February 13, 2018
- US President Donald Trump revealed his infrastructure plan on Monday that asked Congress to pledge $200 billion of federal spending over 10 years to encourage $1.5 trillion in investments in American infrastructure. Trump’s plan aimed to share overall spending with states, counties and private investors to make up the shortfall on required spending.
- The plan marks a significant change in how the US federal government pays for infrastructure projects. Trump faces an uphill battle with Democrats who criticized the initiative for being too small and unfairly burdening local governments.
- Trump also directly admonished Canada for what he believes to be unfair trade practices; the president took issue with agricultural trade and border factors while threatening an undefined tax against US trade partners.
- US stocks posted a notable recovery yesterday as markets moved from risk-off sentiment; European stocks and today’s US open are showing mixed results as investors look to tomorrow’s economic data on US consumer prices for further guidance on inflation.
- The euro is up this morning as investors slowly return to riskier assets while selling off the US dollar; the recent turmoil in global stocks shifted market sentiment away from the euro despite it being one of the most popular FX trades for the year.
- Markets remain bullish on the euro as investors are expecting the European Central Bank to temper its stimulus efforts later this year while the euro zone economy recovers. A fragile coalition deal in Germany and upcoming elections in Italy, however, are upcoming risk events that could derail the euro’s rise.
- Oil prices continue to decline this morning despite both a relative recovery in global markets and reports of shrinking global gut by the International Energy Association.