Trump’s respected economic team of Cohn and Mnuchin released the broad strokes of the tax plan that were leaked out and reported to the media in the last day or so. The plan is very ambitious and focused on making US companies internationally competitive, with the intention of bringing business investment and revenue to the […]
Much of the risk premium related to the French election has been unwound contributing to a surge in European asset prices. EUR is higher, but has stalled around the previous peaks set after the less dovish than expected 9 March ECB meeting. The rally in EUR still appears modest compared to other Eurozone assets. European […]
New Zealand experienced a rebound in headline inflation in Q1, consistent with the global trend and higher oil prices from a year earlier. More recent inflation data from the USA and Europe has eased, along with some flattening in oil prices and still subdued core inflation trends. Market-based measures of longer-term inflation expectations have also […]
The USD has given back its initial Trump inspired rally. Confidence in Trump’s capacity to deliver on his ambitious agenda has faded. Economic recovery outside of the US has gained momentum, attracting capital flow to emerging markets. Geopolitical risks have boosted JPY and gold, while lessened Trump’s desire to pursue trade restrictions against China. US […]
Geopolitical risk appears elevated after recent events in Syria, Tillerson en route to Russia, US warships en route to the Korean Peninsula, and reports of Chinese troops moving towards the North Korean border. These developments are providing support for JPY and gold, and keeping global asset markets on edge, trading in choppy ranges. However, rising […]
It is surprising to see US yields fall and the bond curve at its flattest point since December after the FOMC minutes where the Fed firmed up expectations it would begin its asset run-off later this year, after one or two more rate hikes. The fall in equities in recent weeks and lower bond yields […]
The housing market in Australia appears to be very strong and might be seen as a reason for higher AUD; generating wealth and confidence and preventing the RBA from cutting rates further. However, rapid house price growth is creating more angst over affordability concerns. Combined with high levels of household debt, it may be dampening […]
There are ongoing high levels of global uncertainty related to Brexit, uncertain US government policy direction, modest policy tightening in China, and central banks that are sending mixed signals. There are contradictions in the market with very high consumer confidence in the USA, but a deteriorating approval rating for President Trump. Strong surveys, but modest […]
The outlook for the USD looks weaker on a number of counts – Trump optimism has faded, the Fed has emphasized a gradual approach, and recent US economic data is more mixed. In contrast, political risk is ebbing in the Eurozone and activity indicators have accelerated. US equities look relatively expensive, and the market may view […]
Doubts over Trump’s capacity to provide leadership for the Republican-controlled Congress have been creeping into the market fueled by lingering allegations his campaign had links to Russia and its efforts to influence the USA 2016 election, and Trump’s shrill bombastic style including wild claims of wire-taps. The Russia rumors are set to hang over Trump […]