Focus shifted to the US economy yesterday, as markets and economists await President Donald Trump’s tax rate amendments. Trump seeks to lower taxes from individuals and cut corporate tax to 15%. Trump has promised a “big tax reform and tax reduction” according to a White House official. Investors are also looking to see how long Trump is willing to wait for federal funding, for the building of his infamous border wall.
Trump also hinted of an import duty of up to 24% on softwood timber imports from Canada. Commodity currencies took a hit after the news, with the Loonie depreciating over a percent against the Pound and Dollar yesterday afternoon.
Kim Jong Un’s regime continues to increase tensions in the Korean Peninsula. North Korea conducted the country’s largest ever live fire exercise this week, whilst one of four Ohio guided missile submarines made port in South Korea. Chinese President Xi Jinping called for restraint in a phone call with Trump. The Chinese President's call has been said to demonstrate the concerns and growing alarm over the current tensions.
A relatively quiet economic docket today as we only have one piece of high tier data released. US Crude Oil inventories, which have been lagging of late are forecast to remain in negative territory at -1.1m.
Moving away from the economic calendar, market movement today will no doubt come from US politics, as President Trump is due to announce his tax plans.