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• Fed keeps rates unchanged, remains on road to December hike

The Federal Reserve kept interest rates unchanged on Wednesday and pointed to solid U.S. economic growth and a strengthening labor market while playing down the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December.

Fed policymakers have been buoyed in recent months by a stronger global and domestic economy and further tightening in the labor market, although they are divided over the causes and duration of the current weakness in inflation.

The Fed’s preferred inflation measure sits at 1.3 percent after retreating further from the central bank’s 2 percent target for much of the year.

Nevertheless, Yellen and some other key policymakers have said the Fed still expects to continue to gradually raise rates given the strength of the overall economy. In its statement, the central bank reiterated it expects inflation to rise back to its target over the medium term and emphasized that the unemployment rate has declined further..

U.S. financial conditions remain loose, strengthening the argument that another rate rise would not slow the current brisk growth. The government reported last week that the economy grew at a 3.0 percent annual rate in the third quarter.

A decline in hiring in September has largely been dismissed as a blip caused by the temporary displacement of workers due to Hurricanes Harvey and Irma. That jobs report showed wages growing at an improved pace and the unemployment rate falling to more than a 16-1/2-year low of 4.2 percent.

• Traders continue to see the Fed as likely to raise rates one more time next year, probably by June, based on a Reuters analysis of Fed funds futures traded at CME Group Inc’s Chicago Board of Trade. Before the report, traders saw about an 85 percent chance of a December rate hike and just over a 60 percent chance of further rate hike in June.

• The dollar pulled back from a 3-1/2-month high versus the yen, sagging ahead of a U.S. tax bill that will be unveiled after a one-day delay.

The dollar slipped 0.15 percent to 114.030 yen JPY=.

It had gained about 0.5 percent overnight and approached 114.450, its highest level since July 11 set on Friday, underpinned by upbeat U.S. data and enhanced prospects for a December interest rate hike by the Federal Reserve following its two-day policy meeting on Thursday.

The dollar index against a basket of six major currencies slipped 0.15 percent to 94.685 .DXY after gaining 0.3 percent the previous day.

The euro was 0.1 percent higher at $1.1631 EUR=.

• U.S. companies added the most workers in seven months in October as hiring rebounded from an 11-month low set in September stemming from Hurricanes Harvey and Irma, a report by a payrolls processor showed on Wednesday.

The ADP National Employment Report said private employers hired 235,000 workers last month, exceeding a median forecast of 200,000 among economists polled by Reuters.

• A measure of U.S. factory activity retreated from a 13-1/2-year high in October as some of the boost from hurricane-related supply disruptions faded, but continued to point to strengthening manufacturing conditions.

The Institute for Supply Management (ISM) said its index of national factory activity slipped to a reading of 58.7 last month from 60.8 in September, which was the highest since May 2004. A reading above 50 in the ISM index indicates growth in manufacturing, which accounts for about 12 percent of the U.S. economy.

• White House set to name Powell as Fed Chair on Thursday

President Donald Trump plans to nominate current Federal Reserve Governor Jerome Powell as the next chair of the U.S. central bank, a source familiar with the matter said on Wednesday. The announcement is expected on Thursday.

• A tax bill offering plenty of flexibility was expected to be released by Republicans in the U.S. House of Representatives on Thursday as they grapple with stubborn internal disagreements on paying for the tax cuts they propose.

• U.S. President Donald Trump does not recall a meeting with his foreign policy advisers in March 2016 in which one of them suggested he could arrange a meeting between candidate Trump and Russian President Vladimir Putin, the White House said on Wednesday.

George Papadopoulos, an obscure Trump campaign adviser, pleaded guilty to lying to FBI agents about contacts with people who claimed to have ties to top Russian officials, in the first criminal charges alleging links between the campaign and Moscow, according to court documents released on Monday.

• President Donald Trump signed a Congressional resolution on Wednesday that lets banks block customers from filing class action lawsuits, partly delivering on his election campaign promise to lighten U.S. financial regulation.

The rule, set to go into effect next spring, gave bank customers the option to band together in lawsuits known as class actions to lower their legal costs, but Republicans say the suits only benefit attorneys who reap large fees. They also argue arbitration is faster and leads to larger awards. Democrats say arbitration is rigged against customers and the U.S. constitution guarantees a right to a trial.

• Senior U.S. Republican and Democratic Senators said on Wednesday they would push ahead with efforts to reach a bi-partisan deal on rolling-back some financial rules introduced the 2008 financial crisis, even after a leading Democratic lawmaker walked away from talks.

• The Bank of England looks set to raise interest rates for the first time in more than 10 years on Thursday, despite economic growth appearing weaker than before any other increase in borrowing costs in the past 20.

Almost all economists polled by Reuters expect the BoE to raise base rates to the 0.5 percent they stood at from March 2009 until August last year, when they were halved to 0.25 percent after Britons voted to leave the European Union.

• Chinese President Xi Jinping replied to North Korean leader Kim Jong Un’s congratulatory message on China’s recently completed Communist Party Congress, saying he hopes to promote ties between the two countries, North Korea’s state news agency said.

• Oil prices dipped in see-saw trade on Wednesday, hitting their highest in more than two years and then retreating after weekly U.S. government inventory data showed the latest crude stock draw was not as big as an industry trade group had reported.

Brent futures LCOc1 settled down 45 cents, or 0.74 percent, at $60.49 a barrel, while U.S. West Texas Intermediate crude CLc1 was down 8 cents, or 0.15 percent at $54.30 a barrel.

• “The market had a bit of a pull back today ... prompted by a bit of profit taking,” said Gene McGillian, manager of market research at Tradition Energy in Stamford, Connecticut.

“But, overall, the idea that the (OPEC) production cut will extend through 2018 and increased demand is tightening the supply balance and driving us higher overall.”

• OPEC is likely to stay the course by keeping its current curb on oil production in place for the whole of 2018 despite potential output disruptions next year, Gulf OPEC sources said.

Reference: Reuters, CNBC