Globalism Under Siege - Earnings: FTS, EMA, WIR, CHE, AX
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During the 22 months since the last US election, the US Dollar Index (DXY) has declined by 7.4% and interest rates for 10 year US bonds have increased by 30 basis points from 2.6% to 2.9%. Concerns that the US Central Bank would need to substantially raise interest rates to fund ballooning government debt have not yet materialized as was widely anticipated in the lead up to the Nov-2016 US election. The downtrend for the US currency reflects this.
Since being elected Trump has become increasingly controversial yet underneath all the commotion he moved quickly to reallocate budgets, moving environmental spending to defense. He successfully enacted a much lower tax regime and tightened up immigration. All credible accomplishments.
Fears of ballooning government debt and rising interest rates however, may have only been premature. This is if Trump is able to put his trade agenda into place. For the major items that Trump has gotten right, initiating trade wars and the tariffs used to win them could unwind all the progress made so far, and then some. Commentary this week considers the risk of this happening; it depends on the outcome of the US mid-term elections.
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