Cohn Shocker

Cohn Shocker 
The morning Whitehouse shocker is that Gary Cohn is resigning as head of the White House’s National Economic Council. His resignation increased the risk tenfold that President Trump will follow through with far-reaching trade tariffs given that Cohn was said to be remaining in his role to convince Trump to reverse his trade policy views, or at least temper them.
Predictably USDJPY is wearing the initial brunt of the move, and in general, the Cohn announcement is reversing the positive risk sentiment from the unexpected news from North Korea after reports that North Korea is open to denuclearisation if the safety of its regime is guaranteed.
While the world appears to be in a safer place this morning due to the denuclearisation olive branch offered by North Korea, the market is no less safe from the wrath of Trump’s trade policies.
Gold  Prices
Gold was trading positively overnight on the back of the softer USD trend BS  continues to perform exceptionally well on that narrative. But prices will remain firmly supported on the tariff tail risks from Cohn departure as the tariff gambit hits the market again with blunt force.
Oil Prices 
What goes up must come down or the opposite in the case of US  oil inventories data. The American Petroleum Institute (API) reported a considerable build of 5.661 million barrels for the week ending March 2, e doubling up analysts expectations. Early trade WTI prices remain tentatively supported by the weaker dollar. But with the overhang from the Cohn resignation yet to filter through market’s, risk aversion could see OIl prices move lower during today session.
Overnight long USD hedges were unwound as on the news from South Korea that North Korea was willing to hold talks with the United States on denuclearisation
Currency Markets 
Japanese Yen 
A bit of a topsy-turvy 24 hours for USDJPY spiked on the Korea headlines from 105.90 towards 106.40, which was pips shy of the significant 106.50 support. But is back plumbing the depths this morning as Tariffs are back in play on the back of Cohn’s resignation.
US politics is an absolute mess inspiring little confidence in the President, and this real-life political melodrama unfolds it hard to avoid parallels with Tumps for TV show The Apprentice.
The Malaysian Ringgit
Decision day for the BNM but the market is expecting few if any fireworks. Regional currency sentiment received a boost after surprising news that  North Korea is open to denuclearisation if the safety of its regime is guaranteed.
The prospect of trade tariffs is raising their ugly head again, but when all is said and done, these tit-for-tat tariffs are not significant enough factor to weigh on MYR sentiment let alone derail the buoyant global growth narrative.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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