European Commission Forecast

The European Commission forecast the euro zone economy will grow at its fastest pace in a decade this year.

In the currency market, the U.S. dollar also faced the head wind from the worries about the tax reform, with the euro firming to $1.1644, extending its rebound from $1.1553, its 3 1/2-month low touched on Tuesday. 

The dollar slipped to 113.32 yen, from Monday’s high of 114.735, its highest level since March.

The 10-year U.S. Treasuries yield also briefly fell, though it came back to 2.340 percent, pressured by this week’s government and corporate debt supply. 

U.S. junk bonds were sold off, with the price of major junk bond ETF plunging to its lowest level since March. 

Oil prices held firm, on course to log their fifth straight week of gains, on hopes of supply cuts by major exporters as well as continuing concern about political developments in Saudi Arabia.

A spokesman for Saudi Arabia’s energy ministry said the kingdom plans to cut crude exports by 120,000 barrels per day in December from November. 

U.S. light crude futures traded at $57.04, down 0.2 percent in early Asian trade but still just shy of this week’s more than two-year high of $57.69 a barrel. 

Brent futures changed hands at $57.02, down 0.3 percent on the day but up 2.8 percent on the week.

Concerns about the stability of Saudi Arabia, sparked after the purge of 11 princes and arrests of dozen other influential figures since last week, are intensifying. 

Sources told Reuters Lebanon believes the country’s former prime minister, Saad al-Hariri, is being held in Saudi Arabia, although Saudi Arabia denied reports he is under house arrest.

Saudi Arabia accused Beirut earlier this week of declaring war against the kingdom, blaming what it describes as aggression by Hezbollah, Lebanese Shi‘ite group backed by its arch-rival Iran.