US: Tax plan to drive the markets – ANZ

Analysts at ANZ explain that the news that President Trump will announce details of his tax plan this week gave markets a late boost on Friday but it was far from a convincing one.

Key Quotes

“Perhaps that is because markets have plenty else on their minds right now, from the French elections, to ongoing geopolitical tensions, or even the fact that US data appears to be rolling over modestly. It may even be because markets are sceptical that the real details will not be forthcoming, and interestingly Mick Mulvaney, director of the Office of Management and Budget, has subsequently stated that the announcement will be more about “specific governing principles” than any detail.”

“There is also plenty of conjecture about whether any tax cuts will be able to be revenue neutral, and that could affect their ease of passage through Congress. In that regard, it is with some irony that Congress this week will also have to reach a deal prior to April 28 to avoid a potential government shutdown. Now to be fair, a deal is expected, and even if more time is needed, there is the ability to pass stop gap measures to keep the government functioning.”