• The dollar was steady against a basket of currencies on Wednesday, supported by strong U.S. third-quarter economic growth data, but uncertainty surrounding lawmakers’ efforts to pass a tax bill kept dollar bulls in check.
The dollar index .DXY, which measures the greenback against six rival currencies, was at 93.231, little changed on the day. The greenback also held onto overnight gains made against the yen to trade at 111.97.
• Congressional Republicans scrambled on Wednesday to reformulate their tax-cut bill to satisfy lawmakers worried about how much it would expand the federal deficit, as the measure moved toward a U.S. Senate floor vote later this week.
The U.S. Senate will vote later Wednesday on whether to begin debate on a Republican tax bill, Senate Majority Leader Mitch McConnell told the chamber.
• The U.S. Senate on Wednesday took a step toward passage of tax legislation that is a top White House priority, setting up a likely decisive vote later this week even though it was unclear if the bill has enough Republican support to become law.Congressional Republicans spent the day scrambling to reformulate their tax bill to satisfy lawmakers worried about how much it would balloon the U.S. budget deficit.
Stocks rallied on optimism the tax overhaul package could pass, but obstacles remained, including attempts to address the estimated $1.4 trillion that the bill would add to the United States’ $20 trillion national debt over 10 years.
Lawmakers voted by a 52-48 margin to begin formal debate, a step that could lead on Thursday and Friday to a decisive vote on the bill, which aims to cut taxes on corporations, other businesses and a wide range of individuals and families.
Republicans have a 52-48 majority in the 100-member Senate, giving them enough votes to approve the bill if they can hold together. Without Democratic support, Republicans can afford to lose no more than two of their own votes.
• Opposition has grown among Americans to a Republican tax plan before the U.S. Congress, with 49 percent of people who were aware of the measure saying they opposed it, up from 41 percent in October, according to a Reuters/Ipsos poll released on Wednesday.
In addition to the 49 percent who said they opposed the Republican tax bill, 29 percent said they supported it and 22 percent said they “don’t know,” according to the Reuters/Ipsos opinion poll of 1,257 adults conducted from Thursday to Monday.
When asked “who stands to benefit most” from the plan, more than half of all American adults surveyed selected either the wealthy or large U.S. corporations. Fourteen percent chose “all Americans,” 6 percent picked the middle class and 2 percent chose lower-income Americans.
• The United States warned the North Korean leadership that it would be “utterly destroyed” if war were to break out, after Pyongyang test fired its most advanced intercontinental ballistic missile, putting the U.S. mainland within range.
The Trump administration has repeatedly said all options were on the table in dealing with North Korea’s ballistic and nuclear weapons program, including military ones, but that it still prefers a diplomatic option.
Still, speaking at an emergency U.N. Security Council meeting, U.S. ambassador Nikki Haley warned.
• The U.S. economy grew faster than initially thought in the third quarter, notching its quickest pace in three years, buoyed by robust business spending on equipment and an accumulation of inventories.
Gross domestic product expanded at a 3.3 percent annual rate last quarter also boosted by a rebound in government investment, the Commerce Department said in its second GDP estimate on Wednesday. That was the fastest pace since the third quarter of 2014 and a pickup from the second quarter’s 3.1 percent rate.
• The U.S. economy expanded at a modest to moderate pace in October through mid-November and inflation pressures increased, the Federal Reserve said on Wednesday in its periodic snapshot of the U.S. economy.
• The U.S. economy has gathered steam this year and will warrant continued interest rate increases amid a strengthened global recovery, outgoing Federal Reserve Chair Janet Yellen told Congressional leaders on Wednesday in her final scheduled testimony on Capitol Hill.
Her valedictory session before the Joint Economic Committee described an economy where the jobs market remains strong and economic growth has hit three percent for two quarters running, above the Fed’s estimate of U.S. potential and likely enough for an expected December rate increase.
• The Federal Reserve should keep raising interest rates over the next couple of years, including about four times between now and the end of 2018, San Francisco Federal Reserve President John Williams said on Wednesday.
“From today, four rate hikes through the end of next year is still kind of my base view,” Williams told reporters after an economics forecast luncheon. Williams rotates into a voting spot on the Fed’s policysetting panel next year. “We need to get from here to roughly 2.5 percent fed funds rate over the next couple of years.”
The Fed currently targets short-term interest rates at between 1 percent and 1.25 percent, and is expected to raise them in December.
• The Federal Reserve should be okay with allowing U.S. inflation to run at 2.7 percent for five years, Minneapolis Fed President Neel Kashkari said on Wednesday, embracing a view that is not widely shared at the U.S. central bank but reflects his generally dovish policy stance.
• Britain’s closest-watched gauge of consumer sentiment fell this month to its lowest since just after last year’s Brexit vote, and business morale also softened, as households and firms took a darker view of the economic outlook.
The GfK consumer confidence index dropped by 2 points to -12 in November, its lowest since July 2016 and below the average forecast of a decline to -11 in a Reuters poll.
• South Korea’s central bank is widely expected to raise interest rates for the first time in more than six years on Thursday, ending a five-year easing cycle in an economy riding a global electronics boom.
The Korean won KRW= hit 2-1/2-year highs on Wednesday and bond yields hovered near three-year highs in anticipation of the decision, which if it meets expectations, would mark the first rate hike by a major Asian economy since November 2014.
• Oil prices dipped on Wednesday in a volatile session buffeted by conflicting statements from oil ministers a day ahead of OPEC’s meeting in Vienna, as members debate the path for an extension of the group’s supply-cut agreement.
Brent crude futures settled down 50 cents to $63.1 a barrel, a 0.8 percent drop, while U.S. crude ended down 69 cents, or 1.2 percent, to $57.30 a barrel.
Reference: Reuters, CNBC
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