Forget the Carrier deal, and forget the infamous tweet recently directed at Boeing. If Trump is serious about protecting the American public and being the populist leader he claimed he would be, he will aggressively push back against the proposed AT&T-Time Warner mega merger.
Deloitte’s Brazilian arm was fined a record $8m by a US auditing watchdog for falsifying audit reports, altering documents and providing false testimony during an investigation that unearthed what it described as its “most serious” finding of misconduct. “This is the most serious misconduct we’ve uncovered. It’s cover-up after cover-up after cover-up.”
Matteo Renzi met with Italian president Sergio Mattarella to discuss the terms of his resignation. According to Ansa, Renzi's departure may not be as clear cut as some had expected, and as Ansa reports, Renzi may delay his resignation following a request by the president to hold the post until the Senate Budget Law is passed,
The much anticipated headline is out and, as Bloomberg reports, OPEC has reached a deal agreeing to cut oil production by 1.2 million barrels per day to 32.5mmbpd from the current level of 33.6mmbpd. This would be OPEC's first production cut since 2008.
European stocks were little changed and oil fell as investors assessed declining prospects for an OPEC deal and risks from Italy’s referendum. Asian stocks declined, while S&P futures pointed to a fractionally higher open, erasing 3 points from yesterday's drop.
"We see the US economy moving into modest disequilibrium over the next 1-2 years, with an unemployment rate falling below its long-run sustainable rate and inflation rising above the Fed’s target. Looking ahead, overshooting means that the economy could begin to develop imbalances, increasing the odds of another downturn further into the forecast horizon."
More of the same this morning as the dollar extended its advance on the still undeteremined Trump reflationary policy measures after Yellen signaled an interest-rate hike could be imminent, while bond yields around the globe rose again, metals declined, European stocks advanced and futures were modestly in the red just shy of all time highs.
Two brief days of hiatus from the bond bloodbath are over as following Yellen's testimony, 30Y yields have raced higher once again, breaking above 3.00%. Interestingly, EM bonds are having a big week even as DM bonds suffer...
With nary a dovish word uttered, the end of Janet Yellen's testimony to Congress sparked a buying frenzy in USDJPY (and implicitly S&P 500 futures) sending both to post-Trump highs. At the same time, Dec rate hike odds shifted higher still sending the USD index to fresh 13.5 year highs...
Having warned of "excessive risk-taking" in her earlier released prepared remarks, Janet Yellen's relatively hawkish testimony before the Joint Economic Committee (96% odds of Dec rate hike) will perhaps be most-watched for the Q&A. With Jeb Hensarling wanting to reform The Fed and "throw FSOC in the bin" and Trump allies demanding The Fed reduce its balance sheet (notwithstanding questions over Fed independence), we are sure to see some fireworks.
Janet Yellen signalled that the US central bank is reluctant to delay its next increase in short-term interest rates "for too long", warning that keeping rates on hold could spur excessive risk-taking and adding that a rate hike could be appropriate "relatively soon." Yellen is due to say on Thursday morning that as the Fed sees the case for a rise in rates continuing to strengthen it "must remain forward looking in setting monetary policy".