Last Saturday the Senate approved President Trump’s tax reform, despite initial resistance and political tensions. This measure has had a wide impact on the financial markets.
Based on this news, the American dollar made rapid gains against all major currencies. Other instrument that benefitted from the announcement are US Treasury yields, American stock shares, as well as the stock indices from Europe, most notably in Germany, France, and even the United Kingdom.
The adoption of tax reform also helped dissuade doubts regarding the December rate hike by the Federal Reserve, which now seems completely certain. However, this particular tax reform will actually increase the debt of the United States, so investors looking at the extreme long term should be wary. There are also still other issues concerning the United States regarding the budget, so all is not calm on that front.
Meanwhile, Europe continues to show steady growth. Officials are also hopeful that meaningful progress with the Brexit deal is on the horizon.
