Greenback Remains Weak, Senate Published Its Tax Reform

Market Reviews

The Senate has released its own version of tax reform. As expected, corporate tax lowering will be postponed to 2019. Shares responded with declines. DOW reduced to 23310.02 but then settled at 23461.91, dropping -101.42 points (-0.43%). S&P 500 hit the minimum of 2566.33, then closed at 2584.62, dropping -9.76 points (-0.38%). NASDAQ hit the low of 6687.28 before ending at 6750.05, lowering -39.07 points (-0.58%). 10 year yield lifted 0.006 to close at 2.331. The greenback remains the softest.

Benoit Coeure (ECB Executive Board member) said that Eurozone economy keeps improving. But he also cautioned that ECB should come up with reliable policy. Otherwise, the improvement won’t sustain. Philip Lane (Governing Council member) added that changes may be started even without reaching the inflationary target. David Davis (Brexit Secretary) is planning to present a correction to the EU Withdrawal Bill in the Parliament. He insists on setting an exact date for the divorce, which would be March 29, 2019.

In its Statement of Monetary Policy, Reserve Bank of Australia published its forecasts. Namely, GDP growth is expected to be at 2.5% in December 2017, 3.25% in December 2018 and 3.25% in December 2019. CPI inflation is projected to indicate 2% in December 2017, 2.25% in December 2018 and 2.25% in December 2019. Underlying inflation must be at 1.75% in December 2017, 1.75% in December 2018 and 2% in December 2019. Meanwhile, Japan M2 increased 4.1% yoy in prior month. Britain will release production figures, trade balance and construction output. US will announce U of Michigan sentiment.