Dec 21, 2018, by Lorcan Roche Kelly
Hopes that a Senate bill would allow the standoff over funding for President Donald Trump’s border wall to be pushed back to February were dealt a blow yesterday when House Republicans added $5 billion of funding for the project to the measure before sending it back to the Senate. With Senators from both sides saying the modified legislation won’t pass the chamber, everything is back where it started with only hours left before the partial government closure kicks in. Adding to the sense of tumult in the capital, the abrupt resignation of Defense Secretary Jim Mattis has increased concerns that Trump’s “America First” policy will no longer be tempered.
China’s top policy makers announced “significant” cuts to taxes and fees in 2019 and signaled an easier monetary stance, as the government tries to halt the slowdown dogging the economy this year. Significantly, they used language reminiscent of 2014, before the People’s Bank of China cut benchmark interest rates and bank reserve requirements. The announcement came after the country’s markets closed at the end of a bad week for investors.
Stocks fall further
Global equity markets remain under pressure today. Overnight, the MSCI Asia Pacific Index dropped 0.7 percent while Japan’s Topix index closed down 1.9 percent, pushing the weekly decline to 6.5 percent, the biggest since February. In Europe, the Stoxx 600 Index was 0.8 percent lower at 5:50 a.m. Eastern Time as dip-buyers remained notable due to their absence even as the gauge is set to post its worst year since 2008. S&P 500 futures pointed to further losses at the open, the 10-year Treasury yield was at 2.794 percent and gold slipped.
With less than 100 days to go until the U.K. is set to leave the European Union and still no sign of an agreement that can be passed by parliament, preparations for a so-called ‘hard Brexit’ continued apace. Calls for another referendum are gaining traction, while some see another election as a possible solution to the parliamentary impasse. Whatever the plan, there’s mounting evidence the standoff is harming the wider U.K. economy.
At 8:30 a.m. U.S. durable goods orders for November are published, with the third reading of third-quarter GDP due at the same time. At 10:00 a.m. personal income and spending data is released, with both expected to show a decline from October’s number. University of Michigan sentiment numbers are also due at 10:00 a.m. Oil investors will be watching the Baker Hughes rig count at 1:00 p.m. to see if the recent slump in crude prices has hit activity in shale.