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The Policy Market - Things Calm Down On Tariff Front

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Includes: SRE, TRP
by: The Policy Market

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Volcker rule revamp could hurt bank credit quality

The proposed changes to the Volcker rule, which aim to streamline and improve the efficacy of requirements first adopted in 2013, could "potentially encourage some banks to take greater risks, a credit negative," says Moody's Ana Arsov. She points out that these changes, which look likely to be approved soon by the relevant government agencies, are coming at a time when lower interest rates are putting pressure on bank net interest margins.

Tariff talk turns positive

"I think [the Chinese] want to make a deal very badly," said President Trump, speaking yesterday at a joint press conference with French President Emmanuel Macron at the end of the G-7 meeting. "I don't think they have a choice," he continued. Turning to France's hope of brokering talks between the U.S. and Iran, Trump says he'd be willing to meet Iranian President Hassan Rouhani if the circumstances are right.

Mexico nears deal to allow pipeline project to begin operations

The Mexican government has reached a preliminary agreement with four energy firms to resolve a months-long conflict over natural gas pipeline contracts, according to the WSJ. Under the deal terms, which could be announced as early as today, Mexico will pay higher fees to ship gas through the pipelines for the next 10 years but ultimately will realize nominal savings of ~$600M. If approved, the agreement would allow the South Texas-Tuxpan marine pipeline - which was completed in June - to begin operations. The four companies involved in the project - which would increase Mexico's natural gas capacity by 40% - are Carlos Slim's Grupo Carso, Canada's TC Energy (NYSE:TRP), Sempra Energy's (NYSE:SRE) Mexican subsidiary iEnova, and Mexico's Fermaca.