There was some early optimism on the stock markets yesterday, as Chinese policymakers said they would take action to stimulate growth and prevent an economic slump. China’s finance ministry has pledged to slash taxes in a bid to help companies. The news was initially well received by the markets, but the moves proved short-lived as analysts are concerned about how quickly all of the pledges will happen.
The Federal Reserve’s Neel Kashkari delivered a speech yesterday which toed the recent line of policymakers. Kashkari is known for being a bit dovish and the markets didn’t really react to anything he said, but it is worth noting that after confirming that any 2019 rate hikes will be dependent on data, he said he is not seeing any data at the moment to support further hikes. Interestingly, he also said that monetary policy is meant to be non-political, in what is clearly a response to recent comments made by Trump.
It’s a fairly quiet day in the US today, but we will see mortgage applications up to 11 January 2019. December’s import and export prices are also set for release. Tomorrow we will see initial jobless claims up to 12 January 2019 which are expected to nudge up to 220,000 from an impressive 216,000 last time.
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