Markets React to State of the Union Address
In his second State of the Union address, delivered Tuesday night, U.S. President Donald Trump hailed his efforts and the efforts of his administration for creating 5.3 million new jobs, increasing wages at the fastest rate in decades, and implementing the tax cuts upon which a good part of his campaign was based. He lauded the fact that ‘companies are coming back to our country in large numbers’, and that the U.S. has become the world’s biggest producer of oil and natural gas.
President Trump called for bipartisan action, for both the Republican and Democratic parties to work together to build the country to further greatness. The call came only 10 days before Trump’s border wall proposal will be put to another vote, a vote which will restart the government shutdown that plagued the country for over three weeks in recent months. Trump followed this call by comments about how his tariffs on Chinese goods have sent the message to China that intellectual property theft will no longer be tolerated. He mentioned his recent sanctions on Venezuela, and his desire to reach a political settlement in Afghanistan that would enable U.S. troops to return home. He claimed that despite his administration’s achievements thus far, ‘our most thrilling achievements are still ahead.’
Traders, however, took a more moderate approach to Trump’s optimism, and remained uncertain about the future of international trade. The U.S. dollar index gained 0.16 percent by Wednesday afternoon in Asia, trading at 96.22 as of 3:31 p.m. HK/SIN. The greenback gained against most of its primary trading partners, but struggled against the yen, where it slumped 0.25 percent to 109.69. The euro eased 0.25 percent against the dollar, to trade at $1.1382.
Oil prices were modestly lower, with U.S. WTI futures down 0.07 percent to $53.62 per barrel and Brent futures down 0.10 percent to $61.92 per barrel, despite Trump’s praise of the U.S. production efforts.