Aurelia Butler

COMMENTS:RICK MECKLER, PARTNER, CHERRY LANE INVESTMENTS, NEW VERNON, NEW JERSEY”The biggest reaction is what appears to be the delay on the tariffs. Of all the proposals that are being put forward, that was the one that was most likely to affect the market more dramatically both for its inflationary-potential and just for whatever retribution that would have been for it.””When you say you’re going to study and try to negotiate it after you said that you will do it on Day 1, I think that’s encouraging for the market.””I also think that the market’s view is that a lot of the proposals of the Trump team are aspirational. They may not necessarily implement them or they will implement them slowly. But they did help him get elected. And also some of the proposals need development. The new team is just in place and so the idea of doing it on Day 1 was not realy realistic. So that’s why the market is a little relieved on that.”MATT GERTKEN, CHIEF GEOPOLITICAL STRATEGIST, BCA RESEARCH (Research Note)”We expect significant tariffs early in his administration, whether this week or in the coming three months, since the U.S. labor market is strong and the midterm elections are far away. Weak global manufacturing also gives Trump the advantage.. Later the ability to ratchet up trade pressure will decline and Trump will risk losing the historic opportunity he has to remake US trade relationships.”EUGENE EPSTEIN, HEAD OF TRADING AND STRUCTURED PRODUCTS, NORTH AMERICA, MONEYCORP NE,W JERSEY”There are so many people surprised in some ways of how things are shaping up even though the playbook that Trump basically runs is exactly the same as the first four years. He uses tariffs as a negotiating tool. It seems like he will impose tariffs regardless. The question is how severe. He has a lot of flexibility though in how he can impose them.””In terms of the dollar reaction, it certainly weakened a bit today, but utimately, the dollar has strengthened substantially and I think today’s action changes the playbook for the forseeable future. Just because he did not sign sweeping tariffs on day one doesn’t mean that that’s not going to happen. Everybody is on the negotiating table.””As far as position-taking goes, it’s very important to stay calm and cautious. This is just the first day and there really have not been been much answers just yet. Just because he hasn’t announced sweeping tariffs the first day, it means absolutely nothing in terms of long-term tariff policies. Trade policies with specific numbers, even for him, will probably have to have some semblance of official negotiations before making a decision.”ZACHARY GRIFFITHS, SENIOR INVESTMENT GRADE STRATEGIST, CREDITSIGHTS, CHARLOTTE, NORTH CAROLINA”The rally in the dollar and equity futures was due to expectations that Trump will..not be putting direct tariffs on any country today. That seems to be a relief trade.””But if you look at what Trump said in his speech, it looks like he’s quite firm on tariffs. I think there’s more to come there.” “In terms of opting to not impose tariffs today and that being a market-positive, I’m a little skeptical of that and I am not sure that holds. If you have a more gradual, but still large tariffs in terms of percentage on a broad swath of countries, and if that is rolled out over time, that could be more challenging from an inflation-perspective for the Fed and could even result in policy being tighter for longer.”JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP”Energy prices are going to come down in big way — consumers will rejoice in the savings and the inflation data in 6-7 months is going to look far better.”NIGEL GREEN, CEO, DEVERE GROUP “The energy sector will undoubtedly be the most immediate beneficiary of this sweeping policy shift.””Companies involved in oil and gas exploration, extraction, and infrastructure stand to gain as regulatory barriers are dismantled and investment in domestic production soars. Shares of U.S. energy giants and mid-cap firms are likely poised for significant upward momentum as the markets price in increased output and profitability.””Global oil prices, already sensitive to geopolitical developments, could see sharp adjustments.” GABRIELA SILLER PAGAZA, DIRECTOR FOR ECONOMIC ANALYSIS, GRUPO FINANCIERO BASE “At the beginning of Trump’s speech, the (Mexican peso) exchange rate was at 20.5751…At the end of the speech, it fell to 20.5289 pesos per dollar, which implies an appreciation of 4.6 cents or 0.22%, since there was no announcement of tariffs.”MARC CHANDLER, CHIEF MARKET STRATEGIST, BANNOCKBURN GLOBAL FOREX, NEW YORK”There is a relief rally in foreign currencies, right now.” “Even though Trump did not specify, it’s very clear that when he says that the U.S. is going to be a big auto manufacturer, he’s talking about tariffs. So whether he imposes them in Day 1 or Day 5 or Day 10, I’m not sure it makes that much of a difference.””The idea that he is going to be able to raise $2 trillion in tariffs seems to be an exaggeration. The U.S. imports only $1 trillion of goods, so what does he mean that he will be able raise $2 trillion and over what time period? It doesn’t make sense.” More

At an informal dinner, the EU’s 27 finance ministers also agreed that deeper ties with the U.S. were in the best interests of both the EU and the U.S., EU diplomats familiar with the discussions said.There was also agreement among the ministers that low and stable energy prices were key to prosperity in Europe, because the bloc’s industry and consumers pay twice as much as their counterparts in the U.S. and four times as much as in China.Lowering energy prices was therefore crucial for Europe to stay competitive in the global economy, diplomats said.The IMF said in a paper prepared for the discussions that further EU energy-market integration and joint investment would solve the issue.”Most ministers agreed that further integration of the energy market would be beneficial,” an EU diplomat said. More

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(Reuters) – A look at the day ahead in Asian markets. The first full day of financial market trading in U.S. President Donald Trump’s second term in office is set to get off to a strong start on Tuesday, with Trump’s seemingly more measured approach to tariffs giving investor sentiment an instant shot in the arm.Trump issued a broad trade memo on Monday that stopped short of immediately imposing new tariffs on key trading partners, something he had previously indicated he would do on his first day in office. Instead, trade relationships with China, Canada and Mexico will be assessed and reviewed before he decides what steps to take.The U.S. stock and bond markets were closed for Martin Luther King Jr. Day on Monday, but FX markets were open, and the dollar’s steep fall across the board reflected the relief among investors that Trump appears to be dialing down the tariff rhetoric in favor of a less belligerent approach.Even if it turns out to be only temporary.The dollar index slumped 1%, its biggest decline since August. The dollar may have been primed for a fall, going by hedge fund positioning – the latest Commodity Futures Trading Commission data shows funds last week held a net long dollar position against a range of currencies worth $35 billion last week, the biggest in nine years. The dollar had rallied around 10% since September alongside the surge in U.S. Treasury yields of more than 100 basis points, a tightening of financial conditions that hit Asian and emerging markets particularly hard. A pause or reversal should ease that squeeze.U.S. stock futures are pointing to gains of around 0.4% on Wall Street on Tuesday. Asian markets were already on the front foot on Monday, with the MSCI Asia ex-Japan and Nikkei 225 indexes both rising more than 1%.Markets around the world will be sensitive to the deluge of headlines that’s likely to flow from Washington in the coming days as the new administration announces policy directives and executive orders. It is shaping up to be a volatile week.Crude oil prices dipped further from last week’s six-month high, falling for a third straight day as traders await details on Trump’s executive order declaring a national energy emergency and promise to fill up strategic reserves. Cryptocurrencies, on the other hand, were more buoyant as the self-styled “crypto President” was sworn in and bitcoin leaped to a new high just shy of $110,000. The Asian economic calendar on Monday is light, with producer price inflation from South Korea and consumer price inflation from Hong Kong the only major economic indicators on tap. Expect markets to take their cue from headlines out of Washington, the upturn in global stocks, and the diving dollar. Here are key developments that could provide more direction to markets on Tuesday:- Reaction to Trump’s first day in office- South Korea PPI (December)- Hong Kong CPI (December) More

BRUSSELS (Reuters) – The return of U.S. President Donald Trump to the White House is a wake-up call for European Union countries to fix their economies and become more competitive, the EU’s senior financial officials said on Monday as Trump was sworn in for a second term.The 27-nation EU became increasingly worried last year about losing to China and the United States in the race for new technologies, especially ones that would help the bloc of 450 million people move to an economy with lower greenhouse-gas emissions.Many European innovators expand their businesses in the U.S., where access to capital is easier and companies are less burdened with red tape. In China, some firms receive large subsidies from the government to gain global market share, and Chinese industry already has a dominant position in solar panels, electric cars, wind turbines and batteries.”The new Trump administration should be a wake-up call for Europe,” Belgian Finance Minister Vincent Van Peteghem told reporters. “Rather than focusing on retaliation (against U.S. tariffs), we should focus on the challenges of Europe – the decreasing competitiveness and the increasing productivity gap that we face.”Rather than starting a trade war, the EU should boost its competitiveness and develop capital markets, officials said.”On the election of President Trump, the best response … is to redouble our efforts to deliver what we’ve already committed to do,” the chairman of euro zone finance ministers Paschal Donohoe told a press conference.SPECIAL U.S. RELATIONSHIPFormer EU trade commissioner Valdis Dombrovskis, now in charge of the EU economy at the European Commission, said the European Union was keen to preserve its special trade relationship with the U.S., but not at all costs.”We need to preserve these trade relationships and that’s our starting approach, both bilaterally with the U.S. but also thinking about the multilateral, rules-based trading system globally,” Dombrovskis said. “At the same time, if there is a need to defend Europe’s economic interests, we are ready to do so, as we were doing during the first Trump administration.” Polish Finance Minister Andrzej Domanski, who will set the agenda of meetings of EU finance ministers until the end of June, said key to success in dealing with the new U.S. administration was for EU governments to stick together and to strengthen Europe’s economic power.”It is very important that Europe must remain united,” he said, adding the EU had to focus on lower energy prices for its industry and consumers, as well as cutting regulation.”We must focus on building the strength of the European economy. We must focus on how to reduce energy prices. We must focus on how to remove such a regulatory burden from European companies,” Domanski said.French Finance Minister Eric Lombard said the change of U.S. administration meant the EU would have to double down on protecting its industry. “That is absolutely critical through the Clean Industry Act and other tools that we have in Europe,” Lombard said, adding trade would also be a priority, as would the development of new technologies, especially artificial intelligence. More

PARIS/WASHINGTON (Reuters) – U.S. President Donald Trump’s launch of a crypto token shortly before his inauguration on Monday creates new conflict-of-interest concerns, ethics experts and industry insiders said.  Trump has pledged to hand management of his assets to his children, but the crypto asset is raising particular concerns due to its ability to quickly attract billions of speculative dollars with little transparency.The companies behind the “meme coins” $TRUMP and $MELANIA, for first lady Melania Trump, said they are not investments or securities but are an “expression of support.”The tokens follow Trump-branded non-fungible tokens, sneakers and a Bible, among other items he has launched. Ethics advisors and industry experts say this investment is different because his administration will regulate an industry in which he has a stake through the new token, and one where any value is arguably tied to his presidency.The companies behind the Trump token, CIC Digital LLC, an affiliate of the Trump Organization, and Fight Fight Fight LLC, co-owned by CIC Digital, collectively own 80% of the tokens, meaning that Trump-linked businesses could have gained $8 billion worth of crypto over the weekend.Danielle Brian, head of the watchdog group Project On Government Oversight, said Trump’s moves into crypto are concerning given the industry’s loose oversight. Besides being “a blatant financial conflict of interest on behalf of the president … it is deepening his engagement in a world that raises real national security concerns,” she said.Trump’s office did not respond to a request for comment.Prominent crypto investor Nic Carter said on social media the creation of personal meme coins “opens the door to secretive foreign buyers trying to curry influence with our leaders.”Some Democratic U.S. lawmakers echoed the national security concerns and conflict-of-interest worries.”Anyone globally, even individuals who have been sanctioned by the U.S. or banned from our capital markets, can now trade and profit off of $TRUMP through various unregulated platforms,” U.S. House Financial Services Committee top Democrat Maxine Waters (NYSE:WAT) wrote.Meme coins typically refer to small, extremely volatile, cryptocurrencies, often named after online jokes or trends. While supporters hope the tokens will rise as the memes go viral, most have little value.Both the Trump tokens’ websites avoid using the word cryptocurrency – referring instead to “fungible crypto assets” and marketing them as memes.University of Sussex finance professor Carol Alexander said the Trump and Melania tokens were functioning more like fan tokens that took off in 2021 and would likely become a barometer for support of the couple.Crypto markets were buoyant on Monday, with bitcoin hitting an all-time high as investors anticipated Trump’s crypto-friendly policies.Some said Trump’s coin was a game-changer.”The fact that a president is doing this brings some sort of legitimacy to the space, and I think just means that the industry is moving ahead in a way it hasn’t for the last 10 years,” said Paul Howard, senior director at crypto market-maker Wincent. More

(Reuters) -Russia recorded a budget deficit of more than 3 trillion roubles for the third year running in 2024, the finance ministry said on Monday, with both spending and revenue rising sharply as Moscow ploughed economic resources into the war in Ukraine.According to the ministry’s preliminary estimate, the overall deficit stood at 3.49 trillion roubles ($34.4 billion), with revenues increasing 26% to 36.71 trillion roubles and spending climbing 24.2% to 40.19 trillion roubles.The shortfall narrowed as a percentage of gross domestic product to 1.7% from 1.9% in 2023, the data showed, but was significantly wider than the ministry’s initial plans for a deficit at 0.9% of GDP, or 1.6 trillion roubles.Excluding crucial revenues from oil and gas, however, the deficit widened to 7.3% of GDP from 7% of GDP in 2023.Spending rose sharply in December to 7.15 trillion roubles, exceeding the value of similar year-end expenditures in 2022 and 2023. That jump involved some advance spending for this year, the ministry said. This could give it greater flexibility this year, when federal budget liabilities may increase if the Bank of Russia raises its key interest rate again. The central bank held rates at 21% in December, surprising analysts who had forecast a sharp hike, a day after President Vladimir Putin publicly called for a “balanced” decision. Moscow expects spending this year to increase to 41.47 trillion roubles, of which 41% will be spent on the army, police and secret services. Rising tax revenues are seen narrowing the fiscal deficit to 0.5% of GDP. In 2024, the ministry adjusted its plans twice as the need for more spending arose.($1 = 101.4955 roubles) More