Good morning and happy Friday.
To the scoreboard:
Dow: 23,516.26 +81.25 (+0.35%)
S&P 500: 2,579.85 +0.49 (+0.02%)
AUD/USD: 0.7718 +0.0041 (+0.53%)
ASX200 SPI futures (December contracts): 5,939 (+19)
1. Tax plan is out: The US Republican party has unveiled its huge tax plan, with the proposed bill now set to be put to the House. Full details are here. The reforms include a cut in the corporate tax rate to 20% from 35%. The US dollar finished the session slightly lower in the wake of the tax cut announcement, losing ground against the euro and AUD.
2. Eyes on retail sales: The Aussie dollar is holding above US77 cents ahead of this morning’s key retail sales figures for September (11:30am AEST), which will be closely watched after a poor result in August. David Scutt’s 10-second guide has everything you need to know. Later tonight the US has all-important employment figures, with analysts forecasting a big bounce in October jobs following the impact of hurricanes in September.
3. Pound falls sharply: The main move in currencies overnight was in the UK pound, which took a tumble after the Bank of England raised rates to 0.5% (as expected), but was unclear in its communication to the market about the need for further rate hikes.
4. Powell is in: Jerome Powell was formally selected by President Trump overnight to be the next US Fed chair. The former private equity executive and current Fed board governor is seen as a safe choice who will maintain the Fed’s slow and steady rate of policy tightening. Benchmark US 10-year bond yields are 2 basis points lower at 2.35%.
5. Stocks drift: Global stocks were mixed, as the export-heavy UK market got a bump from the weaker pound while European stocks were lower. The S&P500 struggled for momentum in the wake of the tax announcement and closed flat, although a basket of highly-taxed companies compiled by Goldman Sachs rose higher in afternoon trade. Despite a soft global lead, ASX futures traders are confident of a strong open on the local index this morning.
6. Bitcoin is still going ballistic: The cryptocurrency has now risen by more than $US1,000 in the last week alone. Overnight it hit the key benchmark of $US7,000 and kept going, topping out above $US7,300 before a flash-crash saw prices fall to $US6,850. It’s now back on the climb in morning trade. The price action in Bitcoin Cash — established after a hard fork in August — has been just impressive. It’s climbed by around 70% over the past week and a short time ago was trading above $US560.
Enjoy your weekend, I’m on Twitter @Mr_SamJacobs.