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On May 1, according to the Wall Street Journal, people familiar with the matter revealed that Republicans in the U.S. House of Representatives are seriously considering proposals to further limit tax breaks for corporate top pay, expanding the current restrictions that only apply to a small number of current or former executives with incomes over $1 million. These changes may be included in the trillion-dollar tax and spending bill that Republicans are drafting and trying to push through the House of Representatives this month. Discussions on this idea and other tax provisions are still ongoing, and lawmakers have not yet determined the details of which employees and employers will be affected. Limiting these tax breaks will increase taxes on companies and may indirectly hit high-income families, but perhaps this approach is more politically acceptable than raising the top marginal income tax rate for millionaires, which Trump recently considered and rejected. The resulting revenue can offset some of the tax cuts in the bill, including the extension of expiring provisions in the 2017 tax law, and Trumps plan to cancel the tip tax, overtime pay and social security benefits.European Commission: Twelve EU member states have requested to activate national exemption clauses to increase defense spending.According to the Wall Street Journal: Republicans in the U.S. House of Representatives are seriously considering a proposal to further limit corporate tax deductions for top pay.U.S. Department of Defense: The United States approves the sale of $425 million in post-deployment Patriot systems and related equipment to Kuwait.Market news: A U.S. House of Representatives committee canceled its proposal to remove the Federal Trade Commissions (FTC) antitrust authority from the budget plan.

Asian Shares Fall As Investors Analyze ECB Decisions

Charlie Brooks

Jun 10, 2022 11:14

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Asia-Pacific equities were predominantly lower on Friday morning. Ahead of U.S. inflation statistics, investors are analyzing the European Central Bank's signals for potential interest rate hikes.


At 10:49 PM ET (2:49 AM GMT), the Nikkei 225 was down 1.41 percent, and the KOSPI was down 1.08 percent.


In Australia, the ASX 200 index declined 0.99%.


The Hang Seng Index in Hong Kong fell 0.89 percent.


As a result of the Chinese government's response to a Bloomberg article, the sub-index for Hong Kong-listed IT giants opened 2.9 percent lower. Alibaba (NYSE:BABA) Group Holding Ltd.'s U.S.-listed shares plummeted after the China Securities Regulatory Commission dismissed a Bloomberg report that it was exploring a listing resurrection for the fintech company.


The Shanghai Composite rose 0.10 percent, but the Shenzhen Component rose 0.02 percent.


China's manufacturing factory-gate inflation slowed to its worst pace in 14 months in May, according to previously released data. In May, the producer pricing index (PPI) increased by 6.4% annually, compared to an increase of 8% in April. The reading was the lowest since March 2021. The cooling could be attributable to decreased demand for steel, aluminum, and other industrial commodities as a result of COVID-19-related production disruptions.


Meanwhile, the consumer price index (CPI) increased 2.1% annually.


The European Central Bank (ECB) announced on Thursday that it will prepare a quarter-point increase in interest rates in July and a larger increase in the fall if inflation remains high. Inflation in the eurozone has already surpassed 8 percent.


Short-term U.S. Treasury rates are near all-time highs for 2022 due to a selloff in the euro-area bond market in response to ECB rate rise indications.


The ECB also announced that net asset purchases will halt on July 1, 2022.


Now, investors have moved their attention to U.S. inflation data, due later in the day, for additional hints on the course of interest rate hikes by the U.S. Federal Reserve.


Bloomberg quoted Charles Schwab (NYSE:SCHW) & Co.'s chief financial strategist Liz Ann Sonders as saying, "We've reestablished the inverse relationship between bond rates and stock prices."


"There is a little more discussion, or whispering, about the CPI being a touch above forecasts. Add to that the ECB's more hawkish posture, and you get another bad day."


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