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Cohn Shocker

Dean Popplewell profile picture
Dean Popplewell

By Stephen Innes

The morning Whitehouse shocker is that Gary Cohn is resigning as head of the White House's National Economic Council. His resignation increased the risk tenfold that President Trump will follow through with far-reaching trade tariffs, given that Cohn was said to be remaining in his role to convince Trump to reverse his trade policy views or at least temper them.

Predictably USDJPY is wearing the initial brunt of the move, and in general, the Cohn announcement is reversing the positive risk sentiment from the unexpected news from North Korea, after reports that North Korea is open to denuclearisation if the safety of its regime is guaranteed.

While the world appears to be in a safer place this morning due to the denuclearisation olive branch offered by North Korea, the market is no less safe from the wrath of Trump's trade policies.

Gold Prices

Gold was trading positively overnight on the back of the softer USD trend and continues to perform exceptionally well on that narrative. But prices will remain firmly supported on the tariff tail risks from Cohn's departure as the tariff gambit hits the market again with blunt force.

Oil Prices

What goes up must come down, or the opposite in the case of US oil inventories data. The American Petroleum Institute (API) reported a considerable build of 5.661 million barrels for the week ending March 2, doubling analysts' expectations. Early trade WTI prices remain tentatively supported by the weaker dollar. But with the overhang from the Cohn resignation yet to filter through the markets, risk aversion could see oil prices move lower during today's session.

Overnight long USD hedges were unwound on the news from South Korea that North Korea was willing to hold talks with the United States on denuclearisation.

Currency Markets

Japanese Yen

This article was written by

Dean Popplewell profile picture
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.

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Comments (7)

The market didn't decline on the news of Cohn's resignation,
the market dipped because there is now one less competent person in the white house.

The true shock will be what fool replaces him. Whoever fills his shoes will have to swear lifetime unconditional allegiance to the Orange Emperor, so that means they wont have the best interest of country at the forefront of their mind. slow motion train wreck.
How is Cohn resigning bearish?

He was COO of a firm that was unable to manage it's counterparty risk
going into the 2008 crisis.....a simple task that requires only adding
up your exposure to various trading counterparties.
before you bash him, tell us if you've been able to earn 300 million net worth over your career? I guess if you cant run with the big dog's, then it's popular to berate them as best you can.
he may not have earnt 300 million dollars but perhaps he can use an apostrophe correctly
Great post. He's staff, not the pres.
NRL Capital profile picture
Not a shocker; not many people other than the severely sycophantic will put up with the Orange Emperor. He needs to alienate as many as possible so he can say he did alone if he succeeds or that everyone was incompetent and bailed out if he fails.
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