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US Tax Bill Nears Finish Line; Canadian Economic Data Bolsters Loonie

Published December 20, 2017
  • The US Senate voted 51-48 in favour of passing the Republican tax cut plan in the early hours of Wednesday morning; the plan is the most extensive rewrite of the US tax code, creating massive cuts for US corporates (35% tax rate down to 21%) and cuts for individuals as well.
  • The bill also passed in the US Congress yesterday afternoon as representatives voted along party lines to ensure its passage. The Congress version of the bill differed from the Senate’s; US representatives will need to vote again this afternoon to confirm the Senate’s changes.
  • The final passage of the Republican tax bill is widely expected to be completed this afternoon; US President Donald Trump has scheduled a news conference at 1:00 PM EST at the White House to commend his administration’s first major legislative victory since taking office this year.
  • Celebrations may be cut short, however, as US politicians now must focus on avoiding a government shutdown by passing a temporary spending bill; lawmakers have until Friday to finalize a deal that satisfies both Republicans and Democrats.
  • USD/CAD moved to the low 1.2800s this morning as both investor weariness over the tax bill and strong economic data out of Canada pushed the rate lower; month-on-month Wholesale Sales in Canada showed strong growth of 1.5% versus expectations of 0.5%.
  • Buyers fatigue is also starting to weigh on equities as trades start to thin before the December holidays; the Nasdaq reached record highs earlier this week, however, failed to close at these all-time highs for the past two trading days.