Wall Street closed higher on Friday and Asian stock markets followed suit on Monday morning, with investors expressing optimism that the highly-anticipated U.S. tax bill will be passed in the coming days. Australia’s ASX 200 was up 0.66 percent as of 10:47 a.m. HK/SIN nearing eleven-year highs, while most other Asian indexes were modestly higher. The Shanghai Composite was up 0.05 percent and South Korea’s Kospi was up 0.03 percent.
If the U.S. tax bill is approved by Congressional vote this week, it is possible that President Trump could make it a law by Christmas, analysts say. The current bill is expected to send stock markets higher by reducing corporate taxes in the hopes of increasing corporate profits, prompting buybacks and increased dividends which will stimulate the economy. If this trajectory is completed, the dollar may be further strengthened, and interest rates may be raised at a quicker rate. Skeptics are concerned that aggressive rate hikes may keep inflation too low which could potentially hinder the economy rather than stimulate it.
Currency Movements
The dollar was trading fairly flat against its primary trading partners on Monday morning. The euro was up 0.07 percent against the dollar to $1.176, while the dollar gained 0.04 percent against the yen to 112.62. The dollar was unchanged against the Loonie, and down slightly against both the Canadian and Australian dollars.
Bitcoin struggled slightly on Monday but still remained near all-time highs, trading at $18,730.46 as reported by Coinbase. The cryptocurrency hit a record high of $19,666 on Sunday.