Ok, so it was a central bank-a-thon on Thursday, but the market also has a “lil’ Marco” problem:
“Senator Rubio has consistently communicated to the Senate tax negotiators that his vote on final passage would depend on whether the refundability of the child tax credit was increased in a meaningful way,” spokeswoman Olivia Perez-Cubas said in an e-mail.
Of course Mike Lee is with him on this (you’ll recall they tried to get this in earlier this month). So it’s going to be down the wire on taxes. “These late-stage tax negotiations remind me of the late innings in a game of Jenga, where every time you pull a block out of the tax-reform stack you have to worry about the whole thing falling down,” Bloomberg’s Michael Regan wrote this afternoon.
Appropriately enough, that’s a pretty apt description of the situation for DM central banks. One wrong move and the house of cards that is global risk assets collapses like a Jenga tower.
Obviously, we don’t want “childish” nonsense like this getting in the way of tax cuts for the wealthy and breaks for corporations so this latest waffling pushed stocks lower throughout the afternoon:
Trump’s still pretty confident:
Right. “He’ll be there.” And hell, if not, Trump can just call him a whore on Twitter. So this is a win-win.
New multi-year lows for the 5s30s as flattening resumed:
Here’s a two-day look at the dollar which should give you some context:
The euro fell after the ECB erred on the side of caution, noting for the thousandth time that “an ample degree of stimulus is still needed.” The growth outlook was upbeat but Draghi came across tepid on inflation.
European shares closed lower which isn’t exactly consistent with Draghi. After all, if you got anything from the ECB presser it should probably be that they see the “Goldilocks” environment (decent growth and inflation subdued enough to give them an excuse to stick to a gradualistic approach to normalization) continuing for the foreseeable future. Throw in that damn blockbuster German manufacturing PMI print and there’s an argument to be made that this should have been a good day for European risk. Alas…
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