Earlier declines in equities and risk assets are being trimmedCohn’s resignation earlier opens up a lot of uncertainty surrounding a trade war, and the fact that he was probably one of the more stable persons on Trump’s entourage makes things less certain when it comes to future policy as well.
That led the S&P 500 futures to fall at the open, suffering its biggest opening decline in the Asian session since 2015:
At the same time, USD/JPY also took a tumble falling from 106.10 levels to a low of 105.46. The aussie, loonie, and kiwi also suffered a little — so has oil. Risk assets were mostly in decline.
But it appears that the market is starting to find its feet again after digesting the news a little. S&P 500 futures are now only down less than 1% on the day, and USD/JPY is back up to 105.71.
The bigger picture is that whatever Trump intends to push out in terms of economic policies will largely remain unchanged. The cycle of people coming and going under the Trump administration isn’t something new, and as Adam pointed out here yesterday, Cohn’s work on the tax agenda is over and done with already — so it’s on to the next one I guess.
But for now, the theme in the market still revolves a lot around trade concerns and the possibility of a trade war. And that is something that cannot be ignored.