High energy ahead! US Treasury Secretary rekindles market tax reform confidence law before the election
With the approaching footsteps of the French elections, the financial market is undoubtedly once again in an eventful autumn. The euro was near a three-week high against the dollar on Thursday (April 20), as some traders settled a short bet on the euro before the first round of voting in the French presidential election on Sunday. The US dollar got rid of the early decline at the end of the day. US Treasury Secretary Nuchin said overnight that the White House is approaching the introduction of a tax reform plan, which has rekindled the enthusiasm for the Trump deal, and the US dollar stocks subsequently rose.
At present, the vast majority of the eyes on the global market have undoubtedly gathered above the first round of the French election scheduled for this weekend. Just on the last three days of the date, Paris, France, was again suspected of being attacked by terrorists on Thursday. According to Reuters, police sources said that shootings on the Champs Elysées in Paris, France, have been blocked. In the shooting case, one policeman was killed and two other policemen were injured. Some analysts pointed out that the four major candidates currently competing for the presidency (Mark Long, Le Pen, Fei Long, Mei Langxiong) are very close to the polling rate, and this Paris shooting will undoubtedly make the already tense market Once again, a layer of uncertainty is added.
The US Treasury Secretary said the White House is close to launching a tax reform plan! US dollar stocks rose "Trump trade" rekindled enthusiasm
US Finance Minister Nuchin said on Thursday that the Trump administration will soon be able to implement "primary tax law reform." Earlier, he told the media that the Trump administration’s tax reform schedule is bound to be delayed after the defeat of the Congress’s health insurance plan.
Nuchin changed his previous statement on the tax improvement process when he was interviewed by CNBC on Thursday. He said that the White House is very close to launching a tax reform plan. He hopes that Congress will not have to pass the tax reform until the end of this year, and the tax reform will be completed regardless of whether the medical reform can be realized. In addition, he also said that he is confident that Congress will agree to raise the debt ceiling and expects the issue to be resolved before the summer.
After Nuchin made this statement overnight, the yields of the US dollar, US stocks and US bonds rose. US dollar index recovered in late fall day in New York, was up 0.02%.
The US stock market also rose on Thursday, with the Nasdaq index closing at a record high.
Nuchin’s speech today contrasts with the previous statement of pouring cold water. On Monday, the former Goldman Sachs banker also told the Financial Times that the adoption of tax reform legislation before August "is currently a very aggressive goal, and even somewhat unrealistic." He said at the time, "It can be said that due to medical insurance, tax reform may be delayed." But he still expects to pass the tax reform in 2017. In February of this year, he expressed his hope to see Congress pass this very important tax law reform before the August recess.
Not only Nuchin, Trump’s chief economic adviser, Gary Cohn, has recently said that he is not sure whether the tax reforms that investors are very concerned about will fall in August.
However, US President Trump has been very optimistic about the timetable for the tax reform plan. According to CNBC, he said on Tuesday: "We have done a good job in tax reform. We have a concept for the tax reform plan and will soon announce the tax reform. But we must solve the medical reform. Once the medical reform is resolved, we We will make great strides forward. Please look at it and we will surprise you."
Under Trump's pressure, Nuchin said on Friday that the Ministry of Finance is conducting tax reform work "around the clock" and is approaching a major tax reform plan. He said that this will be a "complete and major" reform and will greatly promote economic growth; if the program does not receive the support of the Democratic Party, they will need to enter the budget revision process.
Trump was sworn in in January this year. Prior to this, Republicans hoped to abolish Obama's medical reform before tax reform. To some extent, the reform of medical insurance will give more room for tax reform. After the abolition of Obama’s failed medical reform last month, Republicans immediately turned their attention to tax reform. The Trump administration's tax plan is designed to reduce tax rates. However, Nuchin pointed out that most of the fiscal revenue losses caused by the tax reform will be compensated by economic growth.
Regarding tax reform, Nuchin said that the purpose is to make corporate taxation competitive and bring back trillions of dollars of investment: "We hope that this will not be realized until the end of this year, which will have a major impact." Mnuchin also said that The government is considering simplifying tax laws and reducing tax rates.
Shock! A terrorist attack before the French election, Le Penfillon canceled the campaign
Although US Finance Minister Nuchin has once again stimulated short-term trading in the market, the biggest hot spot in the market will undoubtedly be the French election this weekend. And overnight, a terrorist attack undoubtedly broke the calm atmosphere before the election! According to foreign media reports, on the evening of April 20, local time, a terrorist attack on the police on the Liszt Avenue in Paris, France, caused one police officer to be derelict and two police officers were injured. A murderer was killed by the police. The international terrorist organization "Islamic State" immediately announced responsibility for the incident and claimed that the gunman was from Belgium.
After the terrorist attacks in Paris, the Amaq news agency affiliated with the "Islamic State" announced that the attack was carried out by the Belgian "jihad" molecule Abu Yusuf. Paris Prosecutor Molins declined to disclose the name of the terrorist at a press conference held late at night, but confirmed that "the intelligence department has mastered and confirmed the true identity of the terrorist." At present, relevant investigation work is still in progress.
According to Reuters, earlier in the day, French police ordered a search for a terrorist suspect who arrived in Paris by train from Belgium. Currently, the French anti-terrorist prosecutor and the National Intelligence Agency are conducting an investigation to determine the nature of the incident. According to the US Limited Television News Network, this means that they are verifying that terrorism may be the motive for the shooting. A spokesperson for the French Ministry of the Interior said it is still too early to decide on the motives for the shooting, but it is clear that the target is specifically directed at the police.
French President Hollande said he firmly believes that the Paris attack is linked to terrorists. US President Trump also said that he expressed condolences to the French people, which looks like a terrorist attack.
On the night of November 13, 2015, there was a terrorist attack in Paris, France, which killed at least 132 people.
Since the time of the terrorist attack was only three days away from the French general election on the weekend, it will inevitably have an impact on this election. French voters will vote in the first round of the presidential election this Sunday. The election campaign for 11 presidential candidates will end this Friday. It is reported that French conservative presidential candidate Francois Fillion said on Thursday night that he will cancel the election campaign scheduled for Friday. The far-right candidate, Marine Le Pen, also said it would cancel Friday's campaign.
It is worth mentioning that similar shootings and terrorist attacks occurred before the Brexit referendum and the US presidential election last year. In the week before the Brexit referendum on June 23 last year, a pro-European British parliamentarian was shot and killed. In the past two months before the US presidential election in November last year, the United States even had a three-day encounter. The terrorist attack triggered the "spicy comments" of the two presidential candidates Trump and Hillary on the social media.
Considering that the French terrorist attack is closer to the date of the French election, it is more likely to influence the voters' vote at the last minute. From the previous positions of several candidates, Le Pen, the representative of populism, is more likely to benefit from the impact of the terrorist attacks!
Euro-European stocks remain strong before the election, investors still need to be careful about the arrival of black swan?
The European stock market has closed due to the overnight French terrorist attacks, so the incident did not have much impact on European financial markets. From the trend so far this week, despite the huge uncertainty in the French election, the current trend of the euro and European stocks is still quite stable. However, some industry insiders are currently worried that investors may be under-prepared for some bad results.
At present, several of the latest polls have once again raised the chances of Mark Long winning. Harris Interactive Poll's latest French national tone shows that three days before the first round of general elections, independent middle-ranking candidate Mark Long's support rate rose by 1 percentage point to 25% a week ago, the extreme right candidate Le Pen's The support rate remained unchanged at 22%, and the support rate of conservative former Prime Minister Fillon fell by 1 percentage point to 19%, juxtaposed with the extreme left candidate Melangon.
IFOP's latest polls show that Mark Long's first-round general vote approval rate rose by 0.5 percentage points to 24%, and Le Pen, Fillon and Mei Langxiong's support rates were steady at 22.5%, 19.5% and 18.5% respectively. In addition, the results of the Harris-LCP poll showed that Markron’s support rate was 24.5%, Le Pen 21%, and Fillon 20%.
Although the rise of Mei Langxiong’s support rate has made the market uneasy, the latest polls indicate that Mark Long’s support rate is ahead of Le Pen, and it also reduces the “most horrible possibility†of Le Pen against Melang’s in the second round of general elections. Vibrate the European stocks. The French CA C40 index rose 1.7% in late trading on Thursday, the biggest increase in six weeks, and returned to the top of the 50-day moving average.
The euro also rose to a three-week high against the dollar, briefly hitting the highest level since March 28 at 1.0778.
CMC Markets analyst Michael Hewson said in the research report that Mark Long’s poll leader is the decisive factor in pushing up the French stock index on Thursday. In an interview with the British Guardian, CFD and Forex supplier IG analyst Joshua Mahony said that most traders believe that Mark Long will win the second round of the general election on May 8, thus pushing up the euro exchange rate.
Marchel Alexandrovich, an analyst at brokerage Jefferies, believes that Fillon’s poll support rate also shows positive signs. The latest polls show that Finn's 65-year-old voters are more likely to vote, which may help Fillon enter the second round of elections.
However, considering Le Pen anti-immigrants and reinvigorating the employment of French local employment, the attractiveness of the lost heavy industry towns is still alive, and some insiders are still worried about the current optimistic trend in the European market. Daniel Christen, an analyst at Capital Economics, believes that the election of Le Pen or Mei Langxiong will trigger a sharp fall in the French stock index and an increase in the 10-year German-French benchmark bond spread, which will also cause the euro to dip against the US dollar. This is not only because the impact of the Brexit on the Eurozone is greater than that of the Brexit, and Le Pen or Melangon’s monetary policy itself will reduce the market’s confidence in holding the euro.
According to the latest survey by Bank of America Merrill Lynch, Wall Street seems to be not prepared for some bad results in the French election. The euro exchange rate is still at a high level, and European stocks are still the most popular among stock market investors. Analysts at BofA Merrill Lynch wrote in a report: "In our view, the market still does not fully absorb the risks. Although the sharp fluctuations in the euro risk reversal index reflect the recent strong demand for hedging, investors still Doing more European assets and the euro. We believe that the election poses an asymmetric risk to the euro. In the positive scenario, the euro/dollar will rise to 1.10, but the negative scenario will fall below the parity and the minimum will hit 0.90."
Bank of America Merrill Lynch pointed out that everything is possible based on recent polls. In particular, the market faces two major negative consequences: 1 For the market, the worst result is that Marine Le Pen and Jean-Luc Melenchon enter the second round of voting because the market may begin to enter Brexit. risk. 2 The market may also react negatively to Francois Fillon and Melangon in the second round of elections, as the poll shows that Melangon is expected to win.
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