US Economy


Trump-Australia propaganda flows

A river of drivel today surrounding Vice-President Mike Pence’s Aussie visit. Grovelling central is the AFR: US President Donald Trump’s “massive” tax reduction plan, details of which are expected on Thursday, will have direct benefits for Australia, Vice-President Mike Pence says. He met privately with the chief executives of Westfield, Macquarie Group, Lendlease and Austral


US jobs good enough

The USD took off Friday night: Commodity currencies were mixed, the Aussie weak: Gold reversed its Syrian gains: Brent a little too: Base metals were weak: Big miners soft: EM stocks too: High yield held up: US bonds were sold: European were bought big but spreads widened: Stocks were stable: The big news was US


Fed hawks up with good US data

The USD was firm last night: Commodity currencies too: And gold: Brent flamed out: Base metals were strong: Big miners stable: EM stocks are stuck: High yield too: US bonds were sold: European spreads stable: Stocks too: US data was good with the ADP printing way above expectations for a second month: Private sector employment


Xi set to run rings around Trump?

From the New Yorker: Trump’s first China summit may well push the White House off its game in more complicated ways. China occupies a prominent, but loosely defined, place in Trump’s world view. As a candidate, Trump rarely delivered a speech without accusing China of abusing the United States with unfair trade practices and by


Will the US strike North Korea pre-emptively?

Via The Australian: The US is “rapidly and dangerously” edging closer to taking military action against North Korea’s nuclear missile program, a former general close to President Trump says. Jack Keane, a four-star general who declined a role in the cabinet, said: “A pre-emptive strike against launch facilities, underground nuclear sites, artillery and rocket response


Grantham: US stocks not a bubble

Pop over to view Jeremy Grantham at the WSJ for a cold shower if you’re concerned about US stocks being in a bubble. Below as well is a nice antidote the recent concern over US corporate lending, via Citi:  The recent investor focus on decelerating C&I loan activity as a gauge for economic trends and


Trumps ramps anti-China tweetoric as Xi meet agreed

Our Donald: Amid this: The Trump administration appears poised to cement China’s unfavorable status in trade cases, making Chinese goods eligible for higher U.S. tariffs well into the future. U.S. officials are preparing a review of China’s “market-economy status” under the World Trade Organization, according to official documents on the Commerce Department website. The review


US GDP rocks and rolls with consumer

DXY is back: Commodity currencies fell: Gold too: Brent rose as sell side permabulls pile in: Base metals fell: Big miners were mixed: EM stocks lifted: HY too, with oil: US bonds were sold: European spreads widened: And stocks rose, especially in Europe: Two events dominated the night. Reuters hosed off ECB tightening: European Central


Trump’s wealthy consumers are very happy

From Westpac, some good material on the US consumer: Confidence is a key factor for the underlying health of the economy and its ability to adjust to changes in the stance of monetary policy. Simply it determines households’ willingness to consume and invest as well as firms’ investment and employment decisions. Following the election of President


Trump to turn to Dems for infrastructure boom

Via Axios: The Trump administration is looking at driving tax reform and infrastructure concurrently, according to a White House source with direct knowledge. It’s a major strategic shift – infrastructure was likely going to be parked until next year – and is only possible because of last week’s healthcare debacle. President Trump feels burned by


Has the Fed already ruptured US credit?

A couple of interesting pieces of research today are important. First from Morgan Stanley: A sharp slowdown in US credit creation: Since October, bank lending in the US has slowed sharply. While higher debt issuance, lower M&A activity and new risk retention rules play a role, the slowdown could stoke concerns that a highly leveraged


More evidence that the Trump boom is real

Via Citi:  It is more typical that bulls have to push back against bearish contentions, with charts showing a series of concerns that need to be addressed. The Fed’s actions, valuation, profit margins, tax policies, and a host of other issues are raised when investors attempt to smear the rally that has been in


Gundlach: Fed to hike until “something breaks”

From Reuters: Jeffrey Gundlach, chief executive officer at DoubleLine Capital, said on Tuesday he expects the Federal Reserve to begin a campaign this month of “old school” sequential interest rate hikes until “something breaks,” such as a U.S. recession. Gundlach, who oversees more than $101 billion at Los Angeles-based DoubleLine, said U.S. economic data support


Morgan Stanley: Stay long USD

From Morgan Stanley: Bottom line: Our economists now expect the Fed to hike rates in March, but we think high yield EM currencies will be able to weather the rate hike, while the EUR should stay weak. The significant tightening of G3 vs USD cross currency basis since the start of the year suggests that


Want business investment? Elect Trump!

From Morgan Stanley: Our composite Capex Plans Index posted its fourth consecutive gain in February, climbing 1.7 points to 24.6—a post-recession high. While the recent surge in our index is promising, actual capital spending will depend largely on the evolving outlook for fiscal and regulatory policy. Our composite Capex Plans Indexgained ground for thefourth consecutive


Trump speech long on gas, short on engine

Here’s the full text of the Trump speech: Remarks as prepared for delivery and released by the White House. TO THE CONGRESS OF THE UNITED STATES: Mr. Speaker, Mr. Vice President, Members of Congress, the First Lady of the United States, and Citizens of America: Tonight, as we mark the conclusion of our celebration of