Market News 18-4

Bloomberg) Fed’s Fischer spoke Mon night and doesn’t see another “taper tantrum” as the Fed begins to unwind its balance sheet – “we appear less likely to face major market disturbances now than we did in the case of the taper tantrum”.

(FT) Treasury Secretary Mnuchin no longer thinks tax reform can be completed by Aug (note that no one in the market thought Aug was a credible target anyway) although he does anticipate a bill being passed this year (note that markets at this point are ~50/50 about whether a tax bill can pass through both the House and Senate and get to Trump’s desk in 2017).
(Bloomberg) — Vice President Mike Pence pressed South Korea and Japan for better trade terms on Tuesday even as he affirmed U.S. support for its Asian allies in dealing with North Korea. On the third day of a swing through Asia, Pence told a business group in Seoul that the U.S.’s trade relationship with South Korea is “falling short” and a trade agreement between the nations is under review. Later in Tokyo, he stressed the need for quick results as he helmed a new economic dialogue arranged by President Donald Trump and Japanese Prime Minister Shinzo Abe.
(Bloomberg) — The dollar pared its gains after comments from U.S. Treasury Secretary Steven Mnuchin, while the euro rose a third day on the back of investors trimming some of their short exposure. The Bloomberg Dollar Spot Index attempted to erase its Monday losses as Mnuchin’s view that the greenback’s strength was “a good thing” longer term came in contrast to President Donald Trump’s comments on the currency.
(Bloomberg) — U.K. Prime Minister Theresa May said she will seek an early election on June 8, in an unexpected gamble aimed at strengthening her hand going into talks on leaving the European Union. The surprise statement came less than a month after she triggered the formal start of Brexit and marks a reversal of her position before the Easter break, when her office insisted an early election wasn’t on the cards. The British Pound rallied after her announcement.
Bloomberg) — Citigroup Inc. joined Goldman Sachs Group Inc. in backing commodities, saying it’s the season to have faith in raw materials and oil will probably rally to the mid- $60s by the end of the year. While U.S. shale output may come “roaring back” amid higher crude prices, production curbs by OPEC and its allies should help offset that increase over the next six to nine months, Citi analysts including Ed Morse and Seth Kleinman wrote in an April 17 report.
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