US Economy

14

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

2

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

5

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

10

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

2

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

2

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

41

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

5

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

37

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

8

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

0

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:

3

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

7

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.

79

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

4

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: