US: Trump To Sign Executive Order Dismantling Department Of Eduction
President Donald Trump is shortly due to sign an Executive Order instructing Education Secretary Linda McMahon to dismantle the Department of Education. The move will be another test of voters' willingness to accept Trump's hardline government reform agenda, already seen as contributing to a slide in Trump's approval rating and negative voter blowback to Elon Musk's Department of Government Efficiency.
- Although the Department cannot be entirely closed without Congressional approval, the administration is likely to take steps to gut the agency by reducing the workforce and returning much of the Department’s authority to state jurisdiction.
- Politico notes: “Today’s EO will effectively destroy a $100 billion-a-year executive department created by statute under Democratic President Jimmy Carter 45 years ago. Dems in Congress are already pushing back on the legality, but it’s unclear what will be left amid the wreckage.”
- The Department’s restructuring is likely to follow the blueprint of USAID's shuttering, which will be rebuilt within the State Department as a limited agency “to help enhance national security and counter adversaries,” according to the Wall Street Journal.
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COMMODITIES: WTI Gains Amid Supply Disruption, Gold Within Sight Of Record High
- Crude has risen today on reports of reduced CPC pipeline flows and speculation that OPEC is considering another delay to output rises. This is offsetting bearish pressure from US-Russia talks, which could pave the way to a Ukraine peace agreement.
- WTI Mar 25 is up by 1.6% at $71.9/bbl.
- Transneft says the damaged CPC station will take 1.5-2 months to repair and may lead to a 30% drop in Kazakh flows.
- For WTI futures, key short-term resistance is at $74.06, the Feb 3 high. On the downside, attention is on $70.20, the Feb 6 low, which has been pierced. A clear break would open $67.75, the Dec 20 ‘24 low.
- Meanwhile, Henry Hub has surged to its highest level since Jan 24, boosted by freezing weather across large parts of the US and record feedgas flows to US LNG terminals.
- US Natgas Mar 25 is up by 7.5% at $4.01/mmbtu.
- Despite US dollar gains today, spot gold has risen by 1.3% to $2,935/oz, bringing the yellow metal to within sight of last week’s record high at $2,942.7.
- Goldman Sachs has raised its year-end gold target to $3,100 due to central bank buying and inflows into bullion-backed ETFs. If uncertainty over economic policy persists, gold could even hit $3,300, in their view.
- A bull cycle in gold remains in play, with sights on $2,962.2, a Fibonacci projection, followed by $3,000 psychological round number resistance.
USDJPY TECHS: Key Resistance Remains Intact
- RES 4: 158.87 High Jan 10 and a bull trigger
- RES 3: 156.75 High Jan 23
- RES 2: 155.89 High Feb 3
- RES 1: 154.24/80 50-day EMA and a pivot resistance / High Feb 12
- PRICE: 151.71 @ 16:12 GMT Feb 18
- SUP 1: 150.93 Low Feb 07 and a bear trigger
- SUP 2: 149.69 Low Dec 9
- SUP 3: 148.65 Low Dec 3 ‘24 and a key support
- SUP 4: 148.01 Low Oct 9 ‘24
USDJPY continues to trade below the Feb 12 high. Recent weakness highlights that - for now - a key resistance around the 50-day EMA, at 154.24, remains intact. A clear break of the EMA is required to confirm a stronger bullish reversal. This would open 155.89, the Feb 3 high. Key support and the bear trigger is unchanged at 150.93, the Feb 7 low. Clearance of this level would resume the bear cycle that started on Jan 10.
US TSYS/OVERNIGHT REPO: ON RRP Takeup Bounces Sharply From Multiyear Lows
Overnight reverse repo facility takeup bounced sharply Tuesday, rising $19.0B (most since Jan 31) vs Friday to $77.8B.
- That's the highest level since Feb 10 and for the moment brings takeup above the post-April 2021 lows set last week ($58.8B on Friday).
- Takeup is expected to remain steady from here/head higher toward end-month.
