by Adam Button
Democratic leaders are hoping to have an agreement on a framework for a reconciliation package this week but the margin for error is razor thin. JPY and CHF are the only currencies gaining vs USD as risk appetite pulls back. US Philly dropped to a lower than expected 23.8 from 30.7, while jobless claims dropped to 290K from a revised 296K. Below is Ashraf's estimate for ETH/XAU. Ashraf has released the latest rebalancing of his crypto holdings to the WhatsApp Broadcast Group.
Two reports on Wednesday underscored how difficult it will be for Democrats in the Senate – where the don't have a single vote to spare – to agree to a reconciliation package.
The first report said Sen Machin had mentioned to Biden the possibility of leaving the party and that he had an exit plan where he would first resign his committee position. The story cited anonymous sources but had enough detail to sound credible, though Manchin quickly and vehemently denied it.
The second report said Sen Sinema had told lobbyists she wouldn't support any tax hikes on higher earners or corporations. That would make paying for the package considerably harder and perhaps doom it. That report was thinner on details and there was no follow up as Sinema rarely speaks to the media.
At this point, it's tough to say that a deal is a big factor in market pricing. The reflation trade has sizzled in the past two weeks alongside commodities. There's a strong sense that the infrastructure portion of the deal will get done with or without reconciliation and that's the main driver for raw materials.