Nothing new here
Markets shuddered early in Trump’s talk because there was a lot of sound and fury but when he got to the actual policies, there was nothing new.
It’s a series of studies and minor measures. Every one of them was rumored, leaked or reported ahead of time.
It’s non-farm payrolls week
Friday’s jobs report is the highlight of the week but for today it’s all about the relationship between the world’s two largest economies.
The US has been floating the idea of reparations and took it a step further on Sunday in this bizarre exchange with Secretary of State Mike Pompeo on ABC:
RADDATZ: Do you believe it was manmade or genetically modified?
POMPEO: Look, the best experts so far seem to think it was manmade. I have no reason to disbelieve that at this point.
RADDATZ: Your — your Office of the DNI says the consensus, the scientific consensus was not manmade or genetically modified.
POMPEO: That’s right. I — I — I agree with that. Yes. I’ve — I’ve seen their analysis. I’ve seen the summary that you saw that was released publicly. I have no reason to doubt that that is accurate at this point.
RADDATZ: OK, so just to be clear, you do not think it was manmade or genetically modified?
POMPEO: I’ve seen what the intelligence community has said. I have no reason to believe that they’ve got it wrong.
To be clear, you’re accusing China of a heinous crime against humanity and you can’t see to get your story straight?
That’s not going to go over well in China but the exact response this time is less important that the trajectory. If it wasn’t entirely clear before, we’re headed towards a decoupling between the US and China and potentially something worse.
Trump also went down that road but said it was a mistake and promised ‘a very strong report’ will be delivered ‘soon’.
“Personally I think [China] made a horrible mistake. They tried to cover it up. It’s really like [they were] trying to put out a fire. They couldn’t put out the fire,” Trump said.
He also threatened new tariffs if China can’t complete the Phase 1 deal.
“We’re going to have to see what’s going on [with the purchases] because of what happened,” said Trump. “They took advantage of our country. Now they have to buy and, if they don’t buy, we will terminate the deal. Very simple.”
S&P 500 futures are down 20 points after an 81-point fall on Friday.
In terms of the economic calendar, the lone potential market mover is factory orders at 1400 GMT.
US funding to the World Health Organisation has been stopped by Trump
- while US reviews virus warnings regarding China
- says WHO was late to examine outbreak in China.
The US contributes around 400m USD to WHO each year, more than any other country.
- The WHO yearly budget is around 4.8 b USD.
- WHO uses the money for vaccine trials, distributing test kits, advising governments around the world and such.
White House press briefing on coronavirus, Trump remarks
- Trump says they’ve bought a “tremendous amount” of hydroxychloroquine
- claims there are “strong signs” it works on the coronavirus
Trump says has a bought 29m doses of the drug
Anthony Fauci, America’s most respected infectious disease expert, and others emphasize that it hasn’t been proven safe/effective
Fauci pictured here behind Trump at an earlier briefing.
Trump calls for Fed rate cuts again after the RBA decision earlier
“Australia’s Central Bank cut interest rates and stated it will most likely further ease in order to make up for China’s Coronavirus situation and slowdown. They reduced to 0.5%, a record low. Other countries are doing the same thing, if not more so. Our Federal Reserve has us paying higher rates than many others, when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut rate big. Jerome Powell led Federal Reserve has called it wrong from day one. Sad!”
What else is new. Either way, the market has also already held the Fed hostage ahead of this month’s policy decision. Knowing the Fed, they’ll oblige to cut rates as such and Trump will get his wish – though that policy room is surely getting smaller.
President of the United States Trump press conference
- Says virus will probably spread in the US
There is no probably about it. I am surprised he is not informed on this.
- May need to restrict travel from Italy, South Korea but now is not the right time
S&P500 futures lower again, getting sold heavily on Globex
Mideast peace plan from Pres. Trump
- Pres. Trump proposes 2 state solution for Israel and Palestinians with Palestinian capital in east Jerusalem
- Israel has agreed to negotiate on the basis of a detailed proposed the map
- Israel agreement on statehood for Palestinians is dependent on security arrangement to protect Israelis
- Israel respect historic role of Al-Aqsa mosque and Jordan’s role with regard to holy sites with the aim of allowing Muslims to visit mosque
- Palestinian state hold is dependent on Palestinians respecting human rights, freedom of the press, and having a transparent and credible judiciary
- Israelis West Bank settlements would be recognized by the United States
- in exchange for Israel’s agreeing to the proposed map, the US will recognize the map
- Israeli would agree to 4 year freeze on settlement activity while Palestinian statehood negotiated
- we bought 4 more years for Palestinians to get their act together and negotiate state
- question for Palestinians. The question is is will they come to the table and negotiate
- if Palestinians agree to negotiate there are some areas that can be compromised in the future
- proposed Palestinian state would be connected with roads, bridges and tunnels with connectivity between Gaza and West Bank
- Trump plan calls for Palestinian refugees to be able to return to a future state of Palestine and creates generous compensation fund.
Israel and Palestinian talks broke down in 2014. US officials are bracing for initial Palestinian skepticism, but hope that over time they will agree to negotiate.
US plan represent the most dramatic and detailed attempt to break the historic deadlock. The Palestinians are skeptical as they say the US administration is biased toward Israel.
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)