Forex & Commo Market News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Aug 31 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil markets held steady, supported by looming U.S. sanctions against Iran's oil exports and falling Venezuelan output, but held back by concerns the trade war between the United States and China could intensify.
- Gold prices inched up but remained on course to rack up their longest monthly losing streak since 2013, hit by worries over lingering U.S.-Sino trade tensions.
- London copper prices fell for a third straight session, weighed down by a report that the United States is ready to impose tariffs on $200 billion more of Chinese goods as soon as the end of next week, even as growth in China's manufacturing sector beat expectations.
- The dollar edged up against its peers, finding support as the latest episode of U.S.-China trade tensions dulled investor risk appetite, with weakness in emerging market currencies also helping lift the greenback.
- Chicago soybean futures were on track for their second biggest monthly drop in two years, having lost around 10 percent in August as a record U.S. crop weighs on prices.  
- The Bank of Canada should hold its benchmark interest rate at 1.50% at its next policy announcement on September 5 amid uncertainty over Nafta negotiations, members of a Toronto-based think tank say. The CD Howe Institute's Monetary Policy Council said the BoC should wait until October to raise the key rate to 1.75%, followed by additional rate rises that would eventually bring the key rate to 2.25% by September of 2019. The group said the Canadian economy is strong and Canada is facing growing inflation pressures, but uncertainty over Nafta negotiations and possible new US trade restrictions suggest the BoC should wait until October before moving rates.
- Agricultural futures were in the red on Thursday, sliding as concerns about oversupply weighed down markets. Hog prices led losses, with October contracts sliding 4.7% to 49.125 cents a pound, the lowest close since 2016. Wheat, soybeans and corn were also lower. A breakthrough over trade between the US and Mexico has done little to bolster markets this week, with traders instead focusing on large supplies of grain and meat being produced at home. Cattle futures were the exception, rising 0.6% to $1.098 a pound. Traders are waiting for the week's physical market to get going, wagering that higher wholesale beef prices will bolster it.
- US stocks skid to session lows as Bloomberg reports President Trump has backed moving ahead with a plan to impose tariffs on China as soon as next week. The Dow Jones Industrial Average was recently down 149 points, or 0.6%, to 25975, on track to end the day lower after four straight sessions of gains. The S&P 500 fell 0.5% while the Nasdaq Composite lost 0.2%. Meanwhile, Wall Street's "fear gauge," the Cboe Volatility Index, jumps 11%.
- Shares of dialysis provider DaVita sharply lower following passage of a bill by the California Assembly Wednesday  that caps insurance payments for dialysis. JPMorgan has estimated it could impair approximately half of DaVita's California earnings, or about 10% of the company's total corporate earnings. The bill still needs to be voted on by the California Senate and then goes to Governor Brown's office where he'll either sign it or veto it by the end of September. Raymond James says that while such a law, if passed, will "leave a mark" on DaVita "it doesn't rise to the level of materiality, in our opinion, unless the 'contagion' spreads to other states." DaVita shares are off 8.7%.
- Contrary to market expectations, ING analysts say that the Bank of Canada may raise interest rates by 25 basis points at the next meeting in September, which would likely push USD/CAD below 1.29, they say. "We think there are potential upside risks to the Canadian dollar as markets are underestimating the odds of a 25 bps rate hike at the next meeting." July labor market data and inflation reports "justify Governor Poloz delivering a second successive rate hike in 2018," the analysts say. USD/CAD is up by 0.1% at 1.2924.
- The pound is slightly lower versus the dollar on Thursday, last down by 0.15% at 1.3006 and below an earlier three-week high of 1.3043, after EU Chief Brexit negotiator Michel Barnier said in an interview with German media that the European Union should prepare for a no-deal Brexit scenario. But Thursday's comments haven't managed to push sterling back to the levels seen on Wednesday before Mr. Barnier said he would offer U.K. a unique trade pact after the divorce, which sent GBP/USD above 1.30. "We are not convinced that the [Wednesday] comments are a game changer," MUFG analysts say. However, they still expect the pound to "stage a more sustained rebound later this year as it becomes clearer that EU and U.K. will reach a final Brexit agreement." EUR/GBP trades flat at 0.8988.
- USD/CAD trades up 0.1% at 1.2933, but expectations of an interest rate increase by the Bank of Canada may lift the Canadian dollar and push USD/CAD down to 1.2845 soon, Societe Generale analysts say. Discussions between Canada and the U.S. over a new trade deal continue and "a trade agreement on Friday may not quite seal the deal for a 25 basis points rate increase next week, but may formalise a move in October." A substantial rise in the second-quarter gross domestic product data is also likely to help, the analysts say.
- The greenback is liable to feel pressure from  Chinese authorities stepping up efforts to support the yuan, a move Bank of Singapore says will also anchor other Asian currencies. It thinks the November midterms could prove to be the peak that dollar bears are awaiting and that US-China trade tensions have yet to top out themselves. The firm has been bullish on the yuan, and its' 12-month target for the dollar is CNY6.50, though that's weaker than CNY6.30 before. The dollar is around CNY6.84 today.

Aug 30 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices inched up, extending solid gains from the previous session on a fall in U.S. crude inventories and expected disruptions to supply from Iran and Venezuela.
- Gold prices inched lower amid expectations of higher U.S. interest rates, but managed to hold above a key psychological level of $1,200 which acted as a strong support.
- London aluminium prices were on course for their first drop in six sessions, as trade tensions between the United States and China again weighed on metals prices after optimism over a revised North American Free Trade Agreement.
- The British pound held firm in Asian trade, after making its biggest gains in seven months the previous day, taking heart from the European Union's offer of a post-Brexit 'partnership'.
- Chicago wheat futures rose for a third consecutive session, adding to a steep rise in the previous session as concerns that Russia may curb exports following a drought pushed prices higher. 
- Although U.S. President Donald Trump and Canadian Prime Minister Justin Trudeau signaled on Wednesday that they might reach a deal on the North American Free Trade Agreement, the Canadian dollar is flat versus the dollar, with USD/CAD at 1.2918. But the Canadian currency may rise pushing if 2Q gross domestic product data due later is strong enough to raise expectations of an interest rate increase on Sept. 5, RBC analysts say. "The chances for a September hike are down to less than 10%, and they could be closer to 30-40% if the numbers were particularly strong."
- China's retaliatory tariffs on US soybeans and meat will cut overall US agricultural exports to China by nearly 40% next year, according to a new USDA projection. While US producers still are on track to sell $19B worth of crops, meat and other farm products to Chinese buyers in fiscal 2018, the USDA sees that total falling to $12B in 2019, led by "sharply lower" demand for US soybeans due to tariffs. Sales of sorghum, pork and dairy products are also likely to take a hit in China, the USDA says in its quarterly outlook on agricultural trade, though cotton exports are heading higher.
- After more than two years, the US Postal Service's board of governors will finally have some members. The Senate has confirmed two of President Trump's three nominees to the board: Robert Duncan and David Williams. And more reinforcements on the way, as the White House also put up two more candidates for nomination. The group, which has
powers that include appointing the postmaster general and approving rate increases, has been without any members since December 2016. Current Postmaster General Megan Brennan has long called for the Senate to confirm nominees to guide the money-losing agency.
- Real estate investment trusts are likely to do well if U.S.-Chinese trade tensions escalate, say Vince Childers, portfolio manager, and Michael Penn, macro strategist, at Cohen & Steers, a listed real assets investment manager. "We believe REITs could fare better than other areas of the market if trade tensions intensify," they say in an email. That's because REITs get most of their revenues from properties within their home market and higher commodity prices would make construction more expensive, possibly slowing the pace of new supply, pushing prices up as a result. Moreover, "bond yields would likely come under pressure as investors shift to safe havens, potentially supporting REIT prices."
- The Chinese should "now pursue a stable USD/CNY policy," ING analysts say, which would temporarily "take a major source of global market risk off the table" and "allow for a tactical outperformance" of Asian currencies versus EMEA currencies. However, if trade disputes between the U.S. and China escalate, which could mean the U.S. imposing 25% tariffs on $200 billion Chinese imports, the Chinese yuan will likely fall on the back of a negative economic outlook for China. USD/CNY could then rise to 7.20, ING analysts say. USD/CNY is last up 0.4% at 6.8292.
- The DXY dollar index is likely to remain in the 93.50-95 range until after Labor Day in the U.S. on Monday, Societe Generale analysts say. This day unofficially constitutes the end of the summer holidays, characterized by thin liquidity in the markets. SocGen's forecast is conditional on U.S.-China trade tensions, and whether they ease enough to push USD/CNY below 6.80 towards 6.75, the analysts say. USD/CNY is viewed as a barometer of trade relations between the U.S. and China and of how trade talks are progressing. DXY trades around 94.84, USD/CNY is last up 0.3% at 6.8255.
- EUR/USD, which is last down 0.2% at 1.1671, isn't pricing in Italian political risks, say Societe Generale analysts. In order to do so it should be trading closer to 1.14, they say. At current EUR/USD levels, the spread between 10-year German Bunds and Italian BTPs should be at more like 240 basis points, they say, rather than the current spread of 277 bps, according to Tradeweb. "The de-correlation with [Italian bonds called] BTPs since last week is striking, and fair value should be closer to 1.14."
- China is unlikely to strike a trade deal with the US any time soon like Mexico did, says Mark Williams, an economist with Capital Economics. He argues that the key to getting a deal to stick is whether those backing it on the US side can sell it to Trump and convince him to announce it, and those around him are "notably more hawkish on China". On the Chinese side, he contends that China may be willing to countenance tactical concessions, but won't likely shift its economic strategy under pressure from a hostile foreign power.
- As the euro rose to 1.17 from 1.13 against the dollar in the past two weeks, it removed all the pricing of political and economic risks from Turkey and the rest of emerging markets, Societe Generale analysts say. EUR/USD is last down 0.2% at 1.1672. The situation in Turkey hasn't changed and the Turkish lira continues to fall, but analysts have taken the view that European banks haven't lent enough to Turkish companies to be a concern if those companies can't repay those loans. The euro is also helped by the dollar not gaining so much from safe haven flows as fears about global trade tensions ease.

Aug 29 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped, pulled down by a reported rise in U.S. crude inventories, although falling exports from Iran ahead of U.S. sanctions prevented the market from sinking further.
- Gold prices edged higher after the previous session's sharp fall, but rising U.S. interest rates and lingering Sino-U.S. trade tensions continued to weigh on the market with investors selling the metal at small rallies.
- London copper prices drifted down, pressured by a recovery in the dollar from a four-week low and worries over softer demand from top consumer China.
- Chicago wheat futures rose for a second session as tightening world supplies were back in focus after the market dropped to a one-month low on fund selling.
- European shares gain 0.15% as a U.S. trade deal with Mexico boosts market sentiment battered by tensions over trade with China. The Stoxx Europe 600 rises 0.57 points to 386.14 as the euro gains 0.27% against the dollar, with the DAX advancing 0.2% and the CAC 40 lifting 0.3%. "The positive sentiment in the U.S. on the back of the trade deal with Mexico has boosted sentiment in Europe," says David Madden at CMC Markets. "Trade concerns have been hanging over global markets for months, and the U.S.-Mexico deal proves there's light at the end of the tunnel." Miners lead the pan-European index higher, with Kaz Minerals up 5.6%.
- The U.S. is a less attractive investment location for German companies since the beginning of the U.S.-EU trade dispute, according to a survey by the American Chamber of Commerce in Germany, or AmCham Germany. The survey results are a warning sign, says AmCham Germany President Frank Sportolari. "Companies need reliability, transparency
and above all a road map for resolving the trade dispute," he says. Almost 20% of the surveyed German member companies said they cut back investment plans in the U.S. since the beginning of the trade spat. About 70% of all surveyed companies said they don't believe a recent meeting between President Trump and European Commission President Jean-Claude Juncker will lead to any substantial breakthroughs.
- EUR/USD rises on Tuesday by 0.4% at 1.1716 as investment flows into the dollar which have been made on the back of trade uncertainties are being reversed, but Italian politics should contain the euro's rise, says MUFG. "The main downside risk to the outlook for EUR/USD in the near-term continues to be posed by Italian political developments," the analysts say. Still, evidence has been building recently "that relative cyclical momentum is beginning to turn less negative for the euro." Another reason for previous falls in EUR/USD--better economic data in the U.S. versus Europe and rest of the world--is also expected to evaporate.
- The risk of the U.S. Federal Reserve raising interest rates by more than currently expected is "quite high," even though it has indicated it may allow inflation to overshoot, says Tine Choi, chief strategist at Danske Invest. Even the rate increases the Fed has already flagged are not reflected in 10-year Treasury yields, showing a level of complacency, she says. "The Fed has been excellent in its forward guidance but looking at 10-year US Treasury rates currently, it seems like we are maybe too complacent." With U.S. tax reform and fiscal expansion in store, "we could get some surprises," but the Fed should communicate any changes to the monetary policy outlook, she says.
- Politics has taken over as driving force for government bond markets over the last couple of months, and the reason for this is growing populism in the U.S. and Europe, Tine Choi, chief strategist at Danske Invest tells Dow Jones Newswires in an interview. "Investors are more focused on politics these days," she says. The issues concerning investors include the U.S.-China trade conflict, Italian politics and budget issues, and Brexit, Choi says. Bank of America Merrill Lynch's August fund manager survey showed that trade war risk remained the tail risk most commonly cited by respondents for the third month in a row.
- China steel rebar futures continue to edge lower amid profit taking. Investors are taking little solace from a preliminary US-Mexico trade deal amid scant progress on tariff issues with China. ANZ cautions against extrapolating too much out of the Mexico deal as the US continues to negotiate with each country on its own merit. Shanghai steel rebar futures are down 0.2%, while Dalian iron-ore futures gain 0.2%.
- The Senate could vote as soon as Tuesday morning to clear a procedural hurdle that would bring up a final vote on the confirmation of Richard Clarida, a Columbia University economist, to serve as vice chairman of the Federal Reserve, according to a GOP Senate side. Depending on how much floor debate lawmakers devote to Mr. Clarida's nomination, the final vote could be recorded later this week, and possibly as soon as later Tuesday. Mr. Clarida is likely to be confirmed to the Fed's seven-member board after clearing the Senate Banking Committee in June on a 20-5 vote. That would leave three additional vacancies on the board, for which President Trump has submitted two nominations.
- The new US-Mexico trade pact could provide an opening for US poultry companies to claw back Mexico sales that lately have gone to rivals like Brazil. Mexico began turning toward Latin America for more chicken after avian influenza struck US turkey and chicken barns in 2015, according to Mizuho analysts, and Mexico continued building relationships with Brazilian suppliers as President Trump ramped up his Nafta criticisms. Brazil now provides about 12% of Mexico's chicken meat imports, while US market share has declined to less than 80%, but "following the resolution of Nafta, we expect that to change," Mizuho says. The firm also expects eventual normalization of US pork exports, which faced tariffs in Mexico.

Aug 28 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady, capped by gradually rising output from producer club OPEC and supported by perceived supply risks from places such as Venezuela, Africa and Iran.
- Gold inched down from a two-week high hit in the previous session, as the dollar firmed against yuan, making the precious metal expensive for buyers in the world's biggest consumer China.
- London copper prices lost ground, set to fall for three out of four sessions as the trade war between the United States and China clouded the demand-outlook for industrial metals.
- Chicago wheat futures ticked higher but the market was still trading near last session's one-month low as selling by investors kept a lid on prices.
- The USDA unveiled details of its planned $12B aid package for farmers dealing with fallout from trade disputes, and despite its size, some farm groups are quick to point out shortcomings. The National Association of Wheat Growers derides the approximately 14 cents per bushel allotted to wheat farmers, well below the 75 cents per bushel the group estimates various trade disputes have cost. The National Milk Producers Federation says the $127M in direct payments planned for the dairy sector represents less than 10% of producers' losses due to tariffs implemented by Mexico and China, while the National Corn Growers Association figures trade battles have lopped 44 cents off per-bushel prices, versus the one-cent payment rate set for corn under the USDA plan.
- The new US-Mexico trade pact could provide an opening for US poultry companies to claw back Mexico sales that lately have gone to rivals like Brazil. Mexico began turning toward Latin America for more chicken after avian influenza struck US turkey and chicken barns in 2015, according to Mizuho analysts, and Mexico continued building relationships with Brazilian suppliers as President Trump ramped up his Nafta criticisms. Brazil now provides about 12% of Mexico's chicken meat imports, while US market share has declined to less than 80%, but "following the resolution of Nafta, we expect that to change," Mizuho says. The firm also expects eventual normalization of US pork exports, which faced tariffs in Mexico.
- While today's bilateral trade agreement is good news for the US and Mexico, the deal could put Canada under pressure to compromise as the country returns to the table, says Paul Ashworth of Capital Economics. The US-Mexico deal shows that the Trump administration is willing to negotiate in good faith and compromise, despite its stubbornness in trade negotiations in recent months. Ashworth anticipates that reaching an agreement on autos should be easy for Canada but that the dairy industry could prove more difficult. "Attention will now turn to what concessions Canada might offer," Ashworth says.
- Farmers' trade-frayed nerves are soothed somewhat with the announcement of a US-Mexico agreement on trade, boosting prospects for farm chemical suppliers--or that's how investors are betting after President Trump talks up the deal, and farm groups voice cautious support. Years of low crop prices have eroded farm incomes and dented profits for seed and chemical companies, but they get a boost today, with seed giant DowDuPont up 2.6% and pesticide specialist FMC up 1.6%. Fertilizer producers Mosaic and Nutrien rise 5% and 2.1% respectively.
- President Trump's remarks from the Oval Office on the US-Mexico breakthrough on Nafta indicates Canada will be presented with a "take-it-or-leave-it offer" on the trade pact, CIBC World Markets economists say. "By saying Canada could be left out, the US is threatening to take a tough line in those talks," firm's chief economist Avery Shenfeld tells clients. The scenario poses uncertainty for Canadian economy, and could prompt Bank of Canada to hold off on a rate rise early next month. Firm adds Trump's announcement is not good news for the Canadian dollar.
- Automakers are trading at session highs as President Trump announces a trade deal between the US and Mexico. Ford Motor up 2.5%, soaring past the S&P 500's 0.7% gain. General Motors adds 3.9% and European-listed Fiat Chrysler Automobiles, parent company of Jeep, Dodge and Chrysler, adds 3%. Investors had worried that automakers, one of the most contentious areas of talks for the US and Mexico's NAFTA negotiators, were particularly vulnerable to fallout from tariffs and production rules. The deal between the US and Mexico opens the way for Canada to rejoin the
negotiations, something that could help ease investor uncertainty over North American trade.
- Uncertainty around the fate of NAFTA has been a big question facing the US meat industry, with Mexico representing one of the biggest foreign markets for US-produced chicken, pork and beef--particularly dark-meat products that aren't as popular with US consumers. An imminent breakthrough in bilateral US-Mexico NAFTA talks has yet to ignite enthusiasm in meat stocks, however. Top US meat producer Tyson Foods, which has struggled with trade-policy challenges, dips 0.2% in early trading Monday, while Pilgrim's Pride rises 0.8% and Sanderson Farms declines 0.9%. Hormel rises 0.4%.
- The dollar was recently down 1.1% against the Mexican peso, as investors reacted to signs the US and Mexico may be closer to reaching a deal on renegotiating the North American Free Trade Agreement. Trump administration officials and their Mexican counterparts are debating a proposal to exempt some industries from dispute-settlement provisions, which would remove one of the most difficult issues, WSJ reported.
- Hog futures bounce after the US and Mexico approach a deal over trade. The bilateral agreement would set the stage for Canada to rejoin talks and for an eventual Nafta revision. The progress with Mexico is particularly welcome to hog traders: Mexico, the largest buyer of US pork, introduced tariffs on the meat earlier this year. That has undermined export demand and cut into prices. CME October lean hog futures rise 2.425 cents to 54.2 cents a pound.
- Investors' conviction in the strength of the dollar is "starting to wane," says TD Securities, which sees EUR/USD as a "buy on dips." The recent "stream of news flow has conspired against" the U.S. dollar, it says. This includes U.S. Federal Reserve chairman Jerome Powell's comments at Jackson Hole and "recent developments in Washington." TD adds that "a loss of [U.S.] data momentum and flattening yield curve against the majors" don't help the dollar. TD's analysis doesn't point to a "strong overweight" in the euro just yet, however. The U.S. Fed chief said Friday he saw no reason to speed up interest rate increases, but reiterated rates would continue to rise gradually.

Aug 27 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped slightly on concerns that a U.S.-China trade dispute will erode global economic growth, although looming U.S. sanctions against Iran's oil sector kept crude from falling further, traders said.
- Gold prices held steady after seeing their best gain in over a year the session before, boosted by short-covering and as comments from the head of the U.S. Federal Reserve signalling a gradual approach to interest rate hikes weighed on the dollar.
- Shanghai base metal prices mostly rose with zinc climbing for a sixth day and hitting a two-week high as inventories in China languish at their lowest in a decade.
- Chicago soybean futures slipped to their lowest in almost six weeks, falling for the fourth time in five sessions, as expectations of a record U.S. crop weighed on the market.
- European shares rise after an upbeat start to trading on Wall Street, though currency movements limited gains. The Stoxx Europe 600 rose 0.05%, or 0.18 points, to 383.56 as the DAX and CAC 40 both gained 0.2%, and the Dow Jones Industrial Average advances 156 points. "Helping suppress the European markets was the gains managed by the pound and the euro against the dollar," says Connor Campbell at Spreadex. "A pair of disappointing core and non-core durable goods orders readings, combined with the U.S.-China trade war and the legal problems surrounding Trump's former cohorts, dragged the greenback lower."
- The Swedish krona is so far this year's worst-performing major currency, having fallen by a little more than 7% year-to-date against the euro. Global trade tensions sparked by U.S. protectionism brought to surface worries on how the krona would react if volumes of cross-border trade diminished, given that Sweden is a small open economy. And to hedge against such a scenario by buying the world's most liquid currency--the dollar--has become expensive as the Federal Reserve continues to raise interest rates, pushing yields higher. Meanwhile, Swedish monetary policy and real interest rates "remain very punitive for the krona," says Carl Hammer, SEB's head of global macro and forex research, in a note. Rates in the country remain negative and Riksbank has postponed a first rate rise twice this year already.
- Copper prices rebounded a bit in Asian trading after modest losses in the previous session following the imposition of additional trade tariffs by the US and China on each other's goods. A slight pullback in the dollar this morning is also supporting most base metals. Three-month copper and zinc prices on the LME are up 0.4% and 1%, respectively, while aluminum is trading marginally higher.
- The IPC stock index closed down 0.3% at 49,750 points, its first loss in five sessions. The peso retreated against the dollar as US and Mexican Nafta negotiators met in Washington, seeking agreement on auto content rules which would pave the way for Canada to rejoin talks on the three-country trade pact. The peso, which has fluctuated with rising and falling optimism about a Nafta deal being reached this month, was quoted in Mexico City at 18.9620 to the dollar versus 18.7350 Wednesday.
- The 2017 tax cut package is still pretty much a dud, according to new research from JPMorgan. "We have so far seen little sign of surprising strength in the components of private demand that would be most likely to receive a boost from tax cuts," writes bank economist Jesse Edgerton. "We continue to view the tax cuts as providing a modest 0.3%-pt boost to growth in 2018 overall," he adds. To the extent the economy is seeing an upside, it's from investment related to oil production and from exports as firms looked to get ahead of the Trump Administration's tariffs.

Aug 24 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose on expectations that U.S. sanctions on Iran will cut significant volumes of crude from the market towards the end of the year, but trading was muted due to the unresolved trade dispute between Washington and Beijing.
- Gold prices held firm after falling nearly 1 percent in the previous session and sentiment for the yellow metal remained negative amid an outlook for rising U.S. interest rates.
- London copper prices edged down in early Asian trade moving lower for a third straight session due to a stronger dollar and after U.S. and Chinese officials ended two days of trade talks without any major breakthroughs.
- U.S. wheat futures dropped for the fifth session in a row and were on track for their steepest weekly fall in two years as U.S. export sales slowed, although expectations of global supply risks may lift prices in the near term.
- The 2017 tax cut package is still pretty much a dud, according to new research from JPMorgan. "We have so far seen little sign of surprising strength in the components of private demand that would be most likely to receive a boost from tax cuts," writes bank economist Jesse Edgerton. "We continue to view the tax cuts as providing a modest 0.3%-pt boost to growth in 2018 overall," he adds. To the extent the economy is seeing an upside, it's from investment related to oil production and from exports as firms looked to get ahead of the Trump Administration's tariffs.
- Hog futures this week have been moving in different directions, with contracts for delivery in the months to come sliding and those due only at later dates rising. Analysts say that may reflect short-term price pressures and potential long-term boons. On the one hand, the US is burdened by oversupply and physical prices continue to march lower. On the other, a sense that Washington is approaching a detente over trade with China and Mexico--who have targeted pork with duties--has fostered increased longer-term buying interest. The spread in China of African Swine Fever, a deadly hog disease, also has some traders bullish for the future. The country's agriculture ministry confirmed a new outbreak on Thursday, this time in Wenzhou, Zhejiang province. Front-month October contracts fall 2.3%, while futures for delivery in December and next year rise.
- Under the Trump administration, NASA has stressed the importance of joint public-private projects for both human and robotic exploration goals. Administrator Jim Bridenstine has even talked up the financial and operational benefits of reusable rockets, technology that ultimately could end up competing with the agency's most expensive project: the proposed huge and expendable SLS deep-space rocket. Now, NASA officials have taken the initial steps toward creating a potential hybrid private-government communications network for future space missions. According to the agency, the initiative seeks "conceptual system designs and descriptions," of future radio and optical communications systems "that could be carried out through partnerships, rather than traditional government procurements." An extra benefit would be fostering private deep-space communications research.
- Omarosa Manigault Newman's "Unhinged: An Insider's Account of the Trump White House," sold 34,000 hardcover copies through August 19, according to NPD BookScan. The company tracks 85% of retail book sales in the US, but it doesn't report e-book or audiobook sales. The tell-all went on sale Aug. 14. "Unhinged" ranked 27th on the Amazon Top 100 best-seller list on Thursday morning. Earlier this year, Michael Wolff's book "Fire and Fury" sold 1M copies in its first week, according to Macmillan, its publisher. That total included e-books and audiobooks, as well as hardcovers, plus books put on order by consumers.
- US Treasurys climb as investors confront an uncertain environment for fiscal and monetary policy, analysts said. While the Federal Reserve signaled its intent to raise interest rates in September, discussion of whether policy remains accommodative called into question how close the Fed may be to reaching a level of interest rates that no longer tilts in the direction of easy money. At the same time, investors remain cautious about the extent of additional turmoil stemming from the investigations into Russian interference in the 2016 election. The yield on the benchmark 10-year Treasury note fell to 2.812% from 2.823% Wednesday.
- Some analysts suggest that Michael Cohen's guilty plea could bring U.S. political uncertainty, which in turn could put pressure on the dollar. But the Democratic Party, who has high chances of winning enough votes to take the House in the mid-term elections, will likely not want Donald Trump's supporters to come to "vote in November in the belief the mid-terms have become a referendum on impeaching Trump," MUFG analysts say in a note. "Therefore, we do not see Washington politics as being a source of dollar selling over the coming days and weeks," MUFG says. Mr. Cohen's plea is incriminating Mr. Trump and the opposition could use this as a way to impeach the President.
- USD/ZAR has erased the losses it made on Wednesday, when the dollar lost ground on the hope of an easing in global trade tensions and the rand benefited from higher South African inflation. Media reports that Mexico and the U.S. have likely reached a deal on the North American Free Trade Agreement fuelled hopes that the U.S./China trade disputes may also be solved. But Commerzbank analysts warn the current environment "remains difficult for the rand in view of the ongoing global trade disputes." The dollar also firms broadly after Federal Reserve minutes reiterated that a September interest rate rise was likely. USD/ZAR is last up 1.5% at 14.3731.
- European stocks are set to open lower as trade concerns continue to weigh, David Madden of CMC Markets UK says. "The U.S.-China trade spat continues as representatives from both countries engage in low-level talks in the U.S.," he says. "Traders will be eyeing developments," Mr. Madden adds. The market will also be looking at flash manufacturing and services PMI reports released by major European countries.
- The Mexican peso strengthens 1% against the US dollar as investors bet the US, Mexico and Canada are moving closer to a preliminary deal to revamp the North American Free Trade Agreement. US and Mexican officials have said a deal could be sealed in the coming days. The Mexican currency closed in Mexico City at 18.7350, compared to 18.92 late Tuesday. The IPC index of stocks gained 1.1% to 49,880 points.

Aug 23 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- International oil prices slipped weighed down by the escalating trade dispute between the United States and China, although a decline in U.S. commercial crude inventories offered some support.
- Gold prices fell after hitting their highest in over a week in the previous session, as fears of another round of U.S. tariffs on China and expectations of higher interest rates lifted the dollar.
- London copper prices slid almost 1 percent falling for a second session as hopes of progress on trade talks between Washington and Beijing faded, triggering concerns about demand for industrial metals.
- Chicago wheat futures bounced back and recouped last session's losses, with prices underpinned by dry weather curbing world supplies.
- The Mexican peso strengthens 1% against the US dollar as investors bet the US, Mexico and Canada are moving closer to a preliminary deal to revamp the North American Free Trade Agreement. US and Mexican officials have said a deal could be sealed in the coming days. The Mexican currency closed in Mexico City at 18.7350, compared to 18.92 late Tuesday. The IPC index of stocks gained 1.1% to 49,880 points.
- European shares drop as automotive makers and suppliers take a hit from Donald Trump's threat to impose a 25% tariff on EU cars exported to the US. The Stoxx Europe 600 falls 0.03%, or 0.13 points to 384.02, though the DAX edges 0.01% higher and the CAC-40 gains 0.2%. "The announcement from the U.S. president last night is a reminder to the markets about how unpredictable he can be," says David Madden at CMC Markets. The European automotive sector's top decliner is tire and brake maker Continental, down 13%, while Peugeot declines 2.1%.
- The Mexican peso rises to a nearly two-week high on media reports that the U.S. administration is likely to announce Thursday that it has reached a deal with Mexico regarding their North American Free Trade Agreement. USD/MXN falls to a 12-day low of 18.7479 Wednesday afternoon, though it has been falling throughout most of the day. The U.S. and Mexico have been in talks for weeks. Canada, another member of NAFTA is expected to rejoin the months-long negotiation process after a U.S./Mexico agreement is reached. USD/CAD is slightly lower at 1.3029.
- US government bond prices edged higher Wednesday as stock futures retreated after the S&P 500 closed just shy of an all-time high. The yield on the benchmark 10-year US Treasury note was recently at 2.822%, compared with 2.846% Tuesday. Bond yields fell overnight as investors weighed political fallout around news that President Trump's former lawyer Michael Cohen said he violated campaign-finance law at the president's request and former Trump campaign chairman Paul Manafort was found guilty on eight charges including tax fraud. Later Wednesday the FOMC releases minutes from its early August meeting.
- Most emerging market currencies are doing relatively well on Wednesday, except for the Russian ruble, which is under pressure on Wednesday on the back of new U.S. sanctions imposed on Russia. USD/RUB hit earlier a nine-day high of 68.0601, according to FactSet, and is last up 1% at 67.9523. On Tuesday, the U.S. Treasury Department blacklisted several Russian firms and individuals, accusing them of violating bans on energy trade with North Korea and breaking U.S. laws against cooperation with Russia's intelligence arm. The Russian central bank hasn't acted against ruble weakness, and "indicated it has been a buyer of foreign currency lately as well and that is helping the markets gain confidence that they are ambivalent to this round of currency weakness," say Jefferies analysts in a note.
- US stock futures weaker following revelations Tuesday that President Trump's former lawyer Michael Cohen said he violated campaign-finance law at the president's request and former Trump campaign chairman Paul Manafort was found guilty on eight charges including tax fraud. Political tensions rising on the day that marks the longest-ever bull run for the S&P 500 at 3,453 days. On Tuesday the S&P 500 briefly topped its closing record in intraday trade before falling back. Target this morning reports better-than-expected quarterly results and raises its yearly EPS outlook. Shares are up more than 5% in pre-market trading. Lowe's off more than 2% after topping quarterly earnings and sales, but cutting yearly guidance after saying it would close its Orchard Supply Hardware business. Later today, investors will watch for the minutes from the Fed's August meeting. S&P futures are off 4.75 points.
- Gold edges 0.14% up to $1,198.29 a troy ounce, as the U.S. dollar remains subdued on increasing political uncertainty, after having torn higher last week. The WSJ Dollar Index is last down 0.1%, having fallen 1.2% over the past five days. Still, the index is up 2.3% over the past three months. A weaker dollar tends to make commodities denominated in the currency less expensive for other currency holders. The pressure on the dollar has allowed both base and precious metals to recoup some of their heavy losses from last week, ING strategists say. Analysts attribute some of the dollar's losses this week to President Trump's criticism of Fed Chair Jerome Powell's handling of monetary policy.
- The dollar should continue to strengthen further "until the summer of next year on favourable interest rate differentials and outflows from emerging markets," says Jane Foley, Rabobank's senior forex analyst, in a note. The DXY dollar index has risen by 3.7% since the beginning of the year. But, that is dependent on whether the Federal Reserve doesn't act to weaken the dollar, Ms. Foley says. The Fed is an independent body, but U.S. President Donald Trump said this week that he would prefer it to not raise interest rates whilst he is negotiating trade deals.
- Haven-metal gold received a boost overnight after a court found Paul Manafort, President Trump's former campaign manager, guilty of eight counts of fraud. His conviction came shortly before Michael Cohen told a federal judge that Mr. Trump had directed him during the 2016 campaign to buy the silence of two women who said they had affairs with Mr. Trump. Mr. Cohen, the president's former personal lawyer, made the statement as he pleaded guilty Tuesday to eight criminal charges. "On balance, we believe that higher U.S. political uncertainty is likely to provide more of a dampener on further U.S. dollar upside potential in the coming months," MUFG's Lee Hardman says.
- U.S. President Donald Trump has expressed his preference for a weaker dollar on several occasions, including this week, when he said he would have preferred the Federal Reserve not to raise interest rates while he is negotiating trade deals. "In the short term this could support Trump's aims of rebalancing the U.S. trade deficit," says Jane Foley, senior currency strategist at Rabobank, in a note. Shrinking the deficit is part of Mr. Trump's goal from trade talks. In the long-term, however, a weaker dollar "could weaken investment flows and increase the inflation potential of the U.S. economy," Ms. Foley writes.
- News that U.S. President Donald Trump's former lawyer has pleaded guilty to violating election campaign finance laws had little effect on the dollar, but it may limit how much it rises going forward. EUR/USD opened flat Wednesday morning in European trading, and is last up 0.2% at 1.1591. But the news still brings uncertainty about U.S. politics. "Higher U.S. political uncertainty is likely to provide more of a dampener on further U.S. dollar upside potential in the coming months," MUFG says. The dollar had been rising in the past months due to U.S. and rest of the world monetary policy divergence, backed by better economic data, as well as on safe-haven investment flows, given that the dollar and U.S. assets are seen as safe-havens due to their liquidity.
- European shares drop after a mixed session in Asia amid uncertainty caused by U.S. political turmoil. The Stoxx Europe 600 falls 0.04%, or 0.17 points to 383.98 as the euro gains 0.15% against the dollar to $1.1589. "Global markets are on the back foot this morning, with European indices following the bearish sentiment seen in Asia rather than the positive U.S. session which saw the S&P 500 approach record highs," says Joshua Mahony at IG. "However, this time around we're seeing the dollar and stocks fall as markets fear potential negative repercussions for Donald Trump after his former lawyer pleaded guilty to several campaign violations, implicating the President in the process."

Aug 22 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose supported by a drop in U.S. crude inventories and a weaker dollar, along with concerns about a potential shortfall of Iranian oil from November due to U.S. sanctions.
- Gold prices hit a one-week high and inched closer to the key $1,200 level as the dollar remained weak on U.S. President Donald Trump's criticism of the Federal Reserve and ahead of minutes from the central bank's August meeting.
- London copper steadied ahead of trade talks between the United States and China, although U.S. President Donald Trump has played down hopes for near-term progress, saying resolving the dispute will take time.
- U.S. wheat futures edged higher steadying after a steep fall in the previous session to an eight-day low on easing fears of a cut in Russian exports.
- The Turkish lira trades steady on Wednesday, with USD/TRY last at 6.0606, but the currency remains under pressure, say UniCredit analysts. "The initial catalyst for the sharp lira move lower--escalating U.S.-Turkey tensions--will likely remain in place," they say. The fact that authorities implemented some sort of capital controls and tighter monetary policy "are unlikely to stabilise the currency, though they could buy time." By choosing last week not to lend funds at the one-week repo rate but at the higher overnight lending rate of 19.25%, Turkey's central bank essentially temporarily lifted interest rates. But "correct policy measures, including fiscal and monetary tightening" is what is needed for the lira to recover, the analysts say.
- It's unlikely the Federal Reserve minutes "will provide any new revelations" on how monetary policy is going to develop further, Commerzbank analysts say. Moreover, the Fed's implied rate path, which is two further rate rises this year "and probably two more next year...is largely priced in, so that the dollar is unlikely to benefit much as a result" if the minutes reiterate expectations. The dollar last trades flat, with EUR/USD at 1.1569 and the DXY dollar index at 95.28. The fact that U.S. President Donald Trump's former lawyer Michael Cohen pleaded guilty to charges related to election campaign violations had little impact on the dollar. "There has been little spill over into financial markets, including the dollar," RBC analysts say.
- There's been a relatively muted response so far to the Michael Cohen guilty plea and his contention that Trump directed him to buy the silence of two women who said they had affairs with the president. S&P 500 futures are down 0.5% in early Asian trading after the index logged in intraday record high but was unable to notch a closing best while posting its best finish in 7 months. And in the only market open in Asia Pacific until the top of the hour, New Zealand's NZX 50 is 0.1% higher. Treasury yields, though, did push down to 2.83% from around 2.845% and the dollar barely flinched.
- Canada was among several countries targeted on Tuesday by new U.S. antidumping duties for welded pipes. The Commerce Department announced preliminary antidumping duties on large diameter welded pipe from Canada, China, Greece, India, Korea and Turkey, saying exporters in those countries were dumping the product in the U.S. at prices below their fair value. Canada's duty is set at 24.38%, according to the Commerce Department. A spokesman for Canada's foreign minister said the government was disappointed with the decision and is in contact with the exporter targeted by the U.S. investigation, which the Commerce Department identified as Evraz Inc. NA. The move comes amid heightened trade tensions between Canada and the U.S., including metals tariffs and uncertainty over the future of Nafta.
- Peter Conti-Brown, a professor at The Wharton School of the University of Pennsylvania, writes in a Yale publication that even as President Donald Trump ramps up his criticism of the Fed Chair Jerome Powell and Fed rate hikes, there's almost no way for him to offer up his reality TV catch phrase "you're fired" to any central bank officials. He notes the law says a Fed governor can be removed for "cause," but courts have interpreted that to mean something genuinely problematic. But it's a bit different for the role of the chairman. "My own sense would be that the Chair is not protected from removal," Conti-Brown writes, while adding "removal litigation is a wild ride that divides the appellate courts that review it."
- The Trump administration's tariffs have yet to hurt industrial real estate demand in the US, which is fueled more by strong domestic consumption numbers rather than trade flows, according to real estate research firm Green Street Advisors. While further tariffs on Chinese imports could hurt demand, the impact on industrial property would be uneven. Nearly three-quarters of Chinese goods shipped by sea arrive at West Coast ports and warehouses there would face a sharper impact from any escalation in the trade spat. That said, it would likely be contained as demand for industrial real estate in the US is now more heavily focused on faster delivery of consumer goods and has mostly decoupled from trade growth in markets with large ports of entry, Green Street added.
- DA Davidson upgrades Estee Lauder to buy, citing the company's continued growth in China, its plans to offset tariff effects as well as its growing sales and profits closer to home. "EL's expansion in high-growth channels in the Americas is now more than offsetting department store declines," analysts say. Analysts say the company has already been managing European levies and makes less than two-thirds of the products it sells in China in the US. The company also has the opportunity to expand brands into China, which currently accounts for more than 9% of sales. Shares are down 3.7%.
- A tax idea under consideration by the Trump administration -- indexing capital gains to inflation -- would yield " roughly zero net additional economic growth" according to a Penn-Wharton Budget Model analysis. The idea would reduce revenue by about $95B over a decade if done retroactively and by $49B if done prospectively. Treasury officials are mulling the idea and haven't said if they think they have the authority to implement it without Congress.
- US Treasurys declined as investors and analysts assess whether President Trump's complaints about the direction of Federal Reserve policy have any potential to alter the central bank's own forecasts for more rate increases. The remarks represent a break from recent traditions that the White House not comment on the Fed, and should lead to more speculation about Fed Chairman Jerome Powell's speech scheduled for later this week. While investors tend to see little risk that policy makers respond to President Trump's statements that he expected Powell to be more in favor of easy money policies, they do cast a shadow over the central bank's future decision making. Powell is scheduled to speak Friday at the annual Fed gathering in Jackson Hole, Wyoming, The benchmark 10-year Treasury note yield rose to 2.842% from 2.823% Monday.
- The U.S. dollar is unlikely to rise this week, ING analysts say, given there aren't many factors on the horizon that could push it higher and as U.S. President Donald Trump's criticism of Federal Reserve rate increases weighs on the currency on Tuesday. EUR/USD is last up 0.3% at 1.1520. "A quiet week for emerging markets, with Turkey now on holiday for the rest of the week, suggests a lid on the dollar until Friday," the analysts write in a note. The dollar could even fall slightly, the analysts say. The DXY dollar index "could edge a little lower to 95.00 in thin markets." DXY is down around 0.4% at 95.55.
- UniCredit continues to favor the euro, but it warns that the political backdrop is concerning and "could shift sentiment in foreign exchange markets either way." Last week's German gross domestic product "numbers are encouraging, and we expect a turnaround in global trade to support eurozone exports in 2H18. However, the risks to our forecast are skewed to the downside for political reasons." U.S. President Donald Trump could extend tariffs on Chinese imports, which could cause China to retaliate, and this would "weigh on global growth dynamics and run the risk of interrupting global value chains." EUR/USD rises 0.3% to 1.1516 on the back of dollar weakness.
- South Korean Trade Minister Kim Hyun-chong says his government and the Trump administration will likely sign the countries' revised free-trade agreement in September, before the deal is submitted to Korea's parliament for ratification. Lawmakers there have warned the amended agreement would fail if Trump decides to impose new tariffs on Korean cars and auto parts on national-security grounds. Kim tells lawmakers that Seoul is still trying to win an exemption.

Aug 21 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged higher as U.S. fuel markets were seen to be tightening while looming American sanctions against Iran were expected to cut supply out of global markets.
- Gold prices climbed on the back of a weaker dollar extending gains into a third session, after U.S. President Donald Trump said he was "not thrilled" with the Federal Reserve for raising interest rates.
- Base metals prices rose with London copper climbing back above the $6,000-a-tonne mark, as the dollar slipped, making metals cheaper for holders of other currencies, while the market awaited U.S.-China trade talks in Washington.
- Chicago wheat futures dropped for a second straight session weighed down by expectations of higher exports from Russia in the months ahead as suppliers boost shipments ahead of potential export curbs.
- Swiss trade figures for July showed just how dependent Switzerland is on the U.S. for its surplus. The country's total goods trade surplus was 1.2 billion francs ($1.2 billion) last month. But the merchandise surplus with the U.S. alone was 2.2 billion francs for the month, which helped Switzerland offset a sizable trade deficit with the neighboring eurozone. Dollar at 0.9874 francs, down 0.4% from Monday.
- The dollar falls on the back of U.S. President Donald Trump's criticism of Federal Reserve monetary policy in an interview with Reuters. Mr. Trump said he isn't "thrilled" with the Fed raising interest rates, suggesting the central bank should take a break from policy normalization while he caries out his protectionist policies. "During this period of time I should be given some help by the Fed," Mr. Trump said. EUR/USD earlier rose to a 12-day high of 1.1543 and is last up by 0.2% at 1.1507. These sort of comments bring "speculation that this administration could even go down the route of outright currency intervention," say RBC analysts. But "we think Trump will be limited to verbal comments, at least for now," the analysts say.
- US firms operating in South Korea expect  Trump's potential tariffs on Korean cars and auto parts to be "counterproductive" at a time especially when US exports to Korea and Korean investment in the US are rising. The US Chamber of Commerce's US-Korea Business Council says if import tariffs are imposed they "would deal a staggering blow to this continued growth" and undermine a renegotiated Korea free-trade deal. Korean lawmakers have threatened to block the revised agreement unless the country's cars win an exemption from proposed American tariffs.
- The big fight over replacing the Clean Power Plan may have nothing to do with Obama-era policy. Trump's team wants changes to an older rule called New Source Review, which requires old plants to install the highest-tech environmental controls whenever they renovate. The efficiency boosts the Trump plan outlines for coal-fired plants would probably trigger that requirement, and much-costlier upgrades. For coal improvements, it's a linchpin. For environmentalists, it's an overreach that undermining current policy.
- After a couple of noisy weeks for the NZD/USD, it's suddenly gone all quiet and Australia & New Zealand Banking Group doesn't see that changing in today's session. "There were a couple of headlines overnight relating to US monetary policy and Trump's apparent unhappiness about its path, which did weigh on the USD," ANZ says. WSJ reports Trump had signaled disappointment in Fed Chairman Powell at a fundraiser in New York last Friday and at a dinner with chief executives at his golf course in Bedminster, NJ, earlier this month. Still, currency markets were otherwise quiet and the kiwi remained in reasonably tight ranges. "Those tight ranges are likely to hold today," says ANZ with the NZD/USD at 0.6647 early in Asian trading.
- Markets largely shrugged after news reports reveal President Trump had again expressed unhappiness about the Federal Reserve's plans to raise interest rates. WSJ reports Trump had signaled disappointment in Fed Chairman Jerome Powell at a fundraiser in New York last Friday and at a dinner with chief executives at his golf course in Bedminster, NJ, earlier this month. One reason for the muted reaction: Trump's public protestations aren't likely to influence the Fed to either loosen or tighten monetary policy. But the critique from the president could complicate how the Fed communicates any policy shift, should it deviate from its current path of slowly raising interest rates down the road, because it wants to be seen as an apolitical institution.
- Hog traders will be looking to see whether the futures market continues its rally. Prices bounced last week on reports that the US was approaching trade deals with China and Mexico, both of which introduced tariffs on American pork. Outbreaks in China of African swine fever, a deadly hog disease, as added to the buying. But the domestic supply-and-demand outlook continues to look unfavorable. Market observers say that meatpackers will start the week bidding 50 cents to $2 less for pigs to slaughter, extending a recent trend of lower physical prices. Physical cattle last week traded for between $1.09 and $1.11 a pound, steady to lower than a week earlier.
- Copper is recovering today, but investors expecting it to sustain that rally may be disappointed. "Last week's news of fresh trade talks helped things, but we were optimistic last time and we know what happened since. Investors' skin has been hardened to comments from Donald Trump," Sucden Financial Research's Geordie Wilkes says. While last week's moves highlighted the market's potential for volatility, lower seasonal trading volumes also played a role, and the growing market expectation for two more Federal Reserve interest rate increases in 2018 may sustain the rise in the U.S. dollar through the second half of the year, he says. Data from CME Group put the chances of a rate increase at the Fed's next meeting on Sept. 26 at 96%.
- Investors have been buying more dollars in recent months, and speculators added more long dollar positions in the week to Tuesday, but MUFG analysts warn that "dollar bullishness has become a little excessive." On the two previous occasions when positioning has reached these levels, "the market has failed to sustain these long dollar positions for very long and were followed by a period of sharp liquidation," they say. One event that could trigger this is the Jackson Hole symposium on Friday, the analysts say, during which the Federal Reserve will discuss emerging markets' impact on its monetary policy. Major changes are unlikely to be announced, "but these speeches are all about nuances." EUR/USD falls 0.3% to 1.1406.

Aug 20 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell as concerns over slowing economic growth dragged on markets. 
- Gold prices inched higher as hopes of easing trade tensions between the United States and China put pressure on the dollar, adding to demand for the yellow metal that improved last week after prices touched 19-month lows.
- London copper climbed as hopes of progress in a trade dispute between the United States and China buoyed risk appetite and undermined safe-haven demand for the dollar.
- Chicago soybean futures climbed more than 1 percent as traders expect China to resume purchases of U.S. cargoes after planned talks between the two nations.
- Oil prices get an end-of-session boost to end up 45c, or 0.7%, at $65.91 as WSJ reports the US and China are plotting a road map to resolve a trade dispute by November. Oil markets have been closely following the US-China tariffs issue, which some investors fear could cause world oil demand to shrink if it were to blow up into a protracted trade war and protectionism by the world's two largest economies. Friday's rise in crude prices was a high-note finale to an otherwise bearish week that saw front-month oil prices fall by 2.5%, fueled largely by an unexpected surge in US oil and fuel inventories.
- Big Pharma stocks such as Pfizer and Eli Lilly are finally feeling the love after being out of favor for much of 2018. JPMorgan says that major drug stocks are up 11% in the past 6 weeks, versus 5% for the S&P 500, helped by strong 2Q earnings reports and a perception that the Trump administration's proposals to cut drug prices won't seriously hurt manufacturers. "For much of the past 12-18 months, investors have been bearish/apathetic towards the Major Pharma names based on industry pricing fears. That appears to be changing as we have seen a clear improvement in sentiment over the past 1-2 months..." firm says.
- There's headline risk and there's actual risk, and Tudor Pickering says a federal judge's decision to order a review of Keystone XL pipeline's approved pathway through Nebraska is mostly the former. "We anticipate the headline risk to be largely overshadowed by the decision to not vacate the Presidential Permit while TRP [TransCanada] committed to slightly delay construction until Q2'19," it says. The 1,184-mile project has seen myriad delays due to environmental protesters and others, but President Trump supports the pipeline, which could help resolve bottlenecks on Canadian crude that have sent local prices tumbling below $40/bbl. Tudor says the project could still be done and ready for service by 3Q21.
- US government bonds rise as investors remain weary of the possibility geopolitical events over the weekend could generate additional risks, investors said. With economic and diplomatic problems in Turkey still evolving and the potential for trade tensions to bubble over in an instant, it's difficult for many investors to feel comfortable selling Treasury debt heading into the weekend, analysts said. Those concerns currently present a greater potential to add volatility to financial markets than any news about the economy, which is widely seen as growing at a strong and steady pace, investors said. The yield on the benchmark 10-year Treasury note fell to 2.857% from 2.871% Thursday.
- Bank of America Merrill Lynch says it likes the euro. "We see some more EUR/USD short-term downside, primarily because of Italy risks, but will be looking for the opportunity to buy the dip ahead of next year," the bank says in a note. It also likes the pound. It says GBP/USD is likely to rise to 1.35 and that the U.K. is likely to agree on a trade deal with the European Union, eventually. This view is shared by most in the market--that a deal, one way or the other, will be achieved. A "no deal" scenario would bring GBP/USD to 1.10. If there was to be "no Brexit"--a view not shared by analysts--then GBP/USD could rise to 1.50, BAML says. GBP/USD rises 0.1% to 1.2733 and EUR/USD is up by 0.3% at 1.1410.
- The U.S. and China have placed tariffs on each other and were threatening to impose even more, but "the tariff war seems to have done little to disrupt trade between the U.S. and China or to address their trade imbalance,"BNP Paribas analysts say in a note. The U.S. says it initiated the tariffs because it said it wanted to fight the trade imbalance with China. The fact that the tariffs have changed little so far may be because of "the low demand elasticity of products subject to the punitive tariff and a strong U.S. economy sustaining strong demand for Chinese products." It could also be because of the fall in the Chinese remnibi versus the U.S. dollar. USD/CNY rose to a 15-month high on Thursday.
- President Donald Trump says in a Tweet that he told the SEC to study extending financial reporting periods for publicly traded companies from quarterly to once every six months. Trump says the move would improve business, add flexibility and cut costs. The idea would likely prove popular with many executives who often complain that investors'focus on quarterly numbers detracts from their ability to plan for the long term. Defenders of the more frequent reporting periods worry that companies would be less likely to alert investors to shifts in business trends on a timely basis if the requirements are eased.
- After rising in previous days and during most of Friday morning, the Turkish lira reversed gains, with USD/TRY reaching a two-day high of 6.3431. The lira has been on the rise most of this week after Turkey's banking regulator limited currency swap transactions, which were considered a form of capital control. The central bank has in a way also offered higher interest rates by deciding not to open its one-week repo auction on Friday. All this is positive for the lira. But analysts have said that fundamentally nothing has changed for the currency. Inflation and debt are still high, the central bank's independence remains in question and the political tensions between the U.S. and Turkey haven't evaporated. USD/TRY is last up 5.6% at 6.1499.
- EUR/USD continues to edge up slightly, last rising 0.2% to 1.1395, but if it were to close below 1.14, it would "confirm the bearish theme" in the euro, ING analysts say. Foreign investors buying eurozone equities have been hedging their exposure to the euro this week, according to ETF flows, the analysts say. "This suggests greater market uncertainty over the euro's broader direction of travel--which makes sense given that the political situations in Italy and Turkey still look precarious." Turkey's high inflation and foreign exchange-denominated debt raise fears that this could cause an economic meltdown, and the new Italian government could spur conflicts in negotiating the new budget.
- The dollar's cyclical macro dynamics "have peaked" in the second quarter, ING analysts say. But the "ample degree of geopolitical noise bubbling in the background" is the reason why the it hasn't started to fall yet, they say. "Leading U.S. activity indicators have been coming off the boil in the past month, while U.S. import and export price data earlier in the week also showed that the economy may be starting to feel the bite of Trump's tariff war." Without the U.S.-China trade dispute in the background, "this may have weighed on the dollar more explicitly." But for now, "troubles elsewhere are keeping the dollar aloft." EUR/USD up 0.1% at 1.1391, having broken recently out of 1.16-1.18 range.
- EUR/USD is up slightly at 1.1392 as it continues the trend seen on Thursday, with dollar weakness arising from the lack of previous safe-haven investment flows on the back of U.S.-China trade tensions. The U.S. and China are this month set for another round of trade negotiations. The dollar had risen this year because of U.S. tax reform, which "leads to capital inflow and to U.S. strength in the medium run," Commerzbank analysts say. "However, in the long run it is likely to put pressure on the greenback though," the analysts say.
- A federal judge strikes down the Trump administration's effort to suspend an Obama-era rule that sought to protect clean drinking water. US District Judge David C. Norton rules Trump EPA's violated the Administrative Procedure Act when it failed to take public comment on what would have been a two-year delay of the Waters of the US, or Wotus, rule. Adopted in 2015 under President Obama, the rule was to expand Washington's power to regulate major rivers and lakes as well as smaller streams and wetlands. The Trump administration wants to revert to the 1980s-era rule that predated Wotus but has been stymied by lawsuits from several environmental groups.

Aug 17 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell, with U.S. crude heading for a seventh weekly decline amid increasing concerns about slowing global economic growth that could hit demand for petroleum products as inventories build.
- Gold prices edged higher as the dollar pulled further away from more than one-year highs, but the metal remained on track to post its biggest weekly decline since mid-2017.
- London copper prices ticked lower, declining for a fifth session in six and set for their biggest weekly decline since early July, as concerns eased about supply disruptions.
- Chicago soybean prices slid, with the market taking a breather after climbing to a one-week high in the last session on support from expectations that China may return to the U.S. market.
- Between tariff threats, trade-policy wrangling and battles for agricultural export markets, you may have overlooked the toll a drought is taking on Europe's potato crop. For spud supplier Lamb Weston, the dry weather is driving prices higher for EU-grown potatoes purchased by its Lamb Weston/Meijer JV, prompting Stifel analysts to lower their 2019 full-year earning projection by $11M to $870M. But, the EU potato travails could be a "catalyst" for the Idaho-based company to speed up its strategy to buy rivals there, Stifel says. LW closed 3.9% lower at $66.59.
- Hog futures have rallied 8% in the past two sessions, partly driven by increased optimism over trade. The US and China are due to resume negotiations over terms of trade, which traders hope could mean an end to Chinese tariffs on American pork. And signals from officials that a deal between the US and Mexico, which also introduced retaliatory duties on US pork, has added to the buying interest. But President Trump on Thursday suggested that a broader agreement over the North American Free Trade Agreement was further away. The WSJ reports that he told advisers that "if we don't have a breakthrough, don't do the deal."
- Canadian Prime Minister Justin Trudeau says the government has no plans to call an early election this fall. The comment follows speculation in the Canadian media about a possible early vote, which one widely-read columnist suggested could reset the Trudeau government's mandate amid heightened trade tensions with the US and conflicts with the recently elected government of Ontario, Canada's largest province. "We have a lot of work that we're going to continue to do," Trudeau said during a media availability Thursday. "There will be no federal election this fall." Canada's next election is scheduled for October 2019.
- Boeing staging something of a relief rally in the wake of plans by China and the US to resume talks over resolving their trade disputes. Shares up 3.4% in heavy trading, eliminating losses over the previous four sessions amid concerns about its exposure as the largest US exporter to China, and broader worries about growth in emerging markets.
- Grain and soybean futures rally as Chinese and US negotiators resume talks after more than two months of deadlock. China's commerce ministry says a vice minister will travel to the US on an unspecified date to discuss trade issues. These are lower-level talks than previous efforts, and the US plans to move ahead with proposed duties on $200B worth of goods in the coming weeks. Nonetheless, any sign that the two countries are trying to resolve a dispute that resulted in 25% Chinese tariffs on US soybeans and other crops is welcome news to traders. China is the largest buyer of US oilseed, and the market has suffered since the dispute escalated earlier this year. CBOT September soybean futures rise 2.8% to $8.81 1/2 a bushel while September corn climbs 1.2% to $3.66 a bushel.
- For EUR/USD to return to 1.18, or even 1.20, emerging markets have to stabilize, budget negotiations in Italy have to have a smooth run, and the U.K. has to agree on a withrawal bill with the European Union, Societe Generale analysts say in a note. A shift in Federal Reserve's policy expectations, which would mean sticking to just three rate rises this year, "would also help but is not conditional," they say. EUR/USD dropped to a 13-month low on Wednesday at 1.1301, according to FactSet, after being stuck in a 1.16-1.17 range for weeks. It last trades at 1.1395.
- President Trump's decision to impose tariffs on imports from other countries could discourage investment in the U.S. and increase inflation, says Gero Jung, chief economist at Mirabaud Asset Management. "Uncertainty certainly doesn't help," he says. If the trend continues then "why would a European or Asian company invest in the U.S.?" he asks. U.S. companies may also be discouraged from investing, he says. Tariffs will also increase inflation, although "for the time being it is marginal," he adds. Mr. Jung notes that the U.S. economy is fairly well insulated from the effects of tariffs as it is "a relatively closed economy," with exports accounting for only around 10% of GDP.
- US tariffs on lumber and steel are driving up construction costs in Canada, a Statistics Canada survey of contractors found. The data agency said construction prices for new Canadian residential buildings rose 1.8% in the second quarter, matching an identical gain in the previous quarter. That increase was largely due to higher softwood lumber prices, which rose 20.5% from January to June. At the same time, non-residential building construction costs rose 1.4% in the second quarter, largely because of higher prices for steel used in industrial buildings. Prices for basic and semi-finished iron and steel products rose 10.8% from January to June. US tariffs on steel, aluminum and softwood lumber have contributed to higher North American prices for those products in recent months.
- The correlation between U.S. government bonds and its currency has broken down as a result of U.S. President Donald Trump's presidency, which has been characterized by unorthodox ways of conducting international politics and an unusual fiscal stimulus boost during a late economic cycle, says Derek Halpenny, European head of global markets research at MUFG. This means that even if U.S.-German government bond spreads continue to rise, the
dollar may not necessarily follow suit. Government bond spreads "are less reliable today because of Trump's influence," he says. Market participants are willing to buy the dollar now, but "dollar sentiment has potential to swing around," he adds. The U.S. and German two-year government bond spread has widened by 180 basis points since Mr. Trump won the elections in favor of U.S. bonds, but the DXY dollar index has lost 1.2% in value.
- The U.S. dollar has strengthened this year on the fact that the U.S. economy is doing better than the rest of the world, as well as because of safe-haven investment flows caused by U.S. protectionism, but MUFG says it's not as strong as it could have been. "The performance of the dollar since President Trump's victory is much less impressive considering what has unfolded over that period," it says. Since U.S. President Donald Trump won the elections about 18 months ago, the dollar has lost 1.5% of its value despite the fact that the Federal Reserve increased the interest rate six times and that the two-year U.S.-eurozone government bond spread widened by 180 basis points, MUFG notes. Moreover, the U.S. implemented the largest tax cutting legislation since the 1980s.
- EUR/USD is up by 0.2% at 1.1368, as the U.S. dollar loses ground against most major currencies, except the Japanese yen. With the dollar gaining from safe-haven investment flows on the back of trade disputes between the U.S. and China, the main driver for its fall on Thursday "is reports that China has accepted a U.S. invitation to trade talks in late-August," say RBC analysts. "The talks are at a relatively low level, but diminish the risk of a further escalation in tension," the analysts say. "News that Qatar has pledged to invest USD15 billion in Turkey is also helping risk sentiment." USD/JPY is up by 0.1% at 110.83.
- Cisco CEO Chuck Robbins says the company is watching the growing trade dispute between the US and China closely, as the US Trade Representative considers levying tariffs switches and routers. Cisco makes some of those products in China and imports them to the US. "We're in deep discussions in Washington with the administration on trying to get to a favorable outcome," Robbins says during a conference call with analysts after the company reported F4Q results. He didn't detail the potential effect the proposed tariffs might have on the company's results. "We like to see that land in a good place," Robbins says.

Aug 16 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices recouped some of the previous day's losses after Beijing said it would send a delegation to Washington to try to resolve trade disputes between the United States and China that have roiled global markets.
- Gold pared heavy early losses that came in the midst of a broad commodity sell-off, bouncing off of a 19-month low on short covering and a softer U.S. dollar following news that Beijing will hold trade talks with Washington this month.
- London base metal prices bounced back from a broad sell-off in the previous session, while the Shanghai complex pared early losses on news of fresh U.S.-China trade talks.
- Chicago soybean futures bounced back, rising more than 2 percent as news on Beijing-Washington holding new round of trade talks boosted hopes of U.S. soybean sales to top importer China.
- Cree finance chief Michael McDevitt told analysts Tuesday that tariffs on various Chinese goods that went into effect last month would reduce the company's F1Q earnings by 2c/share and 3c in subsequent quarters. He added the company hasn't included the effect of additional Trump administration tariffs on Chinese products set to take effect Aug. 23, and that Cree is evaluating ways to further mitigate them and any additional tariffs that may be enacted in the future. Cree reported a loss of $33M, or 33c a share, on revenue of $409M, for F4Q. Shares fall 7.3% to $46.52.
- Rabobank analysts say the Australian dollar has further room to fall and projects AUD/USD to edge towards 0.70 in 12 months. The Australian dollar is one of the currencies which has been the hardest hit by the U.S. and Chinese trade disputes because China is Australia's key trading partner and slower growth can impact demand for Australian goods, whose prices may look also expensive if the Chinese remnibi fall further. Moreover, the Reserve Bank of Australia "is unlikely to stand in the way for further slippage in the value of the Australian dollar," Rabobank says. AUD/USD fell earlier on Wednesday to an 18-month low of 0.7202 and is last down by 0.3% at 0.7216.
- Currency markets continue to be driven by the strong dollar and U.S. trade policy, which means EUR/USD is likely to fall toward 1.12, ING analysts say. EUR/USD is flat at 1.1345, having reached on Tuesday a more-than-one-year low of 1.1317. EUR/USD recently broke out of its range between 1.16 and 1.18. ING analysts say "if Turkey is adding to euro under-performance, then we should look out for some potential key events such as" whether the U.S. pastor is released by Thursday and whether Turkish authorities will offer anything new in an investor call also Thursday.
- Nordic markets are tipped to open slightly higher Wednesday, with IG calling the OMXS30 up 0.3% at around 1613. "U.S. stock markets recovered yesterday after recent days' declines but the positive U.S. session failed to carry over into Asia this morning, with the U.S.-Turkey conflict weighing on risk sentiment," says SEB. "Most stock markets have declined, the dollar has strengthened and Treasury yields are lower." Turkish president Erdogan has said he won't back down and has called for a boycott of American consumer electronics. U.K. inflation and U.S. retail sales are due today. OMXS30 closed at 1608.56, OMXN40 at 1547.24 and OBX at 829.52.

Aug 16 - Best commodity bets? Exposed to China and less open to trade: Russell 

The recent gyrations in the world economy around Turkey's currency and the escalating U.S.-China trade dispute have taken a toll on commodity prices, especially industrial metals. However, while news-driven sentiment can clearly pummel markets, over a longer period of time not all commodities will be equally affected by the changing global economic dynamics. Click here to read full stories

 

Aug 16 - Blockchain benefits still murky for most commodities trading 

Commodity firms and banks have been diving into blockchain pilot schemes over the last two years but the new technology's application for most trading has likely been over-hyped, a report by Boston Consulting Group (BCG) said. Blockchain, originally the platform behind cryptocurrency Bitcoin, is viewed by some as a solution to inefficiencies, improving transparency and reducing to the risk of fraud. But BCG believes its potential has been exaggerated. Click here to read full stories

 

Aug 15 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell pulled down by a report of increased U.S. crude inventories and as a darkening economic outlook stoked expectations of lower fuel demand.
- Gold prices fell to their lowest since January 2017 as the dollar hit an over 13-month peak on demand emerging from concerns about Turkey's financial turmoil.
- London copper fell to a more than one-year low as the dollar strengthened and the union at the world's largest mine in Chile said talks with operator BHP would be extended by another day in hope of averting a planned strike.
- U.S. soybeans fell, dropping for the first time in three sessions, as the market worried the continuing trade war between Washington and Beijing will limit demand at the same time U.S. production may rise to a record.
- Nordic markets are tipped to open slightly higher Wednesday, with IG calling the OMXS30 up 0.3% at around 1613. "U.S. stock markets recovered yesterday after recent days' declines but the positive U.S. session failed to carry over into Asia this morning, with the U.S.-Turkey conflict weighing on risk sentiment," says SEB. "Most stock markets have declined, the dollar has strengthened and Treasury yields are lower." Turkish president Erdogan has said he won't back down and has called for a boycott of American consumer electronics. U.K. inflation and U.S. retail sales are due today. OMXS30 closed at 1608.56, OMXN40 at 1547.24 and OBX at 829.52.
- Home Depot executives downplay the effect of escalating US tariffs on the retailer's business. "The tariff environment is manageable," CEO Craig Menear says on the 2Q conference call. Tariffs on Canadian lumber and Korean washing machines resulted in slight increases to Home Depot's cost of goods. A "mid-teen increase" in laundry-machine prices resulted in lower unit sales, but the CEO expects Korean firms to soon get US factories open. Home Depot reported higher 2Q same-store sales and profits, boosted by strong US economy as well as seasonal sales that fell out of 1Q. Home Depot is trading down 0.3% to $193.50, having given up premarket gains.
- Even if the lira were to strengthen, "it could be too late for Turkey to avoid a significant slowdown in economic activity accompanied by even higher consumer prices," Rabobank analysts say. "The damage has been done already," they say. Interest rates would have to rise significantly and political tensions would have to ease all at once for the Turkish lira to recover. Even before the lira recently extended its substantial year-to-date losses of more than 40% against the dollar and the euro, inflation had accelerated to 15.85% year-on-year in July. High inflation is usually a drag on the economy as it often dampens demand.
- For the Turkish lira to recover, three things have to happen "urgently" and ideally "simultaneously", Rabobank analysts say. The central bank would have to raise interest rates "significantly", diplomatic tension between Turkey and the U.S. would have to ease, and Turkey "would have to swiftly implement prudent fiscal measures and accelerate the pace of structural reforms." The questionable nature of the central bank's independence from the government is the biggest issue for most investors, analysts have previously said. USD/TRY is last down by 5.3% at 6.5434 on Tuesday, paring some of the sharp increases on Friday and Monday when the lira tumbled to new record lows.
- Lower prices for US exports in July could be a reflection of retaliatory tariffs China imposed on a range of goods including soybeans. The Labor Department's export price index fell 0.5% in July from June, the first monthly decline since June 2017, as prices for soybeans plunged 14%. While the data don't include taxes, experts say tariffs can indirectly affect the index by forcing prices for targeted goods lower.
- A trade war remains the tail risk most commonly cited by respondents (57%) in Bank of America Merrill Lynch's August fund manager survey for the third month in a row, it says. Further top risks cited by fund managers are quantitative tightening (15%) and a slowdown in the Chinese economy (14%).
- Political tensions with the U.S. are exacerbating Turkey's problems after the lira's drop fueled concerns about a possible currency and debt crisis given the amount of dollar debt in the country's private sector, says Delphine Arrighi, fund manager at Old Mutual Global Investors. A sizable rate increase followed by drastic measures to reduce the fiscal deficit still appears to be the most viable option to re-anchor the lira and pull the country's economy from the brink, she says. Turkey's markets are pricing in close to nine percentage points of rate increases to stem the lira's depreciation, says Arrighi. But more pressure might be needed to prompt a sufficient response from the central bank and President Recep Tayyip Erdogan, who has been reluctant to acknowledge the severity of Turkey's economic problems, she says.
- Growth in the German economy has picked up somewhat in the second quarter but in a world of increasing risks "the upswing can no longer be taken for granted," says Joerg Zeuner, chief economist of KfW Group. The global trade conflict continues despite the negotiations agreed between President Trump and European Commission President Jean-Claude Juncker, a disorderly Brexit cannot be ruled out, just like Italy seeking confrontation with the European Union, Zeuner says. Germany should therefore play an even greater role in the further development of the euro area and strongly support a world trade system that is as free as possible, he says. Germany's adjusted 2Q GDP rose by 0.5% on quarter, the federal statistical office said.

Aug 14 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose after a report from OPEC confirmed that top exporter Saudi Arabia had cut production to avert looming oversupply.
- Gold prices recovered from an 18-month low hit in the previous session as a break below a key psychological level triggered buying, while the U.S. dollar pared gains after scaling a 13-month high.
- London copper fell for a third straight session, pressured by concerns that the collapse of the Turkish lira could infect emerging markets and as data showed the Chinese economy was cooling.
- U.S. wheat futures rose as much as 1.2 percent, rebounding from a three-week low touched in the previous session, as the U.S. Department of Agriculture pegged the condition of the crop below market expectations.
- China should avoid adopting a confrontational approach in the trade fight with the US given a divergence in the countries' economic fundamentals, says Standard Chartered economist Ding Shuang. He contends a better approach for Beijing is to keep opening up the country's economy, strengthen relationships with non-US economies and leaving American firms left behind from those opportunities. That may soften Trump's tough stance, says Ding. "What's more important is to make yourself healthy and strong." He expects China's loosening policies, which likely will stabilize infrastructure investment this quarter, to help prevent slowing economic momentum from getting out of control.
- Canada's finance minister, Bill Morneau, says his country would take "measured and proportionate" steps if the US imposes tariffs on Canadian-made cars and auto parts. Morneau says Canada would likely respond in kind like it did after the US put levies on imported steel. "We do not believe there are any reasonable grounds for any sort of auto tariffs" on exports to the US, he said at a press briefing in Windsor, Ontario after meeting business leaders and touring a Fiat Chrysler plant. President Trump said in a tweet Friday the US "will tax cars if we can't make a deal" on trade with Canada.
- President Trump's renewed hostility Sunday toward Harley-Davidson is adding downward momentum for the motorcycle manufacturer's shares in a lower market Monday. The president tweeted his support for some motorcycle riders' threats to boycott Harley bikes in response to the company's decision in June to move production for motorcycles for Europe out of the US to avoid retaliatory tariffs on US motorcycles from the EU. Trump called the company's decision a "really bad move" in a tweet and described the planned boycott as "great." The president hosted a contingent of motorcycle riders Sunday at his New Jersey golf resort that called themselves "Bikers for Trump." Harley falls 4% to $41.51.
- UBS analysts say softline retail stocks could soon see the end of their recent rally, but not necessarily due to 2Q earnings results. The average stock in softlines has jumped 19% YTD vs. the S&P 500's 5% gain, but ecommerce disruptions and possible tariffs on apparel and footwear could mean the rally is losing steam, analysts say. However, some stocks such as Tiffany, Lululemon Athletica and PVH don't have much if any China import exposure, becoming "safe havens" from the trade tensions. "The bottom line is we don't forecast many companies missing and guiding down," analysts say, adding that department stores are likely the most at-risk softlines stocks.
- J.P. Morgan stays short sterling "due to the rethink of Brexit complacency," it says in a note. The bank also remains short the New Zealand dollar because of the "fading prospects of RBNZ hikes." However, J.P. Morgan says it is switching to being short these two currencies from against the euro to against the dollar, as the U.S. currency rises on safe-haven inflows, whilst the eurozone common currency gets hurt by worsening economic data and concerns of banks' exposure to Turkish assets. J.P. Morgan remains "long JPY vs. USD and AUD, albeit a panic attack in equities may be necessary for these risk hedges to start to perform."
- Demand for the dollar this summer "looks unlikely to abate," ING analysts say. Therefore, after breaking from the 1.16-1.18 range and falling below 1.15 for the first time in a year, EUR/USD could be heading towards 1.13, they say. The 2% yields on three-month U.S. Treasury bills make the dollar the "go-to safe haven right now" whilst tensions escalate in Turkey. And "until the Federal Reserve acknowledges that US.. policy settings are too tight, or we see a significant de-escalation in EM tension," the dollar should stay strong. EUR/USD fell to a more than one-year low of 1.1364 earlier on Monday, but is last trading flat at 1.1410.
- Sterling has fallen versus the dollar to around 1.27 from around 1.30 since the Bank of England increased the interest rate to 0.75% on Aug. 2, mostly due to the fact that investors have switched their attention to Brexit uncertainties and the possibility of a no-deal scenario, says ING. But Brexit worries haven't been the only reason why the pound has fallen, the analysts say. Dollar strength has also played a role. "The broader global market angst has seen GBP/USD slide to the 1.27-1.28 area quicker than we had anticipated." GBP/USD is last flat at 1.2772.
- Given that the dollar has surged on the back of safe-haven inflows, J.P. Morgan advises changing positions from being short USD/CHF to being short EUR/CHF. Regional eurozone data worsened and economic and political events in Turkey have highlighted the risk eurozone banks hold in their portfolios, hurting the euro. EUR/CHF earlier fell to its lowest in a year of 1.1287, according to FactSet. It last trades flat at 1.1350.
- US government bonds fall as investors expect new issues of corporate bonds will be sold this week, leading some investors to sell Treasurys to raise cash for the higher-yielding investments. Bond yields also climbed on unconfirmed rumors that Turkey intends to release US pastor Andrew Brunson. Some investors said they expect that Turkey will need to seek aid from the International Monetary Fund, and that releasing the pastor could ease some of the pressures that have driven down the value of the country's currency. The yield on the benchmark 10-year Treasury note was 2.882%, up from 2.859% Friday.
- The trade tensions caused by U.S. protectionism have become less global, diminishing U.S. dollar strength versus some currencies and increasing appetite for some riskier currencies, Goldman Sachs analysts say. "Trade tensions have focused more narrowly on the U.S.-China relationship since early July, global risk assets have posted modest point-to-point gains, [and] dollar strength, while continuing, has become more differentiated," they write in a note on Friday. Still, "the global risk environment remains fragile," especially within emerging market currencies, led by a massive fall in the Turkish lira. USD/TRY is last up by 7% at 6.8730.
- Of the currencies which are usually exposed to risk aversion, investors should buy those of countries with good economic growth, such as Australia and South Africa, say Goldman Sachs analysts in a Friday note. The South African rand, however, falls sharply on Monday to its lowest in more than two years due to fears that investors will pull out of emerging markets. Goldman's view is that risk aversion will stabilize as trade tensions caused by U.S. protectionism become less global and focus more on U.S. and China. Investors should also buy Canadian dollars and Mexican pesos, because they also offer exposure to further stabilization and "more insulation from a sharp decline in Chinese demand," Goldman says. To fund these long positions, Goldman Sachs recommends borrowing in low-yielding currencies such as the South Korean won.

Aug 13 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices dipped as rising trade tensions dented the outlook for fuel demand growth especially in Asia, although U.S. sanctions against Iran still pointed towards tighter supply.
- Gold prices extended declines into a third session, as the U.S. dollar climbed to a 13-month high against major peers amid financial crisis in Turkey.
- London copper fell after the dollar rose to a 13-month high against the euro as investors shunned risky assets and sought safe havens amid the Turkish lira's drop to a record low.
- U.S. soybean futures fell 1 percent to a three-week low as the market worried a trade dispute between Washington and Beijing would cause U.S. stockpiles, already projected at a record high, to rise even further.
- J.P. Morgan stays short sterling "due to the rethink of Brexit complacency," it says in a note. The bank also remains short the New Zealand dollar because of the "fading prospects of RBNZ hikes." However, J.P. Morgan says it is switching to being short these two currencies from against the euro to against the dollar, as the U.S. currency rises on safe-haven inflows, whilst the eurozone common currency gets hurt by worsening economic data and concerns of banks' exposure to Turkish assets. J.P. Morgan remains "long JPY vs. USD and AUD, albeit a panic attack in equities may be necessary for these risk hedges to start to perform."
- Demand for the dollar this summer "looks unlikely to abate," ING analysts say. Therefore, after breaking from the 1.16-1.18 range and falling below 1.15 for the first time in a year, EUR/USD could be heading towards 1.13, they say. The 2% yields on three-month U.S. Treasury bills make the dollar the "go-to safe haven right now" whilst tensions escalate in Turkey. And "until the Federal Reserve acknowledges that US.. policy settings are too tight, or we see a significant de-escalation in EM tension," the dollar should stay strong. EUR/USD fell to a more than one-year low of 1.1364 earlier on Monday, but is last trading flat at 1.1410.
- Sterling has fallen versus the dollar to around 1.27 from around 1.30 since the Bank of England increased the interest rate to 0.75% on Aug. 2, mostly due to the fact that investors have switched their attention to Brexit uncertainties and the possibility of a no-deal scenario, says ING. But Brexit worries haven't been the only reason why the pound has fallen, the analysts say. Dollar strength has also played a role. "The broader global market angst has seen GBP/USD slide to the 1.27-1.28 area quicker than we had anticipated." GBP/USD is last flat at 1.2772.
- Given that the dollar has surged on the back of safe-haven inflows, J.P. Morgan advises changing positions from being short USD/CHF to being short EUR/CHF. Regional eurozone data worsened and economic and political events in Turkey have highlighted the risk eurozone banks hold in their portfolios, hurting the euro. EUR/CHF earlier fell to its lowest in a year of 1.1287, according to FactSet. It last trades flat at 1.1350.
- US government bonds fall as investors expect new issues of corporate bonds will be sold this week, leading some investors to sell Treasurys to raise cash for the higher-yielding investments. Bond yields also climbed on unconfirmed rumors that Turkey intends to release US pastor Andrew Brunson. Some investors said they expect that Turkey will need to seek aid from the International Monetary Fund, and that releasing the pastor could ease some of the pressures that have driven down the value of the country's currency. The yield on the benchmark 10-year Treasury note was 2.882%, up from 2.859% Friday.
- The trade tensions caused by U.S. protectionism have become less global, diminishing U.S. dollar strength versus some currencies and increasing appetite for some riskier currencies, Goldman Sachs analysts say. "Trade tensions have focused more narrowly on the U.S.-China relationship since early July, global risk assets have posted modest point-to-point gains, [and] dollar strength, while continuing, has become more differentiated," they write in a note on Friday. Still, "the global risk environment remains fragile," especially within emerging market currencies, led by a massive fall in the Turkish lira. USD/TRY is last up by 7% at 6.8730.
- Of the currencies which are usually exposed to risk aversion, investors should buy those of countries with good economic growth, such as Australia and South Africa, say Goldman Sachs analysts in a Friday note. The South African rand, however, falls sharply on Monday to its lowest in more than two years due to fears that investors will pull out of emerging markets. Goldman's view is that risk aversion will stabilize as trade tensions caused by U.S. protectionism become less global and focus more on U.S. and China. Investors should also buy Canadian dollars and Mexican pesos, because they also offer exposure to further stabilization and "more insulation from a sharp decline in Chinese demand," Goldman says. To fund these long positions, Goldman Sachs recommends borrowing in low-yielding currencies such as the South Korean won.

Aug 10 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices edged up on worries that renewed U.S. sanctions against Iran will tighten supplies, although the escalating trade dispute between Washington and Beijing restricted gains.
- Gold prices held broadly steady in Asia after dipping the session before, drawing little support from global political tensions and turbulence in currency markets.
- Copper prices moved higher in Shanghai and London and were set to end the week in positive territory as the prospect of strikes at copper mines in Chile drew nearer.
- Chicago wheat slid for a second session but was set for its fourth consecutive weekly gain on fears that adverse weather in major global exporters could see global supplies tightening further.
- The dollar rose to a 13-month high against a basket of currencies and the yen also made big strides, with investor appetite for risk dropping amid escalating global trade tensions and diplomatic wrangling.
- Shares in London-listed companies with operations in Russia slide on fears about U.S. plans for fresh sanctions on the country that have sent the Russian ruble sliding. Steel company Evraz PLC tops the list of FTSE 100 fallers, losing 7% to 521 pence, as the U.K. blue-chip index loses 0.6%. Shares in precious-metal company Polymetal International, which has gold and silver mines in Russia, Kazakhstan and Armenia, fall 2.5% to 653 pence. The falls come as concerns grow about the impact on Russia's economy of U.S. plans for further sanctions related to the nerve-agent attack on a former Russian spy in the U.K. The Russian ruble slides to a two-year low against the U.S. dollar.
- The FTSE 100 is expected to open 3 points lower at 7738, according to CMC Markets, with markets turning risk averse as the Turkish lira and the Russian ruble plummet and concerns grow about worsening trade relations between the U.S. and various other countries. "The trade dispute between China and the U.S. is still ongoing," David Madden at CMC Markets says. He says U.S. plans for fresh sanctions on Russia could hurt London-listed companies which have exposure to Russia, such as Polymetal and Evraz. The pound's fall to a one-year low against a broadly stronger dollar may temper losses for U.K. stocks, however. U.K. GDP data will be in focus at 0830 GMT.
- Proposed Trump administration changes to Affordable Care Act incentives for hospitals and doctors to more tightly manage Medicare spending would attract fewer providers, but save $2.24 billion in the coming decade, a draft of the proposal said. Under the ACA's Medicare Shared Savings Program, providers that hold spending below a target can keep some of the money they save. After no more than six years, they must also absorb losses when spending exceeds the target. The proposal would shorten that period to two years, which likely would make it less attractive to providers, the rule said. Since its start in 2012, hospitals and doctors with risk of losses were more likely to save money than those without risk, the proposal said. "We think the time has come for the program to evolve," Seema Verma, administrator of the Centers for Medicare and Medicaid Services said on a conference call with reporters.
- Canada Finance Minister Bill Morneau plays down concerns the diplomatic rift with Saudi Arabia threatens to weigh on the economy. He's aware of reports, including from WSJ, that the kingdom's central bank ordered its fund managers to sell off their Canadian holdings. He said he's seen no evidence that's unfolding. Regardless, Morneau said, "whatever may or may not be happening is clearly not having a big impact on our markets." He added Canada is not contemplating any economic retaliation against Saudi Arabia. Canada PM Trudeau said this week his officials are in talks with peers in Saudi Arabia to resolve this row. Morneau described the dispute as "dynamic" and "unusual," adding businesses "will have to respond accordingly."
- Postmaster General Megan Brennan remains mum about potential recommendations for the Trump administration's task force with the potential to overhaul the US Postal Service. The head of the quasigovernmental agency, however, says she welcomes the close scrutiny the Postal Service's model is getting and that she hope it leads to changes. "As we've said repeatedly, business model problems need to be addressed," she says on an earnings call. While the task-force plan is due any day, Brennan says the agency will still continue to push for reforms like postal legislation that could address retiree health benefits and a regulatory review that could allow greater leeway to raise prices.
- Fitch Ratings warns that cash-strapped Venezuela's delays in debt repayment could affect Latin American development bank Corporacion Andina de Fomento, or CAF, which is headquartered in Venezuela and lends around the region. "Fitch expects payment delays to increase over the near term as a result of current sanctions, which complicates the sovereign's ability to liquidate assets and transfer money, and declining oil production," the ratings agency says. Fitch notes that Venezuela has already fallen behind with other multilateral development banks. Venezuela represents 13.6% of CAF's total banking exposure as of year-end 2017, but Fitch notes it expects that to decrease because the bank cannot disburse more funds to Venezuela's government while it's in arrears. For the moment, Fitch says CAF still has "a sufficient buffer to deal with Venezuela's ongoing payment delays."
- The Turkish lira hits new record lows as it weakens as much as 3% against the dollar on Thursday on souring relations with the U.S over detention of an American pastor. "The Turks need to get this resolved ASAP, these markets cannot stand the suspense at this stage," says Tim Ash of Bluebay Asset Management. "Not sure they realise that their negotiating position is weak .... the fragile state of Turkish markets suggests they have to get real and cut a deal ASAP," he says. USD/TRY is last up 2.3% at 5.3994, after it hit a record high of 5.4488 earlier.
- Geopolitical concerns are growing, including retaliatory trade tariffs between the U.S. and China, U.S. planned sanctions on Russia and Turkey, and uncertainties regarding Brexit and Italian politics. ING says in the short term this could see investors "flock to the dollar," although its analysts are questioning "whether any currency is truly safe." This will leave the DXY dollar index anchored around 95, it says, keeping it close to July's one-year peak of 95.652. DXY trades up 0.2% at 95.25. Dollar gains should keep EUR/USD below 1.16, it says. EUR/USD trades down 0.2% at 1.1587.
- The Russian ruble falls to a two-year low against the dollar, taking USD/RUB to a high of 66.7190, following U.S. sanctions in response to a nerve agent attack in the U.K. Danske Bank says USD/RUB could rise to 72.0 if sanctions become law and Russia retaliates. "Any major selloff of Russian local debt, local credit and stocks would amplify outflows from the RUB." EUR/RUB, which reached a near four-month high of 77.33 on Thursday, could rise to 83.50 in this scenario, it says. Danske Bank notes the U.S. bill calls for sanctions on "Russian political figures, oligarchs, certain parastatal entities (including investments in energy projects) and financial institutions."

Aug 09 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices eked out gains on concerns about Iranian crude supplies as the U.S. hit Tehran with renewed sanctions, halting the previous session's declines amid the escalating China-U.S. trade dispute and worries over China's demand.
- Gold prices rose slightly, after gaining for two straight sessions, supported by a slightly weaker dollar versus the yen in Asian trade.
- Shanghai aluminium rose as much 2.8 percent to a near two-month high, tracking a jump in London in the previous session, as a strike affecting Alcoa's alumina refineries in Australia and warnings of shutdowns by Rusal supported prices.
- Chicago soybean futures climbed to a one-week high, rising for a third consecutive session with the market underpinned by forecasts of hot and dry weather in parts of the U.S. Midwest.
- The Russian ruble falls to a two-year low against the dollar, taking USD/RUB to a high of 66.7190, following U.S. sanctions in response to a nerve agent attack in the U.K. Danske Bank says USD/RUB could rise to 72.0 if sanctions become law and Russia retaliates. "Any major selloff of Russian local debt, local credit and stocks would amplify outflows from the RUB." EUR/RUB, which reached a near four-month high of 77.33 on Thursday, could rise to 83.50 in this scenario, it says. Danske Bank notes the U.S. bill calls for sanctions on "Russian political figures, oligarchs, certain parastatal entities (including investments in energy projects) and financial institutions."
- The FTSE 100 index is expected to open 8 points lower at 7,768, with concerns lingering about U.S.-China trade tensions after China announced plans for retaliatory trade tariffs. Any further weakness in the pound due to investor concerns about the risks that the U.K. could leave the European Union without an agreement in place, could lift stocks, however. The pound stabilizes after its sharp falls on Wednesday but remains below 1.29 against the dollar while the euro remains above 0.90 against the pound. Individual stocks in focus following earnings or trading updates include Randgold, TUI, Zurich Insurance, Legal & General, and Coca-Cola HBC.
- The U.S. should keep its strategic petroleum reserve for genuine emergency cases outside its control rather than try to fill the gap for reduction in supplies it is responsible, a top Iran oil official says. The Trump administration has decided to return restrictions on Iran's oil exports in November. It is also considering releasing its SPR to help fill the gap and lower oil prices. "They put sanctions on me, they call it an emergency," Hossein Kazempour, who represents Iran at OPEC, said in an interview. But by reducing the cushion of oil in storage, "in the end, the price will rise," he said.
- Soybean prices are higher even as data shows China imported less in July. China says soybean imports fell 8% in July from a month earlier, according to Commerzbank. The world's largest consumer of oilseeds introduced tariffs on soybeans from the US, one of the world's major exporters, in July. The drop was largely a reflection of that fact that buyers had raced to gobble up supplies before the duties went into effect, analysts say. "High prices for Brazilian beans may also be acting as a disincentive," Capital Economics says. The USDA expects China to buy fewer soybeans in 2018-19, turning to other sources of animal feed instead. CBOT August soybean contracts rise 0.7% to $8.95 3/4 a bushel.
- Oil prices extend their slide and are now down nearly 2%, just off a six-week-low, as a ratcheting up of trade tensions between the US and China sparks dollar-buying and fears it will hurt global economic growth and reduce demand for oil. Beijing, in retaliation to announced US tariffs on Chinese products, says it will impose 25% tariffs on a further $16B on US imports, matching the US tariffs dollar-for-dollar. "Headlines on trade duty implementation specifics from the U.S. and China look to have added to downside," says Baird. WTI falls $1.34 to $67.83.
- A deepening diplomatic stand-off between Turkey and the U.S. over Turkey's detainment of a U.S. pastor has pushed the Turkish lira to new historical lows, and further falls may prompt the central bank to raise interest rates, says Danske Bank. "We expect the Turkish central bank to remain less hawkish than prior to the general election on 24 June, being very cautious with policy rate instruments, while facilitating FX liquidity operations for local banks. However, we believe further deterioration in the TRY over 5.60 [per U.S. dollar] could cause an emergency hike," according to Danske Bank. It notes that Turkey-U.S. diplomatic ties are likely to see improvements over the next week, as the Turkish diplomatic delegation arrives in the U.S. USD/TRY last trades up 1.2% at 5.2946.

Aug 08 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held steady supported by a report of rising U.S. crude inventories as well as the introduction of sanctions against Iran.
- Gold prices drifted higher in Asian trade extending gains into a second session, as the U.S. dollar softened against China's yuan and the euro.
- London copper ticked higher after the dollar weakened against a basket of major currencies as its recent rally fuelled by U.S.-China trade tensions appeared to fizzle.
- Chicago soybeans edged lower, giving up some of the last session's strong gains, but losses were limited by concerns over U.S. crop condition and expectations of China's return to the market.
- Apple sought to underscore its efforts to preserve user's privacy in a letter to House lawmakers, stating that the company doesn't keep a record of customers' location data or use location information for targeted advertising. The letter, which was dated Tuesday, was in response to questions the House Energy and Commerce Committee posed to Apple and Alphabet's Google in early July. Apple explained that if users turn off location services then location information is stored on their iPhones. The company didn't directly answer a yes-or-no question from the committee regarding whether or not it had suspended or banned apps from its App Store for violating App Store rules. Instead, Apple explained that it reviews all apps for compliance with its rules and rejects about a third of them and investigates apps that violate its rules as needed.
- Australia's LNG producers are unlikely to benefit much from China's proposed 25% tariff on US gas imports. That's because Beijing doesn't buy much LNG from the US, although it could change over time, Capital Economics says. So a key question is how long the tariffs are kept in place, as the long delay between investment in LNG and production means exports aren't very responsive to shifts in demand. Capital Economics estimates that if Australia replaced all US LNG exports to China it would boost the country's total LNG exports by just 2% and add less than 0.1% to GDP. "But the boost to Australia could be bigger over the next 5-10 years as the opportunity of grabbing a larger share of China's growing LNG market may prompt Australian producers to expand capacity and output," Capital Economics says. "That could help mitigate the long-term hit to Australia from a rise in global trade barriers."
- The reported drone attack on Venezuela's president has stoked US national-security concerns about hostile unmanned aircraft that may be launched on a predetermined course and then, relying entirely on satellite-navigation signals, automatically proceed toward a specific target. Jamming systems are being developed to change the trajectory or hack into the communications systems of questionable drones piloted by operators on the ground. More problematic, however, are drones that fly without interim human commands. Protecting against such automated intruders may require local jamming or "spoofing" of signals from ubiquitous Global Position System satellites, with the goal of fooling the software on board to steer the drone to a landing at a safe location.
- Mexico's development banks are in a strong position to increase lending, which is expected under the incoming administration of Andres Manuel Lopez Obrador, and as long as they do so prudently their fundamentals should remain sound, says Moody's. More rapid loan growth, however, could have an impact on asset quality, earnings and capital unless the government decides to support their growth with additional capital. Greater reliance on public lenders is unlikely to increase competition for commercial banks--except maybe in mortgages--as the development banks' business models tend to be complementary, the ratings firm adds.
- Industrial-motor maker Regal Beloit says it's looking to shift production of some China-made components to existing facilities in Mexico and elsewhere in Asia in an effort to avoid current and future US tariffs. The company says around 5% of its US sales are derived from China-made products, and it's already pushing through a price increase--its second of the year--to counter the effect of existing levies.
- Mosaic surges 5.9% after the company beat earnings expectations for 2Q and forecast strong demand in the US and Brazil. Although much of the US agriculture sector is in a tizzy over trade, Mosaic is feeling bullish as global markets for crop nutrients improve following years of oversupply. Despite a sharp drop in crop prices thanks to escalating trade disputes, Mosaic CEO Joc O'Rourke expects US farmers to harvest another large crop earlier than usual this fall, giving them ample time to apply fertilizer to depleted soils. A weaker real has also boosted the profitability of soybeans in Brazil, boding well for fertilizer demand. O'Rourke says Mosaic would watch volatile grain markets closely but that "demand prospects look strong in our two key geographies." Adjusted EPS came in at 40c, higher than analyst estimates, and the company raised its full-year adjusted EPS view.
- Trade disputes between the U.S. and China are "likely to get worse before they get better," says Goldman Sachs. It forecasts further yuan depreciation: USD/CNY at 6.90 and 7.10 in three and six months, respectively. In 12 months it expects USD/CNY to drop back to 6.60, "as an eventual 'deal' still seems to us as a reasonable base case assumption." The Chinese central bank's reimposition of reserve requirements signals "willingness to let the CNY move to reflect changes in the economic outlook, but a desire that any change should be more gradual than the speed of the move so far." USD/CNY last at 6.8250.
- Few investors are confident that an agreement between U.S.' Donald Trump and EU's Jean-Claude Juncker reached at the end of July to start trade talks and prevent the imposition of tariffs will last, according to a poll of credit investors by Bank of America Merrill Lynch. "If tensions again deteriorate, the periphery looks to be the most vulnerable as investors would sell here first," BAML's analyst say, commenting on BAML's credit investor survey results. Only 5% of investors said that they would sit tight and do little if the trade backdrop deteriorated. This contrasts with a 7% of them saying they would sell corporate bonds issued by the auto sector. This is despite sector shorts having jumped since June, BAML's analysts say.

Aug 07 - New commodity funds seek to lure wary investors after giants falter 

New commodity funds springing up to bet on inflation are battling for buy-in from investors still wary of past underperformance and a raft of big-name closures in the sector. At least three commodity-focused hedge funds launched in the first six months of this year, compared with two new funds for the whole of 2017, data from industry tracker Preqin found. Click here to read full stories.

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

- Oil prices rose as the United States reintroduced sanctions against major crude exporter Iran, tightening global markets.
- Gold prices rose, propped up by buying after a recent price slump, but a strong dollar and expectations of further interest rate hikes in the United States limited interest in the precious metal.
- London copper futures fell for a second session as an escalating trade dispute between Washington and Beijing stoking concerns over demand in China, the world's biggest industrial metals consumer.
- Chicago wheat futures gained further with the market trading close to last week's three-year high on concerns over dryness in key exporting countries cutting world output.
  
- South Korea remains calm in the face of the brewing Sino-U.S. trade war, with some of Seoul's top economic policymakers predicting that any fallout from the dispute will be "limited," according to Yoon Jong-won, chief economic adviser to President Moon Jae-in. South Korea's presidential Blue House recently conducted a study on risks posed by the dispute, but noticed that only about 5% of South Korea's exports to China are involved in Chinese trade with the U.S., Mr. Yoon said in an interview last Friday. His comments appear aimed at addressing investor concerns that the transpacific dispute could serve as another harbinger of slackening growth within Asia's fourth-largest economy, as it struggles to cope with slowing job numbers. The newly appointed presidential adviser said Seoul is prepared to deploy fiscal weapons while the Bank of Korea is prepared to dispose its monetary policies in case its economy runs into turbulence in a worst-case scenario, he added.
- South Korea's top economic presidential adviser reaffirmed in an interview on Friday Seoul's hope to expand its exports to Southeast Asia and India to diversify South Korea's exports destinations, as its top two trading partners steadily escalate trade tension. About a quarter of South Korea's exports go to China, while about 11% go to the U.S., according to data from the Korea International Trade Association. South Korea's Blue House recently finalized plans to create a presidential committee that would oversee South Korea's outreach to Southeast Asia.
- Veteran Iranian oil official Hossein Kazempour says the other signatories in the nuclear deal Washington pulled out of--Germany, France, the UK, Russia and China--should join any discussion between Iran and the US. Kazempour says his view were personal but reflected his experience of Iran's diplomacy and politics. He adds another precondition would be the cancellation of returning sanctions and of the US withdrawal of the nuclear deal. But the official also blames the US president's intransigence on secretary of state Mike Pompeo and national security adviser John Bolton. "It's regrettable that the president's advisers are flaring the fire rather than extinguishing it," says Kazempour, who represents Iran at OPEC.
- Stock futures are slightly higher as investors weigh trade concerns against strong corporate earnings. 80% of S&P 500 companies have beaten expectations so far this reporting season, according to FactSet. Over the weekend, Berkshire Hathaway became the latest company to deliver strong earnings boosted by insurance underwriting and a change to accounting rules. Quarterly results from Hertz and Marriott expected later today. In corporate news, Pepsico's Indra Nooyi will step down as CEO in October and leave the chairman role in early 2019. The soft-drink and snack-food giant names current president Ramon Laguarta as the next CEO. Pepsico shares slightly higher in pre-market trading. Yields on 10-year US Treasurys edge down to 2.950% from 2.952% Friday. Traders look ahead to producer and consumer price data later this week. S&P futures are up 2.25 points.
- The Turkish lira extends its slide against the dollar due to strained relations between the U.S. and Turkey. Turkey's President Recep Tayyip Erdogan over the weekend vowed to retaliate against U.S. sanctions and said he had ordered the freezing of assets owned by two senior U.S. officials. "Markets will welcome any sort of indication of a normalization in the relations," says Oyak Securities. USD/TRY trades up 0.6% at 5.1102 after hitting a new record high of 5.1196, according to Factset.
- Will the back-and-forth between the U.S. and China on trade be decided by the Nov. 6 midterm election ? There's probably little reason economically during the next few months for either side to back down from their plans to slap more tariffs on each other's imports, even though some of last week's China PMI data for July hinted at trade impacts. Significant effects are liable to take longer to develop, though. But politics is likely to be the bigger reason behind the lack of a trade deal by November. While the GOP losing both houses of Congress would weaken the White House's negotiating positioning, Trump would be emboldened to keep the pressure on Beijing if Republicans hold on. He would likely extol that trade is a winning issue for the party.

Aug 06 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices held firm after Saudi crude production registered a surprising dip in July and as American shale drilling appeared to plateau.
- Gold prices inched higher, extending their recovery from a 17-month low, amid lingering worries over the U.S.-China trade conflict, while a stronger U.S. dollar capped the safe haven's gains.
- London copper edged lower as the dollar index ticked higher, making metals more expensive for holders of other currencies, even as China's move to place retaliatory tariffs on $60 billion of U.S. goods heightened trade tensions.
- Chicago wheat futures slid for a second session as the market took a breather from a rally that drove prices to a three-year high last week on concerns over dryness curbing production in key exporting nations.

- The latest escalation in the US-China tariff battle has some farmers worrying that China, among the world's biggest markets for agricultural goods, will get used to buying its food elsewhere. "China is adjusting to a new normal that locks US soybean farmers like me out of their market," said Scott Henry, an Iowa soybean farmer and member of advocacy group Farmers for Free Trade. Instead, Henry worries, China is cozying up to Brazil, Canada and Russia. Agriculture industry executives are divided over whether other soybean-importing countries can replace China in terms of demand for US soybean exports.
- Shares in liquefied natural gas companies Cheniere Energy and Tellurian are falling after China flagged the introduction of 25% tariffs on US gas imports. Cheniere stock fell as much as 1.5% in the wake of the news, while Tellurian was down just under 5% in early afternoon trade. China proposed the introduction of a tariff on LNG from the US as part of a broader $60B package of retaliatory tariffs. LNG had previously been exempt from earlier proposed tariffs, in what was seen as an indicator of the importance of cleaner-burning gas to China as it tries to tackle its pollution issues. According to oil and gas consultancy Wood Mackenzie, some 42 cargoes carrying an estimated 3M tonnes of LNG were exported from Cheniere's Sabine Pass terminal on the US Gulf Coast to China in the year to June. China has become the second-biggest export market for US LNG behind South Korea.
- Trade tensions between the US and China have escalated as the two countries threaten additional tariffs, and some firms are starting to put more focus on trade fears rather than company fundamentals. Wells Fargo's Chris Harvey says China's fiscal and monetary stimulus suggests they're willing to expand the trade time horizon, and the process toward resolution seems to be slow-moving. In the near-term, Harvey says equities investors should let it ride. "If you look at the US earnings season, the underlying fundamentals are quite strong," Harvey says. A near-term resolution between US and China is unlikely, Harvey says, in which case if US stocks trend higher the firm would likely recommend that investors take a more defensive stance.
- Microsoft adds language to its annual SEC filing highlighting the potential financial fallout from international trade disputes. The software maker says "emerging nationalist trends" could alter the international trade status quo. "Changes to trade policy or agreements as a result of populism, protectionism, or economic nationalism may result in higher tariffs, local sourcing initiatives, or other developments that make it more difficult to sell our products in foreign countries," Microsoft says in its 10-K report. "Disruptions of these kinds in developed or emerging markets could negatively impact demand for our products and services or increase operating costs." The company, though, doesn't cite specific financial fallout to its results as a result of new trade policies.
- Soybean futures fall after China says it plans to hit a further $60B worth of US goods with tariffs. Beijing is already levying duties on US soybeans, and the new 5,000-long list includes a number of other agricultural products. The announcement comes after the Trump administration threatened to double its proposed tariffs on on $200B of Chinese goods. All this makes the prospect of a negotiated solution to remove the soybean duties less likely. As China is the largest buyer of US oilseed, traders are concerned that the longer the duties stay in place the more chance there is of surrendering market share. "If we lose our market in China, that could be pretty tough," says Ryan Wagner, who farms soybeans in South Dakota. CBOT August soybean futures fall 0.6% to $8.77 1/4 a bushel.
- General Motors has asked the US government to exempt from tariffs a Buick SUV imported from China. The Envision midsize SUV is the only US-sold vehicle imported from China in significant volumes. In a letter to US trade rep Robert Lighthizer, GM said the Envision is a critical part of the Buick lineup and its modest US sales volumes don't warrant domestic production. Buick sells more than 200K of the SUVs annually in China vs. about 42K in the US. GM says the 25% tariff that took effect last month could force the auto maker to drop the model from US showrooms.
- Canada's strong June trade report should help push 2Q growth to 3% or higher, several economists say. But there is some division on what that will mean for the Bank of Canada. Bank of Nova Scotia's Derek Holt says the trade data "incrementally reinforce" his expectation for a rate increase at the central bank's next policy meeting in September. BMO Capital Markets economist Benjamin Reitzes says that's too soon. While the trade data brings "additional intrigue" to the BoC's outlook, Reitzes says, he's doubtful the central bank would move in September given its narrative about gradual rate increases. The BoC last raised the key rate in July, bringing it to 1.50%. Reitzes anticipates the next rate increase will come in October.
- As trade tensions continue to escalate between the US and China, some companies are reporting that they are already seeing effects during 2Q earnings calls. RBC Capital Markets' Lori Calvasina says, "With trade, I think equities have felt the impact more on the sector and stock level than on the broad market level." For S&P 500 companies that have reported earnings through July 26, RBC found that fewer healthcare and technology companies discussed trade and tariffs during their earnings calls compared to consumer, industrials, financials and materials companies. The highest percentage has come from materials, with 83% of companies that have reported addressing trade tensions on calls with investors.

Aug 03 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices were steady supported by traders placing new hedges in the futures market in anticipation of a decline in U.S. crude inventories, but held back from advancing by the prospect of rising global supplies.
- Gold prices held steady near a one-year low amid a resilient U.S. dollar and were headed for a fourth straight weekly fall.
- London Metal Exchange copper prices fell for a third day as the prospect of an all-out Sino-U.S. trade war outweighed a looming strike at the world's largest copper mine.
- U.S. wheat futures jumped to hold near a three-year high as concerns that global production could fall short of expectations pushed the grain towards a weekly gain of nearly 7 percent.
- President Trump's commitment to the US steel industry is "unprecedented" and he's not likely to cave into pressure to abandon the 25% tariff on imported steel, United States Steel CEO Dave Burritt told analysts. "He's with us. The notion that this guy would blink, is just not going to happen," say Burritt, a major supporter of steel duties. The tariff on imported steel in place since March has helped to drive up domestic prices for flat-rolled steel by more than 30% since the start of the year. Steel company shares though have lagged the broader market this year because of investors' anxiety that steel prices will tumble if Trump bargains away the steel tariff in exchange for broader trade deals with other countries. US Steel off 8% at $32.99.
- Manuel Bartlett, the controversial nomination to head Mexico's state electric utility CFE, says President-elect Andres Manuel Lopez Obrador has tasked him with rescuing the firm's profitability, ability to compete, and its social function, not to undo the 2013 power-sector overhaul. "We'll be respecting the structure that exists under the energy reform and these market rules," the senator and longtime opponent of private investment in energy tells local media. CFE reported a $510M operating loss in 2Q. Lopez Obrador's picks for CFE and oil company Pemex have disquieted business leaders who have called on him to reconsider before his Dec. 1 inauguration.
- China's tariffs on US soybeans mean that the country's animal-feed makers and food processors are likely to lean more heavily on Brazil and Argentina for soybeans -- giving farmers there more incentive to plant them. DowDuPont CEO Ed Breen says that could challenge the company's seed business, where corn seeds make up the bulk of sales: "The shift from corn to soy hurts us a little bit as we go into the Latin American season," he says on 2Q conference call.
- DowDuPont's next phase involves breaking up into three new companies focused on materials, agriculture and "specialty products," but the third one is likely to see more portfolio slicing and dicing after the separations are complete, CEO Ed Breen says. Breen says the division, which makes safety gear, enzymes and other things, is likely to divest 5% to 10% of its current portfolio. That means more moves like the recent sale of a European styrofoam business, which represented 1% of the unit's portfolio but a low-profitability business that Breen said was a drag on margins. The bulk of those divestitures will follow the breakup, which is expected to complete next June, he says.
- DowDuPont CEO Ed Breen says he's no fan of tariffs, but tells investors on the chemical conglomerate's 2Q conference call that the duties imposed on US-made products, as well as those levied by the US on imports from China, Mexico, Canada and other countries, won't have a "material impact" on the company this year. The company has taken some defensive actions, like realigning supply chains, but for the most part executives say DowDuPont makes its petro-chemical products in the countries or regions where they're sold. One concern is whether tariffs result in higher consumer prices that slow demand for DowDuPont's products, but that's yet to materialize.
- Stock futures fall on heightened trade tensions after the Trump administration threatened Wednesday to more than double proposed tariffs on $200B of Chinese goods to 25%, up from an original 10%. Hopes about progress in US/China trade talks had spurred equity gains on Tuesday, but major averages fell again on Wednesday. Tesla climbs 8% premarket as the electric-car maker reassured investors it would achieve a profit later this year. The dollar gains against the euro and slips against the yen, while Treasury prices tick higher as investors seek some safety in the ever-changing trade environment. S&P futures fall 15 points.
- The Turkish lira extends its slide against the dollar after U.S. sanctions on Turkey's interior and justice ministers over the continued detention of an American pastor, which adds to the negative sentiment surrounding the currency. "Seems like [Treasury and Finance Minister Berat] Albayrak is waiting until the MTP [medium-term plan] in Sept before road-showing. I think the state of the market would suggest he needs to be meeting and talking to institutional investors way before that," says Tim Ash of Bluebay Asset Management, referring to Turkey's new finance and treasury minister, who was rumoured to be coming to London last month. USD/TRY last trades up 1.9% at 5.0873, having reached a record high of 5.0934, according to Factset.
- European stocks drop as investors fret about the possibility of fresh U.S. trade tariffs on Chinese exports. The Stoxx Europe 600 falls 0.8%, or 3.23 points to 386.61 while the DAX declines 1.8 and the CAC 40 is off 0.9% after all major Asian indices closed in the red. "European markets have followed their Asian counterparts lower, and with U.S. futures pointing towards a similarly dour open, there's reason to believe we'll see these trade concerns cloud trading for the rest of the week," says IG's Joshua Mahony. Shares in KAZ Minerals fall 21% after the miner said it would buy a Russian copper project in Russia for $900 million.
- Nordic markets are seen opening slightly lower Thursday with IG calling the OMXS30 down 0.3% at around 1608. "U.S. stocks closed mixed yesterday on the back of strong earnings from Apple while Trump/U.S. formalized its threat to raise previously announced tariffs on Chinese imports to 25% instead of 10%," says SEB. Asian equities are trading in the red this morning. "The 10-year U.S. Treasury yield hit 3% for the first time since June and stayed at those levels after the Fed, in line with expectations, decided to leave its key rate unchanged." The Bank of England rate decision and inflation report are among the economic highlights on today's agenda. OMXS30 closed at 1612.54, OMXN40 at 1561.41 and OBX at 825.77.
- The FTSE 100 is set to open lower after trade tensions hit sentiment on Wall Street and in Asia. London's blue-chip index is tipped to fall 33 points to 7619, after the Dow Jones Industrial Average dropped 81 points and all major Asian markets are down. An announcement by the White House that President Trump is considering increasing tariffs to 25% on $200 billion of Chinese imports successfully dampened sentiment, Jasper Lawler at London Capital Group says. "With fears rising that Trump's trade war with China is only just beginning, investors are taking risk off the table once more. Asian markets are a sea of red and European bourses are pointing to a softer open."
- Apple has updated its corporate risk statements to include the potential for disruption from international trade disputes, according to its quarterly SEC filing. In a section focused on the risks of political events, war, terrorism, natural disasters and other business interruptions, Apple has added a paragraph stating that trade disputes "could result in tariffs and other protectionist measures that could adversely affect the Company's business." It says tariffs could increase manufacturing costs and adversely affect gross margins and could also make its products "more expensive for customers, which would make the Company's products less competitive and reduce consumer demand." During a call with analysts yesterday, Tim Cook downplayed the risks of a simmering trade dispute between the US and China, saying Apple hasn't been affected by tariffs to date and is monitoring future planned tariffs closely.

Aug 02 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices rose, steadying after losses over the past two days from a surprise increase in U.S. crude inventories and renewed concerns over trade friction between the U.S. and China.
- Gold prices rose, recovering from the previous session's fall, as the U.S. dollar edged lower against the Japanese yen. 
- Shanghai copper fell as much as 1.9 percent after U.S. officials confirmed that President Donald Trump's administration proposed an increase in tariff rate on $200 billion worth of Chinese goods.
- U.S. wheat futures rose for a fourth session, taking gains this week to nearly 6 percent as fears that hot, dry weather in several major exporters will curb global output pushed prices to a one-year high.
- Nordic markets are seen opening slightly lower Thursday with IG calling the OMXS30 down 0.3% at around 1608. "U.S. stocks closed mixed yesterday on the back of strong earnings from Apple while Trump/U.S. formalized its threat to raise previously announced tariffs on Chinese imports to 25% instead of 10%," says SEB. Asian equities are trading in the red this morning. "The 10-year U.S. Treasury yield hit 3% for the first time since June and stayed at those levels after the Fed, in line with expectations, decided to leave its key rate unchanged." The Bank of England rate decision and inflation report are among the economic highlights on today's agenda. OMXS30 closed at 1612.54, OMXN40 at 1561.41 and OBX at 825.77.
- The FTSE 100 is set to open lower after trade tensions hit sentiment on Wall Street and in Asia. London's blue-chip index is tipped to fall 33 points to 7619, after the Dow Jones Industrial Average dropped 81 points and all major Asian markets are down. An announcement by the White House that President Trump is considering increasing tariffs to 25% on $200 billion of Chinese imports successfully dampened sentiment, Jasper Lawler at London Capital Group says. "With fears rising that Trump's trade war with China is only just beginning, investors are taking risk off the table once more. Asian markets are a sea of red and European bourses are pointing to a softer open."
- Apple has updated its corporate risk statements to include the potential for disruption from international trade disputes, according to its quarterly SEC filing. In a section focused on the risks of political events, war, terrorism, natural disasters and other business interruptions, Apple has added a paragraph stating that trade disputes "could result in tariffs and other protectionist measures that could adversely affect the Company's business." It says tariffs could increase manufacturing costs and adversely affect gross margins and could also make its products "more expensive for customers, which would make the Company's products less competitive and reduce consumer demand." During a call with analysts yesterday, Tim Cook downplayed the risks of a simmering trade dispute between the US and China, saying Apple hasn't been affected by tariffs to date and is monitoring future planned tariffs closely.
- AFL-CIO President Richard Trumka applauds the Trump administration for imposing tariffs on China, and says more could be done. "We're pretty supportive when it comes to China," Trumka says at a Christian Science Monitor event. In answering a question about how trade disputes with China affect US farmers, Trumka says the focus should be on what's in the best interest for the country as whole. "Sometimes what's good for the country may be bad for Joe or Jane in the short term, but in the long term what's good for the country is good for everyone," he says. Trumka says almost 100,000 factories closed due to trade agreements. "What would those farmers say about those 100,000 factories? I'm sure he'd say that's bad for this country," Trumka says.
- AFL-CIO President Richard Trumka says national-security interests are a justifiable reason for the Trump administration to impose tariffs on steel and aluminium and possibly other products. The provision is "is a very legitimate enforcement tool," Trumka says at a Christian Science Monitor event. "Whenever something threatens our national security we ought to be able to do something about it." Trumka says less than half of the products needed for national security are made in the US. Though he cautioned against using the provision in regards to Canada. "I don't think that Canada has violated the rules," Trumka says.
- Labor unions head Richard Trumka praised President Trump's attempts to rewrite US trade policy. The AFL-CIO president said existing trade rules favor corporations over working people. "It's time to rewrite those laws," Trumka said. "He [Trump] understands that that's what should be done." The union leader said he's regularly in contact with US Trade Representative Robert Lighthizer and believes the administration is working to implement many union recommendations into a new Nafta pact. He said the administration shouldn't rush talks. "We should not let the clock dictate the substance of the agreement," Trumka said at a Christian Science Monitor event Wednesday.
- GM has hired a former Trump administration economic adviser as its top lobbyist, as the nation's largest auto maker juggles several big public-policy issues, from tariffs to fuel-economy regulations. Everett Eissenstat had been the president's deputy assistant for international economic affairs and deputy director of the National Economic Council before leaving the White House last month. He will be GM's senior VP of global public policy, reporting to CEO Mary Barra. Eissenstat also was chief international trade counsel for the Senate Finance Committee from 2011 to 2017.
- Soybean futures retreat from multiweek highs as trade tensions between the US and China heat up. Trump administration advisers are debating whether to increase proposed tariffs on $200B worth of Chinese goods to 25%, rather than 10%. That would be in addition to tariffs on $50B that are already in the works. Soybean prices had rallied on Tuesday on reports that suggested the two countries were approaching a detente. Now, traders are doing an about-face. "Bottom line is that today it appears as though the trade relations are breaking down, not building," says Karl Setzer of MaxYield Cooperative. CBOT August soybean futures fall 1.6% to $8.89 1/2 a bushel. Corn futures are also slightly lower.

Aug 01 - Market Talk Roundup: Latest on Trump, U.S. Politics (WSJ DJ Reuters)
- Oil prices fell after industry data showed U.S. stockpiles of crude unexpectedly rose, and as economic growth slowed, especially in Asia, amid the escalating trade dispute between the United States and China.
- Gold prices came under pressure as news that the Trump administration has plans to propose higher tariffs on Chinese goods stoked demand for the U.S. dollar.
- London copper edged lower, after losing nearly 5 percent last month, with risk appetite curbed by news that the Trump administration may propose a higher 25 percent tariff on $200 billion of Chinese imports.
- U.S. soybean futures fell 1 percent to retreat from a six-week high touched in the previous session, hit by worries U.S. President Donald Trump could propose additional tariffs on Chinese goods.
- London shares are set to open lower as renewed trade concerns offset an upbeat close on Wall Street after strong earnings from tech giant Apple. The FTSE 100 Index is tipped to fall eight points to 7740 following reports that the U.S. is considering increasing its 10% tariffs on $200 billion of Chinese imports to a 25% tariff. "U.S. and European futures, with the exception of the Nasdaq, are pointing to a weaker start to trading on Wednesday," says Jasper Lawler at London Capital Group. The Dow Jones Industrial Average rose 108 points after Apple posted better-than-expected third quarter earnings.
- Australia's Trade Minister Steven Ciobo has asked his US counterparts to detail the impact of an assistance package for US farmers on Australia's agricultural producers and exports. The recent US announcement of a new $12 billion bailout for US farmers caught in a trade battle "highlights the fact that escalating tariffs is a vicious cycle", says Ciobo. "US taxpayers will be asked to write checks to farmers in lieu of having a trade policy that actually opens and expands more markets." While there's an argument to reform the World Trade Organisation, all members should work within existing dispute frameworks to resolve trade disagreements, he says.
- Apple hasn't been affected by any US tariffs on imports from China to date, but Tim Cook says the company is evaluating the planned $200B in tariffs for potential business effect. Cook said Apple will provide public comment after it's had a chance to evaluate the potential tariffs. "Our view on tariffs is that they show up as a tax on a consumer and wind up resulting in lower economic growth and sometimes can bring about significant risks of unintended consequences," Cook says. But he added that the trade agreements the US has in some markets are in "need of modernizing." Still, Cook says he's optimistic "this will get sorted out because there's an inescapable mutuality between the US and China."
- US stocks rise on reports the US and China will return to trade discussions. The Dow gains 0.4% to 25415, the S&P rises 0.5% to 2816 and the Nasdaq increases 0.5% to 7671. The Dow gains 4.7% in July while the S&P rises 3.6%, their best monthly performances since January. Meanwhile, the Nasdaq adds 2.2% despite the recent selloff. Industrials lead the S&P with a 2.1% gain on the day, as Cummins rises 4.1% after reporting earnings, Deere climbs 4.8% and 3M adds 3.5% on trade hopes. Tech shares gain 0.3%, turning around after an index of the big tech FANG stocks fell into correction territory Monday. Oil prices fall 2% to $68.76 as concerns about Iranian oil ease after President Trump said Monday he would consider meeting with that country's leadership.
- Tyson Foods falls another 3% as investors grow more wary on the meat business following the company's profit warning Monday. Uncertainty arising from US trade disputes with multiple countries, rising meat supplies and slowing domestic demand for chicken prompted Tyson to scale back full-year EPS guidance for 2018 to $5.70-$6--and a 30c range with just 9 weeks to go in Tyson's fiscal year, "should be indicative of the lack of visibility in the [meat] industry," Mizuho analysts say. It's not just Tyson, as chicken rivals Pilgrim's Pride and Sanderson Farms decline 0.9% and 0.8%.
- Soybean futures bounce to the highest point in a month on reports that the US and China are resuming talks over their recent trade dispute. Bloomberg reports that representatives of Treasury Secretary Steven Mnuchin and vice premier Liu He are discussing ways to reopen negotiations. That suggests a potential end to a long-running impasse that has seen Beijing introduce tariffs on American soybeans and other goods in retaliation for billions of dollars worth of US duties. Any sign that China could reopen its markets to US oilseeds is a boon to the futures market, which fell near 10-year lows earlier this month because of concerns over trade. CBOT August soybean futures rise 2.8% to $8.99 1/4 a bushel, on track for the highest close since June 18.
- The US Treasury's report Tuesday on financial technology embraced a series of policy goals sought by that sector. It recommended a "sandbox" giving regulatory financial relief to start-ups, backed a national bank charter for fintech firms, encouraged the federal consumer regulator to rescind its payday lending rule, pushed for a fresh look at rules governing fintech investments by banks, and endorsed an effort by LendingClub and other marketplace lenders to ease the resale of loans.

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."