The vote on President Trump’s first bill proposal since taking office, to repeal Obamacare and replace it with the American Health Care Act, was postponed abruptly from Thursday evening to Friday March 24, due to severe disagreements within the Republican party.
President Trump and Republican leaders have been attempting to convince more Republicans to support the new bill. However, it seems to be difficult to reverse the situation in a short time period. Trump stated that if the bill fails to pass he would leave the Obamacare in place (against his election pledge).
The Republican party holds the majority in the US Congress in both the House of Representatives and the Senate. The Democratic minority will vote against the Bill. The Bill requires at least 215 votes to pass from the House’s 430 current members. Therefore, the maximum of defections is limited to 22 votes from the Republican party’s 237 representatives.
The dollar index has been oscillating in a range between 99.30 – 99.80 set in the past two days. If the Bill fails to pass, markets would likely lose confidence in Trump’s administration and his other policies (such as tax-cuts and regulation reform) which will likely weigh on USD and US equities. The dollar index will likely fall and test the significant support level at 99.00.
Fed Chair Yellen made a speech on Thursday at the Community Development Research. Unexpectedly, she mainly talked about financial education for children and teenagers without mentioning monetary policy and/or the economic outlook.
Dallas Fed President Robert Kaplan (an FOMC voting member) said on Thursday that “the Fed should patiently remove monetary policy accommodation, as the US economy is making progress and the job market is tight, and suggesting three rate hikes this year”. With that said, the Fed will likely raise rates two times more until the end of the year. Conversely, Minneapolis Fed President Neel Kashkari (an FOMC voting member) commented that “inflation remains below the Fed’s target”. He was the only one who dissented a rate hike in last week’s FOMC rate decision.
The Scottish parliament postponed a second Scottish independence referendum vote due to the terror attack at Westminster. The vote was postponed until Tuesday 28 March, which is only one day ahead the triggering of the Brexit process. We can expect volatility on GBP and GBP crosses over the period.
Today we will see the release of US durable goods orders and core durable goods (Fed), accompanied by Canadian CPI and core CPI (Feb), at 12:30 GMT.
Fed presidents are scheduled to deliver speeches today per the following schedule:
12:00 GMT Chicago Fed President, an FOMC voting member, Charles Evans
13:05 GMT St Louis Fed President, an FOMC member, James Bullard
14:00 GMT New York Fed President, an FOMC permanent voting member, William Dudley