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Market Talk Roundup: Latest on Trump, U.S. Politics

13 Apr 2018 7:35 am

The latest Market Talks covering President Donald Trump and U.S. politics. Published exclusively on Dow Jones Newswires throughout the day.

0334 ET - EUR/USD trades flat at 1.2333 as "lingering fears of possible direct U.S. involvement in Syria continue to favor quite subdued activity across currency majors and prevent investors from riding more sustained trends," according to UniCredit. The inability of EUR/USD to drop much below 1.23 "may suggest that investors are not too willing to sell the euro aggressively" because "the ongoing global risk picture may actually prove USD negative whatever occurs in the Middle East," UniCredit says. The U.S. involvement in Syria could boost safe-haven currencies, and push USD/JPY lower. (olga.cotaga@wsj.com; @OlgaCotaga)

0334 ET - Don't look to macroeconomic data for as an explanation for dollar weakness, UniCredit says. "New data releases in the U.S. can be...almost irrelevant for now," it says, given that politics is what's pushing it lower, such as potentially deeper U.S. entanglement in Syria. The University of Michigan Sentiment Index for April is due at 1400 GMT, and even if it comes in softer, it can at most "offer EUR/USD just more cushion to the downside and lock the pair between 1.23 and 1.24," UniCredit says. A WSJ poll suggests the sentiment should come in at 100, compared with 102 a month earlie. EUR/USD is flat at 1.2326. (olga.cotaga@wsj.com; @OlgaCotaga)

0315 ET - The U.S. having a more pronounced involvement in Syria would be negative for the dollar because it would push USD/JPY down, but if there's "no new increase in global uncertainty," that "will probably be ultimately USD-negative as well," according to UniCredit. That's because other high-beta currencies--that are riskier and higher-yielding--would then rise against the dollar, UniCredit says. (olga.cotaga@wsj.com; @OlgaCotaga)

0246 ET - Trump may be using the recent tariffs on steel and aluminium as "a bargaining chip" to encourage Japan to enter into bilateral trade talks, says Marcel Thieliant at Capital Economics. A deal "would benefit Japanese exporters and consumers, though those gains wouldn't materialize for years," he added. Earlier, Japan welcomed the potential of the US rejoining TPP. But a later Trump tweet suggested he feels 2-way deals are better to ones like TPP. (megumi.fujikawa@wsj.com)

0246 ET - Nordic markets are expected to edge lower Friday with IG calling the OMXS30 down 0.1% at around 1517. Risk sentiment was positive Thursday as equity indices rose across Europe and in the U.S. "Overnight, news from Trump indicates that the U.S. may want to join the Trans-Pacific Partnership (a trade deal which Trump withdrew the U.S. from after taking office)," says Danske Bank. "This suggests another conciliatory signal from the U.S. in recent days and should support risk appetite." University of Michigan consumer confidence data is due later. OMXS30 closed at 1518.88, OMXN40 at 1488.86 and OBX at 768.86. (dominic.chopping@wsj.com)

0241 ET - London shares are set to open marginally lower ahead of potential military action in Syria. Dealers expect the FTSE 100 Index to open about five points adrift at 7253. "Shares in Europe look set for a mixed open following a rise on Wall Street ahead of likely military action in Syria," says Jasper Lawler at London Capital Group. "The uncertain timeline for airstrikes makes timing an entry into the market tough." Later, the eurozone will release its own trade balance and the surplus is expected to have grown in February, he adds. (philip.waller@wsj.com)

0103 ET - Folks should be skeptical just how much the US--and Trump in particular--might be regarding being part of TPP, OCBC economist Selena Ling tells WSJ. She adds there's also the matter of whether the 11 countries currently partaking would want to reopen negotiations to potentially get the US back in. Trump tweeted Thursday night that the country "would only join TPP if the deal were substantially better than the deal offered to Pres. Obama." (saurabh.chaturvedi@wsj.com; @journosaurabh)

1709 ET - The leader of Canada's westernmost province, British Columbia, says courts should determine what power BC has in influencing Kinder Morgan's proposed Trans Mountain pipeline expansion. Ahead of a weekend summit with Canada PM Trudeau, BC Premier John Horgan warned against any "saber rattling or provocation," from the federal and Alberta governments, which want the pipeline project--now in peril-- built. Horgan said his province is preparing references to provincial and federal courts to seek what jurisdiction BC has when it comes to protecting the province's coastline in event of a crude-oil spill. Those should be allowed to proceed. BC opposition to the project prompted Kinder Morgan to issue an ultimatum that it will scrap the project by May 31 unless it has clarity on whether expansion can proceed. (paul.vieira@wsj.com, @paulvieira)

1530 ET - Hours after the House Agriculture Committee unveiled its Farm Bill, the committee's top Democrat rejected the legislation thanks to plans included to overhaul the nation's food-stamp program. The Republican-sponsored plan subjects 5M to 7M people to tougher work requirements in exchange for benefits, a proposal that angered Democrats and prompted them to abandon negotiations. "This bill attempts to change SNAP from a feeding program to a work program," said Collin Peterson (D, Minn), adding that "pursuit of partisan ideology" puts farmers at risk during a difficult period for the agricultural economy. The bill is "a dangerous and unproductive step that will only sow division and jeopardize both this and future farm bills," he said. (jesse.newman@wsj.com; @jessenewman13)

1501 ET - Senior officials with the government of British Columbia acknowledge they don't have the legal authority to stop Kinder Morgan's proposed expansion of its existing Trans Mountain pipeline. The western Canadian province's opposition, including the threat of new rules governing shipment of crude, prompted Kinder Morgan to warn Canadian officials they had until May 31 to guarantee the project could proceed or else company would scrap project. According to transcripts of legislative debates this week, BC's Environment Minister, George Heyman, said government has received legal advice "that we did not have the authority to stop a project that had been approved by the federal government within its jurisdiction." Instead, BC could try to attach additional conditions company must comply with in order to protect province's coastline, Heyman told provincial lawmakers. Federal Liberal government approved project in late 2016. (paul.vieira@wsj.com; @paulvieira)

1325 ET - Discussions are already underway between federal officials and Kinder Morgan executives to find a way to save company's proposed Trans Mountain pipeline expansion project, Canada's Finance Minister, Bill Morneau, told a conference in Toronto. "Failure is not an option. We are going to get this done," he said, adding he's "highly confident" federal government has the policy tools available to push project forward. Morneau's comments at a blue-chip policy conference come shortly after PM Justin Trudeau announced he will convene meeting this weekend with Alberta Premier Rachel Notley, who backs Trans Mountain expansion, and BC Premier John Horgan, whose government's opposition prompted Kinder Morgan to threaten to scrap pipeline project on May 31 unless certain guarantees provided that expansion can proceed. (paul.vieira@wsj.com; @paulvieira)

1224 ET - Canadian PM Justin Trudeau plans to hold a meeting Sunday with the premiers of Alberta and British Columbia to find a breakthrough on a dispute thwarting construction of Kinder Morgan's Trans Mountain pipeline expansion. This means a detour on his planned foreign travel plans. He'll return to Ottawa from Peru after the Summit of the Americas to convene the gathering, before heading to Europe. Kinder Morgan has threatened to scrap the project unless there's a government guarantee the project can proceed, despite British Columbia opposition. (paul.vieira@wsj.com; @paulvieira)

(END) Dow Jones Newswires

April 13, 2018 03:35 ET (07:35 GMT)

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