US Economy


Japan masters Trumplomacy

No nation has more at stake in Donald Trump’s north Asian policy than Japan. Perhaps that’s why it has been so quick off the mark in mastering America’s new strongman, via the FT: Japan’s government is pushing companies and investors to hand over details of their US investment plans so Shinzo Abe can deliver a


When should you panic about Donald Trump?

Mainstream media is in a panic about Donald Trump. Financial markets are pretty calm. So, what would it take to spook financial markets? US consumers / US small business owners are the key My take is that the small business sector is the key driver of US employment, the US consumer is the key driver


Bill Evans gauges Donald Trump

From Bill Evans at Westpac today: I have spent some time over the first week of my trip to the US with economists, officials and investors. The general view is that growth in the US will gradually build through 2017; 2018 and 2019. That will be supported by easing financial conditions (tighter credit spreads and


US jobs power up

Friday night the USD was stable, all others were were strong: Commodity currencies were firm as well: Gold threatened to go higher: Brent too: But not base metals, which got flogged on Chinese tightening: So did big miners: EM stocks followed oil not China: Same with high yield: US bonds were bought: European spreads widened:


Is Dodd-Frank a goner?

From Banking Day: The eager and even slipshod reporting on one executive act of US President Donald Trump at the end of last week may lead some to believe that the new and activist administration had taken material steps to wind back or abandon the bevy of financial regulations linked to the six year old


More on USD weakness

From Goldman: The Dollar is falling, shaking the conviction level of Dollar bulls. What is notable about this fall is that it coincides with broadly stable nominal rate differentials, in line with front-end market pricing for Fed hikes that is roughly unchanged since the start of 2017 , with about 125 bps priced through end-2019.


WSJ: Trump mulls religious gay ban

Goodness me, is this fake news? Via the WSJ: A draft of an executive order circulating in the Trump administration would dramatically expand the legal protections for individuals, organizations and employers on the grounds of their religious beliefs, potentially allowing the denial of services to gay and transgender people, and contraception coverage for employees. The


Previewing US jobs

Last night the USD fell and other majors lifted: Commodity currencies lifted, the Aussie roared: Gold bounced again: Oil still wants to go higher: Base metals are in lock step: Miners fell: EM stocks fell: EM and US high yield was bid: Treasuries fell a little: European spreads tightened: And stocks just won’t sell off:


Domainfax versus Donald Trump

For anyone with a sensible and centrist outlook on policy, last year was a shocking shunt away from evidence-based government worldwide. This year has started even worse as President Donald Trump launches his Twitter agenda and the mainstream press beats every tweet into a catastrophe. Yet neither Donald Trump and the deglobalisation revolution, nor the


Breathless Trump reporting

I admit that I fall for it. Time and again, a juicy piece of click-bait that invites me to be outraged at the latest Trump tweet, campaign speech and now (sadly) executive order. From an investor’s perspective you need to be wary though. News media knows that we will click and so will play to


Trump just pushed back the Fed’s rate rises

Along with finally officially killing the TPP, President Trump trademark “you’re fired!” was enacted into reality as an executive order overnight, “freezing” Federal job hires (of course, exempting the military-industrial complex from any such fiscal tightening), which creates a small, but discernable problem for the Fed and NFP (non-farm payroll) watchers. As John Hussman, via


Trump vs Yellen

From the WSJ: Trump would like to talk the USD lower. Just about every policy he has proposed will push the USD higher. Yellen is worried about “nasty surprises” if the Fed doesn’t raise rates. My money is on Trump’s actions having a greater effect than his words… Damien Klassen is Chief Investment Officer at


Baby boomers begin to drain cash in the US

The WSJ has a piece out on the demographic effects of the baby boomers retiring: The largest generation in U.S. history has to start pulling its retirement money this year, kicking off a mandatory movement of cash that could total hundreds of billions in the coming decades. U.S. law requires anyone age 70 ½ or


Chimerica trade war good for Australia says RBA

As tensions heat up between President-elect Trump and the equally sensitive Chinese over trade policies that could lead to an all trade war, amid other problems arising from the “One-China” policy, the RBA is suggesting bring it on! In an interview to the WSJ, RBA board member Professor Ian Harper suggests any trade war would


Evaluating Trump’s corporate tax scattershot

There are a number of elements to Trump’s tax plan. Most of it involves cutting taxes on the richest and hoping that “trickle down” will sort everything out. I don’t think there will be a happy ending to that story. However, the tax plan is more complicated than that, especially at the corporate level –


Chaos as Trump confronts the fake news press

This is going to be a LONG four years. A succinct synopsis from Greg Michalowski at Forexlive: He walked into the room late and stood on the side.  A speaker spoke about how corrupt the press was – to the press – and then introduced the Vice President. He introduced the President-elect and there was