When The Donald Talks! Trump Says US Dollar Too Strong (As 10Y Treasury Yield Slumps)

Like the old EF Hutton ads, when The Donald speaks, currency and bond traders listen.

(Bloomberg) President Donald Trump said he won’t brand China a currency manipulator, retreating from core campaign promise, though he argued that a strong dollar is hampering the ability of American firms to compete.

Trump, in an interview with the Wall Street Journal on Wednesday, appeared to acknowledged that China hasn’t been intervening to weaken its currency recently. “They’re not currency manipulators,” he said.

It’s a shift of opinion after Trump accused China during last year’s election campaign of manipulating its currency to gain the upper hand in trade and vowed to label the country a manipulator on his first day.

U.S. 10-year bond yields slumped and the dollar fell after Trump indicated in the interview that the U.S. currency is getting so strong that it’s harmful to the economy, while other nations “are devaluing” their currencies.

Watch the dollar crash after The Donald speaks.

Here is the Euro against the US Dollar.

The Great Britain Pound against the US Dollar?

And here is China’s Renminbi against the US Dollar.

And the US Treasury 10 year yield slumped. (Trump Slumped??)

Yes, when The Donald speaks, people listen.

Twisted! LIBOR 3M Hits Highest Level Since End Of The Great Recession (Treasury Curve Twisted Since 06/30/09)

The London Interbank Offered Rate (LIBOR) has now reached its highest level since the end of The Great Recession in June 2009. LIBOR is important since many contract are indexed to it.

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I guess we can say the same thing about The Fed Funds Target Rate (UB) — it too is at its highest rate since June 2009 with only two rate increases.

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How has the US Treasury yield curve shifted between June 30, 2009 and today? The 1 year Treasury yield is 44 basis points higher today while the 10 year Treasury yield is around 100 basis points lower. Essentially, the Treasury yield curve has been twisted since the end of The Great Recession.

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This is a character from the PlayStation game Twisted Metal, NOT Fed Chair Janet Yellen. Yellen’s hair is white and shorter.

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