Market Review – Fundamental Perspective 8 November 2017

US and European equity indices finished the day largely lower yesterday, dragged down by financials as the US Treasury curve continued to flatten. The main focus fell on US tax reforms after reports that the US Senate is considering a 1-year corporate tax cut delay which weighed on USD.
Meanwhile, crude oil stabilized after its recent rally and metals underperformed across the board whilst Asian equity markets are mixed as of midday local time today.
In the US, the House of Representatives are scheduled to discuss a tax cut plan this week before a potential vote on a finalized bill as early as next week. The main elements of the bill could cause some market volatility, especially in credit markets.
GBP had a quiet session yesterday and GBPUSD continues to trade in a 1.3060-1.3180 range. According to reports, PM May faces losing another minister over allegations that Priti Patel met with Israeli officials during a family holiday without consulting the prime minister.
Focus for the remainder of the week will be on Brexit negotiations as pressure is starting to build on the UK government as some businesses are already going ahead with Brexit contingency plans.
RUB underperformed yesterday as concerns around potential sanctions have reignited following indictments by the Special Counsel in its investigation of alleged Russian intervention in the US elections. The US Treasury will conclude a review of the possible effects of sanctioning Russian sovereign debt in February.

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