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FC: EUROPEAN CLOSING REPORT: WEDNESDAY – 23RD – AUGUST – 2017 August 23, 2017 at 04:31PM

European cash equity markets are broadly lower at the closing bell (FTSE -0.1%, DAX -0.4%, CAC -0.3%). Media stocks have underperformed, led by WPP after the world largest advertising firm cut its full-year outlook. US stocks are also underwater following comments made by US President Trump overnight regarding NAFTA and a potential government shutdown. Rating agency Fitch added this afternoon that if the debt limit is not raised in a timely manner prior to the so-called “x date” they would review the US sovereign rating, with potentially negative implications. In fixed, core EU bonds have moved higher along with Treasuries after US manufacturing PMI and new home sales fell short of forecasts. Service PMI beat however and rose to its highest since April 2015. In Europe, consumer confidence beat at -1.5 (f/c. -1.8) versus -1.7 prior while ECB’s Weidmann said he does not see the need to extend the asset purchase program into next year. Elsewhere, oil prices hit new highs after the DoE inventory report showed a drawdown of 3.33 Mln barrels last week.

Key Headlines/Data:
* US MBA Mortgage Applications (Aug 14) -0.5%, previous +0.1%
* ECB’s Weidmann said his view is there no need to take further action next year, in particular extending the asset purchase program.
* US PMI Data (Aug P):
Manufacturing 52.5 versus 53.3 expected, previous 53.3

Services 56.9 versus 54.9 expected, previous 54.7 – Highest since April 2015

* US New Home Sales (Jul) 571K versus 612K expected, previous 610K revised to 630K
* Euro Zone Consumer Confidence (Aug P) -1.5 versus -1.8 expected, previous -1.7
* DoE Weekly Oil Inventories:
Crude -3.33 Mln versus -3.65 Mln expected, previous -8.95 Mln

Distillate +0.03 Mln versus 0.00 Mln expected, previous +0.70 Mln

Gasoline -1.22 Mln versus -1.00 Mln expected, previous +0.02 Mln

* Fitch: Debt Limit, Government Funding to Test US Policy Makers
US politicians face two deadlines in the coming weeks regarding government funding and the federal debt limit, which will demonstrate their capacity for coherent fiscal policymaking and cooperation, Fitch Ratings says.

If the debt limit is not raised in a timely manner prior to the so-called “x date” Fitch would review the US sovereign rating, with potentially negative implications.

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