US: Its politics all the way – BBH

Analysts at BBH note that reports that a file from a former UK intelligence officer that has circulated among policymakers and reporters for some time have been unable to derail the dollar, which is edging higher against most of the major currencies today.  

Key Quotes

“The reports claim that Russia collected damaging material to try to blackmail Trump and that senior people close to the President-elect were in contact with Russia during the campaign.” 

“The focus is on US politics and the high degree of uncertainty.  The lead story in the Financial Times is that Trump's nominee for Attorney General "Sessions retreats from Trump's election rhetoric on in Senate hearing."  In particular, the paper identifies three areas of divergence:  Russia, Muslims, and torture.  Today, Tillerson, the former Exxon CEO and nominee for Secretary of State, is also expected to take a firmer line on the risks from Russia.”

These hearings may be overshadowed to some extent today by Trump's press conference, the first since July.  The topic initially was going to be how he was arranging his extensive investments to avoid potential conflicts of interest, but the reports on Russia may be of more immediate interest.  And it is not like there is much US data to compete with these political developments.  The MBA's Mortgage Applications report is the only data on tap.  The economic calendar picks up starting tomorrow with import prices and weekly initial jobless claims, followed by Friday's PPI and retail sales.”


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