many think. He notes the key parameters of the Fed's rate-control regime is actually set by the Board of Governors. There are two more governor vacancies to fill, and if they're like Moore, it could have a real effect on interest-rate policy, Luther tweets.
- Oil prices continued to edge down Thursday afternoon in the wake of another tweet from President Trump calling on the Organization of the Petroleum Exporting Countries to boost production in order to keep a ceiling on crude prices. "Very important that OPEC increase the flow of Oil. World Markets are fragile, price of OIL getting too high. Thank you!" Mr. Trump wrote on Twitter Thursday. Brent crude, the global benchmark, was down 1.1% at $66.50 a barrel, while West Texas Intermediate was down 1% at $58.81 a barrel. Oil prices have risen by more than 20% since the start of the year on the back of OPEC-led production curbs.

Mar 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose on the back of ongoing OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, putting crude markets on track for their biggest quarterly rise since 2009.
- Gold steadied, but was headed for its worst month since August 2018 predominantly on stronger dollar and equities, while palladium bounced back after three straight sessions of sharp selloffs.
- Most base metals advanced, with London copper heading for its first quarterly gain since the end of 2017, as hopes of progress in U.S.-China trade talks and low inventories in some metals lent support.
- U.S. soybean futures edged higher but the oilseed was poised to record its biggest monthly fall in seven months, as fears of a prolonged trade war between Washington and Beijing pressured prices

- Oil prices continued to edge down Thursday afternoon in the wake of another tweet from President Trump calling on the Organization of the Petroleum Exporting Countries to boost production in order to keep a ceiling on crude prices. "Very important that OPEC increase the flow of Oil. World Markets are fragile, price of OIL getting too high. Thank you!" Mr. Trump wrote on Twitter Thursday. Brent crude, the global benchmark, was down 1.1% at $66.50 a barrel, while West Texas Intermediate was down 1% at $58.81 a barrel. Oil prices have risen by more than 20% since the start of the year on the back of OPEC-led production curbs.
- WSJ reports China is offering foreign technology firms better access to the country's fast-growing cloud-computing market, but some analysts are reticent to believe China will follow through on trade promises. "The markets met the news with a yawn," Arlan Suderman of INTL FCStone says. "I don't expect (China) to live up to promises made, for that is their track record, but they want a deal to change the narrative." The US and China begin their next round of trade negotiations today in Beijing. The Dow gains 0.3%, the S&P 500 rises 0.4% and the Nasdaq adds 0.4%.
- The current impasse in the Brexit resolution is likely to play a part in the current downward movements in government bond yields, says David Page, senior economist at AXA Investment Managers. "Given the prominence attached to Brexit in the latest [U.S.] FOMC press conference, we suspect that uncertainty over the Brexit process is contributing to demand for safehaven assets," he says. Although he notes that U.K. gilt yields have dropped by more than 20 basis points to below 1.00% in the last week, this is an underperformance compared to the 24 basis-point drop in U.S. Treasury yields to 2.36%, while German 10-year Bund yields have fallen by almost 20 basis points to -0.09%. Yields fall as bond prices rise.
- Centene CEO Michael Neidorff downplays worries about the future of the Affordable Care Act and some Democrats' plans for universal government health care. He tells WSJ regarding the ACA "they've been trying to do something to it ever since Trump got in ... they may make modifications to it, but it's not going to go away." He points to the enormous cost of providing government health coverage for all Americans: "I don't think Medicare for all is going to happen. I think it's political fodder." Centene is down 7% to $51.03.

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."