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Markets are tuned in for the US infrastructure negotiations in Washington whereby  Senate Republicans intend to send President Joe Biden a nearly $1 trillion counterproposal on infrastructure spending in order to make progress toward a bipartisan compromise just days before the president’s deadline.

There are still disagreements about how much the bill should cost, how it should be funded and what ought to be considered infrastructure.

Negotiators have been locked in a stalemate for weeks over how to fund the massive package.

The markets are mostly concerned about the corporate tax rate hike that Biden wants to use to pay for the infrastructure plan.  

However, this is ongoing and leaving the markets in limbo.  

Republicans are refusing tax hikes on corporations and Democrats are refusing to consider using user fees, such as tolls or a gas tax, to pay for the package.

”White House officials and other Democrats close to the bipartisan infrastructure talks are willing to let the negotiations stretch past their Memorial Day deadline “” but not too far,” Politico has recently written.

”Senate Republicans are slated to bring forward their latest proposal on Thursday, a plan that is unlikely to approach $1 trillion in new spending “” making it far less palatable to the White House,” the article continued.

Importantly, the article explains that ”there also are deepening doubts about an agreement on how to pay for the infrastructure spending package. Democrats are resistant to tapping leftover Covid-relief money, which the White House argues isn’t sufficient to cover the plan, anyway.”

Market implications

US equities and the US dollar is a focus that is attempting to recover from weekly lows vs a basket of major currencies.