Daily Market Color September 22, 2017Flight to Safety Resurfaces with Geopolitical Tensions Jeff Davenport “Rocket Man” Roils Markets…Again – Demand for haven assets was renewed during Friday’s trading session as tensions between the US and North Korea escalated. Early this morning, Kim Jong-un issued a retaliatory statement in direct response to the newly announced sanctions ordered by President Trump which serve to penalize any company, institution or person who does business with the rogue nation. Kim antagonized Trump in his comments, calling him a “mentally deranged U.S. dotard” and “a rogue and a gangster fond of playing with fire, rather than a politician”, before vowing to strike back with “highest level of hard-line countermeasure in history.” US Treasurys rallied from the open of the trading session, with yields/swap rates currently down 1-3 bps. The yield on the 10-year note is poised to finished the week near 2.26%, up 5bps from Monday’s level. All three major stock indices are trending lower with the flight to safety, alongside the US dollar which is down 0.2% against major currencies. Gold futures are up 0.4% on the day, retracing a portion of this week’s loss of nearly 2%. OPEC and Russia: We’re Halfway There… Oil producing nations met in Vienna today to discuss the status of the production cutting agreement that was put into effect nine months ago. Members of OPEC and other major producers announced their plan to hold steady the existing caps on supply levels, noting that the faction was nearly halfway finished with its goal to eliminate the global supply glut. “The process is working fine so far,” stated Kuwait’s Oil Minister Issam Almarzooq, “we hope that we can consume the remaining overhang in this period.” The group of energy representatives stopped short of extending the cuts however, with many believing full compliance within the existing agreement has yet to be achieved. The next OPEC meeting is scheduled for November 30th, where more focus is expected to be placed on the March 2018 expiration of the current deal. WTI crude oil finished the week near $50.60/barrel. Time Running Out for GOP Repeal of ACA With next week marking the end of the fiscal year, Republicans will be hard pressed to get a bill replacing Obamacare approved by the Senate. After September 30th, the process which allows legislation to clear the Senate with a simple majority will expire, at which time the requirement will shift to 60 votes (Republicans currently hold 52 seats in the Senate). The GOP’s latest reform attempt, the Graham-Cassidy bill, will need to receive 50 votes or better, and then pass through the House without any alterations.