Daily Commentary BY THE CURVE TEAM –

Trump Administration Undergoes Some Restructuring

21st of August, 2017

Following on from last week’s big run of data, we are off to a relatively quiet start this week as we lead into Friday’s central bank meeting. Political reshuffling and surprising consumer data out of the US seem to have caught the eyes of markets.

The week closed with some interesting political news out of the US as President Trump had fired his Chief Strategist Steve Bannon, one of the key forces behind the tough stance on immigration. It seemed that markets perceived this to be a positive move as a sense of order was finally being seen within the White House, with US equities rallying briefly.

Contrary to the data we saw domestically, US consumer confidence exceeded expectations with the August preliminary Michigan Consumer Index jumping from 93.4 to 97.6. Markets seemed to have reacted negatively with US yields drifting higher while members of the Fed will be looking carefully at tomorrow’s Manufacturing PMI release to see whether the stronger consumer sentiment is met with stronger business conditions.

The highlight this week will be Friday’s annual central bank symposium at Jackson Hole, where we will hear speeches from both Janet Yellen and Mario Draghi. The discussion on policy withdrawal and balance sheet normalisation will have markets on high alert, following on from the recent dovish statements from the Fed and soft inflation reads.

Oliver Parsons

Client Relationship Officer