Morning Markets: Trump's tax talks could set the trend
- France: February consumer confidence (0745 GMT)
- Italy: December 2016 industrial orders and sales (0900 GMT)
- Italy: business and consumer confidence (1000 GMT)
- US: January new home sales (1500 GMT)
- US: February consumer sentiment (1500 GMT)
Let foreign corporations pay is basically what US president Donald Trump told Reuters in an interview. Ahead of a February 28 speech to congress, in which he is to outline his tax plan, Trump he stresses that his border adjustment tax is to support the US while companies abroad would carry the burden.
"So what is going to happen is companies are going to come back here, they’re going to build their factories and they’re going to create a lot of jobs and there’s no tax,” he told Reuters. Imports used for production shall become more expensive, while input from the US is to become cheaper.
However, it seems president Trump is not taking into account that such a tax regime change would affect the US dollar as well, which could mean import tax and export subsidies could cancel each other out.
In the interview he also targeted a corporate tax rate of 15% to 20% and said the US should lead when it comes to the arsenal of nuclear weapons.
Major US markets seem still to be mainly positive when it comes to the new US president. The S&P500 and the Dow closed in the green again on Thursday, however, the Nasdaq Composite slipped. In Europe, the Dax and FTSE100 fell.
Less important European data will be published today, but as Europe remains nervous, figures from France and Italy might be of some interest to investors. The full European sentiment report will be published next week.
- Asian markets headed lower, following a mixed performance on Wall St on Thursday
- The Nikkei 225 lost ground; it closed down 0.45% at 19,283.54
- Toshiba may put its troubled Westinghouse business into bankruptcy
- The Shanghai Composite was down 0.41% to 3,238.17 at 0548 GMT
- Hong Kong's Hang Seng was down 0.48% to 23,999.38 at 0549 GMT
- South Korea's Kospi Composite was down 0.77% to 2,091.41 at 0545 GMT
- Copper prices retreated on renewed worries about China's economy
- Trump and Mnuchin give mixed signals on whether they see China as a FX manipulator
- RBA head Philip Lowe has virtually ruled out a further cut in interest rates
- The views of the head of Australia's central bank will buoy the Aussie dollar
- Australian miners weighed on the S&P/ASX200; it closed down 0.79% at 5,739.00
- North Korea says Beijing is "dancing to the US tune" in banning its coal
- The US dollar lost ground on expectations of a delay in fiscal stimulus spending
- USD was worth just ¥112.857 at 0550 GMT
- The Australian dollar burst through resistance at 0.77 on USD weakness
- The Aussie dollar was worth 0.7712 at 0547
From the Floor
Sterling strong. “Yesterday we saw sterling gaining and breaking above a short-term range,” says John J Hardy.
Precious. “We see precious metals continuing the good run that they have had so far this year – not least silver,” says Ole Hansen.
Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.
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