There wasn’t much nuance out there this Monday, with investors in macro-mode as they focused on the weekend’s tax bill Senate success.
Though Trump’s reforms still have a few more (comparatively minor) hurdles to clear before the deal is done, investors were far more interested in the big picture than the small details, specifically the hefty cut to corporation tax.
The friction from investors rubbing their hands in glee has sent the FTSE 0.5% higher, leaving it to lurk around the 7350 mark. The UK index has lost some of its early lustre however, after the pound reversed its early losses against the dollar to climb 0.3%, while taking 0.6% off the euro.
That’s because the sterling appeared to receive a double dose of good news this Monday. First November’s construction PMI followed in the footsteps of its manufacturing peer, handily beating expectations at 53.1. Then there were reports that the UK had conceded there will be no ‘regulatory divergence’ for Ireland on the single market and customs union, potentially unclogging one of the major blockages preventing the unlocking of trade talks.
Over in the eurozone the region’s indices were not only celebrating the US tax bill, but the battering the euro is receiving at the hands of the pound (against which it is down 0.5%) and the dollar (where it’s fallen 0.4%). This pushed the DAX to jump 150 points, with the CAC seeing a similarly strong 1% rise.
As for the US markets themselves, the Dow Jones is set to strap a rocket to its back after the bell, with the futures pointing to a 220 point surge. That’d leave the Dow at – what else – a fresh all time high of around 24450, already making last Friday’s FBI-revelations inspired panic a distant memory.
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