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FC: US CLOSING REPORT: FRIDAY – 25TH – AUGUST – 2017 August 25, 2017 at 09:00PM

US CLOSING REPORT
FRIDAY – 25TH – AUGUST – 2017
ECB President Mario Draghi said this afternoon that a significant degree of monetary accommodation is still needed as inflation is not yet converging towards their target. He also called for patience due to the level of labor market slack and slow productivity growth. His comments were a follow up to his opening remarks where he did not mention monetary policy and which sent Eur/Usd to its highest level since January 2015. Dollar weakness also played its part however after Fed Chair Yellen also opted not to address monetary policy in her opening remarks. Instead, she launched a staunch defence of regulations put in place since the financial crisis, arguing that they have made the system safer and contributed to today’s strong economy. Fed Governor Jerome Powell did offer some more notable comments as he called for patience with rates. He also noted that inflation was a little bit below target and said this was kind of a mystery. Elsewhere, US Treasury Secretary Mnuchin repeated his preference for a clean debt ceiling increase and said they will raise the debt ceiling in September. He also said he was very hopeful that tax reform will be passed before the end of the year. Oil prices also settled higher with US crude futures settling at $47.87 (+$0.44) after US oil rigs fell by 4 last week to 759. In equity space, US bourses closed mixed (DJIA +0.2%, S&P +0.2%, NASDAQ -0.1%).
 
Key Headlines/Data:
* US Baker Hughes Rig Count: Oil rigs down by 4 to 759 | Gas rigs down by 2 to 180
* US Treasury Secretary Mnuchin repeated his preference for a clean debt ceiling increase and said they will raise the debt ceiling in September. He also said he was very hopeful that tax reform will be passed before the end of the year.
* Fed Governor Jerome Powell said the FOMC has the ability to be patient with interest rates. He also noted that inflation was a little bit below target and said this was kind of a mystery.
* ECB President Mario Draghi speaks at Jackson Hole:
The global recovery is firming up.

With monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the crisis.

To inject more dynamism into the global economy we need to raise potential output growth, and to do so with ageing societies we need to lift productivity growth.

Yet openness to trade is under threat, and this means that policies aimed at answering this backlash are a vital part of the policy mix for dynamic growth.

Some of those policies can be implemented domestically, but some can only be effectively enacted through multilateral cooperation.

* Draghi added soon after that a significant degree of monetary accommodation is still needed as inflation is not yet converging towards their target. He also called for patience due to the level of labor market slack and slow productivity growth.
* Hurricane Harvey has been upgraded to a category three.
* US crude futures settled at $47.87 (+$0.44) | Brent crude futures settled at $52.41 (+$0.37) 

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