The “Davos get me in there” saga

  • 24/01 8:35 gmt:US treasury Sec Mnuchin: US Treasuries are not an issue in talks with China;
    -not concerned about the level of the USD in the short-term
    Weaker USD is good for trade
    – US Treasury market is one of the most liquid – Need to invest a lot in infrastructure
  • 24/01 13:30gmt:US Commerce Sec Ross: Mnuchin was not advocating a weak USD
    -tariffs should not come as a surprise
    – There’s a good chance’ that renegotiating NAFTA will be successful
    – US is still open to trade talks with EU, it did not walk away from TIPP negotiations
    – Do not expect to see a trade war
    – World needs an arbiter of global trade and must avoid a total free-for-all, but that doesn’t mean we agree with all of current system
  • 25/01 7:30gmt :IMF’s Lagarde: Trade is a very significant engine of growth
    – USD value is determined by markets
    Calls on US Treasury Sec Mnuchin to clarify comments on a weak USD currency
  • 25/01 7:50gmt:Treasury Sec Mnuchin: Earlier comments on USD was consistent and quite clear;
    -Believes in free currencies (markets determine the rates)
    Long-term USD level is determined by economic strength
    – Do not want to enter trade wars
    – Has a very good and open dialogue with China; discussed possible trip to China later in 2018
    – Discussed reducing the trade gap with China
  • 25/01 7:55gmt:Commerce Sec Ross: Trump is more interested in bilateral accords as they have fewer moving parts
    -WTO representative noted that the system needs to be changed, including the resolution mechanism
    – Hard to say when the NAFTA talks will end; need to get a proper deal; mindful of the upcoming Mexican election
    – Will not give previews on what will happen on steel

Being a reality TV star,the past 24hrs have been perfect for Trump’s glitter entry into the ” Forum Celebrity Farm”. While Ross and Mnuchin were killing the bulls in the arena, Lagarde went into the mountains hunting for bears.She managed to scare at least one back into the woods with her IMF shield, Ross went all of a sudden quiet about the currency in his last comments. By any means this is not over. We can expect more comments and POTUS will certainly not refrain throwing a few kilos of salt onto the Swiss snow. It’s gonna be hot there today and tomorrow. We have May, Mnuchin, Merkel and others speaking this morning. Get ready for some more volatility ahead of ECB this afternoon.
Watching Cable 1.4220-1.4320, EURUSD 1.2380-1.2460 and USDJPY 108.80-109.50 boundaries for action if one of them drops a bomb into the Farm

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