GOP lawmakers confident votes will be tallied by the end of the week
The song remains the same this week as market focus stays on domestic legislation progress rather than the President’s tour of Asia. Trump may have been making headlines through his Twitter spat with the North Korean regime, but the dollar’s not paying any attention. Instead, Paul Ryan and his team have been working over the weekend to whip up sufficient votes to get the House in order and pass their version of the tax reform bill.
Lawmakers were ordered to remain work-ready over the extended weekend ahead of an expected vote on Thursday – although GOP leaders have ensured that representatives remain alert well into the close of the week.
According to Politico, the weekend’s work whipping and demanding Republican lawmakers to give the bill their thumbs up was easier than expected, which could mean Paul Ryan and his staff are confident that they’ll have enough votes at the end of week to pass the legislation. But, there will still be further hurdles to tackle before the dollar meaningfully begins to price in tax cuts anytime soon.
Data focus is on the consumer
After a dry spell of data last week, the economic calendar really picks up over the next five sessions with much of the focus on the US consumer. Wednesday will be the flashpoint, with consumer price index numbers and retail sales crossing the wires in the morning. The US consumer is in a precarious position at the moment: the labor market is getting tighter and tighter, the unemployment rate is at multi-decade lows and there’s the prospect of a tax cut in the pipeline. Nonetheless, uncertainty over both domestic and international politics, high levels of inequality and stubbornly low wage growth could hold back sentiment. We’ll see the results on Wednesday.
Elsewhere, producer price inflation figures are due on Tuesday, import & export price numbers on Thursday and building permits & housing starts on Friday. Certainly a busy week.
Fed speakers likely to continue pointing at December
The following Fed members are all due to speak this week: Charles Evans, Janet Yellen, James Bullard, Loretta Mester, Lael Brainard, Robert Kaplan and John Williams. So plenty for markets to chew on. After October’s strong payrolls reading (with both September and August’s readings being revised upwards), the Fed no longer have the excuse of weather-induced volatility for not raising rates and markets continue to believe December will be the most opportune time.
Have a great week