Despite the fact that the House of Representatives has the whole October for discussions on the budget, legislators released a budget statement on Thursday for the next year, which gave the green light for the Trump tax reform. The resolution adopted with a minimum vote edge (219 vs. 206) also includes instructions for budget reconciliation, i.e. tailoring together budget estimates received from various financial departments. The reconciliation limits the Senate's ability to impede the implementation of the bill, which greatly increases the chances of Trump's success.
Protocol of the ECB September decision . Minutes released on Thursday showed that officials were trying to find a compromise between the curtailment of operations on the open market while extending purchases of some debt. The protocol also showed that a strong euro continues to be a matter of concern and the negative impact of revaluation on price increases hinders the beginning of the withdrawal of liquidity from the economy. The European currency has added almost 12 percent since the beginning of the year on expectations that the ECB will "turn off” salvation mode.
As mentioned earlier, job creation was likely to slow down in September as natural disasters reduced the level of labor force participation and postponed hiring, which however became compelled and does not indicate a systemic problem. GDP for the third quarter is likely to deviate from normal values, but catch up in 2018.
According to a Reuters poll, the US economy should add 90K in September after rising to 156K in August. Destroyed regions as a whole were characterized by a high percentage of low-paid jobs, in such areas as retail and hotel business, so the dynamics of salaries in general may not suffer. Employment in production due to the growth in orders is likely to add another 10K after a rise of 36K in August.
This analysis is provided as general market commentary and does not constitute investment advice.