US CLOSING REPORT
MONDAY – 25TH – SEPTEMBER – 2017
US cash equity markets were lower at the closing bell (DJIA -0.2%, S&P -0.2%, NASDAQ -0.9%), with the tech heavy Nasdaq leading the fall. Bank stocks were also lower as yields fell after a further escalation in the North Korea-US tensions sparked a safe haven rally, although the White House has dismissed North Korea’s assertion that the US has declared war on Pyongyang as absurd. Nevertheless, the Yen and Swiss France outperformed on safe haven flow. The Euro meanwhile extended overnight weakness stemming from Sunday’s surprising German election results in which Chancellor Merkel’s conservative bloc secured only 33% of the vote, its lowest showing since 1949. The Euro weakness boosted the USD Index to a 2.5-week high, while investors re-focused on the heightened expectations of a December rate hike following comments from New York Fed President Dudley, who argued that temporary factors depressing inflation were fading. Despite the Dollar strength, gold surged and oil settled sharply higher, with Brent rallying to a more than two-year high and WTI at its highest finish in about five months. Looking ahead, tomorrows US highlights include New Home Sales, Consumer Confidence and Richmond Fed Manufacturing. In addition, the Fed’s Mester, Brainard, Bostic and Chair Janet Yellen are all scheduled to speak.
* Chicago Fed President Evans said the Fed should keep interest rates where they are until there is more evidence that inflation is back on track toward reaching the 2% target set by the central bank. However, he added that there is little in the recent data to suggest inflation will soon rise to target
* ECB Governing Council member Coeure said the ECB still has a comfortable margin before its negative rate on banks’ deposits starts hurting their lending to the Eurozone economy. He also stated that the central bank is not scared by a reduction of monthly QE purchases, but just want to implement it carefully.
* The Pentagon has warned that it is prepared to give Donald Trump options to deal with North Korea if the country’s provocations continue.
* The White House dismissed North Korea’s assertion that the US has declared war on Pyongyang as absurd.
* US crude oil futures settled at $52.22/bbl (+$1.56); Brent crude futures settled at $59.02/bbl (+$2.16)