Aurelia Butler

This is an on-site version of the White House Watch newsletter. You can read the previous edition here. Sign up for free here to get it on Tuesdays and Thursdays. Email us at [email protected] morning and welcome to White House Watch. Steff will be back in the saddle on Tuesday. For now, let’s dive into: Donald Trump has wasted no time in bringing his campaign of vengeance to the Oval Office. On day one he stripped security clearances from perceived foes and granted temporary clearances to those he deemed “qualified and trusted”. He ordered the removal of security detail assigned to John Bolton — his former national security adviser-turned-foe — after threats on his life in 2019, and got rid of a Pentagon portrait of retired General Mark Milley, his former top military adviser who became an arch-critic.This may just be the beginning.“Never again will the immense power of the state be weaponised to persecute political opponents,” Trump said in his inaugural address. Hours later he authorised sweeping reviews of US intelligence and other agencies to correct “past misconduct”.“Ordinarily there may be nothing wrong with retrospective investigations into potential government wrongdoing,” said Ryan Goodman, professor at the New York University School of Law. However, Goodman added that Trump’s pre-existing list of enemies made these actions quite troublesome. It may still be “too early to tell” whether Trump is sending a message for civil servants to “stay out of the way” of his radical agenda or “to rearrange the bureaucracy so that it’s more completely at the service of the president”, according to Yuval Levin, a senior fellow at the conservative American Enterprise Institute. But it’s clear that intelligence agencies are a particular focus. Kash Patel, Trump’s controversial pick to head the FBI, has long argued for the removal of security clearances to eradicate the “deep state”.This could have a “chilling effect” across the government, a former US intelligence official said. “This is a clear sign that Trump will use clearances for political reasons. That will make people wary to speak their minds,” the person added.Trump’s plans go far beyond America’s security apparatus. The executive order on “weaponisation” called for scrutiny of agencies including the Securities and Exchange Commission, the Federal Trade Commission and justice department.The latest headlinesFrom left, Reform party treasurer Nick Candy, Elon Musk and Nigel Farage at Mar-a-Lago More

TOKYO/LONDON (Reuters) -The dollar traded in narrow ranges against major peers on Thursday as it struggled for direction in the absence of concrete announcements on tariffs from U.S. President Donald Trump.A spate of central bank policy decisions could move currencies over the next week, with the Bank of Japan widely expected to raise interest rates at the end of a two-day meeting on Friday.Rate decisions from the U.S. Federal Reserve and European Central Bank are scheduled for Wednesday and Thursday of next week, respectively.The dollar index – which measures the currency versus six top rivals, including the euro and yen – was little changed at 108.34.It tumbled 1.2% on Monday in its steepest one-day slide since November 2023, as Trump’s first day in office brought a barrage of executive orders but none on tariffs.The dollar had climbed to a more than two-year high of 110.17 on Jan. 13 on the back of a strong U.S. economy and expectations of widespread U.S. tariffs, which could dent other countries’ currencies.The euro was down 0.09% at $1.04. The ECB is widely expected to cut rates by a quarter point next week.So far this week, Trump has mooted levies of around 25% on Canada and Mexico and 10% on China from Feb. 1. He also promised duties on European imports, without giving details.Trump is scheduled to speak remotely at the World Economic Forum in Davos, Switzerland, at 11 a.m. ET (1600 GMT), his first major speech to global business and political leaders since returning to power.”President Trump has so far taken a less hostile-than-expected approach to China,” amid overall “softer-than-expected policies and tone on tariffs”, said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY).At the same time, “we are cautious (that) risk sentiment remains fragile and can quickly turn sour if President Trump strikes a more aggressive tone”.Trump on Monday signed a trade memo ordering federal agencies to review a range of trade issues by April 1, which many market participants believe will be a key date in revealing tariff plans.The dollar was up 0.15% against China’s yuan in offshore trading, at 7.292 yuan. It has fallen around 0.5% against the yuan, also called the renminbi, since Trump’s inauguration.”There was a fear that there would be big tariffs on day one, that the Chinese renminbi would weaken,” said Jane Foley, head of FX strategy at Rabobank.”But now you’ve had the news from China overnight about insurers supporting the stock market. You’ve had a different tone, including a call with Trump and Xi (Jinping, China’s president) on Friday.”China announced plans on Thursday to channel hundreds of billions of yuan of investment from state-owned insurers into shares.Japan’s yen was flat at 156.44 per dollar with markets pricing around 95% odds of a quarter-point hike on Friday.The Canadian dollar slipped to C$1.4407 against the greenback after it and the Mexican peso had a volatile start to the year due to concerns about tariffs.The Bank of Canada is seen as likely to reduce rates by a quarter point next Wednesday.The Mexican peso was little changed at 20.49 versus the U.S. currency. More

Average copper prices rose in the fourth quarter, helped by signs of more stimulus in top consumer China, falling inventories and as U.S. job growth accelerated in September, pointing to resilience in the world’s largest economy.Quarterly average realized price for copper was $4.15 per pound, compared with $3.81 per pound a year ago.On an adjusted basis, the company earned 31 cents per share in the quarter, compared with the analysts’ average estimate of 20 cents per share, according to data compiled by LSEG. More

(Reuters) -U.S. stock index futures were flat-to-slightly lower on Thursday, as investors paused after Wall Street’s strong performance in the previous session and focused on corporate earnings, economic data and President Donald Trump’s remarks – all lined up through the day.At 7:12 a.m. ET, Dow E-minis were up 29 points, or 0.07%, S&P 500 E-minis were down 11.5 points, or 0.19%, and Nasdaq 100 E-minis were down 123 points, or 0.56%.The S&P 500 and the blue-chip Dow logged their sixth session of advances out of seven on Wednesday, with the benchmark index notching an intraday record high for the first time in over a month.Trump’s multi-billion show of support for artificial intelligence infrastructure, along with Netflix (NASDAQ:NFLX)’s strong results, provided the latest tailwind for markets, which had been recovering since last week after data showed underlying inflation was cooling despite robust economic activity.In premarket trading, AI darlings Nvidia (NASDAQ:NVDA) dropped 1.7% and Microsoft (NASDAQ:MSFT) dipped 0.7%, while chip stocks such as Advanced Micro Devices (NASDAQ:AMD) and Broadcom (NASDAQ:AVGO) slipped 1.1% each.Uncertainty about Trump’s trade plans prevailed as he said tariffs on imports from Canada, Mexico, China and the European Union could be announced on Feb. 1, although analysts expect April 1 to be the date when major tariff plans will be unveiled.All eyes will be on Trump’s virtual appearance at the World Economic Forum in Davos at 11:00 a.m. ET.”One new area of interest may be the international tax code, where he could potentially tariff (countries) trying to enact the (Organization for Economic Cooperation and Development’s) Global Minimum Tax – clearly something on the mind of his tech industry sponsors,” said analysts at ING Bank.Trump pulled the U.S. out of the OECD tax deal on Monday. Tariff imposition could threaten a global trade war, upside price pressures and slow down the Federal Reserve’s pace of monetary policy easing.Traders expect the central bank to leave interest rates unchanged for the first half of 2025, according to data compiled by LSEG. A moderate rise in longer-dated Treasury yields also limited gains among stocks. On the economic data front, economists expect a Labor Department report, due at 8:30 a.m. ET, to show jobless claims stood at 220,000 in the previous week, which could also reflect some impact from wildfires in California.Among top movers, GE Aerospace advanced 5.9% after it forecast 2025 profit above estimates on robust aftermarket demand.Elevance rose 4.2% after beating estimates for fourth-quarter profit, partly helped by lower-than-expected spending on medical care for its members.Results from Elevance boosted other health insurers such as UnitedHealth Group (NYSE:UNH), Centene (NYSE:CNC), CVS Health (NYSE:CVS) and Humana (NYSE:HUM), rising between 1.4% and 2.6%.American Airlines (NASDAQ:AAL) lost 7.5% after it forecast 2025 profit below expectations.Electronic Arts (NASDAQ:EA) was down 15% after the videogame publisher cut its forecast for annual bookings, citing weakness in its established soccer franchise.Micron (NASDAQ:MU) dropped 3.6% after South Korean rival SK Hynix warned of steeper demand declines in its commodity memory chips used in smartphones and computers. More

In Latin America’s second-largest economy, 12-month headline inflation came in at 3.69% in early January, statistics agency INEGI said, the lowest since February 2021 and within the central bank’s 3% target, plus or minus one percentage point.Annual inflation was below both the previous month’s 4.44% and the 3.78% forecast by economists polled by Reuters.In December, the Mexican central bank delivered its fifth interest-rate cut last year, taking it to 10.00% with a 25-basis-point reduction. At the time, the bank’s board noted that further and larger cuts could be considered in the future.Mexico’s closely watched core consumer price index, considered a more reliable measure of price trends as it excludes volatile energy and food prices, rose 0.28% in the fortnight.The annual core rate came in at 3.72%, exceeding market predictions of 3.68% and the previous month’s 3.62%. More

MILAN (Reuters) – The European Commission is investigating the extent to which EU rules on crypto assets protect the redemption rights of the bloc’s investors in identical e-money tokens (EMTs), the value of which is pegged to that of a single official currency. France’s Autorité de contrôle prudentiel et de résolution (ACPR), the country’s banking and insurance supervisor, last year asked the European Banking Authority to establish whether it would be possible to have technically identical and fully fungible EMTs issued by both an entity licensed in the European Union and by another elsewhere not subject to EU rules. The EBA then turned the matter over to the EU Commission as it is a matter of interpretation of EU law. The EU in 2023 adopted an extensive set of rules for crypto assets, known as MiCAR, under which issuers of EMTs must receive supervisory clearance to operate and hold reserves, including as bank deposits, against tokens sold to ensure they can repay investors when required to.In the United States, President Donald Trump has vowed to ease the regulatory burden faced by cryptocurrency companies, with the U.S. Securities and Exchange Commission this week creating a task force to work on new rules.Some issuers operate both within and outside the EU. For example, Circle, whose U.S. dollar-pegged ‘USDC’ is the world’s second largest stablecoin by market value, operates in the EU as Circle SAS. USDC issued by Circle SAS are fully fungible with those issued by Circle LLC.France’s ACPR also asked whether, in case of identical EMT issuance both within and outside the EU, it would be possible to allow only EU customers to present redemption requests to the EU-based entity.ACPR declined to comment further.”The MiCA regulation already has quite a bit of flexibility built in, to avoid stifling innovation,” said Andrea Resti, a finance professor at Milan’s Bocconi University.”To start interpreting the rules in ways that have not been clearly spelled out in the text could engender risks and weaken the effectiveness of the newly minted rules.” More

Economists widely expect the ECB to slash rates by a quarter of a percentage point at its upcoming policy meeting next week, after having slashed borrowing costs four times to address weak growth and cooling inflation in the currency bloc.Traders increased these bets this week after US President Donald Trump stopped short of formally slapping sweeping new import tariffs on the Eurozone, with money markets now anticipating a total of four drawdowns in 2025. That would bring the rate the ECB pays on deposits by Eurozone lenders to 2% by the end of the year.Meanwhile, policymakers at the central bank have bolstered forecasts for a reduction at the ECB’s January meeting. ECB President Christine Lagarde, along with a slate of other officials at the central bank, have supported bring down rates further.Lagarde, in particular, told CNBC at the World Economic Forum in Davos, Switzerland this week that a “gradual move is certainly something that comes to mind at the moment”.Writing in a note to clients on Thursday, the Deutsche Bank analysts led by Mark Wall said they see the ECB cutting by 25 basis points at each of its Governing Council’s four gatherings in the first half of 2025.The analysts are then predicting the ECB will slow its cutting cycle in the second half, reducing rates by a quarter-point at both its September and December meetings.”This view is predicated on the assumption of below-trend growth, moderately below target inflation and risks to inflation that are skewed to the downside,” the analysts said.However, they flagged that there remains a risk that the ECB could opt to slow down cuts as soon as the second quarter. More