Markets rally after French election result; US govt shutdown looms as debt ceiling reached; Trump wants 15% corporate tax rate; Malaysia pays price for scandal; UST 10yr 2.27%; oil and gold down; NZ$1 = 70.1 USc, TWI = 7.48

Here’s a special holiday update of some key events and data you may want to know about today.

On Wall Street, markets have opened strongly higher, up over +1% in most indexes. Driving the relief mood is that the protectionist hard right has probably been seen off in France. And combined with the recent Dutch vote, the core EU is ‘safe’.

Across the Atlantic, the story is the same. And the euro has risen. And as an aside, the French election, like the Dutch one, was accurately ‘predicted’ by professional polling.

Success at the May 7 run-off poll by the centerist, pro-EU candidate will likely steel the EU negotiators to be tougher in their negotiations over Brexit.

In the US, a government shutdown looms as their debt ceiling limits are reached. The Trump administration is approaching its 100 days in office with little to show, despite the bluster. And a shutdown will compound its problems and perception it can’t get anything done – even though it controls both houses of Congress.

President Trump has ordered White House aides to accelerate efforts to draft a tax plan that slashes the corporate rate to 15% and prioritises cuts in tax rates over an attempt to not increase the deficit. It seems markets will reject the wisdom of this “for the rich” strategy.

The relationship between Malaysia and Abu Dhabi over the corruption scandal that Malaysia dragged Abu Dhabi into is about be would up. Malaysia has reached an agreement to pay Abu Dhabi about US$1.2 bln as settlement over the debt of embattled government fund 1MDB. Abu Dhabi sovereign wealth fund International Petroleum Investment company will get half the amount by the end of July and the rest by the end of this year. Corruption is expensive. And an election is due soon.

In New York, the UST 10yr yield is up today, now at 2.27%. Risk premiums for investment grade corporate debt, especially in Europe, have tumbled today.

The US benchmark oil price is lower today and now just under US$49.50 a barrel, while the Brent benchmark is just on US$51.50.

The gold price is lower as well, down by -US$14 to US$1,274/oz.

The New Zealand dollar is little marginally lower and now at 70.1 USc. On the cross rates it holding at 92.7 AU¢, and a lot lower at 64.6 euro cents. The TWI-5 is now at 74.8.

The easiest place to stay up with event risk over the holiday period is by following our Economic Calendar here »

Daily exchange rates

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for(i=0;i

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