Mar 25, 2019, by Lorcan Roche Kelly
Special Counsel Robert Mueller’s 22-month inquiry found that there was no collusion with Russia during the 2016 campaign, and insufficient evidence to find President Donald Trump obstructed justice, Attorney General William Barr wrote in a letter to Congress. The findings are a boost for the president who has had the investigation hanging over most of his term in office. Democrats are not planning to ease up the pressure on Trump, with House Judiciary Chairman Jerrold Nadler saying they will move ahead with investigations into obstruction of justice, abuses of power and corruption. Russia, meanwhile, is trying to seize the chance for resetting the relationship between the two countries in the wake of Mueller’s findings.
British Prime Minister Theresa May could see her position weaken even further this week as members of Parliament are set to vote later today on whether to take control of the legislative agenda. The move comes as she attempts to contain an open revolt within her cabinet, according to reports, with pressure increasing on the prime minister to stand down in the wake of Brexit turmoil. Markets are taking a wait-and-see approach to everything at the moment, with the pound continuing to hold in the $1.30-$1.33 range.
Developed-market sovereign debt continues to rally, with yields in Australia and New Zealand dropping to record lows overnight following the inversion of the U.S. yield curve on Friday, while Japan’s 10-year yield fell to the lowest since 2016. Money markets are now pricing a 90 percent chance that the Federal Reserve will cut rates by December. Chicago Fed President Charles Evans in a speech in Hong Kong this morning said that the Fed may have to ease if downside risks take hold.
Overnight, the MSCI Asia Pacific Index dropped 2 percent, while Japan’s Topix index closed 2.5 percent lower with all industry groups falling as concerns rose over faltering economic growth. In Europe, the Stoxx 600 Index was 0.3 percent lower at 5:45 a.m. Eastern Time, with the gauge moving off the lows of the session following a better than expected German Ifo survey reading. S&P 500 futures pointed to a drop at the open, the 10-year Treasury yield was at 2.467 percent and gold was higher.
For seasoned investors, there are plenty of time-honored rules in markets. “Never short the bund” is one — and it’s serving a harsh reminder as 10-year German yields stay in negative territory. If Turkish regulators get their way, “never tell clients to sell the lira” may soon be added to the lexicon. The Banking Regulation and Supervision Agency started an investigation into JPMorgan Chase & Co. for what it calls a “misguiding and manipulative” research note that recommended selling the local currency against the dollar. The lira fell more than 5 percent on Friday, with President Recep Tayyip Erdogan warning that bankers deemed responsible for fueling gyrations in currency markets will pay a heavy price after this week’s elections.