Joe Biden’s project of harmonizing taxation worldwide for multinationals is on investors’ radar but remains without any real impact for the moment on financial markets.

The U.S. president has proposed to create a global minimum tax rate to reduce the opportunities for multinationals to slip through the cracks and to better distribute revenues for the public purse. The Biden administration's proposal to 100 countries is a real breakthrough, if only because Washington has decided to take the lead on the issue.

Western countries - tax havens aside - have a vested interest in cleaning up the jungle of tax optimization. In 20 years, the average corporate tax rate in developed countries has fallen from 32% to 23%, thanks to a handful of countries that have made tax domiciliation a business in its own right. They include Caribbean islands, but also members of the Eurozone, British crown territories and even US federal states.

At this stage, it is difficult to know whether the U.S. proposals will be able to counter the talent of multinationals to take advantage of global tax asymmetry. But they do have the merit of encompassing more companies than just digital players, and thus are much simpler than the convoluted OECD proposals. The project is far from perfect, but it has unifying qualities.

But let's not forget that in the end, it is the U.S. Congress that will decide. Joe Biden and his team know that it will probably be more difficult to reach a consensus on Capitol Hill than at the OECD on this issue.

An abundant literature is beginning to emerge on the consequences of such a tax bigbang for companies, especially for listed companies. But it is clear that this does not disturb investors much, for now.

 

Economic highlights of the day

Industrial production figures for Germany and France in February. In the US, March producer prices and February wholesale inventories are due. This morning, China announced a higher-than-expected increase in producer and consumer prices in March.

The euro is up to USD 1.1877. The ounce of gold is back above the USD 1735 USD. Oil is down very slightly to USD 62.8 per barrel of Brent and USD 59.3 per barrel of WTI. U.S. debt is yielding 1.63% over 10 years. Bitcoin is above USD 58,500.

 

On markets:

*The European Medicines Agency said Friday it is investigating four cases, including one fatality, of blood clots in people who received Johnson & Johnson's Covid-19 vaccine.

* Boeing has asked 16 of its customers to correct a potential electrical problem on a specific group of 737 MAX aircraft before continuing operations, the U.S. manufacturer announced Friday, saying it is working with the U.S. Federal Aviation Administration on the production problem. In pre-market trading, the stock has moved into the red and is down 0.1%.

* Tesla once again raised the sales price of its Model 3 and Model Y in the U.S., news site Electrek reported Friday.

* Australia doubled its order for the COVID-19 vaccine developed by Pfizer and BioNTech to 40 million doses, enough for 80% of the population.

* The British competition authority announced Friday that Facebook had suspended 16,000 accounts that marketed fake consumer reviews.

* Levi Strauss reported better-than-expected quarterly results and raised its first-half revenue forecast, expecting a return to normalcy thanks to vaccination.

* Crown Holdings announced on Thursday evening that it had completed the sale of 80% of its European packaging business to private equity group KPS Capital Partners for €2.25 billion. The stock gained 2% in after-hours trading.