REPORT
By Gülbin Yıldırım
U.S. letter, April 10

- U.S. attack on Syria

The number one event last week was the U.S. strike against a Syrian military base. President Donald Trump ordered the strike on Thursday in response to the chemical attack carried out by the Assad regime in the Idlib province at the beginning of the week. According to the Pentagon, 59 Tomahawk missiles were used in the operation. Following the attack, U.S. stocks completed the week with limited losses while the dollar gained some value.

Another important development affecting markets on the last trading day was the March employment report released by the Department of Labor. The report showed that non-farm employment increased by only 98K, just over half the expectation of 180K. On the other hand, the unemployment rate dropped to 4.5 percent, the lowest level in 10 years.  

After the report, Trump's Chief Economic Adviser Gary Cohn cautioned on focusing too much on the monthly data and urged to look at the broader trends.

“When you look at the jobs report as a whole, I think there’s an awful lot of good news in here,” Cohn told the FOX Business Network.

 

- U.S. - China summit

The other major development of the week was the first face-to-face meeting between Trump and his Chinese counterpart President Xi Jinping. "We have made tremendous progress in our relationship with China," Trump told reporters after the critical meeting.

"We will be making additional progress. The relationship developed by President Xi and myself I think is outstanding. And I believe lots of very potentially bad problems will be going away," he added, without providing any details.

 

- Fed minutes and Lacker’s resignation

The Fed's minutes published on Wednesday showed that the majority of the bank’s officials see continuing gradual interest rate hikes and will deem appropriate the start of the balance sheet shrinkage.

Another important development from the Fed was the abrupt resignation of Richmond Fed President Jeffrey Lacker. He announced his immediate resignation Tuesday, admitting that he discussed sensitive information with an analyst regarding the Fed's plans for economic stimulus in October 2012.

 

- New week

Among next week’s expected developments, Fed Chair Janet Yellen’s speech on Monday will be at the forefront of the anticipated news.

The week will start slowly in terms of data releases but will pick up by Thursday with Producer Price Index and weekly unemployment claims, and continue with consumer price index and retail sales on Friday.

Investors will also watch the announcements of the Trump administration in addition to first quarter balance sheets of large corporations, including Citigroup and JP Morgan Chase. 

10 Apr,2017

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