In a win for Donald Trump last week, the US House of Congress passed the Republican healthcare reform bill to repeal and replace Obamacare by a narrow margin (217 to 213). Although it still faces a major hurdle to pass through the US Senate, estimates suggest the bill could deliver savings of $150bn over 10 years and partly fund Trump’s tax cut plan.
The RBA left the cash rate unchanged last week (no surprise) and analysts see jobs growth sufficient enough for monetary policy to remain on hold through 2017 and well into 2018. However, the risk lies with another rate cut given very weak wages growth, below target core inflation and an expected further downturn in hard commodity prices. The most recent additional measures announced by APRA to address risks in the housing market marginally lowers the hurdle for another rate cut, with market pricing currently assigning a 10% chance of another rate cut.
Political newcomer Emmanuel Macron will be the new French President after claiming a decisive win last night (or rather acknowledgement of defeat by his far-right opponent Marine Le Pen) within just 15 minutes or so after the polls closed with an estimated 65% of the vote.