US Economy

95

Trump ignites solar trade war

Make America unwashed and unpowered again? Yesterday, President Trump slapped tariffs on two of its biggest trading partners, Korea and China, with new charges on washing machines and solar cells in his first major trade “deal”. From Bloomberg: The U.S. will impose new duties of as much as 30 percent on foreign-made solar equipment, the

6

Boom, baby, boom!

DXY fell last night as the US government shutdown ended: It looks more like a consolidation before another push lower than it does a capitulation bottom. As risk rose over the past few days there was a bid but as it returned it’s gone. That suggests the better things get the more it will fall

14

Shutting down the US government means a stock shutdown too

The US government shutdown is providing great headlines about Trump’s incompetence – it’s pretty hard to beat shutting your own government down when your party controls the legislative and executive branches – and equal measure to the lack of risk surrounding the shutdown. It will be over in a few days, nothing to worry about

7

Trump tax cut benefits flow

Via BofAML: …expect upward revisions to continue through earnings season, particularly as guidance trends have remained strong as well…we expect more details as earnings season progresses; several companies also indicated they will provide more clarity at upcoming Investor Days. Some early details have emerged from the 20+ S&P 500 companies that announced one-time bonuses, where

2

Trump tax cut to have little impact on US wages

Goldman Sachs analyst Dann Struyven has taken a look at the impact of minimum wage increases and the GOP tax bill on wage growth – perhaps the most important factor in maintaining one’s standard of living as price inflation creeps ever-higher (the whole “wages keeping up with inflation” thing). Struyven concludes that short-term wage growth may be negligible outside of the leisure and

8

Yuan dominating US dollar

While the headlines surround the trajectory of the Australian dollar versus the USD, it’s the Yuan making the rounds as it hits a new two year high. From SCMP: On Monday, the People’s Bank of China (PBOC) lifted the daily yuan reference rate by 0.55 per cent to 6.4570 per dollar, in its biggest daily move since

17

Welcome to the global blowoff of 2018

Welcome to the global blowoff of 2018. DXY is the driver, breaking to three year lows Friday night: AUD flew north of 79 cents: It’s been treading water against EMs: CFTC net positioning blasted from moderately short to modestly long at 5k. Gold is screaming higher as DXY plunges: Oil is tearing the roof off:

22

Outgoing Fed President warns on Trump tax cut largesse

Don’t make an enemy of Donald Creosote. From CNBC: New York Fed President Bill Dudley painted an unflattering picture for future growth, saying in a speech Thursday that the recently passed tax cuts pose an ominous threat down the road. While he said the reforms that slash corporate taxes and lower rates for many earners

17

Trump to lose sway in Congress

The threat to Donald Trump’s presidency is not necessarily just a legal or literary one (Fire and Fury: great book, tremendous page turner, you gotta believe me). This year could see the rug taken out from under him as he suffers the same legislative malaise and roadblocks that his predecessor had to endure for eight

9

Lackluster wage growth in US jobs

Friday night saw the release of the latest employment stats from the US, the most important event on the economic calendar as it gives the Federal Reserve the clearest insight into the strength of the world’s largest economy, and hence sets its interest rate agenda and thus the direction of USD. Stocks reacted positively to the

7

Fed Minutes show concern over Trump tax cuts

Here are the full minutes of the latest FOMC meeting. The TLDR version is thus, via CNBC: Federal Reserve officials expect reductions in corporate and personal taxes to boost consumer and business spending, though they remain unsure of the impact of the new tax law ….they increased their expectations for 2018 GDP growth from 2.1

42

Trump tax plan to further crush America’s middle-class

Cross-posted from The Conversation: The U.S. middle class has always had a special mystique. It is the heart of the American dream. A decent income and home, doing better than one’s parents, and retiring in comfort are all hallmarks of a middle-class lifestyle. Contrary to what some may think, however, the U.S. has not always

10

The Australian dollar smash of 2018

DXY rebounded firmly Friday night as Trump tax reform is go: Australian dollar pulled back: EM forex took off: AUD CFTC speculative positioning lifted slightly to 41k last week, still moderately long: Gold held: Brent too: US rigs fell a bit last week but a new rush is coming: Base metals soared on growth hopes:

0

BTFD US dip!

DXY firmed overnight: AUD surged on: It demolished EMs: Gold rose: Brent too: And base metals: But big miners fell: And EM stocks: Junk was OK: Treasuries were sold: Bunds too: Stocks fell: Four events of note. US retail sales boomed: Advance estimates of U.S. retail and food services sales for November 2017, adjusted for

0

Boring! New record highs for stocks

DXY is off and running as we await the Fed: Weirdly, so is the AUD! Technical no doubt: It crushed EMs: Even though gold sagged: Brent sagged: Though base metals lifted: Big miners didn’t: Nor did EM stocks and they will keep falling if DXY runs: Junk held on: Treasuries were sold: And bunds: With

1

US jobs report preview

From Goldman: We estimate that nonfarm payrolls increased 225k in November, above consensus of +195k. In addition to a firm pace of underlying job growth, our forecast reflects some additional normalization in hurricane-affected regions, as well as above-trend retail job growth associated with the early Thanksgiving. The arrival of over 200k Puerto Ricans in Florida may

20

NYFed threatens CPImageddon by including asset prices

Via Bloomberg: US financial markets have in the last 20 years experienced three unprecedented booms in asset prices and two busts. During this span, the market value of real and financial assets held by households has increased more than $US70 trillion, an astounding amount on its own, but even more so when one considers the

2

Metals mashed as US dollar surges

DXY took off last night in some delayed response to US tax reform: That bashed AUD back into place: EM forex was mixed: But metals hated it. Gold is verging on breakdown: Brent held up: Base metals broke: Big miners too: And EM stocks: Junk was OK: US yields marched on, curve flattening too: Bunds

4

Trump busts and booms in one night

DXY has soft Friday night: AUD took off with iron ore futures: And against EMs: AUD net longs fell 1k last week to still long 39K: Gold pumped and dumped: Brent rose as US rigs added only three last week: Base metals firmed: Big miners just can’t catch the iron ore updraft: EM stocks look

5

US shares boom to new record highs

DXY was strong last night: AUD was soft: And weak against EMs: Gold jumped on another Korean missile. Yawn: Brent eased: Base metals were hit: Big miners too: EM stocks firmed: Junk too: Treasury yields climbed and the Australian spread inversion deepened: Bunds are bogged: The MB Fund S&P500 long is partying hard: US data

3

US charges into Trump boom and bust

DXY firmed overnight: AUD fell: And against EMs: Gold was firm: Brent eased: China caught up with base metals: And big miners: And EM stocks: And junk: Treasuries were bid: Bunds too: Stocks held at the highs: The US is booming. Data was strong with the Dallas Fed easing but still elevated and new home