The ‘Trump effect’ in reverse

It’s the ‘Trump effect’ in reverse this morning as far as markets are concerned, with the dollar and US bond yields both lower following comments by the man himself in an interview with the WSJ

The US President said the dollar is ‘getting too strong’ and it is ‘hurting – it’s very hard to compete when you have a strong dollar’ (never mind that the US economy is effectively at full employment). His comments immediately prompted a fall in the currency, to close to $1.07 against the euro and to Y109 against the yen

Trump also said he likes low interest rates  – ‘I do like a low-interest rate policy, I must be honest with you’ (though Janet Yellen is unlikely to be swayed from raising them a bit more) – immediately prompting a fall in US bond yields, by around 5bps to under 2.25% in the case of 10-year yields (which are now almost as close to their pre-US presidential election levels (of 1.80%) as they are to their recent highs (of 2.60%) set in mid-March)

The unemployment rate in the UK was unchanged at 4.7% in the three months to February, according to latest labour market report published yesterday, though the annual growth in regular wages slowed to 2.2%, below the current rate of inflation of 2.3%

Data due today include consumer confidence and jobless claims in the US