- Catalan leader accepts mandate to form an independent Catalonia
- The International Monetary Fund (IMF) downgrades US growth
By Mike Mistretta
All eyes were on Catalonia yesterday evening. Catalan President Puigedemont said he accepted the mandate to form an independent Catalonia but did not declare it outright, instead he called for deferred independence and weeks of dialogue with Spain. Markets didn’t respond much to the announcement although the Euro did gain a bit of strength. The Spanish Deputy Prime Minister is due to deliver a speech today to address the suspended declaration of independence and as the government have deemed the referendum illegal it is unlikely that the speech will be one of acceptance.
Yesterday we saw broad US Dollar weakness as US stock hit more record highs. The Sterling/Dollar rate pushed back above the 1.32 levels and the Euro/Dollar rate above 1.18. Much of the dollar weakness has been attributed to President Trump’s latest feud with Republican Senator Bob Corker which could threaten his tax agenda. The President's problem is that Corker announced that "there is no way in hell" he would vote for a tax bill that adds one cent to US debt. Mr Trump and the Republicans are already reeling from the failed attempts to repeal Obamacare and cannot afford another blow to their agenda. Another failed piece of legislation and Mr Trump will start to look very weak indeed.
The International Monetary Fund (IMF) also slightly downgraded US 2017 growth to 2.2% from 2.3%. This suggests they aren’t convinced by the tax plan either. All this seems to be overshadowing the expected December rate hike from the FED. The dollar bulls were not helped by a New York Fed survey which showed expected household income growth fall to its lowest since Feb 2014.
This morning Australia Westpac consumer confidence rose 3.6% in October. Japan machine orders rose 3.4% month on month in August. Today the focus will be heavily on the US with the release of Federal Reserve (Fed) minutes and Fed members speaking. Markets are hoping that the minutes should confirm the projected path of December and three interest rate hikes by Fed next year.
What do you call a fish without eyes?
What do you call an alligator detective?
Why shouldn’t you write with a broken pencil?
Because it’s pointless.
Today's Major Economic Releases
||US: Job Openings and Labor Turnover Survey
||Federal Open Market Committee Meeting Minutes
||New Zealand: Food Price Index
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