Geopolitical Risk Tracker >> Americas Fridays

GEOPOLITICAL RISK + GLOBAL MARKETS

WHAT YOU NEED TO KNOW

GLOBAL RISK

How Markets Overcame Past Geopolitical Crises Investors should be aware how the markets have reacted to geopolitical events in the past. -BloombergView

Trump and Yellen may not be an odd couple after all -Reuters

NYE: WHAT I TELL MY NON-AMERICAN FRIENDS >> invariably my foreign friends ask, with varying degrees of bewilderment: What in the world is going on in your country?

Here is what I say …  -Project Syndicate

U.S. RISK

Trump threatens action on North Korea -Politico

BOSCO: The Message of the Tomahawk The U.S. opportunely demonstrated to China that the U.S. would no longer be deterred from dealing firmly with lawless regimes simply because they enjoy by great power protection like that Beijing has provided North Korea for decades. -Reuters

THAT WAS THEN; THIS IS NOW >> Trump’s Previous View of NATO Is Now Obsolete That was then. After 82 days in office, Mr. Trump officially pronounced NATO rehabilitated, taking credit for transforming it into a modern, cost-sharing, terrorism-fighting pillar of American and European security. -NYT

“I said it was obsolete,” the president noted on Wednesday as he hosted NATO’s secretary general. “It’s no longer obsolete.”

Mr. Trump’s Fickle Diplomacy Until a few days ago, Americans and the world had reason to think that the Trump administration’s policy toward Russia would involve cooperation and harmony and seek to reverse the acrimony and dysfunction that had come to characterize relations between the Kremlin and the Obama administration. -NYT

Tillerson meets with Putin amid deepening tensions over U.S. missile strikes in Syria The rift between the United States and Russia was laid bare Wednesday when Secretary of State Rex Tillerson held his first direct talks with Russia’s president. -The Washington Post

TRUMPISSIMO >> Trump to host Italian PM at White House next week White House press secretary Sean Spicer said the two leaders would discuss the upcoming Group of Seven (G-7) summit meeting in Italy “and a range of issues of mutual concern.” -The Hill

BAT is DOA (maybe) >> A Fiscal Reality Test for US Republicans A plan offered by Republicans in the US House of Representatives to reduce the corporate-tax rate from 35% to 15%, and to make up for the lost revenues with a border adjustment tax, is dead on arrival. The BAT does not have enough support even among Republicans, and it would violate World Trade Organization rules. -Project Syndicate

AMERICAS

Meeting with U.S. NAFTA point man Ross ‘reassuring’: Ambrose Canada's Opposition leader says she's feeling a bit reassured after meeting U.S. President Donald Trump's point man on trade and wants to take that message home to calm jitters in the business community. -Globe and Mail

Brazil’s political class is in crisis as over 100 are investigated for corruption Brazil’s Supreme Court has authorized an investigation of over 100 top politicians, implicating an entire swath of the country’s governing elite in a corruption probe that has tarnished the political system and threatened to derail the nation’s economic recovery. -The Washington Post

Venezuela Staves Off Default, but Low Oil Prices Pose a Threat Venezuela has put off a reckoning on its tens of billions of dollars in debt, but its ability to avoid a disastrous default will probably require much higher oil prices than appear likely in the next year or two, financial experts say. -NYT

U.S.-AMERICAS || GLOBAL MARKETS IMPACT +

OPPORTUNITY

GLOBAL BUSINESS

Trump turns to CEOs amid White House turmoil Business leaders are making a push for moderation — and meeting with some success. -Politico

BUY AMERICAN >> Industry assails Trump’s ‘Buy America’ steel plan President Trump is facing criticism from oil companies, pipeline operators and foreign governments for his proposal to require that domestically produced steel be used in pipelines that are built in the United States. -The Hill

ESPECIALLY AT SEA >> Trump administration moving ahead with ending Jones Act exemptions The Trump administration appears to be moving ahead with an Obama administration proposal aimed at reversing long-standing Jones Act exemptions and is not considering weakening its criteria for waivers from the maritime law -Platts

AND BY LAND >> GM to add 1,100 jobs in California over five years at self-driving unit -Reuters

Microsoft reveals new intelligence requests in transparency report -The Hill

Tech companies are pushing the FCC to preserve its net neutrality rules Tech companies are pushing the Federal Communications Commission not to water down its rules on net neutrality, teeing up a confrontation between Silicon Valley and Washington as the nation's top telecom regulator mulls a plan to undo the Obama administration's regulations for Internet providers. -The Washington Post

#RECIPROCITY ARGUMENT RISING>> Chinese Investment in the United States: Time for New Rules?

China’s foreign direct investment (FDI) stock in the U.S. increased some 800% between 2009 and 2015.

These developments have not been reciprocal. Foreign investors—including U.S. investors—do not enjoy similar openness inside China. -Lawfare

Also consider Harris’ book War by Other Means

Yahoo faces Chinese dissidents' lawsuit -BBC

Canada Tries to Turn Its A.I. a handful of researchers in Canada — backed by the Canadian government and universities — were laying the groundwork for today’s boom in artificial intelligence. -NYT

GLOBAL MACRO

TREASURIES-U.S. bond yields flat as geopolitical worries offset supply -Reuters

* U.S. sells $12 billion 30-year bonds to soggy bids

* Worries about overseas conflicts underpin bond demand

* Hopes for less tension after Russia, China comments

Gold settles at a 5-month high as investors focus on geopolitics -MarketWatch

June gold GCM7, +0.94% gained $20.30, or 1.6%, to settle at $1,274.20 an ounce.

U.S. looks to IMF to strengthen its forex rates oversight: Treasury official -Reuters

Donald Trump: China 'not a currency manipulator' -BBC

"I think our dollar is getting too strong, and partially that's my fault because people have confidence in me." He added that a strong dollar had benefits, but would ultimately hurt the US economy.

Dollar rises as geopolitical strife grows -MarketWatch