US: Trump To Deliver Remarks At National Governors Association Shortly
US President Donald Trump is shortly due to deliver remarks at the winter meeting of the National Governors Association in Washington D.C. LIVESTREAM
- As with all of Trump's public speaking engagements, his speech is likely to go 'off script' and include remarks that could move markets.
- The NGA notes, "The Winter Meeting is the most well-attended annual gathering of the nation’s Governors and serves as a forum for bipartisan coordination on pressing national issues."
- WBUR notes: "The NGA’s meetings typically focus on how states can work together on issues such as the economy, energy and innovation. But this year... there will be a focus on the federal funding freezes and cuts enacted by the Trump administration, as states try to navigate all the changes and confusion."
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CNH: USD/CNH Firmer, But Within Recent Ranges, Implied Vols Edge Higher
USD/CNH is holding near 7.2750, a little off earlier session highs (7.2831). Upside focus may rest on Tuesday intra-session highs (7.2965). Before this we have the 50-day EMA close to 7.2870. Yesterday's lows were at 7.2524.
- CNH sentiment has been weighed by earlier remarks from US President Trump, which threatened a 10% tariff on China due to fentanyl flows from the country (per BBG). Trump mentioned a possible Feb 1 date, although he was also discussing that date in the context of tariffs on Mexico and Canada, which was also the date mentioned yesterday in his press conference.
- Broader yuan sentiment had firmed in recent sessions as Trump's inauguration came and passed without any early tariff action. This also follows the release of the America First Trade Policy document from the White House, earlier this week (see this link). This pointed to the start of April in terms of reporting on various issues back to Trump and suggests it could be some time before fresh trade action is launched, at face value in any case.
- USD/CNH implied vols have ticked higher but are still well off recent highs, the 1 week at 5.43%, the 1 month at 5.41%.
AUSTRALIA DATA: Westpac Lead Index Signals Soft But Improving Growth
The Westpac lead index for December fell 0.02% m/m after rising 0.06% leaving the 6-month annualised rate slightly slower at 0.25% from 0.33%. This measure leads growth relative to trend by 3 to 9 months and it was positive throughout Q4 signalling some improvement in growth over H1 2025. Westpac expects GDP growth to reach 2.2% y/y by end-2025 but the first rate cut not until May.
- The improvement in the index from mid-last year has been driven by better consumer confidence, commodity prices in AUD, stronger equities and turnaround in dwelling approvals. The outlook for commodities and markets in 2025 is highly uncertain thus risking the pickup in the Westpac lead index.
- The market has almost 75bp of rate cuts priced in by year end which should support the economy-related variables in the index but the timing continues to be data-dependent and unclear.
- Westpac says that “the more positive growth signal still looks fairly tentative”, but the RBA will want to see signs of the labour market easing, whereas it stabilised in H2 2024 and some indicators even tightened, such as underemployment. It notes that there is still a chance of a February or April easing if core inflation moderates significantly more than expected.
Australia Westpac lead index vs real GDP %
MNI: UK OCT-DEC MEDIAN PAY AWARDS +3.3% :Brightmine
- MNI: UK OCT-DEC MEDIAN PAY AWARDS +3.3% :Brightmine
