FxWirePro: Daily Commodity Tracker - 21st March, 2022 
India–U.S. Interim Trade Pact Cuts Auto Tariffs but Leaves Tesla Out 
Gold and Silver Prices Rebound After Volatile Week Triggered by Fed Nomination 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
Asian Stocks Slip as Tech Rout Deepens, Japan Steadies Ahead of Election 
Japanese Pharmaceutical Stocks Slide as TrumpRx.gov Launch Sparks Market Concerns 
South Africa Eyes ECB Repo Lines as Inflation Eases and Rate Cuts Loom 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
Oil Prices Slide on US-Iran Talks, Dollar Strength and Profit-Taking Pressure 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
Trump’s Inflation Claims Clash With Voters’ Cost-of-Living Reality 
The financial market reaction post-Trump’s win in the US presidential election has been at odds with what was anticipated by many prior to the result. The reaction to date may be too optimistic on the reflation trade, indeed there remains much uncertainty about what a Trump presidency can deliver. Markets also appear to be discounting the geopolitical risks from a Trump presidency.
Further, capital flows continue to exit EM, accelerating post-Trump’s presidential victory. The US CPI is expected to rise sharply again in October amid higher energy prices. Core pressures are set to remain modest. Fed Chair Yellen testifies to Congress on Thursday and it is expected that she will reinforce the view that December is very live for a rate hike, ANZ reported.
Trump’s policy fiscal proposals at face value seem highly stimulatory: he wants to spend up big on infrastructure. The President needs Congress’ support for appropriation and revenue bills. However, on trade the President has considerable unilateral power.
Further, for households, Trump has proposed cutting the seven marginal tax rates to just three, 33, 25 and 12 percent. He also wants to slash the corporate tax rate to 15 percent from 35 percent. Also, under the new personal income tax thresholds, high-income taxpayers would receive the biggest cuts, both in dollar terms and as a percentage of income.
Trump also intends to label China a currency manipulator as a possible precursor to implementing tariffs. Also, he has plans to withdraw membership from the Trans-Pacific Partnership (TPP) agreement. This action could actually reduce the US’s global bargaining power, harm his other trade goals, and ultimately dampen US growth.
"As we look into 2017 and 2018, a number of Trump’s proposals appear inflationary (stimulatory fiscal policy and tariffs) which suggests the Fed may need to tighten a lot more aggressively than is currently priced by the market and by us," ANZ commented in the report.
