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FC: EUROPEAN OPENING REPORT: FRIDAY – 25TH – AUGUST – 2017 August 25, 2017 at 05:50AM

US stocks ended the session in the red with minor losses as investors trod carefully ahead of the Jackson Hole Summit later today. Meanwhile, Treasuries held to the downside despite some macro release earlier in the session – US jobless claims rose by 2K while existing home sales missed at 5.44 Mln (f/c. 5.57 Mln). US short term bonds were also garnering attention with those maturing around the possible US government shutdown date moving lower. US House Speaker Ryan offered some assurances this afternoon however as he said they will pass legislation to honour their debts and will not hit the debt ceiling. Elsewhere, German Finance Minister Schaeuble said the ECB should tighten policy sooner rather than later.
Despite the slightly lower close stateside, Asian stocks traded mostly higher ahead of the Jackson Hole summit. Dallas Fed Governor Kaplan spoke ahead of the event, he said he has not lost faith in inflation returning to 2%, adding the natural rate of US employment may be lower. Kaplan stated he is not in favour of raising the Fed’s 2% inflation target. Data wise, Japan’s national CPI was in line with expectations in July, up 0.4% y/y, while excluding fresh food rose 0.5% y/y and excluding food and energy gained 0.1%. The yen was unchanged following the data. We also heard from a couple of Japanese officials, Economy Minister Motegi said in extraordinary parliamentary session this autumn, they do not expect the government to submit a supplementary budget, while Chief Cabinet Secretary Suga said additional sanctions against North Korea will be imposed by Japan. In later comments, he said now, the economy is not in the situation that requires considering an extra budget. In other news, the PBoC set the yuan mid-point at 6.6579 against the Dollar drained a net 330 Bln yuan for the week via OMOs.
Looking ahead, at 07:00 BST, we get German GDP and import prices, followed by French consumer confidence at 07:45 BST. Up next at 08:00 BST, we get Spanish PPI, followed by Swedish PPI and household lending at 08:30 BST. Then at 09:00 BST, we get Germany’s IFO surveys.

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