Trump shifts tone
US president Donald Trump sounded decidedly more moderate than he did during last fall’s campaign in an interview with the Wall Street Journal on Wednesday. The president reversed course on multiple fronts. First, Trump said he may nominate US Federal Reserve Board chair Janet Yellen to a second term after saying last fall that she was "toast" and he would replace her at the end of her term. He also reversed his opposition to the US Export-Import Bank, which finances US exports. Critics cite the bank as an example of “corporate welfare.” Additionally, the president shifted gears on NATO, saying the alliance is no longer obsolete because it has begun to fight terrorism. Finally, Trump said the United States will not label China a currency manipulator, thus breaking another campaign vow. The reversal may represent an attempt to entice China to increase pressure on North Korea to abandon its nuclear program.


North Korea, Syria in spotlight
Tensions continued to mount on the Korean peninsula as the North Korean regime threatened a nuclear strike in response to any US aggression. North Korea is believed to be trying to develop intercontinental ballistic missiles capable of reaching the US mainland. This week, the US navy dispatched a carrier task force to the western Pacific in a show of force, while Chinese president Xi Jinping said that China is committed to the denuclearization of the Korean peninsula. President Trump called on China to do more to rein in its nuclear-armed neighbor, saying if China won’t help, the US could act alone. Meanwhile, the US and other G7 nations continue to pressure Russia to abandon its support of Syria’s Bashar al-Assad in the wake of last week’s chemical weapons attack on Syrian rebels which led to a cruise missile strike on a Syrian airbase by US forces.


Four contenders vie for two spots in French runoff
For months, there have been three candidates in contention for the two spots in the second round of the French presidential election. Marine Le Pen, the populist firebrand, has consistently led recent polls, trailed closely by centrist Emmanuel Macron. François Fillon, hampered by an ethics scandal, has held the third position most of the time. Now a fourth candidate, leftist Jean-Luc Mélenchon, has entered the fray and is in a virtual tie for third place with Fillon. The conventional wisdom is that Le Pen will be beaten handily in the second round by either Macron or Fillon, who are more centrist. But the emergence of Mélenchon could put an unexpected wrinkle into the process. First-round voting takes place on 23 April.


Yellen: Fed allowing economy to coast
Speaking at the University of Michigan, Fed chair Yellen said that the US economy is healthy and that the Fed is now shifting its focus, taking its foot off the accelerator and allowing the economy to “coast” for a while, saying a gradual path of interest rate increases can get us where we need to go. Yellen also opined on several bills that are working their way through Congress, expressing concern that the Fed could become subject to political pressure if the bills are signed into law.


Poloz: House prices can go down as well as up
Bank of Canada governor Stephen Poloz warned of the growing role of speculation in the recent acceleration in Toronto-area house prices. The central banker said that prices had accelerated from percentages in the high teens to the 30% zone, adding there is no fundamental story that can explain the rise. “I think it is timely to remind folks that prices of houses can go down as well as up,” he said. Poloz also said that further rate cuts in Canada are no longer on the table.


EM debt issuance boomed in Q1
Borrowers in emerging markets raised a record $181 billion during the first quarter of the year. Corporates raised $119.1 billion, beating the Q1 2013 record, while sovereigns raised $61.5 billion, topping the year-ago quarter by over $16 billion, according to data from J.P. Morgan. Total emerging market debt rose to $55 trillion in 2016, equal to 215% of the collective GDP of emerging nations.



  • China reports GDP, retail sales and industrial production on Monday, 17 April
  • The United States releases industrial production data on Tuesday, 18 April
  • The eurozone releases its consumer price index on Wednesday, 19 April
  • The Fed’s Beige Book is published on Wednesday, 19 April
  • The United Kingdom reports retail sales data on Friday, 21 April
  • US existing home sales data are released on Friday, 21 April




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Sources: MFS research; The Wall Street Journal; The Wall Street Journal Online; Bloomberg News;Financial Times;;;


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