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Trump little policy falls dollar while ‘U.S. Treasuries rise’.


U.S. Treasuries
rallied across the board on Wednesday, while the dollar fell after
trading higher for most of the session as President-elect Donald Trump
did not provide much clarity on his future policies.

U.S.
stocks also weakened initially after Trump took aim at the
pharmaceutical industry for charging high prices. He said pharmaceutical
companies are “getting away with murder.”

“U.S.
Treasuries rose because stocks caved in with Trump’s pharmaceutical
comments,” said Kim Rupert, managing director of global fixed income at
Action Economics in San Francisco.
“Overall Trump did not really say
anything new. As a result, we’re still in wait-and-see mode with respect
to his policies.”

In his first press briefing as U.S.
president-elect, Trump presided over a wide-ranging session that touched
on topics such as allegations of Russia spying, Mexico, his business
interests, and drug pricing.

But the briefing, which lasted longer than people expected, did not break new ground, analysts said.
Traders
were hoping that after making generally broad statement for the last
two months on what he intended to do as president, Trump would give more
specific details about key policy reforms.

The
Dow Jones industrial average was up 0.2 percent on the day at
19,901.57, while the S&P 500 fell 0.3 percent to 2,262.98. The
Nasdaq Composite added 0.1 percent, to 5,526.05, a day after hitting a
record high.

Other global stock indexes edged higher as well.

The UK’s FTSE 100 posted a record 12th straight day of gains while European shares rose 0.2 percent to 364.90.

MSCI’s
broadest index of Asia-Pacific shares outside Japan also gained 0.83
percent, to 445.2, while the MSCI world equity index, which tracks
shares in 45 nations, inched 0.2 percent higher to 429.88.

In
the bond market, benchmark U.S. 10-year Treasury prices were up 9/32 in
price, yielding 2.344 percent, down from Tuesday’s 2.379 percent.
German 10-year yields also fell to 0.2410 percent, from 0.248 percent
the previous session.

Trump’s
comments reversed earlier dollar gains, with the dollar falling 0.4
percent against a basket of currencies to 101.58. The greenback also
fell sharply versus the yen, down 0.7 percent at 114.92 yen.

Trump’s
campaign calls for tax cuts and more infrastructure spending have
boosted U.S. shares and the dollar, as well as driving a selloff in
Treasuries, but his protectionist statements and a flurry of
off-the-cuff Tweets have kept many investors from adding to risky
positions.

“The hope is
for a pivot back toward the Trumponomics agenda, which was three key
themes: tax reform, deregulation, and infrastructure spending,” said
Vassili Serebriakov, a currency strategist at Credit Agricole in New
York.

Trump has vowed to
label China a currency manipulator on his first day in office on Jan.
20 and has threatened to slap huge tariffs on imports from China.

U.S.
House of Representatives Speaker Paul Ryan and top members of Trump’s
transition team are discussing a controversial plan to tax imports.

Economists have warned that protectionist measures could stifle international trade and hurt global growth.

“From
a currency perspective, markets will aim to get a clearer picture on
trade, fiscal stimulus and the new administration’s relationship to the
Fed,” Morgan Stanley strategists wrote in a note to clients.

Sterling
meanwhile edged toward a 10-week low against the dollar on Wednesday,
kept under pressure by fears that Britain will undergo a “hard” exit
from the EU in which access to the single market will play second fiddle
to immigration controls. But by early afternoon trading as the dollar
weakened, sterling rose 0.4 percent to $1.2225.

In
commodity markets, oil rose, lifted by reports of Saudi supply cuts to
Asia, but gains were capped by a lack of detail about the reductions and
because of signs of rising supplies from other producers.

Brent
crude was last up $1.76, or 3.3 percent, at $55.4 a barrel. U.S. crude,
on the other hand, climbed 3.4 percent, to $52.54 per barrel.

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