Markets are engaging in quiet holiday trading today while Dollar is paring some losses. But for the week, the greenback is still set to end as the worst performing one. Trading will likely stay subdued today as traders are already having their eyes on next week. In particular, the Senate will return from Thanksgiving recess and would floor the tax bill. Markets will then have a clearer idea on what the final version of Senate tax bill then. And assessment could then be done on the final reconciled version between House and Senate.
Economists believe tax plan would boost debt, uncertain on economy
For now, according to a poll by University of Chicago's Booth School of Business, economists are in consensus that the tax plan will boost US debt but unsure on it's help on the economy. 38 economists from schools like Yale and MIT were surveyed.
The first question was whether enacting "a tax bill similar to those currently moving through the House and Senate" would lead to a "substantially higher" rate of economic growth a decade from now than it would otherwise. 36% said they were uncertain, 33% disagreed and 19% strongly disagreed.
The second question was whether a tax bill like those in the House and Senate right now would leave the U.S. debt-to-GDP ratio "substantially higher" in a decade than otherwise. 43% agreed and 45% strongly agreed. None disagreed.
Japan PMI manufacturing posted strongest improvement since 2014
Japan PMI manufacturing rose to 53.8 in November, up from 52.8 and beat expectation of 52.6. That's the strongest improvements for 44 months since March 2014. Markit economists Joe Hayes noted that "new orders increased strongly, underpinned by business from abroad amid recent yen weakness. New export orders expanded at the fastest pace in almost four years." However, he also warned that " cheaper yen and higher material prices have intensified cost pressures, as input price inflation increased to a 35-month high in November."
New Zealand trade deficit narrowed despite record imports
New Zealand trade deficit narrowed to NZD -871m in October, larger than expectation of NZD -750m. Imports surged to a record high at USD 5.4b, but that was offset by rise in exports to NZD 4.56b. Jump in imports include intermediate goods, used as ingredients or inputs into the production of other goods and services. Meanwhile dairy and lamb shipments were the key drivers of export growth.
Looking ahead
German IFO business climate will be the main feature in a quiet day. US will release manufacturing and services PMIs.