Markets:
- Gold down $32 to $4,582, silver down 3%
- WTI crude oil down 32 cents to $59.51
- US 10-year yields up 6.7 basis points to 4.23%
- JPY leads, AUD lags behind
- The S&P 500 down 0.1%
It’s a public holiday on Monday and Friday markets generally trade like a very long weekend. News flow was steady with some Fed chatter before the midnight outage, but ultimately there was minimal movement in the foreign exchange market to end the day.
Beneath the surface, it was a little livelier. The day’s big moves came after Trump told Hassett at an event:
“Actually, I want to keep you where you are, if you want to know the truth.”
This led the betting market to lower the odds on Hassett to 17%. However, broader market reactions could lead Trump to return to Hassett. Treasury yields rose 5-6 basis points across the curve on the possibility of a less dovish Fed chairmanship. That long-term yields are also rising is somewhat surprising, as Hassett could fan the inflationary fires.
Along the same lines, the US dollar has strengthened in headlines, which goes against what Trump generally wants. Stock markets also fell slightly, but not significantly.
The NAHB figures highlighted a major weak point in the United States: housing. There are rumors that the Trump administration will let Americans withdraw from 401k retirement plans to buy homes, as it faces poor polling on affordability. The current rise in long-term yields won’t help either.
The coming week is short but it will feature major economic dates and we may get the Supreme Court’s ruling on tariffs (Tuesday has been announced as decision day). Have a good weekend.
