US: Its all about Trump – Danske Bank

In a surprising move, US President Trump has agreed to meet with North Korea’s leader Kim Jong-un (first ever US president to meet with a North Korean leader), points out the research team at Danske Bank.

Key Quotes

“While markets consider this mainly to be good news, as it may increase the likelihood of a diplomatic solution, we think this move is “high risk, high reward” in the sense that it also increases the risk that the situation could escalate if the summit collapses. The meeting should take place in May.”

“As expected, Trump made his decision to impose tariffs on steel and aluminium imports official yesterday, exempting Mexico and Canada for now due to the ongoing NAFTA renegotiations (other countries may be exempt as well). The EU and China have already said they will retaliate to any measures taken by the Trump administration. Trump’s next move is likely to target China specifically. The Republican establishment also seems to support this, at least based on House Speaker Paul Ryan’s statement yesterday. It remains our base case that future measures will also be limited in scope, but we believe trade policy will remain a market theme for some time.”