European Markets Lower Ahead of ECB meeting

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ECB Interest Rate Decision to Affect the EUR

Deutsche Bank to Move 4,000 Jobs Out of the UK

Trump Reveals Brand New Tax Plan

 

 

Market Recap – This week in a nutshell:

On Monday European Markets and the EUR gained significant momentum after centrist Emmanuel Macron won the first round of the French election on Sunday. On Tuesday Macron’s victory continued to give the markets a boost as investors grew more hopeful that he will also win the final round of the elections. The global rally subsided on Wednesday however, as most European indices dipped on profit taking while Treasury Secretary Steve Mnuchin unveiled U.S. President Donald Trump’s new tax cut plan!*

 

Thu 27/4: 3 Things you Need to Know about Today’s Markets…

 

1. European Markets Open Lower Ahead of ECB Meeting

European Markets opened lower this Thursday, as investors wait to hear from European Central Bank President Mario Draghi. Draghi is expected to announce the ECB’s latest monetary policy decision at 11:45 GMT. Consensus is short term interest rates will be kept unchanged although E.U. banks are growing wary of the stimulus measures. The European Central Bank has kept key interest rates at 0% for nine consecutive months, so if the ECB keeps rates unchanged once again and does not adopt a more hawkish stance, this could affect negatively the value of the EUR pairs according to investing.com.

 

2. Deutsche Bank to Move 4,000 Jobs Out of the UK after Brexit

Deutsche Bank has stated that 2,000 front office people could be moved, with another 2,000 posts to be reviewed depending on new regulations, after Britain leaves the European Union. In total up to 4,000 UK jobs could be moved to Frankfurt and other locations in the European Union as a result of Brexit. It should be noted that Germany’s biggest bank employs a total of around 9,000 staff across the UK. Deutsche Bank’s announcements come as a response to the the Bank of England’s warnings to all financial firms operating in the U.K. The BOE has given financial firms a deadline (14 July) to explain how they are planning for the UK’s departure from the EU and warned them to prepare for all possible outcomes, including a hard Brexit.**

 

3. Trump Reveals Brand New Tax Plan

The White House just outlined its tax plan late on Wednesday, a proposal they said would be the “biggest tax cut” in U.S. history. Treasury Secretary Steven Mnuchin summarized the plan in a briefing to reporters at the White House and revealed Trump’s plan to cut the number of income tax brackets from seven to three, with a top rate of 35 percent and lower rates of 25 percent and 10 percent.The tax rate will be zero for the first $24K in income. The proposal will also chop the corporate tax rate to 15 percent from 35 percent. The plan further aims to eliminate tax deductions, with only a few exceptions, including the mortgage interest and charitable contribution deductions.*

 

*Source: Bloomberg
**Source: Seeking Alpha

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