Greenback and Yields Growing, Donald Trump Announce His Tax Plan

Market Reviews

Donald Trump has presented his tax plan, which was taken rather warm by markets. The plan suggests that tax rates on corporations will be lowered from 35% to 20%, pass through business tax rate will be at 25%, the amount of tax brackets for individuals will be at 3%, the new tax brackets will make up 12%, 25% and 35% and top rate will be at 39.6%. Overall, the plan should equate to a 2.2 trillion dollars tax cut, 5.8% dollars will be used to reduce rates and 3.5 trillion dollars will be recouped by eliminating deductions. 10 year yield rose 0.080 to close at 2.309. 30 year yield grew 0.093 to settle at 2.863. S&P 500 lifted 0.41%, reaching the maximum of 2511.75 to end at 2507.04. DOW improved 0.25% and stopped at 22340.71. December’s rate hike is priced in 83% odds now. The greenback remains firm.

Yesterday, Canadian Bank Governor Stephen Poloz delivered a speech which has seriously subdued Loonie. The Governor seemed cautions and insecure about the rate hike, claiming that it’s too soon to plan it. He added that everything will depend on economic figures and geopolitical risks. Official cash rate of New Zealand Reserve Bank remained at 1.75% this month. Domestic growth projections were lowered. The Bank is likely to preserve this stance the rest of the 2017.

Today, Germany will announce Gfk consumer sentiment and Consumer Price Index. Eurozone will feature confidence data. The US will show final Gross Domestic Product of the second quarter, trade balance, jobless claims and wholesale inventories.