US embassy in Baghdad hit with a rocket

Rockets hit Green Zone in Baghdad

Five Katyusha rockets hit the Green Zone in Haghdad on Sunday, according to Iraqi security forces.
There were no casualties but one hit the US Embassy, according to al-Sumaria. A separate report says the dining facility was hit.
The attack was first reported 4 hours ago and there is said to be heavy helicopter traffic there now.
In May 2019 a rocket was fired inside the Green Zone and on January 4 one rocket landed in the Green Zone.
The Iraqi PM said the attack will have serious consequences and condemned it.

US President Trump is to sign the new NAFTA (USMCA) next week – Wednesday

Reuters citing an unnamed official, Trump to sign the deal between the United States, Mexico and Canada on Wednesday during a ceremony at the White House

This United States-Mexico-Canada Agreement (USMCA) replaces NAFTA
It is yet to be formally approved by Canada.
The delay from CAD may be donut related? (kidding)
Reuters citing an unnamed official, Trump to sign the deal between the United States, Mexico and Canada on Wednesday during a ceremony at the White House

The real test for markets on the new coronavirus outbreak in China is yet to come

Fears have receded a little today but it may still come back soon enough

Flu

The new coronavirus outbreak in China could not have come at a worse time. It is starting to become more widespread just as the Chinese New Year holidays are about to kick start – starting from 24 January to 30 January.
This is a period of mass travel across China and many citizens will be heading back to their hometowns (domestic and abroad) to celebrate the festive occasion with their families. Not only that, many will also use this break period to travel overseas.
As such, don’t be too startled if we do see an uptick in the number of cases of the new coronavirus across China and potentially in other countries as well.
The real test for markets will be trying to determine if the situation is still going to get worse or if the virus is largely contained and things will get better.
The way I see it is that if the virus is not seen too widespread despite extensive travel activity and human contact during this period, it will be viewed as nothing more than a blip to markets – as compared to the SARS virus back in 2002-03.
However, if the number of reported cases starts to increase rather drastically, the fear is that it could have potential spillover implications to the Chinese economy – the services sector especially, as we have seen with the SARS virus almost two decades ago.
With the Chinese economy having a much tighter stranglehold over the global economy in today’s environment, bad news for China would also have a negative impact on emerging markets and other economies around the world too.
As such, that would result in a more serious setback for risk until the situation feels more in control and blows over in due time. So, while the fear has receded a little for now, it doesn’t mean that we have completely moved past this issue just yet.

US Senate sets rules for Trump’s impeachment trial, adopts McConnell’s plan

The Senate rejects the final Democratic amendment to the impeachment rules

Trump

The rules resolution passed with a vote of 53-47, allowing for a more relaxed timeline as Trump’s defense now have three days to present their arguments – instead of the originally proposed two days.

The Senate is also sticking with Mitch McConnell’s plan to put off the question of calling additional witnesses and have shelved amendments from Chuck Schumer to subpoena new documents and testimony related to the trial.
It’s not like this makes a huge difference but this just reaffirms the notion that Trump will no doubt be acquitted when all this is said and done. But this just means that the trial could conclude as soon as next week if no new witnesses are called upon.

North Korea warns the US that there may not be deunclearisation if sanctions continue

Some comments from North Korea being cited by Reuters

US NK
  • US has ignored year-end deadline for nuclear talks
  • No reason for North Korea to be unilaterally bound to any commitment
  • US is applying ‘the most brutal and inhuman sanctions’
  • If US continues with ‘hostile policies’ towards North Korea, there will never be denuclearisation of the Korean peninsula
Much like the Iran issue, this is one that does not really matter until it does – when something escalates in a significant manner. For now, just take note that US-North Korea relations have been deteriorating as of late and tensions are beginning to mount once again.

The Trump impeachment legal team and your trading. How are they related?

It’s all about building your case

In an economic week in the US where the existing home sales, the weekly unemployment claims and the flash manufacturing PMI are the only events on the docket, it is hard to get too excited about the prospects for trading. At least from the economic release angle.
However, the US impeachment trial of President will begin this week with enough uncertainty and drama for viewers to be mesmerized – and potentially ruin any hope of movements in the forex markets as a result of the made for TV drama.
At the end of the day, however,it will take a “2/3 supermajority of those present in the Senate” to impeach the President. With 53 Republicans, 45 Democrats and 2 Independents, the odds are in the President’s favor that he will NOT be impeached.
Nevertheless, the show must go on and there are other battles to be won through the process. It is after all, an election year.  If impeachment is not possible, voting out the President or shifting the power in the House and Senate is at stake.  It IS a high stakes game.
To defend himself, President Trump announced his team of lawyers who will defend him yesterday.  Included in the list is Alan Dershowitz.
Dershowitz is a retired Harvard Law Professor and famed criminal defense attorney.  He  became the youngest full professor of law at Harvard in its history at the age of 28.
Dershowitz is a Democrat who endorsed Hillary Clinton, calling her a “progressive on social issues, a realist on foreign policy, a pragmatist on the economy”.  He also supported Barack Obama for re-election on the basis of his “excellent judicial appointments, his consensus-building foreign policy, and the improvements he has brought about in the disastrous economy he inherited”.
He campaigned against Trump during the 2016 election, and has been a critic of some of his actions including his travel ban, and the rescission of protections for “dreamers”.
Sounds like a Trump type of guy right?  I would have expected that Trump would steer clear of that resume and might have taken a shot or two at him on Twitter at some point as well.
However, Dershowitz has also be supportive at times of the President calling the Trump’s alleged disclosure of classified information to Russia as the “most serious charge ever made against a sitting president”, and called the Democrats attacking Trump’s mental fitness as a “very dangerous” line of attack.

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Reports of at least 11 US soldiers were injured in the Iranian missile attack last week

Some of the injuries are reportedly quite sever:

  • At least 11 US soldiers were injured in the Iranian missile attack on Al Asad Base in Iraq last week.
  • evacuated to US Military hospitals in Germany and Kuwait
You will recall that US had said the 11 Iranian missiles that struck on January 8 had caused no casualties.
The reports I am hearing of now about the place remain unconfirmed as yet.
iran missiles

The next step in the impeachment process of president Trump is underway. Do not waste your time.

The impeachment process will now move to a Senate trial.

Love him or loathe him, the result will be Trump acquitted and remaining President. Trump’s party holds a big enough majority in the Senate for this.
This is a sideshow. Trial to begin Tuesday January 21.
The impeachment process will now move to a Senate trial.

Unanswered phase one deal question is what imports China commits to (and the caveats)

Will there be a hard target? What about pricing?

Will there be a hard target? What about pricing?
Reuters today reports that China has pledged to buy nearly an additional $80 billion in manufactured goods from the US over the next two years plus $50B more in energy supplies. The deal also calls for Chinese purchases of agricultural goods to increase $32B over two years and imports of US services by about $35 billion.
However some of the details may be kept secret and instead we would get targets for four broad areas: energy, manufacturing, services and agriculture with a total near $200B above the 2017 baseline.
From the Chinese side they risk running afoul of WTO rules and the multilateral system they’re trying to uphold. However that could be mitigated by provisions in the deal that say the US will have to provide the goods at competitive prices.
Global Times editor (and party mouthpiece) Hu Xijin appeared to confirm the deal with that caveat:
As far as I know, China did make a commitment to expand imports from the US. China has a huge market which is growing quickly. It will be more of a test for the US whether it can provide enough products that Chinese market welcomes and are competitive in price.

Iran’s Rouhani gives assurance that plane crash incident will not be repeated

Well, it should have never even happened in the first place

Ukraine airline
  • Iran admits it accidentally shot down Ukrainian airliner
Rouhani goes on to note that the incident was an unforgivable error and that it should be investigated carefully, with those involved in the incident will be punished.
It’s a really tragic event and no doubt it will raise questions about the safety of Iranian airspace over the next few years at the very least – or even permanently.
The way Iran has handled the situation has been rather poor but at least they have admitted their wrongdoings in denying the allegation previously. Hopefully those affected by the tragedy will get more closure in due time.