Trump Publishes Tax Reform Plan, ECB and BOJ Hold Policy Meetings, France’s Final Vote Count Awaited

U.S. stocks edged lower on Friday with all three major U.S. indexes ending the session in negative territory. At the close on NYSE, the Dow Jones Industrial Average lost 0.15% to 20,547, the S&P 500 and the Nasdaq Composite dipped 0.30% and 0.11% respectively.

Despite the final declines, shares had attempted to pare losses after the release of bullish economic data and an update from President Donald Trump on his tax reform plan.  Trump on Friday said that he would unveil a tax plan in the following week that includes a “massive tax cut” for individuals and businesses.

Meanwhile, also on Friday, the National Association of Realtors reported sales of previously owned homes in the U.S. reached a ten-year high in March. According to the report, existing home sales jumped sharply 4.4% last month from February to an annualized pace of 5.71 million units. The reading comfortably beat economists’ estimates of a 2.5% gain.

In the week ahead, the U.S. is scheduled to release preliminary figures on first quarter economic growth on Friday which is expected to show an economic growth rate at 1.1% on a yearly basis in the first three months of 2017, easing from growth of 2.1% in the fourth quarter. Before the GDP report, this week’s calendar also features U.S. data on consumer confidence released by the Conference Board Inc. and new home sales by Census Bureau on Tuesday, and durable goods orders also reported by Census Bureau on Thursday.

Turning to the Euro zone, markets will be waiting for the final vote count due in early Europe on Monday following the first round of the French Presidential Election held on Sunday. After that, on Thursday, the European Central Bank will announce its latest interest rate decision. Despite recent indications of robust growth and surging inflation, the central bank is not expected to make any change in its monetary policies. Instead, investors will be looking to President Mario Draghi’s press conference 45 minutes after the announcement.

Besides the ECB, the euro zone will publish flash April inflation figures on Friday which are forecast to show consumer prices rose 1.8% this month, accelerating from a gain of 1.5% in March. Meanwhile, core prices may have increased 1%, compared to 0.7% in the prior month.

The Bank of Japan is also about to releases its latest rate decision and monetary policy statement on Thursday. The BOJ is seen keeping its short-term policy interest rate unchanged at minus 0.1% and maintain the 10-year government bond yield target at around 0%. The net amount of Japanese government bonds it buys annually is also anticipated to be held intact at around 80 trillion yen. BOJ Governor Haruhiko Kuroda will hold a press conference afterward to discuss the decision.

In the U.K., the Office for National Statistics is to produce preliminary data on U.K. economic growth for the first quarter on Friday. The country’s economy is forecast to grow 0.4% in the three-month period to March, after expanding 0.7% in the preceding quarter. If confirmed, the British economy would expand by 2.2% in the first quarter compared to the same period last year, up slightly from growth of 1.9% in the previous three-month period.

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