Greenback Still Weakening, Tax Reform Confusions

Market Reviews

The greenback remains weak as corporate tax lowering is likely to be postponed. Soon, Jerome Powell will be officially nominated as Fed Chair. Republicans have already showed their endorsement of Powell. The latter truly seems as a good match for the position. He will continue raising rates and lowering the balance sheet. Meanwhile, Kiwi has mildly reinforced. Reserve Bank of New Zealand maintained official cash rate at 1.75% but raised inflation projections.

New BoJ member Goushi Kataoka is calling for a stimulus increase. He also says the target for 15 year bond yields should be under 0.2% despite the fact that currently Bank is targeting 10 year bond yields. Other members declined his proposal and claimed that the policy doesn’t require changes so far. Inflation remains a huge problem for BoJ. It’s questionable whether it’s going to reach a 2% aim and some say that if it’s not until 2019, the economy will be threatened.

Japan machine orders fell -8.1% mom in September and current account surplus reduced to 1.84 trillion yen. Australia home loans reduced -2.3% mom. China Consumer Price Index rose to 1.9% yoy last month, PPI remained at 6.9% yoy. British RICS house price balance increased 1.0%. Swiss unemployment rate stayed at 3.1%. September’s German trade surplus was still at 21.8 billion euros. European Central Bank will publish monthly bulletin. Canada will announce new housing price index and US will show jobless claims.