West Wing Scandalmongering.
White House schmaltz continues to weigh negatively on investor sentiment.
The influence of gossip mongering was on full display as investors launched into full risk averse mode when chatter circulated that that White House Economic Advisor Gary Cohn is disconsolate with his White House role and on the verge of resigning. Despite Whitehouse denial,
the market remained flustered into the NY close as the mear thought of more internal conflicts and or power struggles within the administration sends investors scurrying for cover. Cohn is one of the Trump’s key political/economic operators and is pivotal to getting President Donald Trump’s economic agenda of tax cuts, and infrastructure spending put through. The thought of this key backroom operator heading for the exit could sound the death knell for Trump fiscal agenda.
Diminishing West Wing support from both business and political allies will continue to abrade investors’ confidence in President Trump’s economic agenda.
The White House Drama shows little sign of easing and with US investors nerves fraying at the thought of a discombobulated Whitehouse as the face of the nation, investor risk appetite could remain fractured for some time
The dollar, for the most part, remains in a state of directionless confusion, supported on the one hand by resurgent US economic data yet burdened by the expanding rat’s nest in the West Wing.
The go to currency haven USDJPY continues to sag in early Asia trade as investor remain unnerved by the 24/7 US political melodrama that’s filling the airwaves. A very risk off scenario was evident overnight, and I suspect there could be more room for this move to play out as one should surmise we’ve only brushed the surface on the Cohn saga.
Not too surprising as the market chatter was suggesting that the ECB would lean against the speed of the EURO’s recent ascension The European Central Bank minutes showed concern over EURUSD “overshooting” providing a distinctly dovish flavour to the minutes.This should take a bit of wind out of the Euro sails over the short run until further clarity on the ECB tapering plans are cemented
Risk aversion weighing on the risk sensitive Aussie overnight
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