The FTSE is up more than 0.5% this Monday morning as news of significant progress overnight on Trump’s tax reforms boosted the UK’s blue-chip multinationals.
The US Senate and House Republicans found agreement over the weekend on the US Tax Reform, increasing the prospect of the Bill being passed later this week. Spreadex analyst, Connor Campbell noted “It might be a bit late, but there were signs of a – tax bill-inspired – Santa rally this morning, with the European indices opening sharply higher.”
FxPro analyst, Edward Anderson was bullish about the tax reform’s impact on the Dollar “As the US Tax Bill gets closer to being enacted into law the reducing in US Corporation Tax will likely see share buy-backs and/or higher dividends by US Corporations. This will, in turn, increase the pace of interest rate hikes and see a stronger USD as a result.”
Over in the US, equity markets closed at record highs across the board on Friday, buoyed by the prospect of tax reform before Christmas. Accendo Markets analyst, Mike van Dulken commented “The Tech-focused Nasdaq outperformed, climbing 1.2% to an all-time best close, while Financials, Retail, Healthcare and Tech lifted the S&P 500 close to 1% higher, and the Dow Jones rallied 0.6% thanks to gains for United Technologies, The Travellers and Microsoft.”
There is little to disrupt the tax ‘reforms’-based trading until the end of the week when the final US and UK Q3 GDP readings are reported on Thursday and Friday.