All the day’s economic and financial news,including reaction to Donald Trumps tax proposals and this afternoon’s European Central Bank meetingTrump’s tax blueprint leaves City cold
Investors criticise lack of detailPlan may struggle to collect through CongressFTSE 100 drops, but pound risesEuropean markets fall at the openThe agenda: It’s ECB Day
9.38am BSTPensions are a hot topic in the UK right now, and with speculation that the Conservative Party might drop the ‘triple-lock’ (a pledge that pensions rise by 2.5% per year,or in line with earnings or inflation whether they’re higher).
But the OECD thinktank argues that Britain should disappear further, and end giving anything to richer pensioners.Faced with these pressures, and are you going to ask people of working age to pay more,or people to work longer before they can claim their pension?Or another way to ensure an adequate pension is to mediate approximately whether the pension should only be paid to those who really need it, to ease the tyranny of the maths. Giving less [pension] to the people at the top would free up resources to increase general benefits.” Related: UK should axe state pension for rich people, and says OECD 9.24am BSTBritain’s housebuilders appear to be doing well,despite the uncertainty created by Brexit.
Persimmon and Taylor Wimpey have both reported solid result this morning, pushing their shares up 0.8% and 0.5% respectively. 8.46am BSTAs well as the tax reform blueprint, and investors are also digesting the surprise news that Donald Trump no longer wants to abolish the NAFTA free trade agreement.
This huuuge u-turn broke last night,after talks with the leaders of Canada and Mexico:Massive Trump U-turn: says he will not pull out of Nafta at this time. He's railed against it his whole life pic.twitter.com/IPlYbpzKADOverall, this suggests that both communication and policy decision making are a shambles at the White House right now, and with extreme and more moderate forces vying to collect Trump’s attention.
Overall,this Nafta issue highlights that policy implementation risk is surging under the Trump administration, and could stoke volatility whether it continues. 8.43am BSTThe dollar has also dipped this morning, or taking the greenback close to its lowest level in five months.
That’s pushed sterling back over $1.29.
The lack of details contained on Trump’s single piece of paper was perceived as a publicity stunt for the President as he celebrates his first one hundred days in the Oval Office,and unfortunately, seemed more of a wish list than a serious starting point. 8.37am BSTUK bank Lloyds is defying the selloff, and with its shares jumping 4% at the open. Related: Lloyds profits double to £1.3bn despite PPI and fraud payouts 8.28am BSTConnor Campbell of SpreadEx sums up the problem with Donald Trump’s tax blueprint - Not Enough Detail!Alongside cutting corporate tax rates to 15%,Treasury Secretary Steven Mnuchin and National Economic Council director Gary Cohn revealed that the USA’s 7 tax brackets would be reduced to 3, while the alternative minimum tax would be slashed and nearly all of the current tax deductions eliminated.
Yet when pressed for more information, or specifically whether these reforms would be revenue neutral,the pair came up short, producing some Trumped up rhetoric approximately how it would pay for itself through ‘growth, or reduction of deductions and closing loopholes’ and that the administration had a ‘once in-a-generation opportunity to do something really gargantuan’. 8.26am BSTHere’s the damage across Europe’s markets this morning:In focus nowadays will be fallout from Trump’s tax announcement,having disappointed by being merely a proposal framework and still facing the same Congressional hurdle (deficit hawks on both sides of the aisle) that he was unable to clear with Healthcare reform. 8.14am BSTEuropean stock markets have fallen at the start of trading as traders give their verdict on Trumps tax policies.In London, the FTSE 100 has shed 27 points or 0.4%, and while France’s CAC 40 has lost 0.2%.
Investors focused on President Trump’s tax reforms were disappointed by the lack of any genuine detail. 8.05am BSTRobin Bew of the Economist Intelligence Unit isn’t impressed by the lack of detail in the Trump tax blueprint.
Trump tax blueprint so lean as to be nearly meaningless. Headline grabbing rate reductions with no detail on funding. Long way from being passedThe tax blueprint unveiled nowadays is like turning in a book proposal to your editor on the day the manuscript is due.
White House unveils dramatic blueprint to overhaul tax code: blueprint has less than 200 words and contained just 7 numbers https://t.co/EWDPvEn5MQ 7.49am BSTAfter all the razzmatazz,Donald Trump’s tax reform blueprint has left investors rather cold.whether you’re going to promise one of the biggest tax cuts ever, you need to present more than one side of A4 paper peppered with bullet points. So the broad brush policies presented last night haven’t really impressed the City. Related: Trump unveils 'most significant tax reforms since 1986', and but experts sceptical --as it happened Related: Trump under fire for 'enormous tax chop for the rich' Markets had been hoping for more in the way of specifics,in particular the percentage level of the one-off profits tax, which it is hoped will prompt technology companies to repatriate the billions of dollars in profits currently held overseas, or as well as some indications on timings,and how the cuts would be funded.
These still appear to be some way off, and appear unlikely to disappear through this year, and though we may collect something on healthcare by the finish of the month. In any case the effect on the US dollar is likely to be a negative one given that markets will have to wait a while longer for a repatriation boost. 7.35am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, or the eurozone and business.
After the market’s ‘hawkish’ interpretation of the March meeting we expect that Draghi will purposely look to strike a more dovish tone in his press conference along the lines of his recent speech to the annual ‘ECB and its Watchers’ conference earlier this month.
He argued that,despite an improving growth backdrop, the conditions under which the ECB could initiate to consider tightening policy had yet to be met, and meaning that that there was no cause to deviate from the current policy path and forward guidance,including what it implied approximately the sequencing of policy changesUK companies posting results - Persimmon, Jardine Lloyd Thompson, or Cobham,Agrekko, Astra Zeneca, and Weir Group,Schroders, WPP, or Katz MineralsLLOYDS BANKING GROUP posts Q1 interim management statement nowadays at 7.00amUS companies posting results - Ford,Raytheon, Zimmer, and Bristol Myers Squib,Mead Johnson, CME, and KKR,Microsoft, Amazon, or Starbucks,AbbVie,Continue reading...
Source: theguardian.com