US Treasury bucks Trump on China
By Peter Rosenstreich
Who’s manipulating their currency? President Trump says China is. But the US Treasury Department says China is not. There is no claim of that in its just-released semi-annual report on International Economic and Exchange Rate Policies. Treasury actually softened the anti-China tone found in its first such report this year, released in April.
The latest report does not brand any currency manipulators, but it does report that Switzerland and Brazil made net purchases of foreign currency that exceeded 2% of GDP over a 12-month period. Treasury will continue to monitor these countries, along with China, Germany, South Korea and Japan for manipulation.
Oil rally looks shaky
By Arnaud Masset
Although crude prices extended gains on Tuesday with the WTI and Brent rising 0.50% and 0.80%, respectively, we remain cautious. There are many clouds on the horizon and we do not rule out a reversal in the short-term.
Iranian production is a major question mark. President Trump has thrown Iran’s nuclear-limitation-agreement into the hands of Congress. A collapsed deal could push down production, which has ramped up over the past year. Meanwhile, recent tensions in Iran plus the tensions in Kurdistan-Iraq have boosted oil to multi-month highs, and a decline in the US rig counts also weighs on supply. A contraction in US crude inventories accelerated recently. After shrinking by 2.7 million barrels last week, inventories are expected to contract by another 3.25 million barrels – the fourth weekly decline in a row.