Fading Confidence in Trump administration – AmpGFX

According to Greg Gibbs, Director at Amplifying Global FX Capital, the weaker US equity market that peaked on 1 March may account for some of the recent fall in US yields and curve flattening, including during trading on Wednesday. 

Key Quotes

“USA equities fell after the FOMC minutes were released.”

“Weaker equities and weaker US yields in recent weeks may reflect the poor political performance of Trump; including the failure of the healthcare bill and ongoing questions over alleged links to Russia.  The market has down-shifted its expectations for tax reform and infrastructure spending.”

“There may also be some increased concern over how the USA will handle rising geopolitical stress after chemical gas attacks in Syria and ballistic missile tests by North Korea.”

“Such considerations may be weighing on US equities, US yields and the USD against safe havens, JPY, and gold.”