US: Trump in his element - AmpGFX
Greg Gibbs, Analyst at Amplifying Global FX Capital Pty Ltd suggests that there is a question that will Harvey storm have political implications as prior to its hitting, and the NK incident, Trump was reported to be about to pivot to promoting tax reform, which is on the back-burner again. But it also may have prevented Trump from raging over NK, he further adds.
Key Quotes
“Trump is probably aware that how he responds to Harvey will be more crucial to his political standing. President Bush is widely regarded to have bungled his initial response to the Hurricane Katrina disaster in 2005. Trump may sense this is an opportunity to demonstrate strong leadership and compassion. He is using his twitter account to bring attention to the disaster and this may work well.”
“Trump had most of his cabinet with him on Air force One, making appearances in Texas, leaving nothing to chance on public relations and using his celebrity and charisma to full effect.”
“He could parlay a good performance in Texas into placing subtle pressure on Congress to get on with spending bills and tax reform. Funding for the contentious border wall may no longer seem as imperative in the next stop-gap spending bill, helping smooth its passage and the debt ceiling in Sep/Oct.”
“There is a possibility that Trump’s Harvey response could end up being seen as an important turning point for his presidency and a circuit breaker in Congress.”
“However, the market will remain cautious in guessing what Trump will do. He tweeted in recent days that the wall must be built and Mexico will pay for it. And threatened to pull out of NAFTA again. A tougher line on the wall and NAFTA might be seen as raising risks of a government shutdown, while also generating fears for global trade.”
“Trump so far has said little about the NK missile, which may be helping the market reverse some of its knee-jerk sales of the USD, US yields, and equities. However, it may be wishful thinking to assume Trump will not unleash fear and fury.”