EUROPEAN CLOSING REPORT
THURSDAY – 24TH – AUGUST – 2017
European cash equity markets have held higher this afternoon to end the session with modest gains (FTSE +0.5%, DAX +0.1%, CAC 0.0%). In fixed, core EU bonds are trading with minor losses but did extend the daily highs which saw the German 10-year yield hit a fresh eight-week low. Treasuries are also in the red with focus towards the front of the curve with T-Bill yields hitting multi-week highs on fears of a government shutdown towards the end of September. Staying in the US, data impulses were mixed with better jobless claims figure (234K v 238K exp.) followed by a miss for existing home sales (5.44 Mln v 5.57 Mln exp.). Kansas City Fed Governor George called on the FOMC to continue with a gradual rate path while Dallas Governor Kaplan repeated his call to be patient. Turning to currencies, the Japanese Yen has been the underperformer as risk sentiment sits skewed to the upside as the Jackson Hole summit gets underway (Draghi & Yellen due tomorrow). Oil prices are also offside with US crude futures losing over one-percent at the lows. Still to come today, a US 5-year TIPS auction and possible comments from the ECB’s Visco at 18:00 BST (13:00 ET).
* Moody’s: Brexit Monitor — Weaker consumption and housing market are key concerns for UK growth
Signs of a prolonged moderation in UK consumer growth and a stagnating housing market are among the key concerns for the UK economic outlook
* Moody’s Annual Report: US supported by robust strengths despite fiscal challenges
The United States’ (Aaa stable) credit profile is well supported by formidable strengths, but rising entitlements spending underscore the importance of effective fiscal policy for the US credit profile in the years ahead
At the time of publication, the Congress has not yet agreed to raise the debt ceiling. In this particular respect, the stable outlook on the US’s Aaa rating reflects Moody’s view that the debt ceiling will ultimately be raised
* CNN: Congressional investigators have unearthed an email from a top Trump aide that referenced a previously unreported effort to arrange a meeting last year between Trump campaign officials and Russian President Vladimir Putin, according to sources with direct knowledge of the matter.
* AXIOS: Top White House and GOP leadership officials tell us the chances of a market-rattling government shutdown are rising by the day — and were even before Trump threatened at his raucous Phoenix rally on Tuesday night to use a shutdown as leverage to get funding for a border wall.
* Kansas City Fed Governor Esther George said she thinks the FOMC should continue with a gradual rate path as inflation is running close enough to two-percent.
* @realDonaldTrump: I requested that Mitch M & Paul R tie the Debt Ceiling legislation into the popular V.A. Bill (which just passed) for easy approval. They didn’t do it so now we have a big deal with Dems holding them up (as usual) on Debt Ceiling approval. Could have been so easy-now a mess
* US Jobless Claims Data:
Initial Jobless Claims (Aug 19) 234K versus 238K expected, previous 232K
Continuing Claims (Aug 12) 1.954 Mln versus 1.950 Mln expected, previous 1.953 Mln revised to 1.954 Mln
* US Existing Home Sales (Jul) 5.44 Mln versus 5.57 Mln expected, previous 5.52 Mln revised to 5.51 Mln
* US EIA Natural Gas Storage Change (Aug 14) +43 Bcf versus +45 Bcf expected, previous +53 Bcf
* Platts: Sources have told S&P Global Platts that OPEC kingpin Saudi Arabia and Russia, the world’s largest producer, have discussed extending the deal for an additional three months through June
* Dallas Fed Governor Kaplan repeated his view that the FOMC should be patient. He added that he is confident the US will grow in excess of 2% this year but is not factoring in any fiscal policy changes to his forecasts.
* Harvey now expected to become a major hurricane, according to the NHC