Tax Bill Approved By Senate; US lower overnight
City Index December 20, 2017 9:35 AM
Markets across Europe have started Wednesday slightly lower, taking the lead from the US overnight. Last night saw the House and the Senate pass the tax reform bill, with both votes being along party lines. The bill will now return to the house for a final vote, due to a procedural issue, but this is a formality no more, so the bill will be on Trump’s deal for signing before Christmas.
Markets across Europe have started Wednesday slightly lower, taking the lead from the US overnight.
Last night saw the House and the Senate pass the tax reform bill, with both votes being along party lines. The bill will now return to the house for a final vote, due to a procedural issue, but this is a formality no more, so the bill will be on Trump’s deal for signing before Christmas.
US indices dipped slightly lower on the news, meaning a slightly negative start for the Europe. The reason that the bill, which is expected to relieve tax burdens across corporate America being passed resulted in the indices turning marginally lower is because the result had baked into the price. Investors had been expecting for some time that the bill would be passed, which is why we saw a string of record highs in the lead up to the vote. The US futures are pointing to a stronger start this morning, although we are likely to see volumes dwindle now as we head towards the Christmas break.
Carney & CBI retail data in focus
Today sees a relatively quiet UK economic calendar, with investors set to focus on Mark Carney’s appearance as he discusses the financial stability report. The other point of interest will be the Confederation of British Industry (CBI) retail sales survey. The survey showed a strong increase in November, after dropping steeply in October. The market will be keen to see a positive outlook for the all-important month of December.
The pound is most likely to be impacted, if at all, by these events. GBP/USD is holding up around the $1.34 level, with a strong support found at $1.3330.
Bitcoin down but resilient after South Korea Hack
The bitcoin is trading around 0.7% lower around $17,500, picking itself up from an overnight low of $16,500 as investors were unnerved once again by security issues with bitcoin. South Korea’s exchange Youbit has been forced to file for bankruptcy after a hack meant the exchange lost a huge chunk of its reserve’s.
This was the second security breach on Youbit in just 8 months. Crypto currencies are particular popular with South Korea’s tech savvy population, yet the high price of bitcoin is making it an enticing target for criminals. Around 20% of all cryptocurrency trades go through South Korea.
While bitcoin dropped on the news, the price has actually held up surprisingly well overall. The decline that we saw following the breach is within the limits of what could be considered normal trading for the virtual currency.
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