A bit of risk aversion peeked back in the markets, allowing the yen and Greenback to advance despite dovish remarks from FOMC member Kashkari.
- Canadian wholesale sales down 0.2% vs. projected 2.1% gain in Feb
- FOMC member Kashkari: Infrastructure spending isn’t the key to strong growth
- Kashkari: Best thing to spend on would be U.S. education system
- Trump tax plan to reduce corporate taxes to 15%?
- Nasdaq closed at record highs, approaching 6000 level
Anticipation for Trump’s tax plan – Dollar traders seem to be turning their attention to expectations of tax reform from the Trump administration as the Donald is gearing up to make his big announcement on Wednesday.
According to a White House official, the plan includes a proposal to cut corporate taxes down to 15% even as the government is approaching a potential shutdown by the end of the week. Take note, however, that any tax changes would still need the approval of Congress and we all know how the Obamacare overhaul went down recently.
Still, market watchers are banking on Treasury Secretary Steven Mnuchin’s recent remarks on being able to pass an overhaul of the tax code before the end of the year. These upbeat hopes, along with a few strong earnings reports, were enough to keep Nasdaq up by 1.24% and on track towards reaching the 6000 key level.
Cautious remarks from Kashkari – Remember the fella who dissented against the Fed rate hike recently? Well, Fed official Neel Kashkari was back on the podium once more but offered very little remarks on FOMC policy due to the ongoing blackout period ahead of the actual statement.
Instead, he cautioned that increased infrastructure spending won’t do the trick when it comes to stimulating U.S. economic growth. While he did say that spending more on building roads and airports could boost productivity, he pointed out that it would be much better to invest in the U.S. education system.
Major Market Movers:
JPY – The yen regained some ground after gapping down against most of its higher-yielding counterparts at the start of the week.
EUR/JPY retreated from 119.80 to a low of 118.91, GBP/JPY is down from 141.33 to a low of 140.28, AUD/JPY dropped from the 83.50 area to a low of 82.91, and CAD/JPY slumped to the 81.00 area.
Watch Out For:
- 12:50 am GMT: Japanese SPPI y/y (0.7% expected, 0.8% previous)
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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