It’s been another mixed open for European stock indices this morning although overall there’s a slightly softer tone. It’s all been something of an anti-climax after yesterday’s anticipated House vote on repealing and replacing Obamacare was delayed. It’s unclear what may happen next although the president is pushing for the vote to take place today. Mr Trump has also said that without a vote he’ll move on to other issues and leave the controversial Affordable Care Act in place.
The outcome of the vote is viewed as a crucial test of the Trump administration’s ability to push through legislation not just on healthcare, but also on tax reform, future spending and regulatory roll-back. Trump can only afford to lose the votes of 22 Republicans, but ahead of the debate it appeared that as many as 30 representatives from the GOP were threatening to defy their president. This would be an early and unwelcome defeat for the new president and would undoubtedly delay any chances of fresh fiscal stimulus coming through this year. Given that the stock market rally since the November election has been based on Trump’s campaign promises, any possibility that these may not get through Congress raises the risk of a sharp market sell-off. Investors have been banking on fiscal stimulus to offset monetary tightening from the Fed, particularly as there are fears that US growth appears to be less robust than it was even a few weeks ago.
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EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.