Greg Gibbs, the founder of Amplifying Global FX Capital, offers extensive insights on the upcoming Trumpcare bill vote and why its passage is so important for the Trump administration as well as for the markets.
“Trump’s leadership faces a crucial test on Thursday – the House of Representatives vote on the healthcare bill endorsed by Trump. Passage in the House is necessary to keep the USA equity market focused on Trump’s deregulation and tax policy agenda, and bolster Trump’s reputation as a deal-maker.”
“The bill is reported to hang in the balance; passage will see a relief rally in US equities, bond yields, and the US dollar. A vote against the bill may see a further significant fall in US equities, yields, and the US dollar. “
“Creeping Trump doubts have had a much bigger impact on US assets and the US dollar than other markets and currencies. There has been relatively little broader contagion, with strong gains in dollar alternatives – JPY and gold, and only a mild fallout to emerging market equities and currencies.”
“A weaker Trump presidency in many ways poses less threat to global growth and trade. The global economic recovery has established a firmer footing and policy inertia in the USA may result in a stable albeit more moderate USA growth outlook. “
“Less Trump policy action may keep the Fed on a benign gradual policy tightening cycle, and see capital flow from expensive US equities to global asset markets. “