DAX 30

Spanish stocks and the euro fell, while Spanish government bond yields hit their highest levels in over a month after Catalan secessionists delivered an unexpected blow to the government of Spanish PM Rajoy by winning the Catalan regional election. Meanwhile across the Atlantic, U.S. equity futures and the dollar rose on the last trading session before the Christmas holiday. The MSCI index of world stocks was flat.

Dow futures are up some 80 points this morning after early on Wednesday morning the Senate passed the Tax Reform bill in a party-line vote, and is now set to become law after a follow-up vote in the House and Trump's signature some time on Wednesday afternoon. The good news is that the biggest political drama of 2017 will then be over. The bad news is that once the bill becomes law, the market will no longer be able to "price it in" every single day as it has for the past year.

Yesterday we joked that with the US House of Representatives set to vote for the GOP tax bill on Tuesday, markets would "price in" the same tax legislation they have been pricing in every day for the past year, all over again...

Get ready for US markets to price in tax reform all over again in just a few short hours

— zerohedge (@zerohedge) December 19, 2017

Global stocks and US equity futures roared upward to new record highs to start the second-to-last week of the year, boosted by optimism over a Republican agreement on the shape of U.S. tax cuts aimed at lifting growth; incidentally this is the 6th consecutive day that the "tax bill" has been priced in by the market, and according to cynics, 6th consecutive week and/or 6th month. Meanwhile, the dollar dropped and Treasuries headed lower.

U.S. equity index futures point to a higher open, having rebounded some 10 points off session lows with the VIX stuck on the edge between single and double digits, while European and Asian shares decline as investors assess central banks’ shift toward tighter monetary policy and concern over tax overhaul ahead of final plan. 

It has been a groggy end to what is still set to be a third week of gains for MSCI’s global stock index following more upbeat data and signs that central banks including the Federal Reserve will keep treading carefully with interest rate hikes.