The Democrats have announced a minimum tax on the biggest companies in the US, which would see companies making more than $1bn in profit a year, forced to pay back 15% of that in corporation taxes per year. Senior Democratic senators laid out plans for a new minimum tax on over 200 US companies, in support of Joe Biden’s Build Back Better agenda. This was spearheaded by Elizabeth Warren, Angus King and Ron Wyden. The latter told reporters that the minimum tax plans aimed to raise between $300mn and $400mn in the next ten years. The policy will reduce the ability of firms to use tax loopholes and claim deductions to reduce their tax base.
UK Chancellor Rishi Sunak will commit to fiscal discipline in the Budget as upgraded growth forecasts for the UK economy show faster than expected growth, giving the Chancellor the chance to unveil extra public spending. This is an opportunity for Sunak to make his case to parliament and the country that he has successfully steered the country through the volatile economic waters brought about by Covid-19, showing that the long-term economic “scarring” of the economy will be less severe than expected. The updated forecast will lend credibility to Sunak’s plans to investment in the NHS and Levelling Up in the Budget.
Sterling is higher against the dollar and lower against the euro in overnight trade. The deadline to avert a crippling rail strike during the COP26 summit in Glasgow is just hours away. ScotRail and the Scottish government have given the RMT until 17:00 on Wednesday to accept an offer already agreed to by three other unions. The RMT has described the move as like “having a gun pointed at our head”. On Tuesday, Scotland’s Transport Minister Graeme Dey said he was “not optimistic” industrial action would be avoided. The price of a pint of beer will have to rise by as much as 30p to help pay for higher wages and energy costs, following the rise in the National Living Wage to £9.50 per hour in April for over 23-year-olds, according to City Pub Group.
The euro is stronger against most major currencies overnight. As the new German parliament opened, there was a cautious tone struck by departing president Wolfganag Schauble who stated that German lawmakers have a ‘responsibility to strengthen the parliament in the face of growing demands from the electorate to act on the results of the election. New Bundestag President Barbel Bas, a Social Democrat will face the challenge of waiting for Olaf Scholz to finalise a German coalition government with the Greens and FDP. Emmanuel Macron will have a working lunch today at the Elysée palace with his Polish counterpart, Andrzej Duda, aimed at ending the EU rule of law crisis.
The dollar is lower against most majors in early morning trade. An expert committee advising the Food and Drug Administration on Tuesday recommended that regulators authorize Pfizer-BioNTech’s coronavirus vaccine for 5- to 11-year-olds, bringing about 28 million children a major step closer to becoming eligible for shots. The panel of vaccine experts voted 17 to 0, with one abstention, endorsing the vaccine be permitted for children 5 years to 11 years of age and concluding that the benefits of the shot outweigh any risks. The positive recommendation will likely soon lead to an expansion of the U.S. vaccination campaign to millions of young children.
Ballinger & Co. Morning Report–27th October 2021
GBP>EUR – 1.1853
GBP>USD – 1.3753
EUR>USD – 1.1599
GBP>CAD – 1.7059
GBP>AUD – 1.8318
GBP>SEK – 11.842
GBP>AED – 5.0416
GBP>HKD – 10.676
GBP>ZAR – 20.583
GBP>CHF – 1.2608
· USD Durable Goods Orders(Sep)
· USD Nondefense Capital Goods Orders ex Aircraft(Sep)
· CAD BoC Rate Statement
· CAD Bank of Canada Monetary Policy Report
· CAD BoC Interest Rate Decision
· CAD BoC Press Conference
· EUR ECB’s President Lagarde speech
· Forex Today: Majors stay in familiar ranges, eyes on US data, BoC policy decisions
· EUR/USD Forecast: Key technical levels hold as focus shifts to US data
· GBP/USD Price Analysis: Bulls trying to defend ascending channel support near mid-1.3700s
· Bank of Canada Rate Decision: Inflation prospects headline policy review
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