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US healthcare reform sickens, possibly dies

| Posted by: Paul Donovan | Tags: Paul Donovan

  • In the US, Trumpcare II (the return of Trumpcare) appears to have quietly choked and died, with a further two Republican senators refusing to back the healthcare measures. This leaves investors questioning President Trump's ability to get any legislation passed. It also opens the schedule for fiscal policy to be debated now.
  • The US NAFTA negotiation aims were more moderate than many in the markets may have feared. The US has also announced an increase in the number of temporary immigrant visas for work purposes. This may limit investor fears about an isolationist US.
  • The Reserve Bank of Australia meeting minutes had an upbeat tone on the economic outlook, and were unusually explicit (for a central bank) in setting a 3.5% level for the neutral interest rate. A 3.5% rate is 2ppt above current levels, and the explicit nature of the communication helped boost the currency.
  • UK inflation data is due at a time of heightened uncertainty about the direction of the Bank of England. Politically, there is a lot of noise about falling real wages although most of this is based on a misunderstanding (average earnings are not the same thing as wage growth).