World Events Summary: 25th April – 2nd May 2017

Trump Tax Plan: markets were unsure how to react to the White House’s announcement as it was long on ambition and short on details. Mnuchin and others cautioned about the likely length of negotiations. The New York Times reported that the Republicans are likely to go it alone in cutting taxes, giving power to the freedom caucus and fiscal conservatives who want deficit neutrality.

One China: Trump lavished praise on Xi Jinping as the US administration called for further constraining measures from China against North Korea. Trump appeared to offer China an advisory position regarding US-Taiwan relations. In Hong Kong a Beijing official stated that calls for independence could threaten the ‘one-China, two-systems’ policy of administrative autonomy.

Brexit: Junker and other Brussels bureaucrats leaked a confrontational view of a recent meeting with UK PM May. This account was refuted but it seems to set a precedent for future talks. Subsequent to that meeting the FT reported that the EU could seek to bring Euro clearing within the Eurozone imminently and that a precondition to trade talks will be a non-refundable €100bn up-front payment.