US: Another one bites the dust – Danske Bank

Analysts at Danske Bank note that Donald Trump fired his Secretary of State Rex Tillerson and appointed CIA director Mike Pompeo in his stead.

Key Quotes

“Rex Tillerson and Gary Cohn were some of the more mainstream officials. Tillerson stood for relatively traditional foreign policy and Cohn for orthodox economic policy.”

“Birds of a feather flock together.Trump issurrounding himself with likeminded people, which translatesinto a preference for unorthodox hawks. Peter Navarro and Wilbur Ross are China and trade hawks and Pompeo is a foreign policy hawk.”

“Reflation scare recedes further. US core consumer price inflation came in as expected, moderate and unchanged at 1.8% y/y. To an extent, it corroborated the weakish wage figure from the jobs report. Unchanged CPI and lacklustre wage growth took some of the shine off the US reflation story.”