Forex & Commo Market News

Feb 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices hit their highest levels since November last year, lifted by OPEC-led supply cuts, U.S. sanctions against Iran and Venezuela, and hopes that the Afro-American trade dispute may soon end.
- Gold prices rose to their strongest level in more than two weeks as the dollar weakened on hopes the United States and China are nearing a trade deal, while palladium hit a record high.
- Shanghai base metals rose, buoyed by optimism over the demand outlook, after Chinese lending increased and Sino-U.S. trade talks continued.
- U.S. wheat futures fell to multimonth lows on Friday, despite broad strength in commodity and equity markets as grain traders monitored bearish technical signals as well as falling prices in the global cash wheat market.

- The safe-haven Japanese yen "is the night's top performer," says RBC. The dollar falls by 0.2% against the yen to 110.28 as U.S.-China trade talks make little progress. Adding further uncertainty, President Trump could declare a national emergency to get full funding for his Mexico border wall. President Trump is at the same time due to sign the spending bill, which included just a fraction of what he asked for to be spent for the wall. The signing of the spending bill would avoid another U.S. government shutdown.
- Nordic markets are tipped to edge lower Friday with IG calling the OMXS30 down 0.5% at around 1555. "Asian equities are trading in the 'red' this morning after a sour U.S. session hit by the retail sales miss, stories that the U.S. and China remain far apart in trade negotiations and Chinese PPI figures falling short of expectations," says Danske Bank. Danske expects markets to stay alert to news from Beijing, as high-level trade talks continue. "Also, we believe focus will remain on the risk of a new partial U.S. government shutdown." Still, at this stage, it seems President Donald Trump will sign the spending bill Congress has passed, avoiding another shutdown. OMXS30 closed at 1562.36, OMXN40 at 1528.71 and OBX at 777.86.
- TransCanada expects the Nebraska state supreme court to reach a decision on the state's controversial approval of the Keystone XL pipeline expansion by the end of March, says CEO Russ Girling. Opponents have said the pipeline's route through the state was wrongfully approved. Meantime, the company has received approval from 80% of the state's affected landowners for construction easements through their territory, Girling says. TransCanada is coordinating with the US justice department to appeal other blocks to the pipeline, including one in Montana, and won't start construction until all approvals are granted. Shippers have so far claimed all the space available on the pipeline, he adds, in a call with analysts.
- Amazon's decision to scrap its planed HQ2 in New York could boost Nashville's economy, SunTrust says. Analysts think Amazon will redirect to Nashville some of the roughly 25,000 jobs it was planning to bring to the Big Apple. That should be good for banks like Pinnacle Financial, FB Financial, First Horizon and Regions Financial, SunTrust says.
- DA Davidson analysts think Amazon's decision to cancel its plans to open a headquarters in New York City amid criticism from politicians could be a bluff rather than a final decision, as a way to bring the government back to the table. "We have a difficult time believing the company would have invested so much time and energy in selecting a second city for a new headquarters (in this case announcing two/three - Northern Virginia, New York City, and Nashville) only to throw in the towel on the first significant blowback," analysts say. "We will continue to monitor the situation as, in our view, the company may not, in fact, be pulling the plug on New York City."
- The news that Amazon is ditching plans for a major office in New York will likely disappoint New York-centric real estate investors and developers, who expected the deal would further cement the city's status as a tech hub. Earlier this week, Vornado Realty Trust CEO Steven Roth told analysts on a conference call that if "the political climate in New York blows this deal, it would be the stupidest damn thing I've ever seen. And that's what I think." He said on the call he was fairly confident Amazon would open the office, despite the recent pushback on the deal.
- Shares of real estate company JBG Smith Properties are rising after Amazon said it's abandoning its plans to build a new headquarters in New York City amid backlash from local politicians and it will continue to add jobs at its other headquarters location in Northern Virginia. Back in November, JBG Smith Properties agreed to lease 500K square feet to Amazon in Arlington and sell property that offers up to 4.1M square feet of development rights. JBG Smith shares, which were trading lower prior to the announcement, are up 0.9% to $40.33.
- Most miners are in positive territory after upbeat Chinese trade data bolstered metal prices. Chilean copper miner Antofagasta is the sector's top riser, up 0.7%, as the price of copper gains 0.9% and other base-metal prices also climb. Chinese exports jumped 9.1% versus an expected decline of 3.2%, while imports fell 1.5%, better than expectations of a 10% drop. "Copper climbs for the second day as China's export-import data highlights surprise gains and President Donald Trump is reportedly considering a delay to the deadline to secure a trade deal," analysts at commodity equity brokerage S.P. Angel note.

Feb 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude oil prices hit 2019 highs above $65 per barrel, spurred by OPEC-led supply cuts and a partial shutdown of Saudi Arabia's biggest offshore oil field.
- Gold traded in a tight $3 range as concerns over an economic slowdown supported prices for the safe-haven metal and a firm dollar kept a lid on gains.
- London copper prices slipped after China's factory-gate price growth missed expectations and as investors awaited the outcome of Sino-U.S. trade talks in Beijing.
- Chicago soybean futures ticked higher, although the market was set for a third week of decline with pressure on prices from China cancelling U.S. soybean cargoes.

- DA Davidson analysts think Amazon's decision to cancel its plans to open a headquarters in New York City amid criticism from politicians could be a bluff rather than a final decision, as a way to bring the government back to the table. "We have a difficult time believing the company would have invested so much time and energy in selecting a second city for a new headquarters (in this case announcing two/three - Northern Virginia, New York City, and Nashville) only to throw in the towel on the first significant blowback," analysts say. "We will continue to monitor the situation as, in our view, the company may not, in fact, be pulling the plug on New York City." Amazon shares are down 0.6% to $1630.15.
- The news that Amazon is ditching plans for a major office in New York will likely disappoint New York-centric real estate investors and developers, who expected the deal would further cement the city's status as a tech hub. Earlier this week, Vornado Realty Trust CEO Steven Roth told analysts on a conference call that if "the political climate in New York blows this deal, it would be the stupidest damn thing I've ever seen. And that's what I think." He said on the call he was fairly confident Amazon would open the office, despite the recent push back on the deal.
- DC-area defense and tech companies ask whether Amazon might accelerate its hiring plans in the region after dumping a planned regional headquarters in New York. Recruitment specialist Glassdoor lists 186 job openings by Amazon in the DC region, including four directly related to Pentagon work and more tied to cybersecurity and data analytics. Defense-company executives have been split on the effect of Amazon's expansion to as many as 25K workers, with some fearing a tougher labor market while others argue it could attract a broader talent pool.
- Amazon cancels plans to build a major campus in Queens despite it polling well in New York state. High-profile opposition from some politicians, including US Rep. Alexandria Ocasio-Cortez and state Sen Mike Gianaris, contrasted with strong support from Gov. Andrew Cuomo and NYC Mayor Bill DeBlasio, who offered up to $3B in tax incentives to Amazon. Cuomo and DeBlasio said the campus would diversify the economy and generate $27B in revenue over 25 years. WSJ reported Tuesday the Siena Research Institute found 56% of voters statewide supported the project, while 36% were opposed. City residents favored the project 58%-35%, while the least enthusiastic group across racial, political, economic, age and regional divisions were upstate voters--who were split 46%-46%. The poll, taken Feb. 4-7, included 778 registered New York state voters and had a margin of error of +/- 4.3%.
- The Canada Pension Plan Investment Board fund will continue to invest "steadily and prudently" in China, although it is "alive to any potential emerging risks," CEO Mark Machin tells WSJ. Despite tensions stemming from China-US trade negotiations and the Chinese government's anger over Canada's extradition arrest of a senior Huawei executive on behalf of the United States, Machin says there are investment opportunities in the Asian country for "patient long term investors." CPPIB is Canada's largest pension fund with C$368.5B of net assets, of which about 8% are invested in China.
- Most miners are in positive territory after upbeat Chinese trade data bolstered metal prices. Chilean copper miner Antofagasta is the sector's top riser, up 0.7%, as the price of copper gains 0.9% and other base-metal prices also climb. Chinese exports jumped 9.1% versus an expected decline of 3.2%, while imports fell 1.5%, better than expectations of a 10% drop. "Copper climbs for the second day as China's export-import data highlights surprise gains and President Donald Trump is reportedly considering a delay to the deadline to secure a trade deal," analysts at commodity equity brokerage S.P. Angel note.
- Nordic markets are seen opening slightly higher Thursday with IG calling the OMXS30 up 0.3% at around 1563. "U.S. equities ended yesterday in green on the back of not least Trump further opening the door for an extension of the trade truce with China if the parties were close to a "real deal"," says Danske Bank. Meanwhile, comments from Senator Marco Rubio that he intends to submit a bill to tax corporate buybacks limited the equity rally, Danske adds. "This morning most Asian equity indices are trading flat in a fairly eventless session as markets await news from Beijing on trade talks." OMXS30 closed at 1558.58, OMXN40 at 1527.30 and OBX at 777.86.
- Airbus, now out with 2019 guidance, is poised to once more end the year behind rival Boeing. Airbus says it will hand over 880 to 890 planes this year after delivering 800 in 2018. Boeing shares have taken off in recent weeks after the company promised to build as many as 905 airliners this year, an industry record, up from the 806 high it set last year. Airbus also promises EUR4 billion in free cash flow before mergers and acquisitions and customer financing last year. Boeing has promised as much as $17.5 billion operating cashflow in 2019.
- Cisco says it dodged significant fallout from the trade fight between the US and China as it posted strong F2Q growth in sales of its networking gear even as it raised prices to deal with the spat. The Trump administration's 10% tariffs on Chinese-produced goods went into effect in late September, and hit a collection of switches and routers, some of which Cisco makes in China and imports to the US. "We have navigated them incredibly well and I think the results would tell you that they didn't have much of an impact," Cisco chief executive Chuck Robbins tells WSJ. The White House has threatened to boost tariffs further March 1 to 25% if the two countries don't resolve their differences. Robbins believes the US and China are making progress, and that the deadline could be pushed out if they are close to an agreement. "I remain optimistic, probably more optimistic today than I was 30 days ago," he says.
- Despite a recent push from politicians to rein in buybacks, Cisco's board of directors has approved a $15B increase to the authorization of its stock-repurchase program, bringing the total remaining authorized amount to $24B. The company also boosts its quarterly dividend by 2c to 35c. "Our increased dividend and share repurchase authorization show confidence in the strength of our ongoing cash flows and reinforce our commitment to returning capital to our shareholders," Cisco's CFO Kelly Kramer says. Earlier today, Senator Marco Rubio joined a long list of politicians in criticizing buybacks, saying on Twitter the tax code "discourages (the) best aspect of (the) free market by giving buybacks a deferral advantage over dividends or investment," and that he will soon file a bill to eliminate that
advantage.
- Attempts to revive and extend expired tax breaks have reached a "dead end for now," said Senate Finance Chairman Charles Grassley (R., Iowa.) The breaks include tax credits for biodiesel and for short-line railroads that lapsed at the end of 2017. Grassley said the Senate can't act until it gets a House bill, because tax bills must start in the House.

Feb 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose buoyed by hopes that potential progress in the latest Sino-U.S. tariff talks would improve the global economic outlook, and as China's trade figures including crude imports beat forecasts.
- Gold prices edged higher as soft U.S. inflation data raised expectations that the Federal Reserve will pause rate hikes this year, while investors were looking for developments in trade talks between Washington and Beijing.
- London copper prices moved higher for a second session after better-than-expected trade data from top copper consumer China, while investors awaited the outcome of high-level Sino-U.S. trade talks in Beijing.
- Chicago soybean futures slid for a second straight session although easing trade tensions between Washington and Beijing kept a floor under the market.
- The dollar held near three-month highs versus the euro supported by sustained strength in core U.S. inflation and weaker-than-expected data out of Europe.

- Cisco says it dodged significant fallout from the trade fight between the US and China as it posted strong F2Q growth in sales of its networking gear even as it raised prices to deal with the spat. The Trump administration's 10% tariffs on Chinese-produced goods went into effect in late September, and hit a collection of switches and routers, some of which Cisco makes in China and imports to the US. "We have navigated them incredibly well and I think the results would tell you that they didn't have much of an impact," Cisco chief executive Chuck Robbins tells WSJ. The White House has threatened to boost tariffs further March 1 to 25% if the two countries don't resolve their differences. Robbins believes the US and China are making progress, and that the deadline could be pushed out if they are close to an agreement. "I remain optimistic, probably more optimistic today than I was 30 days ago," he says.
- Despite a recent push from politicians to rein in buybacks, Cisco's board of directors has approved a $15B increase to the authorization of its stock-repurchase program, bringing the total remaining authorized amount to $24B. The company also boosts its quarterly dividend by 2c to 35c. "Our increased dividend and share repurchase authorization show confidence in the strength of our ongoing cash flows and reinforce our commitment to returning capital to our shareholders," Cisco's CFO Kelly Kramer says. Earlier today, Senator Marco Rubio joined a long list of politicians in criticizing buybacks, saying on Twitter the tax code "discourages (the) best aspect of (the) free market by giving buybacks a deferral advantage over dividends or investment," and that he will soon file a bill to eliminate that
advantage.
- Attempts to revive and extend expired tax breaks have reached a "dead end for now," said Senate Finance Chairman Charles Grassley (R., Iowa.) The breaks include tax credits for biodiesel and for short-line railroads that lapsed at the end of 2017. Grassley said the Senate can't act until it gets a House bill, because tax bills must start in the House.
- European shares close higher, with the STOXX Europe 600 index ending up 0.6% at 364.97, as the prospect of a breakthrough in U.S.-China trade talks lifts risk appetite, boosting equities globally. Spanish stocks underperformed, however, after lawmakers blocked the Socialists' 2019 budget bill, raising the chances that Prime Minister Pedro Sanchez's leadership will be challenged by snap elections. Spain's Ibex 35 index ends flat as a result, while Germany's DAX rises 0.4% and France's CAC 40 closes up 0.4%. U.K. stocks outperform, benefiting from a weaker pound and gains for miners, with the FTSE 100 index ending up 0.8%, while Italy's FTSE MIB closes up 0.9%. Dutch lender ABN Amro is the biggest pan-European faller after it said fourth-quarter net profit plunged 42% as it booked impairment charges.
- The Dow is up 0.4% as stocks are supported by optimism about ongoing trade negotiations between the US and China, as well as reports that President Trump will likely sign a border-security deal that would keep the government open. The S&P 500 rises 0.3%, led by gains in the energy group. Of the 11 sectors, all but utilities are trading higher. After beating earnings and revenue expectations, Hilton Worldwide is leading the index, with shares up 6.3%.
- Nordic markets are set to open slightly higher Wednesday with IG calling the OMXS30 up 0.5% at around 1557. Stock markets continued to rally overnight in Asia, driven by rising optimism that the U.S. and China will strike a trade deal fairly soon and that it will drive a recovery in the global economy, says Danske Bank. "U.S. President Donald Trump indicated he could let the ceasefire deadline of Mar. 1 slide a little if a real trade deal with China was close," says Danske Bank. "He also said he expects to meet with Chinese President Xi Jinping to close the deal at some point." Trump also played down the risk of another government shutdown, Danske adds. OMXS30 closed at 1549.41, OMXN40 at 1514.55 and OBX at 784.03.

Feb 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as producer club OPEC said it had cut supply deeply in January and as U.S. sanctions hit Venezuela's oil exports.
- Gold firmed slightly as investors held onto the safe-haven metal while seeking more clarity on Sino-U.S. trade talks, and as volatility in the dollar provided further support.
- London copper prices rose heading for their first session of gain in five, after U.S. President Donald Trump said he could see the deadline for a trade agreement with top metals consumer China being pushed back.
- U.S. soybean futures inched back towards a five-day high hit the day before, buoyed by hopes of deal to end a trade dispute between Washington and Beijing.

- US stocks open higher after top lawmakers reach an agreement in principle to fund border security that could prevent another partial government shutdown. The S&P 500 is up 0.9% and the Dow is up 1% as investors also wait to see whether the US and China will make progress in trade negotiations this week. "Trade talks with China are ramping up again, but with little to no news coming out (of) Beijing to assess the progress at this point," says Arlan Suderman of INTL FCStone, adding that volatility could increase as March 1, the deadline for both a deal between the US and China and the debt ceiling increase, approaches.
- The Chinese copper market needs to generate more scrap domestically in order to fulfill its copper needs -- some 250,000 metric tons worth, according to Colin Hamilton with BMO Global Commodities Research. This need for copper comes from China's increasing bans on imported foreign scrap, while Chinese copper demand continues to grow at a projected 3%, or 425,000 tons. "Over the years, various parts of the copper value chain have contributed to providing for Chinese growth, and the key debate at this time each year is what will have to step up," says Hamilton. "This year is no different." The copper 3-month contract on the London Metal Exchange is currently trading at $6,115.50 per ton, off nearly 3% from a year-high of $6,289.50 hit last week.
- Venezuela's Defense Minister Vladimir Padrino calls US-led efforts to deliver humanitarian aid a show while reiterating the military leadership's support for embattled President Nicolas Maduro. Padrino said on state television that calls to allow aid into the country are an attempt to undermine the administration. He makes the comments at a military base where he told soldiers to sign a pledge opposing sanctions and foreign meddling in Venezuela. "What we are doing here is to show our complete rejection against the empire," he says of the US. Maduro's support from military leadership has been key to his ability to remain in power amid an economic and political crisis.
- The Trump administration's appetite for tariffs has added uncertainty to an already vexing inflation environment. Contrary to the president's claims China is paying these tariffs, these taxes fall on firms within US borders and they're either passed on to consumers in the form of higher prices or they eat up profit margins. Inflation has been low but some at the Fed have long worried tariffs would give way to opportunistic price hikes, potentially goosing inflation levels. Nomura chief US economist Lewis Alexander says right now he sees tariffs adding about 16 basis points onto the overall level of CPI. "If the Trump administration increases the tariff rate on $200 billion of Chinese goods imports in March, we expect additional inflationary pressure of about 12 basis points on US consumer prices," he adds.
- S&P Global Ratings says it sees evidence of a substantial pre-Brexit inventories surge by companies selling into and out of the UK. "The ongoing risk of a no-deal Brexit poses significant risks to cross-border logistics chains and companies have triggered contingency plans in response. This implies upward pressures on working capital, which could have an adverse impact on free cash flow and debt reduction plans," S&P senior director Gareth Williams says. Lack of certainty around the course of Brexit and what it might mean for cross-border trade and logistics has triggered a short-term surge in inventories, warehouse relocations and supply chain adjustment, S&P says. Costs are mostly modest in relation to total cash flow, the ratings agency says, but higher working capital requirements imply greater credit risk at a time when European economic growth is under pressure.
- Grains futures on the CBOT have started the week trading lower, as the market has shifted its attentions from the milquetoast WASDE report released by the USDA Friday to the outcome from a new round of trade talks between the US and China that start today--as well as the potential for another US government shutdown starting this Friday. March soybean futures are down 0.8%, while wheat has fallen 0.7% and corn futures are off 0.5%. Unless big news hits the market today, traders will continue to trade off of the disappointing WASDE, according to analysts.

Feb 12 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSD DJ Reuters)
- Oil prices rose amid OPEC-led supply cuts and U.S. sanctions against Iran and Venezuela, although analysts expect surging U.S. production and concerns over economic growth to keep markets in check.
- Gold prices held steady as investors kept a cautious stance ahead of a fresh round of Sino-U.S trade talks, while a firmer dollar capped gains for the bullion, which was drawing support from global economic slowdown worries.
- London zinc lost more ground, falling for a third consecutive session to its lowest in more than two weeks on concerns over U.S.-China trade dispute and slowing global economic growth.
- U.S. soybean futures gained, rebounding from a three-week low touched in the previous session, as concerns over dry weather curbing yields in top exporter Brazil supported the market.

- S&P Global Ratings says it sees evidence of a substantial pre-Brexit inventories surge by companies selling into and out of the UK. "The ongoing risk of a no-deal Brexit poses significant risks to cross-border logistics chains and companies have triggered contingency plans in response. This implies upward pressures on working capital, which could have an adverse impact on free cash flow and debt reduction plans," S&P senior director Gareth Williams says. Lack of certainty around the course of Brexit and what it might mean for cross-border trade and logistics has triggered a short-term surge in inventories, warehouse relocations and supply chain adjustment, S&P says. Costs are mostly modest in relation to total cash flow, the ratings agency says, but higher working capital requirements imply greater credit risk at a time when European economic growth is under pressure.
- Grains futures on the CBOT have started the week trading lower, as the market has shifted its attentions from the milquetoast WASDE report released by the USDA Friday to the outcome from a new round of trade talks between the US and China that start today--as well as the potential for another US government shutdown starting this Friday. March soybean futures are down 0.8%, while wheat has fallen 0.7% and corn futures are off 0.5%. Unless big news hits the market today, traders will continue to trade off of the disappointing WASDE, according to analysts.
- Media companies that own local television stations may have much to look forward to as the next election cycle starts to heat up. Meredith, which owns 17 stations, reports $66M in political-spot advertising in its fiscal 2Q, a period that ended in December--up from a mere $2.1M a year earlier. Spending related to "competitive elections on the federal, state and local levels," the company says, was particularly robust in the Phoenix, Las Vegas, St. Louis and Kansas City markets.

Feb 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by around 1 percent as drilling activity in the United States, the world's largest oil producer, picked up and financial markets were pulled down by trade concerns.
- Gold prices eased as uncertainties around U.S-China trade tensions made the dollar buoyant, taking sheen off the metal's safe-haven appeal even as investors were worried about a slowdown in global economic growth.
- Shanghai zinc fell more than 3 percent, the first trading session after a week-long national holiday, tracking a drop in London prices in the previous session.
- Chicago wheat futures slid for a third session in four as ample global supplies weighed on the market, although lower plantings in the United States kept a floor under the market.

- London stocks rise 0.2%, or 13.27 points, to 7106.85 as traders stay cautious after downbeat sessions in the U.S. and Asia. "After yesterday's big declines, it's been a subdued start for markets in Europe this morning as investors take stock with respect to the next moves in the U.S.-China trade talks," says Michael Hewson at CMC Markets. "The news that President Trump and Xi [Jinping] won't be meeting before the March 1 deadline for an increase in tariffs, has raised concerns." Energy utility SSE pares early losses to rise 0.2% after forecasting lower-than-expected fiscal 2019 adjusted earnings per share.
- The dollar's higher trading on Friday could be attributed to President Trump's announcement that he won't meet with Chinese counterpart Xi Jinping to discuss trade relations before March 1, when U.S. tariffs increase on $200 billion worth of Chinese exports. "This has renewed speculation that the U.S. and China will not be able to complete a new trade deal that would prevent U.S. tariffs from increasing on March 2, and has driven a risk-off move," MUFG says. The dollar benefits from acting as a safe-haven in a risk-off environment.
- Senate Finance Committee Republicans offered a quick rejection Thursday after President Trump mused aloud to reporters about changes to the $10,000 cap on state and local tax deductions that was part of the 2017 tax law. The committee "won't be revisiting" that issue, said Michael Zona, spokesman for Chairman Charles Grassley (R, Iowa). Many Democrats want to repeal the cap, though the benefits of that would go overwhelmingly to high-income households.
- Indications from the Trump Administration that a trade deal with China may not be complete by March 1 has grains futures on the CBOT down today. March wheat futures are currently down 2.4%, while soybeans futures are down 1.1% and corn futures are down 0.9%. US National Economics Council director Larry Kudlow said during an interview on Fox Business that the two sides have "miles to go" before a deal is reached. "It now looks less likely that we will see a trade deal with China before tariffs get ratcheted up to 25% from the current 10% on March 2nd, although Kudlow's comments may also be a negotiating ploy to pressure China," says Arlan Suderman of INTL FCStone.
- Philadelphia's city council votes 9-5 against a bill that would have banned certain gifts from drugmakers to doctors, and would have required pharmaceutical sales representatives to register with city government. Councilman Bill Greenlee, a Democrat, introduced the bill last year as a tool to fight the opioid-addiction crisis, blaming drugmakers for influencing doctors to overprescribe them. Industry groups including PhRMA and BIO lobbied against the measure, saying it would impose onerous requirements and stifle companies' interactions with doctors. Councilwoman Maria D. Quiñones-Sánchez, who voted against the measure, said city government should do more itself to combat the opioid crisis before regulating companies.
- The Dow is down 1.3% and the S&P 500 is down 1.4% as investors continue to weigh trade tensions between the US and China. Earlier, White House economic adviser Larry Kudlow said in an interview with Fox Business Network that the two countries were still far from striking a deal. Meanwhile, CNBC reported that a meeting between President Trump and China's Xi is "highly unlikely" before their March 1 deadline.

Feb 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets fell, pulled down by worries over a global economic slowdown, although OPEC-led supply cuts and U.S. sanctions against Venezuela provided crude with some support.
- Gold held steady on worries that a prolonged Sino-U.S. trade war could worsen global economic slowdown, but a strong dollar put bullion on track for its first weekly loss in three.
- London copper prices ticked lower for a second session as concerns over world economic growth and Washington-Beijing trade tensions weighed on the market.
- Chicago soybean futures were little changed with the market set for a second consecutive weekly loss on concerns over a prolonged Washington-Beijing trade war and slowing global economic growth.

- Philadelphia's city council votes 9-5 against a bill that would have banned certain gifts from drugmakers to doctors, and would have required pharmaceutical sales representatives to register with city government. Councilman Bill Greenlee, a Democrat, introduced the bill last year as a tool to fight the opioid-addiction crisis, blaming drugmakers for influencing doctors to overprescribe them. Industry groups including PhRMA and BIO lobbied against the measure, saying it would impose onerous requirements and stifle companies' interactions with doctors. Councilwoman Maria D. Quiñones-Sánchez, who voted against the measure, said city government should do more itself to combat the opioid crisis before regulating companies.
- The Dow is down 1.3% and the S&P 500 is down 1.4% as investors continue to weigh trade tensions between the US and China. Earlier, White House economic adviser Larry Kudlow said in an interview with Fox Business Network that the two countries were still far from striking a deal. Meanwhile, CNBC reported that a meeting between President Trump and China's Xi is "highly unlikely" before their March 1 deadline.
- US jobless claims fall to 234K from 253K a week earlier, compared to expectations of 225K, but BMO Capital Markets senior economist Jennifer Lee says the weekly figures should be taken with a grain of salt. "The weekly numbers are so incredibly volatile...I think we should be wary given the noise coming from the government shutdown," she says, adding that the broader trend is that the labor market remains quite strong. "Regardless of the volatility in financial markets, for the all-important consumer it's about how strong the job market is," Lee says.
- A gauge of layoffs across the U.S. known as jobless claims fell by 19,000 to a seasonally adjusted 234,000 last week, the first full work week since the partial government shutdown ended, according to new data from the Labor Department. A measure of the number of federal employees that applied for unemployment benefits fell in the week ended Jan 26 but remained higher than normal; federal worker data is reported with a one-week lag. Overall jobless claims rose sharply during the last week of the shutdown, signaling federal contractors, which would be included in the headline number, could have applied for benefits in larger numbers.
- Today's Bank of England meeting is set to have increased significance following the dovish path recently set out by various central banks globally, including the Federal Reserve, the European Central Bank and the Reserve Bank of Australia, says Mohammed Kazmi, portfolio manager at UBP. The BOE is expected to emulate peers and signal dovish bias given the deteriorating global growth backdrop since the last meeting, as well as looming Brexit risks in the run-up to the end-March deadline. Mr. Kazmi also expects the BOE to deliver a cautious economic outlook in light of the recent weakness in domestic data including the Purchasing Managers' Index as uncertainty continues to weigh on the economy.

Feb 07 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices slipped after U.S. crude inventories rose and the country's production held at record levels, but OPEC-led supply cuts and Washington's sanctions against Venezuela supported markets.
- Gold fell to a more than one-week low, pressured by a stronger dollar, but worries over slowing global economic growth and the spectre of another U.S. government shutdown kept the safe-haven metal above the key $1,300 level.
- The Australian dollar languished near a two-week low on rising bets that interest rates would most likely come down this year amid heightened growth risks at home and abroad.
- London nickel fell, extending its pullback from a more than four-month peak reached the day before on supply concerns, while copper retreated after a three-day rise amid a stronger dollar.
- U.S. soybean futures edged lower, retreating for the first time in five sessions, as concerns about lower yields of South American crops eased on good rain forecast.

- Today's Bank of England meeting is set to have increased significance following the dovish path recently set out by various central banks globally, including the Federal Reserve, the European Central Bank and the Reserve Bank of Australia, says Mohammed Kazmi, portfolio manager at UBP. The BOE is expected to emulate peers and signal dovish bias given the deteriorating global growth backdrop since the last meeting, as well as looming Brexit risks in the run-up to the end-March deadline. Mr. Kazmi also expects the BOE to deliver a cautious economic outlook in light of the recent weakness in domestic data including the Purchasing Managers' Index as uncertainty continues to weigh on the economy.
- Count Nvidia and Qualcomm, down 32% and 21% respectively over the past 12 months, among the potential winners of the US push to invest in next-generation technologies like 5G wireless and artificial intelligence, two key areas of competition with China. For Qualcomm, it would be the second assist in as many years from the White House after President Trump last year blocked Broadcom's hostile bid for Qualcomm on national-security grounds. The US had singled out China and 5G technology as concerns. Broadcom, now based in the US, could itself benefit from the renewed domestic push for 5G. Look for Texas Instruments, Analog Devices, and MaxLinear among others that stand to gain. Nvidia closed up 2%, Qualcomm gained 0.7%, Broadcom added 2.3%, Texas Instruments gained 4.1%, Analog Devices rose 2.1%; and MaxLinear closed 11% higher.
- The Trump administration's proposal to change Medicare Part D's rebate rules is "a very good move," Novartis CEO Vas Narasimhan tells WSJ in an interview. Novartis is still evaluating the 123-page proposal, but for now the company doesn't expect it will cut its list prices in response since there would no longer be a real distinction between list and net prices. "Our expectation is that any rebates we have today would now flow through to the patient," via reduced out-of-pocket costs, Narasimhan said. "In effect, that means our current list prices fall to our current net prices in these plans." He adds that if the Medicare rebate rule is adopted, it won't necessarily change how private insurance plans handle rebates absent other government action, he said. Rather, "I think we would end up with two separate worlds," he said.
- GM says higher commodity costs--partly stemming from the effect of US tariffs on steel and aluminum--hit its bottom line by more than $1B last year. The company expects costs of another $1B in 2019, though executives says it's difficult to forecast. "It's a pretty volatile environment," GM CFO Dhivya Suryadevara tells analysts. Spot prices for steel and aluminum have eased some, she says, but prices for other raw materials, like palladium, have increased. GM's operating profit for the year fell 8%, to $11.8B. Suryadevara says moves in spot prices for those commodities tend to hit GM's bottom line after a roughly three-month lag. GM gains 1.5% to $39.88.
- The grains complex is showing little movement to begin trading, with neither last night's State of the Union speech by President Trump or this morning's news of a soybean sale to China doing much to propel the market. According to analysts, Trump's speech did little to persuade or inform anyone--and the USDA announcements of soybean export sales were expected by the market after the declaration that the Chinese would buy 5M more metric tons of soybeans from US growers for storage in state reserves last week. As a result, traders see little reason to act ahead of any surprises that come out of the WASDE report. Wheat futures are up 0.3%, soybeans are down 0.1%, and corn futures are down 0.4%.

Feb 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged higher for the first time in three sessions, although concerns over the outlook for the global economy capped gains.
- Gold prices held firm after U.S. President Donald Trump in his State of the Union speech vowed to build a border wall and gave little clarity over the ongoing trade discussions with China, with the bullion's gains offset by a firmer dollar. 
- London copper rose for a third straight session as trade tensions between Washington and Beijing ease, although concerns over slowing factory activity in China limited gains.
- Chicago soybean futures ticked lower with pressure from South American harvest gathering pace, although losses were limited by top importer China buying U.S. cargoes.

- As drugmakers face rising political pressure for price increases, they're increasingly saying they don't realize much benefit from list-price hikes. Instead, drugmakers say their average US net prices are flat or declining because they pay bigger rebates to middlemen including pharmacy-benefit managers. In the past, drugmakers cited need to fund R&D to justify pricing. Companies including J&J, Pfizer, Novartis and Allergan raised list prices on many drugs in January but say their average net pricing is flat or down. JPMorgan says in note this week: "Net pricing is expected to be negative for most companies in 2019," due to lower price hikes, higher rebates and an increase in drugmakers' share of funding of Medicare's prescription benefit. New products and volume growth should offset the price pressure, firm says.
- The ISM non-manufacturing index fell to 56.7 in January from 58.0 in December, suggesting the partial government shutdown weighed on growth last month. "This is a six month low for the series, but still well in expansion territory," says Jon Hill of BMO Capital Market, adding that effects of the government shutdown on results are "particularly salient going into the State of the Union tonight, with any potential read through into the probability the federal government shuts down again in less than two weeks."
- Coming off "extremely small" US soybean exports to China in the fourth quarter, Archer Daniels Midland CEO Juan Luciano says he believes trade issues between the two countries to improve enough this year to return US-to-China soybean shipments closer to normal. "We are expecting the trade dispute in China to resolve during the year,"  Luciano says on ADM's 4Q earnings call. The US and China may continue discussing other trade-related issues, but when it comes to soybeans, "we're still counting on sizable exports from the US in Q4," he says.
- Oil markets were quick to attribute recent moves in the price of oil to a crisis in Venezuela as the US government makes its most aggressive move yet to take down the Socialist government that's held power in the oil-rich nation ever since Hugo Chavez won the presidency 20 years ago. But a quick resolution may not happen, and JBC Energy says investors should look beyond the Venezuela story. "While Venezuela is taking headlines left, right, and center, we should not forget about developments elsewhere in the world, with data available for December continuing to show a mixed picture from a demand-side perspective," JBC says, noting important developments in Brazil and Asia.

Feb 05 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- U.S. oil prices inched up, buoyed by expectations of tightening global supply due to U.S. sanctions on Venezuela and production cuts led by OPEC.
- Gold inched up in thin trading as investors made purchases after prices touched nearly one-week lows in the previous session, but improved appetite for riskier assets capped bullion's gains.
- The dollar held on to recent gains against its major peers, supported by a recovery in investors' risk appetite, which gave an overnight boost to U.S. yields.
- London zinc rose to its highest since early July amid concerns over shortages due to falling stocks and delays to new capacity in top producer China.
- Chicago soybean futures were little changed after closing marginally higher in the last session amid Chinese buying, but ample global supplies kept a lid on the market.

- The dollar could react to U.S. President Donald Trump's State of the Union address, which is due late on Tuesday in Washington, says Commerzbank, adding: "the market is desperate for new momentum." Focus is likely to be on any indications on how U.S.-China trade negotiations are going, it says. Any positive developments could be positive for the dollar. The dollar is slightly higher at 1.1423 per euro. The ISM non-manufacturing report will also be watched at 1500 GMT. The headline composite indicator is expected to edge down to 57 in January, according to economists polled by WSJ, slightly lower than 57.6 in December.
- Venezuela's already battered economy will enter into an even bigger crisis if the turmoil isn't resolved soon. The country is already struggling with food and medicine shortages, as well as rampant crime and hyperinflation. Now, fuel supplies could dry up within a week following US sanctions on the state oil company, according to oil workers and diplomats. That includes diesel that is largely used for national power generation. "This is fast turning into a war economy," said Evanán Romero, a former deputy energy minister.
- US sanctions on Venezuela's state oil company PdVSA appear to be already having an impact, with production well below one million barrels a day, according to oil union officials and people closely tracking the operations of the firm. That would be a more 10% drop from December. J Alexander Blackman, an executive at US energy company Standard Delta LLC, says sharp declines are "not out of the question largely due to the challenges of sustaining production and the geopolitical impact of redirecting the flow of crude and other products."
- President Trump's State of the Union speech, scheduled to be given in front of a joint session of Congress tomorrow night, is expected to spark upward movement in grains prices if the President talks more about the status of a US-China trade deal before March 1. "We expect more air time will be given to a positive US/China trade deal potential in Tuesday's State of the Union Address," says AgResource. "This will underpin CBOT breaks." Trump spoke some on a deal during an interview with CBS aired Sunday, intimating that the two sides were getting closer to a resolution. "We have a good chance to make a deal," Trump said.

Feb 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were stable, largely maintaining gains from the previous session as OPEC-led supply cuts and U.S. sanctions against Venezuela provided the market with support.
- Gold prices slipped as risk aversion waned amid some signs of progress in U.S.-China trade talks, while a firm dollar kept bullion under pressure.
- London copper prices slid, easing for a second session amid pressure from concerns over slowing factory activity in the world's biggest industrial metals consumer China.
- Chicago soybean futures eased after climbing to their highest in more than seven months in the last session, but were still supported by Chinese purchases of U.S. beans in the wake of Sino-U.S. trade talks.

- The partial government shutdown contributed to the increase in the January unemployment rate, the Labor Department says. The agency highlighted that the number of unemployed on temporary layoff climbed by 175,000, largely attributable to federal government worker layoffs. The unemployment rate is a household survey measure; employment and earnings, measured using the establishment survey, did not show any "discernible impacts" from the shutdown, the Labor Department says.
- Livestock futures finish trading lower, with lean-hog futures down 3.2% to 60.225 cents per pound and live cattle futures down 1.4% to $1.26300. The extreme cold weather in the Midwest has slowed down consumer demand for meat in the short term. Longer term, traders have doubts that the US-China trade deal can be finalized before the March 1 deadline passes, or that the demand from China for US pork will be as strong as previously believed.
- A Bloomberg report saying pizza magnate and failed presidential candidate Herman Cain is under consideration for a Fed governor slot is curious. Cain's views on monetary policy are very out of step with President Trump and his post-election conversion to a love of easy money and a disdain for rate rises. Cain was once chairman of the Kansas City Fed's board of directors, overseeing one of the Fed's most hawkish regional bank branches. Cain also attacked the Fed and extolled the virtues of "sound money" in a 2012 WSJ op-ed, even going so far as to endorse a return to the gold standard. These aren't the views of a man who thinks the Fed has been erring with rate rises.
- USDA unveils a list of dozens of organizations set to receive funding for trade promotion activities as part of the government's effort to blunt the impact of ongoing trade disputes. The biggest winner of the 57 chosen organizations is the American Soybean Association, slated to receive nearly $22M to identify and access new export markets. The US Meat Export Federation and US Grains Council follow behind, receiving close to $18M and $14M, respectively. The announcement fulfills a promise by USDA to award $200M to help increase agricultural exports at a time when foreign tariffs on goods from soybeans to pork to cheese continue to roil agricultural markets, pressuring prices and incomes for farmers.
- Lean hog futures on the CME are down 2% in trading as doubts about the Chinese appetite for pork are spreading among traders. "There's more questions than answers right now," says Mike Zuzolo of Global Commodity Analytics--adding trader sentiment is that Chinese demand for pork is starting to slip, which is significant because Chinese demand is what the industry is relying on, as domestic demand alone isn't enough to support the industry. Hog futures' performance also ties into growing doubts the Trump administration can reach a trade deal with China by March 1, thusly introducing tariffs on goods including US pork.
- Secretary of Agriculture Sonny Perdue will be traveling to New Orleans to deliver a speech at the National Cattlemen's Beef Association Convention tomorrow, according to the USDA. Perdue will also be visiting the Port of New Orleans as part of the trip. This is the latest in the Trump Administration's outreach to US agricultural professionals, coming approximately 2.5 weeks after Trump himself addressed farmers at the American Farm Bureau convention. So far in trading today, live cattle futures are up 1%, while hog futures are down 2%.
- Valero Energy, the second-largest American importer of Venezuelan crude last year, is no longer purchasing oil from the country due to US sanctions, the refiner says. The company previously relied on Venezuela for about 20% of the heavier, more sulfurous crude it ran at its refineries, said Gary Simmons, a senior vice president. He added that the company has put alternatives in place and is looking to maximize its intake of lighter, less sulfurous crude, which makes up most of the oil the US produces. However, Valero still has "some holes to fill in our supply plan," Simmons said
- US CEO Dave Burritt says he's confident the Trump Administration won't abandon the tariff on imported steel any time soon. President Trump has come under increasing pressure from US manufacturers paying more for steel and key trading partners now selling less steel in the US to roll back the 25% duty. But Burritt told analysts "We don't see the administration blinking on any of this. We have a high degree of confidence that the tariff won't be pulled back." While the 10-month-old duty has driven down steel imports and allowed domestic steel companies to raise their prices, demand for steel has weakened in recent months.

Feb 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady, torn between hopes the United States and China could soon settle their trade disputes and new data raising fresh concerns over China's economic slowdown.
- Gold fell as investors sought riskier assets amid optimism the United States and China may reach a trade deal, although a pause in U.S. interest rate hikes kept bullion on track for a second weekly increase.
- The Australian dollar fell versus the greenback.

- Most London base metals prices dropped after a closely watched private survey showed that factory activity in China, the world's top metals consumer, shrank by the most in almost three years last month.
- Chicago soybean futures bounced back, recouping last session's losses amid heightened hopes for a trade deal between Washington and Beijing, although the oilseed was still on course to post a weekly decline.

- Lean hog futures on the CME are down 2% in trading as doubts about the Chinese appetite for pork arespreading among traders. "There's more questions than answers right now," says Mike Zuzolo of Global Commodity Analytics--adding trader sentiment is that Chinese demand for pork is starting to slip, which is significant because Chinese demand is what the industry is relying on, as domestic demand alone isn't enough to support the industry. Hog futures' performance also ties into growing doubts the Trump administration can reach a trade deal with China by March 1, thusly introducing tariffs on goods including US pork.
- Secretary of Agriculture Sonny Perdue will be traveling to New Orleans to deliver a speech at the National Cattlemen's Beef Association Convention tomorrow, according to the USDA. Perdue will also be visiting the Port of New Orleans as part of the trip. This is the latest in the Trump Administration's outreach to US agricultural professionals, coming approximately 2.5 weeks after Trump himself addressed farmers at the American Farm Bureau convention. So far in trading today, live cattle futures are up 1%, while hog futures are down 2%.
- Valero Energy, the second-largest American importer of Venezuelan crude last year, is no longer purchasing oil from the country due to US sanctions, the refiner says. The company previously relied on Venezuela for about 20% of the heavier, more sulfurous crude it ran at its refineries, said Gary Simmons, a senior vice president. He added that the company has put alternatives in place and is looking to maximize its intake of lighter, less sulfurous crude, which makes up most of the oil the US produces. However, Valero still has "some holes to fill in our supply plan," Simmons said
- US CEO Dave Burritt says he's confident the Trump Administration won't abandon the tariff on imported steel any time soon. President Trump has come under increasing pressure from US manufacturers paying more for steel and key trading partners now selling less steel in the US to roll back the 25% duty. But Burritt told analysts "We don't see the administration blinking on any of this. We have a high degree of confidence that the tariff won't be pulled back." While the 10-month-old duty has driven down steel imports and allowed domestic steel companies to raise their prices, demand for steel has weakened in recent months.
- Raytheon says Saudi Arabia accounts for some 5% of sales expectations this year, and doesn't expect calls from some US lawmakers for sanctions on arms sales to have an impact. CFO Toby O'Brien says on investor call that half of these are for defensive equipment, which retains strong legislative support. Lockheed Martin said this week that it expects to secure a multi-billion deal from the Kingdom for Thaad missile defense systems, where Raytheon is a big supplier, in the first quarter.
- The USDA released its weekly export sales totals for the week ending Dec. 20 this morning -- the first export sales data to come out of the USDA since the shutdown began last month. Exports of soybeans totaled 2.405M metric tons for the week, almost doubling analyst estimates. Corn sales totaled 1.753M tons, also beating analyst estimates. Wheat totaled 526,300 tons and soymeal totaled 427,400 tons, both within analysts' estimated ranges. Soyoil totaled 13,700 tons, below projections. The USDA will issue a report combining a months-worth of sales on Feb. 22, with the regular reporting schedule then resuming.
- Jobless claims among federal workers clocked in at 14,739 in the week ended Jan. 19, a decrease from the previous week and low compared with previous government shutdowns. Federal employees file under a separate program than regular state programs, which are captured in the headline jobless claims number. Claims among federal employees peaked at 225,000 in the wake of the 1995-96 government shutdown and near 70,000 in the 2013 shutdown. Both those shutdowns, by comparison, had more than twice as many federal employees eligible for unemployment benefits.
- "Sorting the value from the value traps" is key right now for Chinese stock investors, says Investec with the market trading below 10-year averages on book and forward-earnings bases. "Future growth looks set to be increasingly driven by consumer demand and services, led primarily by the private sector." That as while "headwinds remain in the form of trade war concerns," the investment firm thinks that "Trump's actions could even speed up reforms in globally relevant Chinese companies, making China more competitive in the process."
- Fed Chairman Jerome Powell said a second government shutdown could have a lasting economic effect largely because it could trigger a loss of confidence in the government. Last week's agreement to reopen the government left open the possibility of another shutdown in February if lawmakers are unable to strike a deal on immigration.

Jan 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose for a third day, pushed up by lower imports into the United States amid OPEC efforts to tighten the market, and as Venezuela struggles to keep up its crude exports after Washington imposed sanctions on the nation.
- Gold prices held near eight-month highs hit in the previous session, as the dollar weakened after the U.S. Federal Reserve paused its monetary tightening cycle, putting bullion on course for its fourth straight monthly gain.
- Most base metals rose after the U.S. Federal Reserve said it would be patient with interest rate hikes, although a second straight monthly contraction in manufacturing activity in top metals consumer China capped gains.
- Chicago wheat futures rose for a second session with the market set to end the first month of 2019 in the positive territory as cold weather in the United States threatened production and supplies dwindled in the Black Sea region.

- Fed Chairman Jerome Powell said a second government shutdown could have a lasting economic effect largely because it could trigger a loss of confidence in the government. Last week's agreement to reopen the government left open the possibility of another shutdown in February if lawmakers are unable to strike a deal on immigration.
- The tariff exclusion process for the Section 232 tariffs on steel and aluminum imports into the US is extremely backlogged, especially since none were processed during the 35-day government shutdown, according to a report from the Mercatus Center at George Mason University. The report says exclusion requests are taking too long to process, with over half of all requests still pending a decision -- and no transparent way for companies to check the status of their claims. Additionally, allowing exclusion requests is said to cast doubt on the need for tariffs at all, with Chinese imports being the most approved by the Commerce Department. The 10% tariff on steel imports and 25% tariff on aluminum imports were ordered by President Trump last year.
- In a conference call after quarterly results were released, Alibaba addressed the issue of tightening regulations over internet businesses in China. "We have witnessed the government becoming more adept at calibrating the interplay between regulation and economic growth," said Vice Chairman Joe Tsai. Among the regulations is a new e-commerce law that places a stricter registration requirements for online merchants, a headache for some small companies that previously didn't take those steps. According to Tsai, the law has created uncertainness among merchants about what the consequences could be. But new tax relief measures targeting small businesses, which includes lower corporate tax rate for certain small companies, is likely to offset such concerns, he said.
- Market concerns have grown over fallouts on global companies from the trade battle between China and the US. Alibaba's Vice Chairman Joe Tsai made an effort to ease those fears, highlighting that the company's exposure to tangible effects of tariffs is small. "For our businesses in e-commerce, consumer services, entertainment and cloud computing, the primary growth driver is not exports but domestic consumption and corporate transformation," he said in a conference call after the company released fiscal 3Q earnings.
- A trade group representing biotech seed makers says that any US-China trade deal is "inadequate" without reforms to the way China reviews and approves genetically engineered crops. The Biotechnology Innovation Organization calls upon the Trump administration to push for change to China's agricultural regulatory system, which US seed manufacturers have long called opaque and costly. While Beijing in January approved five new biotech crops for import to the world's second-largest economy, the trade group cites Informa research estimating that delays in Chinese approval generally have cost the US $7B in foregone gross domestic product, and $4.6B in wages. Since so many US crops are exported to China, its approval is crucial before seed companies can widely release new varieties.
- Nordic markets are set to open slightly higher Wednesday with IG calling the OMXS30 up 0.2% at around 1506. "U.S. equities ended yesterday slightly lower and Asian stocks are mixed this morning ahead of the U.S.-China trade talks that will start in Washington today and tonight's Fed decision," says SEB. Apple Inc. rose almost 6% in post-trading after earnings beat expectations, while in the U.K., the House of Commons backed Theresa May's bid to return to Brussels to re-open the Brexit negotiations and revise the Irish backstop. "The future remains very uncertain but our best guess is that if the talks with the EU fail, the Commons will again reject the deal on Feb. 13." OMXS30 closed at 1502.72, OMXN40 at 1471.70 and OBX at 775.62.
- Base metals edged higher in Asian trading following overnight gains on hopes from the US-China trade talks which are to start later Wednesday. But trading sentiment remains cautious as investors await the outcome of the discussions. Three-month copper futures on the LME are up 0.3%, after notching a gain of around 1% in the previous session. Zinc and aluminum are each up 0.2%.
- With the next round of US-China trade talks set to begin later today, Citi sees a window of opportunity for a trade deal between two countries such as reducing the bilateral trade deficit, granting market access to US exports, and some commitments on intellectual property protection. However, recent developments with Huawei and US allies, as well as the upcoming decision of the Department of Commerce on potential export controls on emerging technologies, additional trade and investment restrictions are likely even if there is a preliminary US-China trade deal, the bank adds.
- Tokyo rubber prices have bounced back slightly in early trading paring Tuesday's losses. Commodity prices have broadly gained with the US-China trade talks due to begin in Washington today improving market sentiment. The Tocom six-month ribbed smoked sheets contract is currently trading up Y3.6/kg at Y180.5/kg.

Jan 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose as concerns about supply disruptions following U.S. sanctions on Venezuela's oil industry outweighed pressure from a darkening outlook for the global economy.
- Gold prices edged up to hit their highest since May 2018, supported by uncertainty over U.S.-China trade relations and expectations the Federal Reserve will keep rates on hold.
- The pound tried to find its footing after sliding on fresh concerns about the possibility of a "no-deal" Brexit, while the dollar eased ahead of the Federal Reserve's policy decision.
- Nickel prices rose sharply to their strongest in around three months, as the commodity used to make stainless steel tracked ferrous metals higher.
- Chicago wheat futures were little changed, trading near last session's lowest in almost two weeks as a lack of demand for U.S. supplies added pressure on the market.

- Tokyo rubber prices have bounced back slightly in early trading paring Tuesday's losses. Commodity prices have broadly gained with the US-China trade talks due to begin in Washington today improving market sentiment. The Tocom six-month ribbed smoked sheets contract is currently trading up Y3.6/kg at Y180.5/kg.
- Commerzbank says the Reserve Bank of Australia won't be raising interest rates for as long as the US and China remain embroiled in a trade dispute. The worry is that China's demand for Aussie raw materials will drop sharply in the event that the trade row rumbles on, hurting the economy. So, Commerzbank expects the RBA will be on hold until fall at least as talks continue and the effect of any agreement is known. "However, those hoping for a more cautious tone from the RBA next week could be disappointed," it says. The RBA will likely point to increased risks for the global economy, like other central banks, but the domestic economy still justifies a neutral stance. The AUD/USD is at 0.7150 early in Asian trading.
- In announcing the toughest sanctions yet against oil-rich Venezuela, the Trump administration tried to say it won't hit the pocketbooks of American consumers via higher gas prices. After all, US refiners use a relatively small amount of Venezuelan crude, and could easily replace it with oil from elsewhere. But "while that may be true in the short run, if this goes on for an extended period it will get harder and harder to replace Venezuelan heavy crude oil," says Phil Flynn at Price Futures in Chicago. Markets seem to be already betting on this, with WTI up 2.6% today at $53.35/bbl, while RBOB gasoline futures are up 2.4% at $1.38/gallon.
- Whirlpool, which says it's successfully raising prices, is up 6% after starting the day negative. Whirlpool said 4Q price increases had more than offset higher raw-material costs, many of which are linked to tariffs. Whirlpool has increased pricing across its regions. "North America was particularly positive on the pricing sides," CEO Marc Bitzer says.
- Democrats are unlikely to just accept Republicans' proposed technical corrections to the GOP's 2017 tax law, said Andrew Grossman, chief tax counsel for Democrats on the House Ways and Means Committee. These provisions, many sought by businesses, could be the subject of a hearing or heavy negotiations, he said at a tax conference in Washington.
- US sanctions on Venezuela state oil company PdVSA announced Monday could damage its Houston-based subsidiary, refiner Citgo, which may benefit other refiners. "The Citgo situation presents intriguing potential upside," say analysts at Tudor Pickering. "If the profits are moved to blocked accounts, and if Citgo cannot import Venezuela barrels, then some sort of impact on operations seems like a distinct possibility." This, they say, would be welcome news for US Gulf Coast and Midwest refining markets, where utilization and gasoline inventories currently stand at or near new 5-year highs. "This could help names like MPC, PSX, PBF, and VLO."
- Beijing and Washington will likely agree to stop slapping tariffs on each other and buy more time to sort out their thorny issues, says Zhang Yansheng, a researcher with a think thank affiliated with the state planning agency. "I'm cautiously optimistic about a tariff ceasefire because neither U.S. nor China can afford additional tariffs," Zhang says at an official briefing. Current tensions surrounding Chinese technology firms, such as Huawei, represents "irrational thinking" between the two countries, he says. After all, the U.S. can't shut its door to all Chinese tech firms which are rapidly becoming stronger, he says.
- The Stoxx Europe 600 rises 0.5%, or 1.87 points, to 356.25 as traders shrug off mixed signals on U.S.-Chinese trade talks. The DAX gains 0.1% and the CAC 40 is up 0.4%. Spreadex notes trade talks between Washington and Beijing later this week come as the U.S. has hit Chinese smartphone giant Huawei with criminal charges for issues including alleged theft of technology. "Understandably this has cast doubt on the outcome of Vice Premier Liu He's trip to Washington," the spread-betting firm's Connor Campbell says. "Despite this latest twist, the European markets avoided a blanket decline as Tuesday got underway." German online fashion group Zalando is a notable pan-European faller, down 4% after reported downgrades from Wells Fargo and SocGen.

Jan 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices crept up after Washington imposed sanctions on Venezuelan state-owned oil firm PDVSA in a step set to severely curb the OPEC member's crude exports to the United States.
- Gold prices hit a more than seven-month high as investors shun riskier assets on worries over escalation in Sino-U.S. trade tensions after the U.S. Justice Department charged China's Huawei Technologies Co Ltd with fraud.
- The yen strengthened versus its peers, as investors took refuge in safe-haven assets.
- London aluminium prices rose, rebounding from a 2.8 percent plunge in the previous session, with investors' focus returning to inventories, U.S.-China trade talks and the upcoming U.S. Federal Reserve meeting.
- Chicago soybean futures lost ground, falling for a second straight session with concerns over escalating U.S.-China trade tensions and improved weather in Brazil weighing on the market.

- Closely watched US economic data from the Bureau of Economic Analysis that were scheduled for release this week and next will be delayed because of the partial government shutdown. Indicators include fourth-quarter gross domestic product, personal income and expenditures, and trade. Government officials are struggling to sort through a backlog of work resulting from the 35-day, partial shutdown. BEA added it "has not yet set new release dates for those economic reports." The bureau plans to set new release dates for other reports that were slated to come out during the shutdown.
- A group of Senate Democrats is urging US regulators to examine more closely whether financial institutions are prepared for climate-change risks. The senators sent a letter to the Federal Reserve and two other regulators urging them to follow the lead of other countries' central banks in determining if banks and other financial institutions could be hurt by falling asset and collateral prices or other climate effects. "US regulators must join their international peers in ensuring the financial system is resilient to climate-related risks," the senators write. The effort doesn't enjoy a bipartisan push, leaving it with limited leverage to compel regulators to act.
- With trade negotiations, a Federal Reserve meeting, the jobs report and key corporate earnings all lying ahead this week, JPMorgan Funds' David Kelly says investors are unlikely to make any big moves. "There's a lot of uncertainty and a lot to unpack," Kelly says, though the temporary end of the government shutdown "takes one uncertainty off the table." As the March 1 deadline approaches, Kelly says he doesn't anticipate a breakthrough in US-China trade talks this week. "I hope markets retain a sense of cynicism about this," he adds. The Dow is down 1.6%, while the S&P 500 has fallen 1.4%.
- A meeting between China's Vice Premier Liu He and US officials including US Trade Representative Robert Lighthizer in Washington on Wednesday will be closely watched by the grains market to see if there's any confirmation of increased Chinese agricultural purchases. Until traders have some idea of what to expect from this weeks' talks, prices on the CBOT are expected to either remain steady or trend lower. "These talks are expected to be 'determinative' and by nearly all accounts, the two sides are close to an agreement for China to boost its buying of US goods (especially agricultural products)," says Tomm Pfitzenmaier of Summit Commodity Brokerage -- who forecasts that prices could also follow a "buy the rumor, sell the fact" pattern this week instead.
- Export sales data that was not released during the government shutdown is expected to come out this week as the USDA's Foreign Agricultural Service recovers from the 35-day lapse of funding, the department says. "We're generating all of our information," says Conchita Powell, management analyst with the Export Sales Department. According to Powell, the department will send out information clarifying its schedule for releases today, but expects to have up-to-date export sales out this week. The release of the sales figures could cause significant movements in grains futures. "The largest sticker shock, in our opinion, will be the release of a month's worth of USDA FAS 24--hour announcements," says Terry Reilly of Futures International.
- Aluminum prices on the London Metal Exchange are down nearly 2% at $1,884 per metric ton, in reaction to news over the weekend that President Trump had officially removed sanctions on United Co. Rusal, as well as two other companies associated with Russian oligarch Oleg Deripaska. The sanctions had prevented US buyers from being able to procure aluminum supplies from Rusal, the second-largest aluminum producer in the world. While the removal of sanctions is not expected to change the world supply-demand outlook, aluminum prices are still expected to fall. "There is some potential for stocks which were previously held off-exchange (as the LME/CME would not accept their delivery) now becoming visible to the market," says BMO Global Commodities Research.
- United Co. Rusal shares are up 9.4% at HK$3.26 -- their highest price since the plummet that followed U.S. sanctions last April, after the U.S. Treasury Department lifted sanctions on three companies linked to Oleg Deripaska, including United Co. Rusal. London three-month aluminum futures were last down 1.02% at $1,885.50 a metric ton in midmorning trading in London. That broader aluminum price move was relatively muted, says Alastair Munro a broker at Marex Spectron in a note. Aluminum prices are also affected by an uptick in on-warrant aluminum stocks and Chinese media reports of rising aluminum-products output from China during December.
- Gains for Hong Kong-listed shares of Rusal could be limited today even with the US lifting sanctions on the aluminum heavyweight. As signs were pointing to such a move happening, the stock has jumped 22% during its current 7-day winning streak. Shares are at their best level since early April, when the sanctions were first levied. Within 2 weeks, Rusal's stock crumbled 72%. But shares have more than doubled since.

Jan 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by 1 percent after U.S. companies added rigs for the first time this year, a signal that crude output may rise further, and China, the world's second-largest oil user, reported additional signs of an economic slowdown.
- Gold prices held steady, near a seven-month peak scaled in previous session, on hopes the U.S. Federal Reserve will keep interest rates unchanged during its two-day policy meeting later in the week.
- The dollar eased versus most of its peers as investors turned their attention to the Federal Reserve policy meeting.
- London aluminium prices fell after the United States formally lifted sanctions on Russian aluminium producer United Company Rusal.
- Chicago soybean futures slid to give up some of their gains from the last session, although concerns over adverse weather in top exporter Brazil kept a floor under the market.

- Capital Economics analysts say that President Trump is unlikely to start another government shutdown after agreeing to reopen the government for the next three weeks with temporary funding. "Under those circumstances, we still expect first-quarter GDP growth to be 2.0% annualized," they say, and the overall economic effects of the 35-day shutdown will likely be rather limited to affecting some data and possibly slightly delaying tax refunds. Given the shutdown's effects on his approval ratings and air travel, "it would be remarkable if Trump then decided to back himself into a similar corner in three weeks' time and triggered another shutdown," analysts say.
- US airline shares recover their brief drop after the ground stop at LaGuardia caused by shutdown-driven staffing issues. American, Delta and Southwest are the largest carriers at the New York airport, with American leading broader industry gains with a rise of more than 4%. One sell-sider views the development as a catalyst that could help end the political stalemate. "Our view is that it is unlikely that such a ground delay program is allowed to continue for more than a few days before a resolution," said analysts at Raymond James in a client note.
- As the government shutdown stretches into its 35th day, the grains market is beginning to question whether or not the February World Agricultural Supply and Demand Estimates (WASDE) report from the USDA will arrive on time. The report is currently slated to come out on February 8 -- however, market participants say that the USDA needs anywhere from 5-10 days to build the report, making next week a key one to determine the report's fate. The January report, originally scheduled for January 11, has still not been released. "The fast approaching February WASDE report on the 8th would be a logical date/time to offer up all of the data to restart the flow of US Gov't information for the US Ag markets," says AgResource.
- The U.S. and China may reach a deal on goods but the underlying conflict over dominance in technology won't be solved, Suntory CEO Takeshi Niinami says in an interview with Bloomberg TV at Davos. The head of the Japanese brewer says despite the recent slowdown in Chinese confidence, Suntory intends to expand its footprint in China and India, where consumer power is growing. Mr. Niinami adds that Suntory avoided any direct impact from tariffs applied by the U.S. and the EU by storing European inventory, but continued trade tension will begin to affect its bottom line and the company needs to be smart about pricing.
- Hedge-fund billionaire George Soros said Chinese technology prowess is a "mortal danger facing open societies from the instruments of control that machine learning and artificial intelligence can put in the hands of repressive regimes." Speaking on the sidelines of the World Economic Forum in Davos, he called on the Trump administration to not let telecom equipment makers "ZTE and Huawei off lightly, it needs to crack down on them. If these companies came to dominate the 5G market, they would present an unacceptable security risk for the rest of the world."

Jan 25 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose more than 1 percent as turmoil in Venezuela triggered concerns that its crude exports could soon be disrupted.
- Gold prices edged higher on concerns about a prolonged U.S. government shutdown at a time when global growth is already slowing, with markets also waiting on U.S.-China trade talks due next week.
- Sterling scaled an 11-week high after The Sun reported that Northern Ireland's Democratic Unionist Party has privately decided to offer conditional backing for Prime Minister Theresa May's Brexit deal next week.
- London copper edged higher as support from a weaker dollar saw the metal claw back the previous session's losses, although uncertainty over the progress in U.S.-China trade talks capped the upside.
- U.S. soybean futures held steady, though the oilseed is poised to record a weekly loss amid concerns over future demand for North American supplies as a trade deal between Washington and Beijing remained a distant prospect.
- Hedge-fund billionaire George Soros said Chinese technology prowess is a "mortal danger facing open societies from the instruments of control that machine learning and artificial intelligence can put in the hands of repressive regimes." Speaking on the sidelines of the World Economic Forum in Davos, he called on the Trump administration to not let telecom equipment makers "ZTE and Huawei off lightly, it needs to crack down on them. If
these companies came to dominate the 5G market, they would present an unacceptable security risk for the rest of the world."
- The government shutdown could push Southwest's plans to travel to Hawaii into 2Q, chief operating officer Mike Van de Ven says. Adding service to Hawaii is Southwest's major growth initiative for the year, but the timeline has slipped. Now the Federation Aviation Administration officials who would oversee the final steps in Southwest's certification to fly long distances over water are furloughed. If the shutdown ends in a week, Van De Ven says there's a chance Hawaii flights could begin in 1Q, but otherwise they will be pushed back. In the meantime Southwest is incurring many of the costs of a start-up without the benefit of flying, CFO Tammy Romo says. Southwest is up 4.7% at $53.40.
- American Airlines CEO Doug Parker expresses worry the protracted government shutdown could lead to staffing shortages at air-traffic control towers, slowing down air travel. "You get larger separation of aircraft, so you have delayed airspace," Parker says on a call with analysts and reporters. "That's what we fear may happen." American is up 5.4% to $33.37.
- A new missile from Russia not only breaks the Intermediate-Range Nuclear Forces Treaty with the U.S. but also lowers the bar for the use of nuclear weapons, says NATO Secretary General Jens Stoltenberg in an interview with CNBC at the World Economic Forum in Davos. "We call on Russia to come back in to verifiable, transparent compliance with that treaty, because this is really important for all of us," said Mr. Stoltenberg.
- President Trump could help bring about a reform of international institutions, Dutch Prime Minister Mark Rutte tells CNBC at the World Economic Forum at Davos. "The United States has voted, and Trump is the President (...) We have to work with him, and I think he is also an opportunity, an opportunity to make changes to some of those multilateral organizations that we hold dearly, like the WTO, but it's not functioning very well" he says. "His critique of those international organizations is sometimes very valid. Make use of that, get him on your side, so that collectively, with Trump, we can change those organizations," the Dutch Prime Minister adds.
- Grain futures are falling at the Chicago Board of Trade as traders watch for any developments surrounding US-China trade negotiations. Due to Brazil's earlier harvest this year, some analysts say that farmers are harvesting more soybeans to sell to China as tensions with the US continue. "Chinese buyers can book their supplies at a large discount to those of US origin," say analysts from MaxYield Cooperative, due to the ongoing tariffs. "This price gap has widened in favor of Brazil since positive discussions between US and China last month put pressure on basis values in that country." Soybean futures are down 0.3%, corn futures are down 0.7% and wheat futures are down 0.4%.
- As some analysts had expected, European Central Bank President Mario Draghi said at the Thursday press conference that the "risks surrounding eurozone growth outlook have moved to the downside." Mr. Draghi's comments sent the euro to a three-week low of $1.1307. Against the pound, euro falls to a 10-week low of 0.8683 on a combination of Mr. Draghi's comments and hopes that the Brexit deadline will be extended beyond March 29. Mr. Draghi said incoming data has been weaker than expected and that headline inflation is likely to fall in the coming months. He did say, however, that the ECB hasn't taken any decision on introducing long-term refinancing operations. EUR/USD last down 0.3% at 1.1341.
- US jobless claims fall to 199K last week, a 49-year low, while economists polled by the WSJ were expecting 218K. "This is more evidence that the labor market is strong," said Michael Pearce of Capital Economics, adding that weekly numbers tend to bounce around a lot and are less indicative of trends than the employment report released next week. Meanwhile, claims filed by federal employees rose sharply during the third week of the US government shutdown, though Pearce says there is less incentive for employees to file as they will have to repay those funds when the government reopens.
- The number of federal employees requesting jobless insurance rose about 15,000 in the week ended Jan 12 to approximately 25,000, the Labor Department said. These employees file for benefits in a different program than normal workers, and the data are produced with a one-week delay. The number has risen in recent weeks as the partial government shutdown continues and federal employees go longer without pay.
- A gauge of layoffs across the US--known as jobless claims--fell to 199,000 last week, the lowest level since the end of 1969, according to new data from the Labor Department. Thursday's claims data suggest the US labor market is continuing to tighten despite the ongoing government shutdown that, at the moment, appears likely to continue into the coming weeks. Slowing global economic growth, a strengthening dollar and other economic uncertainties have plagued equity markets too.
- Consumer sentiment in China is being dampened by U.S.-China trade tensions and that will weigh on auto sales in the first quarter, Volkswagen AG chief executive Herbert Diess told reporters Thursday on the sidelines of the World Economic Forum meeting in Davos. "The trade war between China and the US really influences the customer mood," Mr. Diess said. "The first quarter will be a difficult quarter for VW." But beyond the impact of the trade friction on consumers' willingness to buy cars, the fundamentals of the Chinese market remain strong, he said. "The demand is still there. The purchasing power is there. It's really about what's going to happen between the U.S. and China," Mr. Diess said. Since both sides would benefit from a trade deal, he is optimistic that a deal will eventually be reached, although "we are not excluding that we have a downturn (in sales) for two or three quarters."
- Cargill Inc. CEO David MacLennan said he hopes both the U.S. and China recognize that there's more to gain by working together on trade. "I'm choosing to believe we'll have a deal," Mr. MacLennan said on the sidelines of the World Economic Forum in Davos. While the Trump administration still has the political support of the U.S. farm belt, he said, soybean farmers are increasingly under pressure from stocks piling up because they can't be exported to China. In 2017, the Asian country bought more than half of all American soybeans exported. "We need the market to be open," Mr. MacLennan said.

Jan 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices declined on lingering concerns that slowing global economic growth may limit fuel demand and after a surprise build in U.S. crude inventories.
- Gold held steady, supported by a softer dollar due to concerns the prolonged U.S. government shutdown will limit economic growth even as concerns of slowing global growth grew.
- London aluminium prices slipped from near one-month highs hit in the previous session on expectations that a period of tight supply will soon come to an end.
- Chicago wheat rose for a third consecutive session, climbing to its highest in five weeks on expectations of higher demand for U.S. supplies as inventories dwindle top exporter Russia.

- While RBC predicts Venezuela's average daily oil production will fall a further 300-500,000 barrels this year, it says ongoing political turmoil--which could result in US sanctions on the country--may cause the projected output drop to rise "by several hundred thousand additional barrels." That would add to OPEC's production cut of 1.2 million barrels/day. Oil futures remain modestly lower in midday Asian trading, currently off 0.4% after 2 days of declines.
- Texas Instruments blames weaker 4Q sales on an expected cyclical slowdown and increased caution due to US-China trade tensions. "We assume that this weakness is a combination of lower local end demand as well as reduced exports," Dave Pahl, head of investor relations, says on the earnings call. Personal electronics, specifically smartphones, saw weaker-than-expected demand, Pahl says. Meanwhile, revenue from TI's communications-equipment segment rose about 20% from the year earlier, benefiting from 5G deployment.
- White House acting chief of staff Mick Mulvaney asks federal agencies for a list of high-impact programs that would be affected if the partial government shutdown continues into March, according to a senior official in the Office of Management and Budget. The shutdown entered its 33rd day Wednesday. The official says in a statement: "Prudent management means planning and preparing for events without known end-dates."
- Workers who screen passengers and bags at US airports will continue receiving funds to cover parking or transit as the partial government shutdown that has them working without pay continues, TSA Administrator David Pekoske says on Twitter. TSA employees have been increasingly calling out of work as financial pressures mount, the agency says: TSA's absence rate has hovered at or near 7.5% Monday and Tuesday after spiking to 10% on Sunday. As the prospect of missing a second paycheck this week looms, union officials have said the cost of transit to come to work is becoming a problem, but Pekoske said the agency will be able to continue covering the benefit for the coming month.
- Oil prices are unsurprisingly jittery and remain 1.3% lower after President Trump recognizes Venezuela opposition leader Juan Guaido as that country's interim president, and indicates the US will press on with economic sanctions against the socialists led by Maduro. The news could certainly be bullish for oil in the near-term as it could lead to greater strife and a further drop in Venezuelan oil output. But longer-term investors are also envisioning a bearish potential to the news. If this all leads to Maduro losing power and a US-friendly president taking over, that could quickly spark a ramping up of oil production in Venezuela, a country famous for having the largest oil reserves in the world.
- Alexey Mordashov, chairman of Russian steel giant Severstal, says the company has suffered from the sanctions the U.S. has placed on Power Machines, a power equipment business in which Severstal holds a 30% stake. The company has lost suppliers and customers and has had to rewrite existing contracts, many of which were denominated in dollars. General Electric pulled out of a turbine project in Vietnam, said Mr. Mordashov, forcing the company to find a new supplier half way through the project. "We have learned how to live with the sanctions, but it's not good," he said on the sidelines of the World Economic Forum in Davos. He added that appeals to the U.S. Treasury to review the sanctions have gone unanswered.
- Boatmaker Marine Products is feeling the pinch of the US-China trade kerfuffle. The maker of Chaparral pleasure boats and Robalo sport-fishing boats says international sales dropped by more than 50% during 4Q, due mainly to trade tariffs enacted during 2018. The good news: international sales accounted for only 3.2% of total sales in the quarter. The bad news: corporate finance VP Jim Landers says on the earnings conference call the situation hasn't improved.
- The U.S. is a very healthy market for environmental investment despite President Trump's withdrawal from the Paris agreement, RWE Chief Executive Rolf Martin Schmitz says in an interview with CNBC at the World Economic Forum at Davos. Brexit, meanwhile, should not hurt RWE's activities in the U.K., Mr. Schmitz says, even in the case of a hard Brexit.
- The government shutdown that's upending the effort to provide officials statistics on the economy's performance appears to be taking a closely watched growth tracker off the field. The Atlanta Fed's GDPNow real-time tracker hasn't been updated since Jan 16, and it's unclear when the next update will be. Private sector efforts continue, however. Macroeconomic Advisers sees the first three months of the year at meager 1.4%, in what appears to be a continuation of a trend where the US economy starts the year off tepidly. Of course, even those estimates could be volatile given that the shutdown itself, the longer it persists, raises serious risks to continued growth.
- US government bond prices fall as investor sentiment about the prospects for trade talks between the US and China improved, analysts say. Investors largely see that both sides of what has been a thorny relationship in the past year have incentives to come to an agreement, analysts say. A decision by China's central bank to add stimulus to its economy in order to lower financing costs for small and mid-sized businesses also spurred investors to take on more risk and eschew safe assets. A solid earnings report from IBM was also seen as a positive sign amid the reduction in available economic data due to the partial government shutdown, analysts said. The yield on the benchmark 10-year Treasury note rose to 2.768% from 2.732% Tuesday.
- Grain prices are trading higher as traders continue to watch for updates on China negotiations and the ongoing US government shutdown. CBOT soybean contracts for March delivery are up 0.9%. March corn contracts are up 0.6% and wheat contracts are up 0.6%. "The latest has the meeting between (US-China) negotiators still on for next week, but questions remain on just how close to a deal the two sides are," Allendale analysts say, adding that traders will continue to monitor trade headlines. Meanwhile, MaxYield Cooperative analysts say that the February supply and demand report will likely not happen on schedule due to the shutdown.
- Are grains traders over the off-again, on-again nature of the negotiations between the US and China for a new trade deal? According to some analysts, the answer is yes. "It seems that everyone involved is starting to get burnt out from the rumor mill regarding China as the market gained back most of the losses after the rumors release," says Wally Cunningham of Top Third Ag Marketing. "The market seems to be taking the approach of 'I'll believe it when I see it' regarding China and Russia this year." Wheat futures finished 0.7% higher yesterday on reports of supply tightness in the Black Sea region, while corn and soybean futures both finished down on a bearish sentiment tied to slower-than-expected GDP growth in China.

Jan 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched up after China said it would raise spending to stem an economic slowdown that has been weighing on financial markets.
- Gold prices stood firm, after gaining the most since Jan. 9 the day before, on higher demand for safe-haven assets over concerns of slowing global economy and uncertainties about the U.S.-China trade row.
- The safe-haven yen fell versus its peers as risk appetite marginally improved in Asian trading, though concerns over slowing global growth and U.S.-Sino trade tensions are likely to cap gains in riskier assets.
- London aluminium prices rose for a second session to trade near last session's one-month high, underpinned by signs of falling production in China.

- Chicago soybean futures rose, set to gain for four out of five sessions with prices underpinned as dry weather curbs yields in top exporter Brazil.
- Eurozone government bond yields trade slightly lower with the newest developments in the U.S.
- China trade conflict spreading caution. The fragile optimism last week over the easing of trade tension was punctured abruptly Tuesday evening on reports that the White House cancelled a planned trade meeting with Chinese officials planned for this week, says Michael Hewson, chief market analyst at CMC Markets. Caution is justified however given upcoming events on home turf, with key PMI data and the European Central Bank's meeting due on Thursday. On the supply front, Germany will launch a new five-year government bond, or Bobl, with EUR4 billion volume at an auction. The 10-year Bund yield is trading at 0.176%, down 0.8 basis points, according to Tradeweb.
- Local USDA offices will reopen Thursday as the agency attempts to mitigate the effect of the government shutdown on farmers and ranchers. USDA Secretary Sonny Perdue says the agency is temporarily recalling nearly 10,000 employees to help staff its Farm Service Agency offices nationwide, where farmers apply for a variety of loans, crop insurance and disaster assistance programs. Among the services the offices will provide are those related to trade mitigation payments offered by the government to farmers to cushion the blow of global trade spats. Perdue says the deadline to apply for government payments had been extended to Feb. 14 from the original deadline a month earlier. USDA employees will receive back pay for their work during the shutdown, Perdue says.
- White House economic adviser Lawrence Kudlow said he is pleased at the recent turn in the Federal Reserve's communications, in which many senior officials have signaled greater flexibility, or "patience," in weighing additional rate increases. Speaking on CNBC, Kudlow said the Trump administration didn't believe its policies to boost growth would lead to more inflation, and he defended President Trump's recent criticism of Fed rate increases. "It sounds to me like the Federal Reserve has come around more closely to that view," said Kudlow. He said the Fed sets policy independently of the White House but singled out for particular commendation Fed Chairman Jerome Powell and Vice Chairman Richard Clarida.
- Travelers eager to avoid congestion at Sea-Tac airport in Seattle will have to wait a little bit longer due to the government shutdown. Alaska Airlines is pushing back its planned start from Paine Field in Everett, Wash., where it had aimed to begin offering flights next month, citing furloughed FAA officials who were critical to process of certifying that airport for commercial service. Alaska is pushing its start date back to March 4 and rerouting many of its scheduled flights through the Seattle airport. The airline cautions the start could be delayed more if the shutdown continues. United Airlines is slated to begin service at Paine Field later in March.
- Two-thirds of federal employees searching for jobs last week said the partial government shutdown has them considering employment in the private sector, according to a survey from job search site Ziprecuriter.com. More than 1,900 federal workers impacted by the shutdown and using the site were surveyed. Of those, 67% said they were considering leaving the government. Ziprecuriter reached out workers who were furloughed or working without pay. The poll found that 87% were looking for work due to the shutdown and 77% were seeking a full-time position. The guarantee of back pay for time missed, which President Trump signed Jan. 16, could act as an incentive to stay in public service.
- While the US government shutdown has made it more difficult for economists to judge how the economy is performing, recently released data have been fairly upbeat, Capital Economics says, citing December's surge in payroll employment and manufacturing output. A prolonged shutdown could "end up having a significant negative impact on first-quarter GDP," economists say, as temporary loss of income could weigh on consumption growth. However, "that wouldn't in itself be a serious concern...as most of the hit to activity would be reversed once the government reopened," economists add.
- EU data privacy laws are encouraging companies to get creative to retain access to the European market, Marietje Schaake, a lawmaker in the European Parliament, said at the World Economic Forum in Davos  on Tuesday. "Companies are now incentivized to innovate while upholding privacy laws," Ms. Schaake said. "Sometimes necessity sparks innovation, because you have to be more creative in finding solutions." Europe's rules-based approach to privacy reflects wider values in society, she said, noting this differs from approaches in China or the U.S. where the market is more prevalent. "I think we are in a global competition to see which system is dominant," she said.
- An end to the U.S. government shutdown will likely be found soon given the stakes at hand, Carlyle Group CEO David Rubenstein told CNBC at Davos. "Members of Congress and people in the administration know the shutdown is hurting the economy," Mr. Rubenstein said, adding there will be much "political backlash" if a solution isn't found soon. Congress could reopen the government by passing legislation without the U.S. President's signature while a presidential commission explores longer-term solutions, Mr. Rubenstein added. He says that the U.S. constitution allows this. "Both sides recognize this is not in the country's interest," he said. "This won't go on for months."
- Political issues are now very connected to economic issues, not unlike the late 1930s, says Bridgewater Associates Founder Ray Dalio. Speaking at the World Economic Forum, Dalio draws a parallel to a time where the printing of money and purchases of financial assets created a sense of polarity, populism and antagonism, while a rising power like China was also dealing with the conflict of an existing power. "What scares me the most longer term is that we have limitations to monetary policy, which is our most valuable tool, [...] at the same time as we have greater political and social antagonism. So the next downturn in the economy worries me the most."
- The new trade agreement between the U.S., Canada and Mexico is a good deal for all three countries, Canadian Minister of International Trade Diversification James Carr tells CNBC in an interview at the World Economic Forum at Davos. "I'm confident it will be ratified," he adds.
- VTB Bank President Andrey Kostin says he isn't interested in acquiring Russia's largest private lender, Alfa-Bank, in an interview with CNBC at Davos. Mr. Kostin says VTB doesn't have enough capital for the transaction and wouldn't be able to draw on state support. In December Alfa-Bank's owners were reported to have approached competitors about a possible sale. Mr. Kostin says he's pessimistic about the possibility of a thaw in US-Russia tensions in the next few years, but sees possible chances of a better relationship with Europe.

Jan 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by around one percent as signs of a spreading global economic slowdown stoked concerns over future fuel demand.
- Gold prices edged lower, hovering near a three-week low touched in the previous session, as a firmer dollar made bullion more expensive for buyers using other currencies, even as concerns about a global slowdown mounted.
- Base metals prices moved lower, with benchmark London copper extending a sharp drop from the previous session, after economic growth in top metals consumer China slowed to its weakest in 28 years.
- Chicago soybean futures lost ground, falling for the first time in four sessions on concerns over a lack of Chinese demand for U.S. supplies amid a trade war with Washington and as the world's No. 2 economy slows.

- Market participants have started to buy sterling and other U.K. assets after the U.K. parliament roundly rejected Prime Minister Theresa May's Brexit deal last week. But clients are becoming more neutral, instead of turning completely bullish on the pound, says Russell Lascala, global co-head of foreign exchange trading at Deutsche Bank, speaking late last week. Corporations had to hedge sterling versus the euro at 0.95 after Bank of England warnings EUR/GBP could rise to that level. So now, corporations are "unwinding their trade protection," he says. By way of elimination, some Brexit scenarios have become much less likely now, including a hard Brexit, he adds.
- The number of airport screeners and other TSA employees not showing up for work continues to climb as the partial government shutdown nears the one-month mark, raising concerns of staffing shortages that could cause airport waits to lengthen. TSA says 10% of its workforce was absent yesterday--the highest figure yet for a group that is still working but not being paid as long as the shutdown continues. Security wait times were generally not significantly longer than usual on Sunday, with 99.9% of passengers waiting less than 30 minutes, according to TSA. But the agency has sent reinforcements so that security is not disrupted at John F. Kennedy International, LaGuardia and Newark in the New York area, O'Hare International Airport in Chicago, Hartsfield-Jackson Atlanta International Airport and Miami International Airport.
- The USD/CNY is likely to end 2019 at around 6.75, as the moderation in growth has been broadly priced in, says SEB Asia strategist Melody Jiang, after China logged a 6.4% growth in 4Q on year, largely in line with market expectation. With the Federal Reserve more dovish, the market is pricing in less rate increases from the US, leading to a softer USD, Jiang says. "Although we expect the US-China tensions to continue to simmer, we do not see further escalation in the tariff front, allowing a mild recovery in the yuan," she says adding that there seem to be 'limited' downside risks to the USD/CNY forecast at this point. The pair was last at 6.7890.
- Investors have been hunting for "black swans" ever since they were caught flat-footed by the events that led to the global financial crisis more than a decade ago. Fitch Solutions has highlighted some possibilities for oil this year. On the supply side, except for a breakdown in relations between Saudi Arabia and Russia, "all of them pose downside risks to supply and so upside risk to prices." As for demand, the black swans "are largely economic in nature" and would pressure prices. On the list of what Fitch Solutions considers to have the most potential of happening are Iranian oil exports falling to almost zero without U.S. sanction waivers, and a "full economic collapse" in Venezuela.

Jan 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Crude prices rose to their highest so far in 2019 after data showed refinery processing in China, the world's second-largest oil consumer, climbed to a record last year despite a slowing economy.
- Gold prices held steady as expectations that the U.S. Federal Reserve will pause its multi-year interest rate hike cycle were offset by a recovery in investor appetite for risk.
- The dollar held steady near a two-week high against a basket of currencies, as investor risk appetite held up despite the latest data showing China's 2018 economic growth slowing to a near three-decade low.
- London copper prices slid, on course to fall for the first time in five sessions, amid concerns over slowing economic growth in top industrial metals consumer China.
- U.S. corn and soybean futures rose for a third straight session on Friday in a broad commodities and equities market rally sparked by renewed optimism about U.S.-China trade talks.

- As the US government shutdown nears its fifth week, economists are weighing the potential economic damage of the ongoing closure. Deutsche Bank economists expect real GDP growth for 1Q to fall 0.2 to 0.3 percentage points if the government reopens by the end of next week, but if the shutdown lasts the entire quarter, growth could fall a full percentage point. Capital Economics economists say while the direct costs of the shutdown are relatively modest, the indirect costs could harm the economy more. "For every government department without funding, there will also be suppliers going unpaid, cancellations of contractor work and even missed rental payments on federal buildings," they say.
- Steep duties applied by China to chicken imports could actually wind up helping the US meat industry. The duties in this case are antidumping levies on Brazilian chicken, implemented by China last June. As US and Chinese trade officials discuss reopening China to US chicken exports, Mizuho analysts say China's duties on Brazilian chicken--the biggest competitor to US meat companies when it comes to poultry byproducts--set up "an easier path for US producers to regain market share" in China.
- The shutdown has spread into space. Lockheed Martin warns in a regulatory filing that furloughs threaten the launch of a commercial satellite for a Saudi Arabian customer, as well as some other SpaceX launches. Lockheed needs government approval for a giant, Russian-owned cargo jet to fly satellites from California to Florida, and cautions that the timetable for some planned military launches later this year.
- President Trump last week drew hearty applause at the Farm Bureau's annual convention, but a survey released this week shows that ongoing trade battles are eroding some of his farm-country support. A Farm Journal survey, sent out in late October, shows that 37% of farmers view Trump less favorably since trade disputes with Mexico, China and other countries got underway early last year. That's up from 35% in mid-August, shortly after the Trump administration outlined plans to pay farmers billions of dollars to soften the financial blow of tariffs imposed on US farm goods, like crops and meat. If President Trump were up for election in late October, 56% of farmers surveyed would've given him another term, versus 44% saying no, according to Farm Journal's survey.
- While investors focused on the possibility of a reduction in the U.S. and China's tit-for-tat trade tariffs, they're also eyeing the potential impact of Beijing widening its metal scrap imports ban, due to take effect July 1. Some analysts expect the edict will shrink China's copper scrap imports by 10% and its aluminum scrap imports by nearly 40%. The move represents "the government in Beijing taking another step toward combating environmental pollution in the country," Commerzbank analysts say. This latest tightening of waste restrictions is unlikely to be Beijing's last. Next week traders will also look to China's industrial production and growth figures due Monday, with concerns about a slowing Chinese economy one of the key drivers of recent market volatility.
- Copper prices rise 1.2% to $6,065 a metric ton as commodities advance on the prospect of softening trade tensions between the U.S. and China. Aluminum, zinc, and nickel prices also increased by 1% or more. The long-running trade spat between the world's two largest economies has for months distracted metals investors from market fundamentals, with economic pressure on China--which is responsible for approximately half of global metals demand--posing a greater threat to industrial metals prices than most other factors, many analysts say. "Although it doesn't appear immediately clear that there's certainty around [possible tariff reductions], I think the bigger impact is more what wouldn't happen," Capital Economics' Ross Strachan says. "So far it's been more the threat of further escalation would have had a bigger impact, and that being taken away is improving sentiment."
- US stocks finished higher for a third straight session on hopes of easing trade tensions, a conflict between the US and China that has rattled financial markets in recent months. The Dow jumped 163 points, or 0.8%, after falling more than 100 points in morning trading. Major indexes got a boost after WSJ reported US trade officials are debating ratcheting back tariffs on Chinese imports. The news was welcomed by investors. "It's too early to say whether there's some kind of concession here, or that the US will relax the tariffs, but I'm somewhat encouraged," says Jeremy Held, head of investment strategy at financial-services firm ALPS.
- Labor Secretary Alexander Acosta said the private-sector labor market remains strong despite a nearly one-month long partial government shutdown. "Clearly the shutdown imposes economic harm," he said Thursday in an interview with WSJ. "When the shutdown ends, a lot of that harm will reverse itself." He pointed out that unemployment claims, other than those filed by federal workers, fell last week to near the lowest level in 49 years. "I think what that shows is the enduring strength of the private-sector labor market," he said. Jobless claims are a proxy for layoffs, and the historically low number comes at a time when the economy has added to payrolls for 99-straight months, the longest stretch of consistent job creation on record.
- US stocks jump, with the Dow rising more than 200 points on a WSJ report Washington is debating easing tariffs on Chinese imports. Sources close to the talks tell WSJ that the potential concessions come as officials seek in part to calm financial markets. S&P 500 rises 1% and Nasdaq gains 1%.
- The House, including scores of Republicans, voted overwhelmingly -- 362 to 53 -- to pass a resolution disapproving of Treasury's plan to ease sanctions on aluminum producer Rusal, the world's second largest. It is controlled by a Russian oligarch with ties to the Kremlin. Though the optics of Republicans rebuking President Trump is a notable political development, it isn't expected to slow Treasury's plans to delist. It would take a joint resolution of Congress to do that, and a parallel measure failed in the Senate yesterday.

Jan 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices climbed 1 percent after a report from the Organization of the Petroleum Exporting Countries (OPEC) showed its production fell sharply last month, easing fears about prolonged oversupply.
- Palladium held above $1,400 an ounce after surging to record levels in the previous session amid tight supplies and robust demand, while gold stood firm even as risk sentiment got a boost from hopes of progress in U.S.-China trade talks.
- The dollar was firm against the yen as growing optimism of progress in Sino-U.S. trade talks supported broader appetite for risk.
- London copper prices rose for a fourth straight session, hitting their highest level so far this year, on optimism that the United States and top metals consumer China are closer to resolving their long-running trade dispute.
- Chicago soybean futures ticked down with the market poised to finish lower for a second consecutive week on pressure from a lack of Chinese buying.

- US stocks jump, with the Dow rising more than 200 points on a WSJ report Washington is debating easing tariffs on Chinese imports. Sources close to the talks tell WSJ that the potential concessions come as officials seek in part to calm financial markets. S&P 500 rises 1% and Nasdaq gains 1%.
- The House, including scores of Republicans, voted overwhelmingly -- 362 to 53 -- to pass a resolution disapproving of Treasury's plan to ease sanctions on aluminum producer Rusal, the world's second largest. It is controlled by a Russian oligarch with ties to the Kremlin. Though the optics of Republicans rebuking President Trump is a notable political development, it isn't expected to slow Treasury's plans to delist. It would take a joint resolution of Congress to do that, and a parallel measure failed in the Senate yesterday.
- William Blair cuts F5 to market perform, saying the application-services company suffers from stagnant demand in its enterprise business. There's also uncertainty around the success of F5's upcoming cloud-native application-delivery controller offering, which perform common tasks in data centers, due to product-positioning challenges and greater competition from other cloud providers and startups Avi Networks and Nginx, the firm says. Blair had raised F5 to outperform in April when it thought conditions were better. MKM says the government shutdown is another hurdle for F5. MKM says 7%-8% of F5's sales come from the federal government, and if the shutdown lasts into February it could put communication equipment makers' guidance for March quarters at risk. F5 is down 3.5% to $156.19, but still up 12% over the last year.
- US defense stocks all gain ground after President Trump flags a planned third year of increased military spending, with the White House proposal due in early February. His remarks, unveiling a Missile Defense Review, lift Lockheed Martin by almost 2% and Northrop Grumman by nearly 3%. Contractors mostly insulated from shutdown effects, though closures at some departments have prompted furloughs at subcontractors and delays in payments and contract awards. SAIC says it has had a $10M weekly dent to sales, with payments behind by as much as $50M.
- While earnings growth remained strong at the end of last year, Capital Economics analysts say that investors are too optimistic about the outlook for 4Q earnings. "The ongoing government shutdown in the US is keeping official data releases there to a minimum, so as far as the stock market is concerned the spotlight is firmly on firms' Q4 earnings numbers out this week," analysts say. The firm expects economic growth to slow significantly in 2019 and 2020, taking a "more obvious toll" on the economy that makes double-digit EPS growth look too hopeful, analysts add. Of the S&P 500 companies to report 4Q earnings so far, 77% have reported results that beat analyst expectations, compared to historical average performance of 64% over the full quarter, according to Refinitiv data.
- A lack of progress in the government shutdown standoff between President Trump and House Democrats has grain markets worried that they will be operating without important USDA for an extended period of time. "There are still no signs that the US government will be funded in the near or even medium term," says AgResource. "The two sides seem to be getting farther apart." The shutdown is now on its 27th day, the longest shutdown in US history. During that time, the grains market has not had access to key USDA data including weekly export sales, confirmations of purchases by foreign nations, and the World Agricultural Supply and Demand Estimates (WASDE) report, among other things.
- US jobless claims fall to 213K from 216K the prior week, compared to consensus estimates of 220K, as the labor market starts the new year strong. "(Jobless claims) appear to be stabilizing at a very low level," says Michael Pearce of Capital Economics. Meanwhile, 10,450 federal employees, who file under a separate program that reported with a one-week lag, filed for first-time benefits for the week ended Jan. 5, or the second week of the shutdown. That figure is up by about 6,000 from the prior week, but Pearce says that's a small figure considering how many are without pay during the shutdown. Federal workers granted backpay would have to repay any unemployment benefits once the shutdown ends, lessening the incentive to make those claims, Pearce adds.
- The number of federal employees filing for unemployment benefits climbed by nearly 6,000 to 10,450 in the week ended Jan 5, likely due to the government shutdown. Federal employees file under a separate program than state employees and are thus excluded from the headline jobless claims figure of 213,000 for the week ended Jan 12. On the state level, federal employees' applications for unemployment benefits were highest in California and Texas, likely due to large populations in these states. The state with the third highest number of applications was Utah, which has a large number of national parks and sizable number of IRS employees.
- A report by the U.S. commerce department, due Feb. 17, could serve as a catalyst for declines in the euro, says MUFG. The report will "indicate whether automotive imports are considered strategically important and thereby could pose a threat to U.S. national security." President Donald Trump used the national security threat card to back up his protectionist stance before and add import tariffs on Chinese products last year. "Such a finding could provide a strong case for President Trump to slap tariffs on auto imports in a blow to both Japan and the EU," which could deliver another "negative blow" to the euro, says MUFG.
- The Stoxx Europe 600 slips 0.1%, or 0.45 points, to 350.14 as tech stocks drop after reports that U.S. federal prosecutors are investigating Huawei Technologies Co. for allegedly stealing trade secrets. German semiconductor maker Siltronic declines 3.9%, while STMicroelectronics backtracks 2.5% and Infineon Technologies and ams AG are both down 2.2%. Austrian steelmaker Voestalpine slides 6.6% after cutting its guidance for the 2019 financial year due to lower-than-expected provisional earnings in the first nine months.
- The FTSE 100 Index is set to open 31 points lower at 6837 after reports that U.S. federal prosecutors are investigating Huawei Technologies Co. for allegedly stealing trade secrets. The Dow Jones Industrial Average closed 141 points ahead on Wednesday but Chinese and Hong Kong indexes were firmly in the red. Jasper Lawler at London Capital Group notes that the U.S. investigation comes as Sino-American relations were improving. "It goes right to the heart of the unresolved intellectual property issues with China," he says. "Signs of Chinese retaliation could see stocks sink further."
- Alcoa continues to press its case that more pressure needs to be applied to curb China's aluminum industry. The company has been an outspoken opponent of US tariffs on imported aluminum to counter depressed prices, insisting that China's massive exports of semi-fabricated aluminum products are the source of weak prices globally. Alcoa maintains that the tariff is misplaced, hitting foreign aluminum producers who aren't causing the problem. "Overcapacity and overproduction inside of China--we believe that those things are having an outsized impact on prices," said CEO Roy Harvey during Alcoa's 4Q conference call. Shares are down 1.5% after-hours.

Jan 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped as U.S. crude production quickly approached an unprecedented 12 million barrels per day (bpd) just as worries about weakening demand emerge.
- Palladium rose to a record high on lower supply and increasing demand for the metal used in auto catalysts, while a firmer dollar offset expectations of a pause in the U.S. Federal Reserve's rate-hiking cycle, keeping gold steady. 
- London copper prices rose for a third straight session China's move to inject liquidity into the financial system boosted expectations of higher demand in the world's top industrial metals consumer.
- Chicago soybean futures rose for a second session with prices supported by adverse weather in South America though concerns over a prolonged trade war between Washington and Beijing curbed gains.

- Even as more than 2,000 Federal Aviation Administration return to work without pay monitoring airline safety, other employees responsible for approving certain drone flights and overseeing organizations that train pilots for business and private aircraft remain off the job. Approvals of exemptions and waivers for unmanned aircraft operations have virtually stopped. So have the FAA's recurring approvals of instructors and simulator devices at flight schools and pilot-training companies. Even routine permits to ferry business jets around without passengers, or allow corporate planes to cross the US border, are being held up. FAA officials say all essential safety functions, including air-traffic control and airline inspections, are continuing as before with some 33,000 of 44,700 employees working.
- The Fed's Beige Book signals tightening financial conditions and falling optimism in economic activity that lays the groundwork for no rate hike in March, says Jon Hill of BMO Capital Markets. "(The Beige Book) was consistent with moderate underlying domestic growth and increasing risks appearing on the horizon," Hill says. Hill also notes that tariffs are now only one of several considerations mentioned for domestic companies now that variables like the federal government shutdown have arisen, and that a still-tight labor market could contribute to a drag on growth in the future.
- Companies across Fed districts reported seeing rising material costs, sometimes linked to higher tariffs, in the Fed's beige book. Some firms were able to pass along price increases to customers. Meanwhile, others looked for ways to cut costs or avoid price increases altogether. To offset the climbing cost of raw materials, for instance, a Maryland can manufacturer looked to increase automation in hopes of lowering employee headcount and thus labor costs. In a bid to get ahead of anticipated tariff increases, a Virginia display case manufacturer had Chinese goods shipped through West coast ports.
- In the Chicago Fed District, payments to farmers have "been disrupted" by the partial government shutdown, and lack of agricultural economic data are leaving market participants in the dark, the beige book report showed. The federal government's Market Facilitation Program, which supported farm incomes for soybean producers, has thrown such compensation into disarray, the report said. The shutdown also delayed the release of key government reports on agricultural market conditions, "leading to greater uncertainty for market participants," the report said. These two references were the beige book's sole mentions of the partial government shutdown, which began last month.
- Oxford Economics warns that the government shutdown thus far tied to President Trump's inflexible demands for funding for a border wall is a growing threat to the economy the longer it persists. "If the shutdown lasts through Q1, the drag would cumulate to 0.6ppt, bringing our GDP tracker to 1.5%," the firm told clients. "The longer the shutdown lasts, the larger the multiplier could be via disruption to essential services like food stamps and increased private sector uncertainty."
- Airbnb is offering up to $110 to federal employees who open their homes to guests or take people on adventures. The home-sharing platform announces that federal workers who host people for three nights any time between Friday and March 18 will receive the credit, which was determined to be the average income per night for US hosts. Experienced hosts are also eligible, with the amount based on the total booked value of their experience. The promotion is open to new and existing hosts. Airbnb's move comes as several other companies are looking for ways to extend assistance to federal workers during the partial government shutdown. Several banks have offered fee reversals and waivers and food companies such as Kraft Heinz have offered a bag full of Kraft products to those affected.
- Prime Minister Theresa May's failure to get the votes to move forward with the proposed Brexit plan is "a huge blow for UK businesses and their counterparts as they will likely be forced to continue to operate in an uncertain environment," says Charlie Ripley, senior investment strategist for Allianz Investment Management. While risk assets are continuing to perform well, "the current state of paralysis not only weighs on the European economy, but (the global economy as well)," Ripley adds. Now, the immediate focus shifts to the upcoming no-confidence vote for May's government.
- There's no lack of public holidays in Japan. There will be more this year with a new emperor's reign set to start May 1, following Akihito's abdication. That should help boost consumer spending, says Nomura. Also, investors are likely soon to begin paying attention to the potential impact from Tokyo's hosting of the 2020 Summer Olympics. "We believe that markets will start to factor in some benefit of the Olympics in industry sectors such as construction, media and tourism." Local politics are also expected to buoy stocks, the investment bank says. The upper house will face voters this year, and so might the lower house "depending on the progress of peace-treaty negotiations between Japan and Russia." Nomura says the government is likely to push policies to maintain its control.
- The drive to deploy airborne digital messaging to pilots from air-traffic controllers, one of the FAA's top priority modernization projects, is being slowed by continuing agency furloughs. So-called data-link communications to airliners flying in domestic airspace are intended to phase out routine radio messages between controllers and pilots. Commands and information would be displayed on computer screens or printouts. But under the current partial government shutdown, training and testing schedules for such enhancements are being delayed. Airlines have been anticipating fuel savings and other economic benefits from the changes, which are intended to supplement digital links already used to transmit route clearances and other information prior to takeoff.

Jan 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady as signs of a global economic slowdown were countered by OPEC-led supply cuts which helped support Brent crude futures above $60 per barrel.
- Gold edged up, supported by uncertainty around Brexit after lawmakers voted down British Prime Minister Theresa May's deal to leave the European Union, while calls grew for a pause in U.S. rate hikes.
- The pound steadied but remained on the backfoot following a volatile overnight session after British lawmakers defeated Prime Minister Theresa May's Brexit divorce deal by a crushing margin.
- London copper prices advanced for a second straight session, as a weaker dollar made the base metal cheaper for holders of other currencies, and indications of more stimulus from top consumer China buoyed investor sentiment.
- U.S. soybean futures rose 0.5 percent, rebounding from a two-week low in the previous session, although gains were checked amid concerns over a prolonged trade war between Washington and Beijing.

- The drive to deploy airborne digital messaging to pilots from air-traffic controllers, one of the FAA's top priority modernization projects, is being slowed by continuing agency furloughs. So-called data-link communications to airliners flying in domestic airspace are intended to phase out routine radio messages between controllers and pilots. Commands and information would be displayed on computer screens or printouts. But under the current partial government shutdown, training and testing schedules for such enhancements are being delayed. Airlines have been anticipating fuel savings and other economic benefits from the changes, which are intended to supplement digital links already used to transmit route clearances and other information prior to takeoff.
- President Trump's top economic adviser says the partial government shutdown is affecting his staff, acknowledging that, at least on a personal level, those in the White House are feeling a pinch in the shutdown's fourth week. Kevin Hassett, chairman of the Council of Economic Advisers, says one long-time employee is now driving for Uber. He adds another person may turn down a job because it's unclear when they could start. "Nobody thinks that government workers are better off because of the furlough," Hassett says on a call with reporters. "It breaks my heart that that is going on." He confirms he's working but not receiving a paycheck. It's an apparent change in tone from a PBS interview posted Thursday, where he said the shutdown allowed government workers to vacation without using their leave.
- While the vote on Brexit was in many ways meaningless, the defeat--at least symbolically--was crushing for May's deal. This was nothing more than a necessary exercise that will now accelerate the process and allow other options for parliament to be explored, including a vote of no confidence in the government, says Craig Erlam, strategist at OANDA. The confidence vote looks unlikely to succeed without the support of the DUP, which continues to support the Conservative party, but again this is a necessary exercise that ticks another box and allows for a second referendum to gain momentum, he adds. It's no surprise then that the EU has not changed its position on the exit deal as a referendum or withdrawal of article 50 is clearly in its best interest.
- US Attorney General nominee Bill Barr's time as a top telecom lawyer prompts some specific questions during his confirmation hearing, including one on his approach to Chinese electronics makers Huawei and ZTE. The would-be AG is less ambivalent on that question that he is addressing other hot-button topics, telling senators "in my old Verizon days we understood the danger" and steered clear of the gear despite "economically attractive" prices. Both suppliers have faced mounting pressure from law enforcement in recent months and Huawei's CFO was arrested in Canada last month on US Justice Department charges.
- Takeda Pharmaceutical Chief Executive Christophe Weber says the US should change federal laws to improve transparency with rebates and discounts to prescriptions drugs. Doing so, he said, would fuel industry competition and ultimately help patients. "Increasing transparency could certainly be a way to improve the system," Weber said in an interview after the Japanese drugmaker officially listed in the New York Stock Exchange. He expects the topic of drug pricing to "become more important" in the 2020 election and beyond. Takeda recently completed a $62B acquisition of Shire PLC, creating one of the world's largest drugmakers with revenues north of $30B.
- Fuel prices are likely to rise next year, a rebound from a weak 2019, as new environmental rules for commercial ships raise demand for higher quality fuels, EIA says. Brent oil prices are likely to get a $2.50-a-barrel boost from new standards set by the International Maritime Organization -- an arm of the UN -- that slash the amount of sulfur in marine fuel for oceangoing ships as of Jan. 1, 2020. This estimate is from EIA's monthly Short Term Energy Outlook, released Tuesday with EIA's first analysis of the IMO rules. They were set roughly a decade ago, but now raise the chances of higher fuel prices in a presidential election year. The Trump administration has been exploring ways to ease the rollout of the new rules since last autumn, so far with little success.
- Delta Air Lines CEO Ed Bastian says the carrier isn't seeing significant numbers of passengers missing flights due to long airport security lines during the government shutdown. "In isolated airports we're having some longer lines, but it's not a system-wide issue at all," Bastian tells analysts and reporters. Delta is helping staff checkpoints and rebooking passengers who miss flights. The bigger impact appears to be the approximately $25M in lost revenue from reduced government travel.
- Delta says it's working with the TSA to help keep lines under control at airports while TSA staff goes unpaid during the government shutdown, including providing personnel to perform nonessential tasks in the security process. Airlines and airports have helped TSA out before when it's been short staffed, providing workers to do things like instruct passengers and direct traffic so that more TSA employees can focus on security screening. Hartsfield-Jackson Atlanta International Airport, in Delta's hometown, is one of the airports where waits have grown at times as TSA officers have been absent. The Atlanta airport has warned that travelers should leave themselves three hours to get through security during peak travel times, but airport officials said there were no delays Tuesday morning.
- The grain market outlook for futures prices on the CBOT is mixed, with many analysts in the market unimpressed with the lack of specific announcements in President Trumps' speech at the American Farm Bureau's convention in New Orleans yesterday. "President Trump defended his tough trade policies in front of thousands of farmers who have suffered during his trade war with China, disappointing others who had hoped to hear a plan for a swift resolution," says Allendale. Soybean and wheat futures fell yesterday, while corn found support under $3.80 per bushel.
- Oil prices bounce higher after a two-day decline as investors re-focus on increased oil sanctions against Iran. Reports indicate the US has decided to grant no additional waivers to countries that wanted to keep importing oil from Iran. So as the remaining temporary waivers slowly chip away, that should curb Iranian crude exports, tighten global supplies and lift oil prices. Markets will shift gears to the US later today as the EIA is due to release its monthly Short Term Energy Outlook, while trade group API reports its weekly US inventory data at 4:30 pm ET. WTI was recently 1.4% higher at $51.23/bbl.
- JPMorgan Chase CEO James Dimon said on a conference call that the ongoing shutdown of parts of the federal government "is not going to help the economy." Dimon said that while it was unclear exactly what effect the shutdown would have on the economy, he relayed one estimate that if it continued for the entire first quarter, economic growth could go to zero. Finance chief Marianne Lake said on the same conference call that the bank was hopeful that the shutdown would end as soon as possible.
- Delta flags the headwind from the government shutdown alongside Easter's move into April and forex moves, though still expects adjusted unit revenue in 1Q to be in a range of flat to up 2%, with capacity rising 4% from a year earlier. United, which reports later Tuesday, is expected by analysts to be more exposed to any shutdown impact given its hub at Washington Dulles. Shares in both carriers marked lower before the open.

Jan 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose by more than 1 percent amid supply cuts led by producer club OPEC and Russia, although a darkening economic outlook may soon weigh on growth in fuel demand. 
- Gold prices held steady, supported by market expectations of fewer interest rate hikes in the year by the U.S. Federal Reserve, while a bounce in Chinese equities stoked interest in riskier assets.
- Most base metals rebounded as China signalled more supportive measures to stabilise a slowing economy after weak trade data disappointed investors.
- Chicago soybean futures ticked higher, recouping some of the previous session's decline on concerns over adverse weather in South America, although slowing demand in China limited the gains.
- The dollar weakened on heightened expectations the Federal Reserve will hold off on raising rates this year due to a slowdown in global growth, while sterling edged up ahead of Britain's parliamentary vote on its Brexit plan.

- SunTrust Banks, Verizon Communications and Applied Materials, a semiconductor manufacturer have challenges to shareholder proposals pending at the SEC to exclude shareholder proposals that would establish a board committee on social and environmental issues. Apple faced a similar proposal, but received SEC permission to exclude it prior to the shutdown and ahead of the company's March 1 annual meeting. If the shutdown continues even after companies need to send out proxy statements to shareholders, companies could include proposals in their proxy statements but not make them subject to a vote, saying they are waiting for a determination from the SEC.
- Publicly traded companies could have to put thorny proposals that they oppose up for shareholder votes if the government shutdown doesn't end soon. The SEC, which is closed and operating with a skeleton staff, must sign off on requests by companies to exclude these proposals from a vote at annual meetings. The SEC each winter handles a wave of requests from companies to keep unwanted initiatives off the proxy ballots every public company puts before its shareholders. Proposals can be struck from the ballot if they have been voted on before; or because they are deemed to not be economically relevant to the the company's performance; or if they don't relate to a company's core business activities, among other reasons.
- The U.K. parliament voting against Prime Minister Theresa May's Brexit deal this evening "is priced into sterling and gilts to the extent that the government does not lose by more than around 100 votes," Societe Generale says. "A much bigger defeat, say closer to 200, would initially be negative for the pound and yields, as it would tip the scales towards Labour tabling a motion of no-confidence," SocGen says. If Mrs. May were to lose a no-confidence vote, and no new Conservative leader emerges, general elections could follow, which most analysts say would be negative for the pound. GBP/USD falls 0.2% to 1.2836, while EUR/GBP slips 0.1% to 0.8907 as the euro weakens after German GDP data.
- An experimental treatment for peanut allergy in children faces delays getting to market because of the partial US federal government shutdown. Aimmune Therapeutics said in a securities filing the US Food and Drug Administration won't begin reviewing Aimmune's application to market the drug, AR101, "as a result of the U.S. government shutdown and lapse in appropriations." The FDA will start its review when the shutdown and funding are resolved. Aimmune submitted its application Dec. 21, before the shutdown began. The drug showed promise in a study whose results were released in November. FDA Commissioner Gottlieb has tweeted that the agency only has several weeks of funding left from user fees to review new drug applications.
- During a speech at the American Farm Bureau Federation in New Orleans on Monday, President Trump noted that Argentina had opened its market to buy US pork and he praised China and President Xi, saying that "it's our fault," for the US allowing a trade deficit to grow between the two countries, promising that China will eventually drop its tariff on US pork. Additionally, Trump said that China had begun ordering US agricultural products, although he did not provide specifics on what purchases had been made. Lean hog futures closed trading on the CME Monday down 1.3%. President Trump said that as part of his administration's border reform approach he would revise rules to "make it easier" for migrant farm workers to stay in the US legally. "For the people that work the farms--it'll be easier for them to get in," says Trump. The President did not provide any specifics regarding how it would be made easier for workers to stay in the country.
- Weak US import data out of China is dragging down grains futures on the CBOT today - with March soybean futures down 0.9% and wheat futures down 1.1%. The news that China's total imports had dropped 7.6% year-over-year in December cast doubt on reports that China had purchased millions of metric tons of soybeans during the shutdown -- although grains purchases announced in December may not transact until later months. "It was another great reminder of how far behind we are on soybeans sales," says Brian Grossman of Zaner Group. "It was a hard reality check that the Brazilian harvest is a month away." Chinese buyers have reportedly favored Brazilian soybeans over US ones while the US-China trade dispute is still active.
- Credit Suisse asks if Democrats and Trump could agree on drug pricing, after a series of proposed measures to tackle the issue were presented last week. While partisanship remains high, drug pricing seems to be one of the fields where the two sides of the aisle seem to align, notes CS. If price cuts of 10-25% are considered across different programs, AstraZeneca could be most exposed, while Bayer, Johnson & Johnson and Merck KGaA the least, says the bank.
- Canada PM Trudeau unveils changes to his cabinet, after a senior minister stepped down last week. Cabinet heavyweights such as Foreign Minister Chrystia Freeland and Finance Minister Bill Morneau stayed put, as widely expected. The only significant surprise was a change at Justice, where a former law professor at Montreal's McGill University, David Lametti, was appointed Justice Minister. Canada's justice minister could ultimately have to decide whether to approve the US extradition request for Huawei CFO Meng Wanzhou. Meng is in Vancouver, out on bail, and next appears in court in early February. The cabinet changes come less than a year before Trudeau faces national voters in an election campaign.
- With the government shutdown now the longest on record and showing few signs of ending soon, the grain market appears resigned to continue its  focus on Brazilian data as a source of market clarity this week. "With no government export data, all the trade has to focus on is South American  weather and the dry conditions in Central Brazil continue to attract attention," says Tomm Pfitzenmaier of Summit Commodity Brokerage. In the soybean market, which abounds with rumors of Chinese purchases in the past  few weeks, traders are treading water and waiting for the end of the  shutdown or announcement of a full US-China trade deal, according to Pfitzenmaier.

Jan 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by almost 1 percent, with Brent crude slipping below $60 per barrel, after Chinese data showed weakening imports and exports in the world's biggest trading nation and second-largest crude oil consumer.
- Gold prices rose as the dollar fell on expectations that the U.S. Federal Reserve will not raise rates this year and as Asian stocks tumbled after lacklustre China data pointed to a slowdown in the world's second-largest economy. 
- Copper and aluminium prices in both London and Shanghai lost ground after China reported disappointing export and import data for December.
- Chicago soybean futures lost ground as imports by the world's biggest buyer China dropped for the first time since 2011, following a trade war between Washington and Beijing.

- The Federal Aviation Administration is gearing up to order more airline-safety inspectors to return to work in coming days, as the agency copes with the partial federal government shutdown. Reacting to the length of the budget impasse--and the potential it could stretch for days or weeks longer--FAA managers are making plans to recall certain safety-critical employees to work such as inspectors who monitor airline operations. Air-traffic controllers already are exempt from the shutdown, but now the FAA is studying other employees who need to work in order to ensure safety. An FAA spokesman says resources are being allocated "based on risk assessment to meet all safety critical functions" and "we continue to proactively conduct risk assessments" and recall inspectors and engineers as needed.
- The union that represents US Air Traffic Controllers is the latest government employee union suing the federal government for not paying its members who have had to work without pay during the partial government shutdown. Air traffic controllers are among the 420,000 federal workers who are deemed essential and have had to keep working through the partial government shutdown even though they aren't receiving paychecks. The government's "unlawful failure to pay" the workers "has and continues to have a devastating effect on those devoted federal employees' lives," the suit alleges. The American Federation of Government Employees has brought a similar suit.
- Transportation Security Administration workers are getting a small measure of relief: one day's pay. The agency has determined that "legally and financially" it can pay TSA agents for work they did on Dec. 22, the first day of the partial government shutdown, TSA Administrator David Pekoske says on Twitter. "We are working hard to process every TSA employee who worked that day so they can get paid early next week," Pekoske says. Aside from that, TSA officers who are deemed essential workers and have to keep working during the shutdown won't be paid until appropriations are made to the agency.
- The federal shutdown has left grocers unable to renew their food stamp licenses and unable to acquire new ones, according to the National Grocers Association. "The partial government shutdown has had serious effects on the Supplemental Nutrition Assistance Program and the independent grocery industry," the trade group wrote to members. The government instructed states to load food stamp benefits to participants by Jan. 20, but currently won't put additional cash loaded on cards next month. "The government shutdown is having significant impact on your stores and the customers you serve," wrote Independent Grocers Alliance CEO John Ross to members.
- Transportation Security Administration officers will not be paid today for the first time since the partial federal government shutdown began. The agency's rate of unplanned absences has been higher this week than the same time a year ago, but relatively steady at around 5%, and wait times have remained normal at most major airports as the holiday travel rush has slowed. Still, TSA says it's "working with key stakeholders and industry partners to explore efforts to consolidate officers and operations."
- Venezuela President Nicolas Maduro was sworn in to a second, six-year term Thursday, and analysts say this probably means the OPEC-member nation's struggles with oil production, exports, refining and every other part of the industry will just keep trudging along. "Oil production is likely to further decline from its current level of 1.1M bpd (even if at a slower rate since remaining production is now primarily join ventures)," says Eurasia Group's Risa Grais-Targow. "And any oil-related sanctions from the U.S. would further complicate cash-flow." Venezuela's socialist revolution is now nearly 20 years old, and while Grais-Targow says Maduro remains vulnerable, she says that for now "we see no indication of a catalyst for political change."
- Speculation on the Fed's monetary policy moves weigh on the dollar, but that's not the only thing that does: The fact that the partial U.S. government shutdown is close to setting a new longevity record, that America's deficit topped $1 trillion in the last fiscal year and that the national debt stood at $21.9 trillion as of Jan. 9 don't augur well for USD sentiment, MUFG says. The partial shutdown stretched into its third week on Friday and will become the longest in U.S. history if it continues into Saturday.
- The day's U.K. economic releases show that "Brexit has basically ground all business activity to a halt as markets await some resolution of the issue before committing any investment capital," says Boris Schlossberg, managing director of forex strategy at BK Asset Management. GDP, industrial and manufacturing production data indicated a softer U.K. economy, while Britain's trade deficit has also increased. "If U.K. politicians allow the situation to devolve to a no-deal ending the collapse in economic activity is sure to become much worse," Mr. Schlossberg says. For now, sterling is stable against the dollar as "markets await the results of next week's Parliament vote." GBP/USD is last up 0.6% at 1.2830.
- Despite apparent progress at this week's US-China trade talks, Aberdeen Standard Investment says America's "ultimate goals of reducing the bilateral trade deficit; preventing intellectual-property theft and cyberattacks; and creating a more-level playing field for US firms exporting to or wanting to operate in China will be difficult to achieve." The firm also believes that "there are significant limits to the extent that China will be willing to upend its industrial- and foreign-policy strategy, and in particular the Made in China 2025 initiative given its centrality to achieving Xi's long-term economic goals." So while tensions are liable to de-escalate near-term, likely good for investors in risk assets--especially in Asia--Aberdeen thinks "there is a high likelihood that any agreement to suspend tariffs eventually breaks down when it becomes clear that Trump's objectives cannot really be met."

Jan 11 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were on track for solid weekly gains after financial markets were lifted by hopes the United States and China may soon resolve their trade disputes, and as OPEC-led crude output cuts started to tighten supply.
- Gold prices climbed as the dollar retreated on expectations the Federal Reserve may pause interest rate hikes if the U.S. economy slows this year, while investors awaited news on progress in the Sino-U.S. trade talks.
- London copper prices edged higher as the dollar weakened, making metals cheaper for holders of other currencies, while investors welcomed signs that talks to resolve the U.S.-China trade row were moving to the next level.
- Chicago soybean futures ticked higher but the market is poised for its first decline in three weeks on lack of further purchases by China despite it holding trade talks with the United States.

- Despite apparent progress at this week's US-China trade talks, Aberdeen Standard Investment says America's "ultimate goals of reducing the bilateral trade deficit; preventing intellectual-property theft and cyberattacks; and creating a more-level playing field for US firms exporting to or wanting to operate in China will be difficult to achieve." The firm also believes that "there are significant limits to the extent that China will be willing to upend its industrial- and foreign-policy strategy, and in particular the Made in China 2025 initiative given its centrality to achieving Xi's long-term economic goals." So while tensions are liable to de-escalate near-term, likely good for investors in risk assets--especially in Asia--Aberdeen thinks "there is a high likelihood that any agreement to suspend tariffs eventually breaks down when it becomes clear that Trump's objectives cannot really be met."
- The trade spat between the U.S. and China has yet to have much of an impact so far, Fed Chairman Jerome Powell said Thursday. "I don't think tariffs on either side have had much of a visible mark," he said. Trade talks between the U.S. and China could go either way, he said. "If this process leads us to a fairer, more open, lower tariffs environment for trade that will be good," he said. If instead it leads to more protectionism, he said, "that will lead to a less productive economy here in the United States and around the world."
- Fed Chairman Jerome Powell says he doesn't see any signs from the economy suggesting that the risk of a recession is elevated in the near term. Inflation isn't high enough to force the Fed to hit the brakes on growth by raising rates. Mr. Powell said his principal worry is the global economy, noting that China's growth has been slowing amid the trade confrontation with the U.S.
- Federal Reserve Chairman Jerome Powell told an audience Thursday he wasn't bothered by President Donald Trump's criticism of his performance. Mr. Powell, who was nominated by Mr. Trump, said he and his colleagues would focus on the job Congress has given them. "We don't get distracted by other things," he said. "We do not take political factors into consideration." Mr. Powell also said he hadn't received an invitation to meet with the president but hinted he wouldn't decline such an offer. "I'm not aware of any Fed chair turning down an invitation to the White House, nor do I think that would be appropriate," he said.
- US stocks are weaker, but have trimmed some of this morning's losses. The Dow is off 36 points, or 0.2%, while the S&P 500 falls 0.3% and the Nasdaq drops 0.2%. Retailers including Macy's and Kohl's reported disappointing sales results from the holiday season, reigniting investor concern. Macy's is off 18%, and Kohl's down 8%. Meanwhile, President Trump spoke to reporters Thursday morning, saying he will "maybe definitely" declare a national emergency if Democrats refuse his demand for border wall funding.
- The US Commerce Department, scheduled to release figures for November wholesale inventories at 10 am, will not publish the report this morning due to the partial government shutdown. Economists surveyed by WSJ expected wholesale inventories to log a 0.5% increase in November after a 0.8% rise in October. The shutdown has so far prevented the publication of reports including new-home sales, construction spending and international trade. Economists say the delayed publication of such data is obscuring the economic picture at a pivotal moment for the global economy.
- US weekly jobless claims fall 17K to 216K for the latest week, signaling the continuation of a strong labor market. "(The numbers) are not the lowest we've seen but they're still very low, and they're right in line with the strong job growth we saw last week," says Veronica Clark, Citi economist. Stock futures are still pointing to opening losses after four sessions of gains, with S&P 500 futures down 14 points.
- Jobless claims for federal employees increased by nearly 4,000 in the week ended December 29, likely reflecting furloughs in the wake of the government shutdown, according to Thursday's Labor Department report. This measure of federal-employee claims is separate from the headline jobless claims figure that reflects claims made under state programs. It is also released with a one-week lag. Overall claims fell by 17,000 to 216,000 in the week ended January 5, indicative of a historically tight labor market in which employers are reluctant to let workers go.
- European bourses are set to open lower in early Thursday trading, with investor sentiment dampened by reports that talks between President Trump and his Democrat counterpart Nancy Pelosi broke down in acrimony, says Michael Hewson of CMC Markets. Germany's DAX should open 43 points lower and France's CAC 40 is set to open 15 points down, says Mr. Hewson.

Jan 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by about 1 percent on swelling U.S. supply and amid a cautious reaction to trade talks between the United States and China, the world's two largest oil consumers, that finished without concrete details to ending their dispute.
- Gold prices rose as growing expectations that the U.S. Federal Reserve will pause its rate tightening cycle this year and an impasse between U.S. President Donald Trump and Democrats on funding for a border wall weighed on the dollar.
- London copper prices shrugged off early losses to rise for a second session, as a weaker dollar enabled the metal to hold gains made from optimism over the latest round of U.S.-China trade talks.
- Chicago soybean futures slid, giving up some of last session's gains, although losses were limited on optimism the United States and China may be inching toward a trade deal, soothing fears of an all-out trade war.

- European bourses are set to open lower in early Thursday trading, with investor sentiment dampened by reports that talks between President Trump and his Democrat counterpart Nancy Pelosi broke down in acrimony, says Michael Hewson of CMC Markets. Germany's DAX should open 43 points lower and France's CAC 40 is set to open 15 points down, says Mr. Hewson.
- President Trump nominates Andrew Wheeler to formally take over the Environmental Protection Agency. Wheeler, a former energy-industry lobbyist, has been running the agency as acting administrator for months and Trump previously said he planned to nominate him. Wheeler, 54, continues to push Trump's deregulatory agenda, which now includes crafting new rules that rollback climate-policy mandates on power plants, cars and trucks. Wheeler has already received Senate approval once, but by a narrow margin on largely partisan lines and after a delay tied in part to the EPA's management of biofuels mandates. The Senate Environment and Public Works Committee scheduled a nomination hearing for Jan. 16 at 10 am.
- US stocks and Treasury yields pared advances after President Trump addressed reporters on Capitol Hill. Trump says he may have to declare a national emergency "at some point" if negotiations over the border wall don't progress. The S&P 500 rises 0.3%, giving up its gains from after the Fed minutes, while the yield on the benchmark 10-year US Treasury note was at 2.714%, around a session low. Yields fall as bond prices rise.
- Bank of Canada governor Stephen Poloz was unequivocal at an Ottawa press conference: the US-China trade row is "the most important bit of uncertainty" hovering over the economy. "You are seeing this in expectations [on] the soft surveys. A lot of companies globally are quite concerned about the future of economic growth at this stage. And you see this in the stock markets," Poloz says. In its quarterly economic forecast, BOC cited the trade conflict between US and China as top risk to the inflation outlook. It said failure to obtain a resolution could hit Canadian exports and business investment hard, due to a potential breakdown in global supply chains and weakening confidence.
- The number of Transportation Security Administration workers calling out of work is inching higher as workers get closer to a payday without a check. Yesterday 5% of TSA workers were absent, compared to 4.6% on Monday and 3.9% on January 8 a year ago, according to TSA. If the agency doesn't receive appropriations by tomorrow afternoon it won't be able to make payroll for the more than 50,000 workers who screen passengers and bags at airports. Those workers are deemed essential and have had to continue working through the partial government shutdown that began in December. Still, security lines haven't spiked, with wait times at most major airports still maxing out below 30 minutes Tuesday according to TSA data.
- Roadrunner Transportation Systems says the government shutdown is delaying a $450M rights offering planned for this month because the Securities and Exchange Commission is not able to declare registration statements effective. The trucking company says it will file an amendment to its registration statement allowing it to automatically take effect 20 calendar days after filing without SEC action. The rights offering is to pay off costly rescue financing from hedge fund and major shareholder Elliott Management as well as raise cash for operations. Roadrunner says it intends to close the rights offering by March 1, 2019, and may be able to accelerate timing if the partial government shutdown is resolved before the automatic effective date.
- The US IPO market was supposed to have a big year, but the federal-government shutdown could spoil the party. "It could really put a damper on 2019," says Keith Townsend, who advises companies looking to go public as a partner at law firm King & Spalding. The DC impasse "is going to have the effect of essentially shutting down the IPO markets until the government is back to work." The shutdown has caused a partial closure of the SEC, meaning major companies working on IPOs are now in a holding pattern. While things are unlikely to impact the big unicorns like Uber and Lyft who are planning IPOs later this year, the longer it goes the more companies which may need to push back their offerings.

Jan 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose more than 1 percent, extending gains from the previous session on signs that Washington and Beijing may soon resolve a trade dispute that has cast a pall over the global economy.
- Gold prices edged lower as a likely end to a long-drawn Sino-U.S. trade war boosted risk sentiment, outweighing expectations of a pause in interest rate increases by the Federal Reserve.
- Base metals moved higher, with London copper hitting a one-week high, after a report that top consumer China would try to boost spending on autos and home appliances this year, as well as signs of progress in Sino-U.S. trade talks.
- Chicago wheat futures rose for a second session, gaining nearly 1 percent on expectations of increased demand for U.S. cargoes as rival exporters in the Black Sea region run out of surplus supplies.
- Commodity-linked currencies such as the Australian dollar and the Canadian dollar rose, helped by a rise in oil prices and growing optimism that China and the United States may be inching toward a trade deal.

- General Electric will begin disclosing contributions to 501(c)(4) "social welfare" organizations and non-tax-deductible contributions to major trade associations, both of which can be spent on elections, according to a nonprofit pushing companies to improve political-spending transparency. The agreement, which expands existing GE disclosures, was reached with the Center for Political Accountability and New York's state comptroller after shareholder-engagement outfit Investor Voice submitted a proxy proposal on the subject in September. Political-spending proposals rarely win majority shareholder support, but large companies have increasingly agreed to expand disclosures amid pressure from some institutional investors.
- The three major US stock indexes are heading toward a third consecutive session of gains on trade optimism. The Dow is up 255 points, or 1.1%, to 23779. The S&P 500 gains 0.9% and the Nasdaq rises 1%. Wells Fargo Investment Institute analysts say they expect that the risks of trade-tariff escalation should stay contained so long as trade negotiations continue to be productive. "Since formal talks have only just begun, we expect this trade-related narrative to remain with the markets for some time," analysts say.
- The USDA announces it will be extending the deadline for agricultural producers to apply for payments under the Market Facilitation Program. The deadline for applications was originally set for Jan. 15, but the government shutdown has left farmers unable to apply. "We will ... extend the application deadline for a period of time equal to the number of business days FSA offices were closed, once the government shutdown ends," Agriculture Secretary Sonny Perdue says. "Farmers who have already applied for the program and certified their 2018 production have continued to receive payments." Perdue also urges Congress to "pass an appropriations bill that President Trump will sign and end the lapse in funding."
- There's suddenly a lot more to unpack and worry about regarding Exxon's exploration and drilling activities in offshore Guyana, its biggest growth region outside the Permian. Guyana's foreign oil-friendly government recently lost a no-confidence vote, meaning likely snap elections by March, and Exxon-overseen ships were harassed by Venezuela's navy, whose government claims they were in Venezuela's--not Guyana's--waters. Christian Wagner at global risk consultancy Verisk Maplecroft says higher royalties, lower cost recovery allowances, higher local content requirements and/or contractual revisions are all now at least possible, but says for the time being Exxon's enjoying a remarkable success rate "and continued activity by Exxon is good news for local contractors and suppliers, providing certainty that business will continue as usual."
- The Stoxx Europe 600 rises 0.9%, or three points, to 345.89 after traders shrugged off downbeat eurozone economic data amid optimism about U.S.-China trade tension easing. The DAX gains 0.5% and the CAC-40 is up 1.1%. "Dealers have high hopes for the U.S.-China trade talks, there were some optimistic words from President Trump and that added to the bullish move," David Madden at CMC Markets says. Tech stocks are again among the biggest pan-European risers, with Austrian sensor-maker AMS AG up nearly 11%.
- US stocks rise sharply as investors monitor developments in trade negotiations between the US and China. The Dow Jones Industrial Average is up 1%, to 23,759, and the S&P 500 index gains 0.7%, lead by the industrials sector as the group has been hammered by trade tariffs. WSJ reports that negotiators have narrowed differences on trade between the two countries. While the two sides are still not ready to conclude a trade deal, cabinet-level follow up talks are expected later this month.
- The global economic expansion which followed the financial crisis of 2008 hasn't ended because of natural causes, it hasn't ended because of global trade disformer Federal Reserve Chairman Ben Bernanke highlighted last week at the American Economic Association's Annual Meeting. It ended because of global trade disputes, Mr. Bernanke said. Agreeing with Mr. Bernanke, Societe Generale says that "one of the culprits of the current slowdown is the trade war and the negative feedback loop it is causing in foreign trade, corporate profits and equity valuations." Asia "leads the downturn, and this is not just evident from the contraction in manufacturing purchasing managers' surveys in South Korea and Malaysia, but more generically in the tightening of financial conditions," SocGen says. Samsung posted on Tuesday an operating profit below consensus, highlighting "the China slowdown pain."
- The US Commerce Department, scheduled to release figures for November international trade at 8:30am ET, will not publish the report this morning due to the partial government shutdown. Economists surveyed by The Wall Street Journal expected the November deficit to clock in at $54.2B, down from $55.49B a month earlier. The two-week-old shutdown has so far prevented the publication of reports including new-home sales and construction spending. Lack of trade data comes as the US and China are in talks to resolve a trade fight that poses threats to the global economy.

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

- Oil prices jumped around 1.5 percent, pushed up by optimism that talks in Beijing can resolve a trade war between the United States and China, while supply cuts by major producers also supported crude.
- Gold rose, helped by a weaker dollar on expectations that the U.S. Federal Reserve might apply brakes on its monetary tightening cycle in 2019, although an improved risk appetite limited gains for the safe haven metal.
- Base metals moved higher, led by steel-linked nickel and zinc, after top metals consumer China took measures to boost lending following a contraction in industrial growth and focus shifted to its trade talks with the United States.
- Chicago soybean futures rose for a fourth consecutive session to their highest in nearly three weeks as trade talks between Washington and Beijing boosted expectations of U.S. soybean exports to China.

- U.S. President Donald Trump on Sunday floated an idea of declaring a national emergency to build his long-promised border wall without congressional approval, as talks on it and ending a partial government shutdown continued.
"I may decide a national emergency depending on what happens over the next few days," Trump told reporters at the White House before leaving for Camp David, a presidential retreat in the state of Maryland, for meetings with senior White House staff on border security and other issues.
The president said that a wall or a barrier must be built along the U.S. southern border with Mexico, while signaling a willingness to accept a steel barrier instead of a concrete wall by saying that "steel instead of concrete is fine."
He has insisted that the wall is essential to addressing illegal immigration and drug trafficking, while Democrats have slapped the proposal as an "inefficient, unnecessary and costly" solution to strengthening border security.

- The Sunday remarks came a day after negotiations between senior Trump administration officials and congressional Democratic staffer on the border wall funding and a budget standoff yielded what Trump described as "not much headway," as each side accused the other of giving no ground.
"This shutdown could end tomorrow or it also could go on for a long time," Trump said Sunday.
Mick Mulvaney, the acting White House chief of staff, told CNN's "State of the Union" program on Sunday that the negotiations held Saturday was "disappointing." Trump is demanding over 5 billion U.S. dollars in border security to deliver his signature campaign promise to build the border wall, whose construction and funding have been strongly rejected by Democrats.
Roundup: Trump shows no signs of budging on border wall funding as weekend talks falter

- After a weekend of talks between White House officials and Democratic lawmakers, U.S. President Donald Trump on Sunday showed no signs of yielding to pressures or giving up his demand funding the construction of a physical barrier on the U.S.-Mexico border. Trump tweeted in the evening that his administration is now planning to build a "steel barrier" rather than "concrete" wall on the southern border following what he said was a "productive" meeting during the day between Vice President Mike Pence and congressional Democratic staffers.
Heading to Camp David in Maryland for a meeting with White House staff, Trump told reporters that he will not give up the border barrier, which is one of his primary presidential campaign promises in 2016. "There's not going to be any bend there," he said.
The border wall issue was also among the topics at the Camp David meeting, according to media reports. Upon returning to the White House in the afternoon, Trump told reporters he had told his aids to use the term "steel barrier" instead of concrete wall because the Democrats "don't like concrete, so we'll give them steel."
Disputes between the White House and Democratic lawmakers over the wall led to a federal budget deadlock that triggered a partial government shutdown, which is entering the third week.

Jan 04 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)

- Oil prices rose, shaking off early losses after China said it would hold talks with the U.S. government on Jan. 7-8 to look for solutions to a trade dispute between the world's two biggest economies.
- Gold erased most of its early gains after touching 6-1/2-month highs, as Asian equities and the U.S. dollar regained some footing after Beijing announced a new round of trade talks with Washington amid fears of a global economic slowdown.
- London copper rose more than 1 percent, recovering from an 18-month low hit in the previous session, although the market is facing its biggest weekly drop in almost two months on worries over slowing growth in top consumer China.
- U.S. wheat futures edged up, rising for a third consecutive session and trading near last session's one-week top, on expectations of strong demand for U.S. supplies.
- The safe-haven yen weakened versus the dollar on hopes upcoming U.S.-China trade talks would make some progress, but broader market confidence remained weak amid worries over slowing global growth.

- Fed Chairman Jerome Powell "would want the public to be assured that we have a strong culture, it's not a fragile one, it's not subject to being disrupted," he says in remarks on a panel in Atlanta. The comments came in the context of a discussion of President Trump's recent attacks on the Fed. "We are committed to achieving the goals that the law gives us, and doing so in a completely nonpolitical way," he says. "It's very much in the DNA of anyone who has spent any time at the Fed," the chairman says.
- Shares in Richemont and Swatch trade higher today after the confirmation of U.S.-China talks to resolve trade tensions. The shares rebound from earlier losses caused by Apple's profit warning blaming weakening sales in China. The two watchmakers are highly exposed to Chinese customers, who make up about 40% of all Swiss watch sales, Morgan Stanley says. The brokerage sees Chinese demand weakening in 2019, citing Apple's warning on the magnitude of China's economic slowdown and a year-on-year drop in Hong Kong watch and jewelry sales for November. Richemont trades 3.3% higher at CHF63.28 and Swatch trades 3% higher at CHF284.60.
- Fed Chairman Jerome Powell said Friday he has not received any direct communication from the White House complaining about his job performance. Asked if he would resign if President Trump asked him to, Powell responded simply, "No." He said meetings between Fed leaders and presidents have happened in the past, but said nothing has been scheduled between him and the president at this time.

Jan 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell by 1 to 2 percent amid volatile currency and stock markets, and on concerns that an economic slowdown in 2019 will cut into fuel demand just as crude supplies are surging.
- Gold prices scaled a more than six-month peak as worries about a global economic slowdown and volatility in equities boosted safe-haven buying, while a weaker dollar offered support.
- London copper and aluminium edged higher, recouping some of the previous session's deep losses although concerns over economic growth in top consumer China kept a lid on prices.
- U.S. soybean futures firmed, trading near two-week highs on the prospect of declining yields in top producer Brazil due to scarce rains.
- The yen soared versus its peers, breaking through key technical support levels as heightened global growth risks pushed investors into safe haven-assets in moves exacerbated by thin holiday volumes.

- Apple's bonds could underperform its A-rated tech peers if market concerns grow over escalating trade tensions between the U.S. and China and weak iPhone demand, CreditSights says. The research firm reiterates its underperform recommendation on Apple's bonds and advises investors to avoid longer-dated bonds. Apple lowered late Wednesday its revenue guidance for fiscal 1Q19 to $84 billion, down from the $89 to $93 billion it had previously projected, on the back of lower-than-expected iPhone sales and a weakening Chinese economy. "It's a rare miss for the company, which generally does not pre-announce earnings, and the sheer size of the miss for this large tech behemoth
could spook markets," CreditSights notes.
- The FTSE 100 is expected to open 42 points lower at 6,692 after negative trading in China following Apple's move to reduce first-quarter guidance. All major indices in Asia are in negative territory. The Dow Jones Industrial Average managed to eke out a modest 18-point gain in late trading, though Apple shares fell 7% in after-hours trading as the tech giant blamed weaker Chinese sales for its guidance cut. Sterling is 0.38% lower against the dollar at 1.2558 after a media report claimed U.K. Prime Minister Theresa May had been urged to again delay a parliamentary vote on her deal to leave the EU after Government whips failed over Christmas to persuade enough lawmakers to back it.
- Fed officials have said a number of times that Trump's trade wars, most notably those aimed at China, haven't taken much of a bite out US momentum yet. Downgraded earnings guidance from Apple today suggests some grounds for worry. The company tells investors "over 100 percent of our year-over-year worldwide revenue decline occurred in Greater China." The company adds "we believe the economic environment in China has been further impacted by rising trade tensions with the US." It remains to be seen how that will affect the US, but in a year when growth is expected to slow, this isn't a helpful sign for the economy. Apple slumps more than 7% after hours following a trading halt.
- The US oil industry's strong support for Trump is on the rocks as the president calls for even lower gasoline prices and keeps up a China trade fight that's raised steel prices for oil companies and may threaten US oil exports to China. "Tariff and quota policies are hitting America's natural gas and oil industry from multiple directions," the oil industry's main trade group, API, says in a blog post after a tweetstorm of trade-war criticism. Early on, Trump was an oil-industry darling as he cut environmental regulations and taxes, upended the Paris climate deal, discussed ending electric-car subsidies and hired pro-oil Texans like Rex Tillerson and Rick Perry for top cabinet positions.
- Grains traders continue to be concerned about whether or not the USDA will release its World Agricultural Supply and Demand Estimates report as scheduled on January 11 -- with the government shutdown entering its 13th day and delaying most of the USDA's data reporting functions while the shutdown is active. On Twitter, President Trump has continued to attack Democrats for being unwilling to fund a US-Mexico border wall. However, in a tweet yesterday Trump did express being open to negotiation, saying "border security and the wall 'thing' and shutdown is not where Nancy Pelosi wanted to start her tenure as speaker! Let's make a deal?"
- European bourses lose ground as disappointing manufacturing data from China feed concerns over the global economy. "European equity markets have sold off heavily due to the disappointing manufacturing data from China," David Madden of CMC Markets UK says. "China has been slowing down for years, and the announcement hammered home the point that the second-largest economy in the world is cooling," he adds. The recent data, coupled with trade tensions between China and the U.S., add to fears of a global slowdown, Mr. Madden says.

Jan 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets dropped by around 1 percent in 2019's first trading, pulled down by surging U.S. output and concerns about an economic slowdown in 2019 as factory activity in China, the world's biggest oil importer, contracted.
- Gold prices rose on demand for safer investments amid falling equity markets and concerns over the outlook for global economic growth.
- Copper slid for a second session as the market kicked off 2019 trading amid concerns over growth in top metals consumer China as the latest data showed slowing factory activity.
- U.S. wheat futures fell more than 1 percent on Monday in thin, technically driven trade, brokers said, but still posted a yearly gain of nearly 18 percent.
- Safe-haven currencies such as the yen rose against the dollar, as a cautious mood prevailed on the first trading day of the year on concerns over global growth, the U.S. government shutdown and a slower pace of Federal Reserve rate hikes.

- Grains traders continue to be concerned about whether or not the USDA will release its World Agricultural Supply and Demand Estimates report as scheduled on January 11 -- with the government shutdown entering its 13th day and delaying most of the USDA's data reporting functions while the shutdown is active. On Twitter, President Trump has continued to attack Democrats for being unwilling to fund a US-Mexico border wall. However, in a tweet yesterday Trump did express being open to negotiation, saying "border security and the wall 'thing' and shutdown is not where Nancy Pelosi wanted to start her tenure as speaker! Let's make a deal?"
- European bourses lose ground as disappointing manufacturing data from China feed concerns over the global economy. "European equity markets have sold off heavily due to the disappointing manufacturing data from China," David Madden of CMC Markets UK says. "China has been slowing down for years, and the announcement hammered home the point that the second-largest economy in the world is cooling," he adds. The recent data, coupled with trade tensions between China and the U.S., add to fears of a global slowdown, Mr. Madden says.
- European credit seems to have started 2019 with some of the old negativity from the previous year, according to Commerzbank. Trade conflicts and growth fears remain the key driver of spreads, the bank says, and should continue to provide headwinds unless China and the U.S. reach a trade deal. President Trump tweeted over the weekend that "big progress" has been made following a phone conversation with his Chinese counterpart Xi Jinping. Yet Commerzbank remains cautious on whether it will yield tangible results. Also, lasting rallies in corporate bonds will be prevented by bond issuance in periods of calm, says the bank.

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

- London stocks begin the final session of a shortened week on the front foot after Wall Street's late recovery on Thursday. The FTSE 100 Index climbs 0.9%, or 58.88 points to 6,643.56 in opening deals after the Dow Jones Industrial Average pared early losses to close 260 points ahead at 23138. Accendo Markets attributed the U.S. volatility to portfolio rebalancing, automated trading, poor U.S. consumer-confidence data, bargain hunting and thin holiday volumes. "All the same headwinds prevail; U.S. government shutdown, U.S./China trade uncertainty, Brexit, monetary policy tightening, oil supply/demand, etc," says Accendo's Mike van Dulken. "In focus today, macro data of note includes U.K. mortgage approvals, which could have read-across for U.K. house-builders, banks and estate agents."
- Support for President Trump is said to be thinning among some farmers, who did not receive the second round of farm aid payments before the government shutdown was initiated. "The mood in the country seems to be shifting a bit," says Mark Gold of Top Third Ag Marketing. "Farmers I have talked to, are very disappointed the President did not issue the second market payments to farmers before the government shutdown." According to Gold, farmers also are clamoring for a conclusive end to the US-China trade war -- one that results with China buying US crops again.

Dec 26 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ)
- The partial shutdown of the US federal government clamps down on potential positive news in the US-China trade truce. The forced holiday hiatus for many federal functions extends to the USDA's Foreign Agricultural Service, which has been watched closer than usual this month as China made its first significant soybean buys in months, and hopes continue for US corn and pork. Traders have looked to FAS reports to confirm export sales, with speculation on the size of sales varying widely among market participants. Now on the FAS homepage: "Due to a lapse in federal funding, this USDA website will not be actively updated."
- Grains market analysts are projecting steady to higher opens for grains futures this morning, although any major news on Chinese purchases of corn or soybeans along with any major news on the government shutdown could move futures considerably. "The thing to watch here is that the funds are already holding a large long position (on corn) and they need some new demand news before they will have much interest in adding to those positions," says Tomm Pfitzenmaier of Summit Commodity Brokerage. The movement of the stock market could also be a factor for futures today, with  investors seeking to place money in less-volatile assets like commodities.
- The government shutdown has put a stop to much of the data released by the USDA on a weekly basis. According to the USDA, data affected by the shutdown includes "NASS statistics, World Agricultural Supply and Demand Estimates report, and other agricultural economic and statistical reports and projections," all of which are of keen interest to grains traders. According to the USDA, these reports will resume when the shutdown ends. President Trump has indicated willingness to let the shutdown continue into January, as he continues to hold out for funding for a US-Mexico border wall.

Dec 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices climbed after tumbling 5 percent in the previous session on signs OPEC's production cuts that start next month will be deeper than expected.
- Gold prices steadied, holding firm near a six-month high struck in the previous session, as the dollar remained under pressure due to a subdued outlook towards U.S. interest rates and the economy, and investors shunned risky assets.
- Copper edged higher, supported by concerns over lower mine output and a report by an industry study group showing a widening supply deficit.
- U.S. soybeans futures held steady after hitting a three-week low earlier in the session, but the oilseed was poised to finish the week down nearly 1 percent amid tepid Chinese demand.

- PM Morrison has recommitted Australian soldiers to stay in the Middle East after Trump announced the US is withdrawing troops from Syria, with Afghanistan potentially next. Morrison says Australia, which also has soldiers in Afghanistan, will keep fighting Islamic State militants. But he declined to criticise the US decision and the White House judgement that IS has been "defeated," saying after a visit of around 800 Australian soldiers in Iraq that "we will continue to work side by side with Iraqis, Afghans and our coalition partners to destroy Da'esh and Al Qaeda." Defense Minister Christopher Pyne notes Western allies including Australia have reduced their troop presence in the Middle East, but says it's too early to consider a full withdrawal.
- US allies in the western Pacific and elsewhere may have more to worry about with Pentagon chief Jim Mattis' departure than American adversaries, say Australian foreign-policy analysts given the broad trust for his handling of international security and image as a stabilizing force in the Trump administration. "Trump's instincts are essentially those of a militant isolationist," contends Euan Graham, executive director of the La Trobe Asia security think tank. Australia's government hasn't commented on the announcement. Andrew Carr, another leading security thinker Down Under, notes Trump hasn't reduced America's global security presence any more than Obama did. But he adds the test will come "once the Mattis handbrake is removed in 2019."
- Food-stamp recipients in huge swaths of America will no longer have their work requirements waived under a rule proposed Thursday by the USDA. The step, which tightens standards for states seeking waivers from work requirements for participants in areas of high unemployment, will allow Trump to sign a farm bill that rejected other controversial attempts to reform the nation's nutrition program. It applies to millions of able-bodied adults who aren't working, according to the USDA, and would eliminate waivers for 75% of currently exempted regions, saving an estimated $15 billion over 10 years. The rule "restores the dignity of work" to certain program participants and allows Trump "to support a farm bill he might otherwise have opposed," says Agriculture Secretary Sonny Perdue.
- Eurasia Group thinks "constructive engagement with Pyongyang will continue through next year" but that the odds of significant progress in denuclearization efforts remain highly unlikely. The political consultancy notes the North has refused to declare its nuclear arsenal in detail, and Eurasia thinks it remains unlikely that the country will abandon its nuclear weapons. That means the US will probably keep sanctions in place, though it could give waivers to Seoul to advance inter-Korean economic initiatives.

Dec 19 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell to erase most of their gains from the day before, resuming declines seen earlier in the week amid worries about oversupply and the outlook for the global economy.
- Gold prices steadied, after shedding half a percent in the previous session as the U.S. Federal Reserve delivered a less-dovish outlook on monetary tightening than many had expected.
- The dollar steadied in Asian trade after the Federal Reserve stepped back from a more aggressive policy tightening path even as it gave markets the distinct impression of being much less cautious than they had anticipated.
- London aluminium prices sank to a 16-month low after the United States said it would withdraw sanctions on Russian aluminium producer Rusal, while other metals fell on signs the U.S. Federal Reserve would continue to hike interest rates.
- U.S. soybean prices hit a three-week low, with investors disappointed by the strength of Chinese demand for North American supplies amid a truce in a trade war between the two nations.
- Canada PM Justin Trudeau toned down his rhetoric regarding possible cancellation of $10B deal with General Dynamics to buy armored vehicles from a local unit of the US defense giant that are then sold on to Saudi Arabia. Over the weekend, Trudeau said officials are trying to find "a way of no longer exporting" land-armored vehicles to Saudi Arabia, in the aftermath of Saudi Arabia's role in death of dissident Jamal Khashoggi. At Ottawa press conference, Trudeau said he's aware of "hard-working" Canadian families that rely on building those vehicles for employment. "We are going to keep those jobs in mind." He then added Ottawa was bound by a "difficult contract." General Dynamics warned Monday that Canada would face "billions of dollars of liability" if Liberal government tried to nix the agreement. "This is a complex situation."
- The announcement that the US Treasury Office of Foreign Assets Control intends to terminate sanctions on aluminum giant United Co Rusal PLC may push the US Midwest aluminum premium--the freight premium added on top of the LME aluminum cash price--lower as Russian aluminum supply is allowed to again be sold in the US. "Without a full marketing organization, there will be attempts to sell on price," says independent analyst Lloyd O'Carroll -- noting that Rusal may price it's prime aluminum at discount to its competitors in order to regain business lost following the April sanctions.
- "Political considerations play no role whatsoever" in the Fed's monetary policy decisions, Fed Chairman Jerome Powell says, a rebuke to President Trump's public campaign calling on the Fed to refrain from raising interest rates. "Nothing will deter us from doing what we think is the right thing to do," Powell says, adding that the Fed's independence is "essential" for the central bank to be able to do its job. The president has previously criticized the central bank's interest-rate increases and said the "Fed has gone crazy."
- If the FOMC doesn't hike today, it could bring a relief rally to skittish risk assets, says BTIG's chief equity and derivatives strategist, Julian Emanuel. "The Fed's transparency about the unknowns of" where a neutral Fed-funds rate is "in time of extraordinary geopolitical risk make it less likely that the response to a pause will be 'What does the Fed know that we don't?' and more along the lines of 'This is good risk management.'" While Trump has been calling for the FOMC to pause and would likely take a victory lap if policymakers opt against a December rate hike for the first time since 2014, Fed inaction could also bring the president some heat. "Passing on a hike puts additional pressure on the executive branch to get a deal done with China," says Emanuel.

Dec 18 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices clawed back some ground as global equity markets showed signs of stabilising, but crude was still under pressure from worries about oversupply and a slowing global economy that had driven sharp losses in the last three sessions.
- Gold prices climbed to a more than five-month peak as a softer dollar supported the bullion while investors awaited cues on the rate hike trajectory of the U.S. central bank from its two-day policy meeting.
- Shanghai copper hit a three-month nadir and led most China base metals lower, as investors concerned about global economic growth waited to see whether the U.S. Federal Reserve would raise interest rates for a fourth time this year.
- U.S. soybean futures held steady as expectations of continued large-scale Chinese purchases offset weakness across the broader grains market.
- The currencies of central and eastern Europe could benefit from the Federal Reserve raising interest rates on Wednesday, but at the same time pointing towards a slow down of monetary policy tightening in 2019, says Piotr Matys, emerging markets forex strategist at Rabobank. However, the rise "will prove relatively constrained by prevailing risk that trade tensions between the U.S. and China could re-escalate," he says. "To expect sustainable improvement in market sentiment towards risky assets, the trade truce would have to end with both sides of the conflict agreeing an armistice," he adds. So far the U.S. agreed to no raise tariffs for three months and China agreed to cut import tariffs on American cars and buy more American soybeans.
- The potential for the Federal Reserve "to signal a rate hike pause as early as in March poses the main downside risk for the U.S. dollar in the near-term," says Lee Hardman, currency analyst at MUFG. The dollar falls Tuesday, with EUR/USD up 0.2% at 1.1373 and USD/JPY down 0.3% at 112.51. The Fed is due to make its last announcement for the year on Wednesday, during which it is largely expected to raise interest rates by 25 basis points. "We expect Fed Chair Powell to emphasize that future policy decisions are becoming more data dependent as they shift away from their current gradual rate hike path," says Mr. Hardman.
- The dollar is lower on Tuesday after U.S. stocks fell on Monday "as investors fret over the health of the economy and the next steps by the Federal Reserve," says London Capital Group. The Fed is expected to raise interest rates on Wednesday--the fourth time this year--but investors are looking at what the Fed intends to do in 2019. "The market's overriding fear is that the Fed will press ahead with plans to raise interest rates, which could be too much for the U.S. economy to handle." EUR/USD is up 0.1% at 1.1365 and GBP/USD is down by 0.3% at 112.49.
- President Trump's announcement via tweet of a new round of payments to farmers and ranchers by the USDA is being seen by the US grain market as an optimistic sign for the future of the US-China trade truce talks going forward, with the second payout allowing farmers to hold on their grains longer without being forced to sell their stockpiled supplies at unfavorable prices. "I think there will be a lot of farmers relieved by this," says Dave Marshall of First Choice Commodities. On his Twitter, USDA Secretary Sonny Perdue lauded the President for the decision, saying that farmers "will know that you have their backs and have kept your promise to them."
- US soybean farmers, hog producers and others facing tariff-related struggles will get a second round of relief payments from the USDA, the agency announces. That's bound to ease nerves in farm country--most farmers never looked at the USDA's payments as much more than a Band-Aid for the trade disputes' toll on prices and export sales, but they had come to expect it, and uncertainty in recent weeks over the timing of a second tranche of payments had raised some rural stress levels. USDA Secretary Sonny Perdue says the payments "will help with short-term cash flow issues as we move into the new year," but he also terms it the "final" round of trade-mitigation payments.

Dec 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Brent crude prices dropped more than $1, falling for a third straight session, as reports of inventory builds and forecasts of record shale output in the United States, now the world's biggest producer, stoked worries about oversupply.
- Gold prices were steady, having touched a one-week high, ahead of a key U.S. Federal Reserve meeting, as speculation that signs of economic turbulence may prompt the central bank to put brakes soon on its monetary tightening cycle kept the dollar under pressure.
- London copper prices fell for a third straight session as concerns that global trade ructions would cool economic growth were compounded by signs of rising supply, but low inventory levels limited losses.
- Chicago soybean futures retreated from Monday's highs as the Asian session failed to drum up follow-on buying interest in the absence of fresh Chinese buying.
- US soybean farmers, hog producers and others facing tariff-related struggles will get a second round of relief payments from the USDA, the agency announces. That's bound to ease nerves in farm country--most farmers never looked at the USDA's payments as much more than a Band-Aid for the trade disputes' toll on prices and export sales, but they had come to expect it, and uncertainty in recent weeks over the timing of a second tranche of payments had raised some rural stress levels. USDA Secretary Sonny Perdue says the payments "will help with short-term cash flow issues as we move into the new year," but he also terms it the "final" round of trade-mitigation payments.
- The bullish tone struck by General Dynamics over any threat by the Canadian government to cancel its deal to sell locally-made armored cars to Saudi Arabia shared by some on the sell side. Cowen & Co points to a $750M break fee as well as some 2,000 direct manufacturing jobs and thousands more in the supply chain tied to the $10B deal. "Coming as it does following GM's recent announced Canadian layoffs and Bombardier's announced intention to consider sale of its CRJ program, a decision to cancel the contract would come when jobs are a key issue for Canada," says Cowen in a client note. GD is the worst performer in the sector Monday, falling 3.2%.
- General Dynamics says Canada would face "billions of dollars of liability" if it tries to cancel a deal to buy armored vehicles from a local unit of the US defense giant that are then sold on to Saudi Arabia. Canadian PM Justin Trudeau said it's reviewing export licenses tied to the $10B deal in the wake of the controversy surrounding the death of journalist Jamal Khashoggi. In an interview broadcast over the weekend on Canada's CTV Network, Trudeau said officials are trying to find "a way of no longer exporting" land-armored vehicles to Saudi Arabia. General Dynamics says it's still producing the vehicles, and in a statement warns of the impact of any unilateral termination by Canada on jobs.
- The latest version of a House Republican tax bill adds extensions of two new expired tax breaks -- one for short-line railroads that would become permanent and one for biodiesel producers that would be phased out. Republicans have struggled to corral votes for their multi-part tax bill and senators in both parties have been unenthusiastic about the prospects for a year-end catch-all tax law. The latest bill could get a vote in the full House this week.
- The number of banks that have announced buyback programs so far this quarter is at its highest level in about a decade, Sandler O'Neill & Partners says. Sandler O'Neill says so far in 4Q, it estimates 63 banks have announced share buyback authorizations. In 1Q08, that number topped 100, according to data from Sandler O'Neill and S&P Global Market Intelligence. Sandler O'Neill says banks have re-evaluated share buybacks following the new tax law and the decline in bank multiples. The KBW Bank Index is down 17% in last 12 months whereas the Dow, S&P 500 and Nasdaq Composite are down 3.3%, 3.8%, and 1.2% respectively.
- The dollar is over-valued by about 10% right now, says Athanasios Vamvakidis, global head of G10 forex strategy at Bank of America Merrill Lynch. This means that barring major surprises and political headwinds next year, the dollar is likely to fall and stabilize against the euro at an equilibrium level, which is of between 1.20-1.25 in EUR/USD, Mr. Vamvakidis says. Growth in China is likely to slow, but if it goes to just above 6%, it should help stabilize Europe, he says. Moreover, if China agrees a trade deal with the U.S., it should be euro-positive, he adds. EUR/USD is last up 0.3% at 1.1339.
- Deutsche Bank upgrades Stanley Black & Decker to buy, as analysts' tariff concerns are lifted by recent US-China trade developments. Since the US has agreed not to raise tariffs to 25% from 10% until March 1 if a trade deal isn't made, the firm says the toolmaker's headwinds will pare back considerably, as its hand tools are subject to finished-goods import tariffs. "If the 10% is maintained throughout (2019) - which is our base case - we estimate SWK's annualized headwind could be reduced by (about) $90M," analysts say. The firm also raises its price target to $143 from $136. Stanley gains 2.9% to $121.75 as the broader market falls.
- The yellow vest protests sweeping France have had a significant impact on the country's retail sales in November, which could linger into December, says Guillaume Leglise, analyst at Moody's Investors Service. "Although impact of the protests will mostly be felt in 2018 results, it's probably accelerated the rise in online sales, a credit negative for many retailers, with the notable exception of Amazon.com," he says. By company, Fnac Darty, THOM Europe, and Mobilux 2 S.A.S., which are heavily reliant on Christmas sales are likely to be under pressure. Moody's cites revenue losses in the sector of EUR1 billion since demonstrations started, according to Federation du Commerce et de la Distribution.
- The euro edges higher after the release of eurozone economic data on Monday, increasing to $1.1344 from $1.1329 beforehand. The October eurozone trade balance rose to a surplus of EUR14 billion from EUR13.1 billion month-on-month, but it was lower than the EUR17.8 billion recorded in the same period last year. Inflation in the euro area was revised down to 1.9% from 2% year-on-year for November, below October's 2.2%. Core inflation, however, remained at 1%.

Dec 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped amid concerns over slowing economic growth in China and as investors cashed in on gains of over 2 percent from the previous session, although supply cuts agreed last week by major crude producers offered some support.
- Gold prices were steady supported by the uncertainty around the Federal Reserve's policy outlook for next year but the metal was on track to mark its biggest weekly decline in five weeks, as a firmer dollar weighed on the sentiment.
- London copper turned south and was on course for a third straight weekly drop after data showed China's industrial production slowed last month, denting demand prospects for the metal that is facing a 15 percent decline this year.
- Chicago soybean futures slid for a second straight session, dropping to their weakest in more than one week as lower-than-expected Chinese buying weighed on the market.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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."