US: House Republicans Not Sold On Two-Step Legislative Agenda, Semafor
Semafor's Kadia Goba reporting on X that House Republicans may be set to reject the two-step 2025 legislative agenda outlined by incoming Senate Majority Leader John Thune (R-SD). Thune's plan involves two major filibuster-proof reconciliation bills: The first to focus on border security and energy and the second to focus on tax reform.
- MNI's Political Risk team noted in today's edition of the US Daily Brief that top Republican tax writer in the House, Ways and Means Chair Jason Smith (R-MO), has been the most vocal holdout against Thune’s plan, believing that delaying tax reform or carving out popular immigration items into a separate bill, could imperil the most important plank of US President-elect Donald Trump's legislative agenda.
- Smith told reporters: “I’ve been very successful getting votes. I know the House on tax policy better than anyone else. If they want to give me the best opportunity to pass the president’s tax plan, make it all in one bill.”
- Goba reports: "Looks like any two-bill plan the House endorses will sort of have to start with taxes! Here's what one source told me: "There was general consensus that burning our sweetener (border money) in a skinny package would seriously jeopardize the rest of Trump’s legislative agenda (TCJA extension, energy production, mandatory cuts, DOGE, etc).""
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POLITICAL RISK: Scott Slightly Favoured In Race For Senate Leadership
Senator Rick Scott (R-FL) is slightly favoured to win the race to replace outgoing Senate Minority leader Senator Mitch McConnell (R-KY) as the top Republican in Senate, according to Polymarket.
- President-elect Donald Trump has so far declined to endorse a candidate, despite a wave of Trump-aligned media figures calling on Senator to back Scott in Wednesday's secret ballot. A strong relationship with the Senate Majority Leader will be critical to legislating Trump's agenda, but the Washington Post notes: "Some advisers and people who have spoken to him have suggested to Trump that he not get involved, questioning if it’s the place to extend political capital, especially if his choice doesn’t win."
- The Post notes, "Thune’s most important supporter right now might be Sen. Steve Daines (R-MT), who is extremely close with Trump and is in Republicans’ good graces for winning back the majority as NRSC chair, a position that has also made him close with the incoming Republican class. Daines has been doing work behind the scenes to help Thune’s candidacy."
Figure 1: Next Senate Majority Leader, % Implied Probability
Source: Polymarket
GBPUSD TECHS: Trend Signals Remains Bearish
- RES 4: 1.3389 High Oct 1
- RES 3: 1.3274 High Oct 3 and the bull trigger
- RES 2: 1.3175 High Oct 4
- RES 1: 1.2991/3048 20-day EMA / High Nov 6
- PRICE: 1.2867 @ 16:03 GMT Nov 11
- SUP 1: 1.2834 Low Nov 06 and the bear trigger
- SUP 2: 1.2799 Low Aug 15
- SUP 3: 1.2762 Low Aug 13
- SUP 4: 1.2665 Low Aug 8 and key support
The trend condition in GBPUSD remains bearish and last week’s fresh cycle low reinforces current conditions. The move down highlighted the end of the recent corrective bounce and confirms a resumption of the downtrend. Key short-term support and the bear trigger at 1.2844, the Oct 31 low, has been pierced. A clear break of it would open 1.2799, the Aug 15 low. Key short-term resistance has been defined at 1.3048, the Nov 6 high.
FOREX: Greenback Rally Extends, EURUSD Approaches Yearly Lows
- Renewed demand for ‘Trump trades’ on Friday extended into this week, providing further strength for the greenback during Monday’s session. The Euro has continued to show relative underperformance across G10 in the aftermath of the US election, largely owing to Eurozone growth concerns and an escalating political crisis in Germany.
- Bearish technical conditions dominate for EURUSD, and spot has notably extended below 1.0666 on Monday, a key support for the pair. Lows of 1.0629 were traded today and this narrows the gap to 1.0611, the 38.2% retracement of the Sep ‘22 - Jul ‘23 bull cycle, just ahead of the year’s lows at 1.0601, printed back in April.
- For EURGBP, weakness has extended today, and the cross now cleared the bear trigger at 0.8295, the Oct 18 low. An initial target includes 0.8250, the Apr 14 ’22 low and below here another major support resides at 0.8203, the Mar 7 ‘22 low.
- The Japanese yen is the weakest performer today, with USDJPY rising 0.8% to 153.87, although we remain well off the post-election highs of 154.71. In contrast, USDCHF (+0.53%) has extended its short-term rally and printed above 0.8800 for the first time since late July.
- In emerging markets, the likes of MXN, HUF and PLN all came under substantial pressure, declining the best part of 1.5% against the dollar. In particular the South African Rand fell 2% to a two-month low.
- UK labour market data highlights on Tuesday, alongside German ZEW sentiment figures. Short-term focus will be on US CPI, scheduled on Wednesday.
