US Dollar Steamrolls Everything as Next Fed Chair Announced

President Trump announced this morning that Kevin Warsh has been selected to replace Jerome Powell as Fed Chair after the current term ends in April. Professor Warsh currently teaches at Stanford and has previous experience at the Fed as a member of the Board of Governors from 2006-2011 through the Great Financial Crisis.

Seen as somewhat of an outsider from the current political and monetary hierarchy, media chatter about this appointment has been generally positive this morning, with comments focusing on him being someone who could keep the Fed independent from politics.

The US Dollar is soaring on the news against everything priced in US Dollars, especially precious metals. Gold is down 5.5%, Silver is down 13.5%, Platinum is down 12.2%. The Greenback is up 0.4%-0.8% against the Loonie, Euro, Pound, Yen, Aussie and Swiss, and 1.6% against Bitcoin. Commodities are also under pressure with Crude Oil down 0.3%, and Copper down 3.1%.  

US index futures are down 0.5%-0.7% with NASDAQ futures getting hit the hardest. European markets are climbing today as their currencies tumble with the DDA up 0.9% and the FTSE up 0.5%.

US producer prices (3.0% vs Street 2.7% and previous 3.0%) were worse than expected in December.  US Chicago PMI (Street 44.0) is due at 9:45 am EST. This weekend brings an OPEC+ meeting and Manufacturing PMI reports from around the world as the calendar turns to February.

Amid everything else going on, the market reaction to overnight earnings has been subdued so far. Apple ($2.85 vs Street $2.67), Chevron ($1.52 vs Street $1.42), and Exxon Mobil ($1.71 vs Street $1.70), all beat expectations. Canadian National Railway is scheduled to report later this morning.

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