FC: EUROPEAN CLOSING REPORT: THURSDAY – 28TH – SEPTEMBER – 2017 September 28, 2017 at 04:32PM




European cash equity markets are mixed at the closing bell (FTSE 0.0%, DAX +0.3%, CAC +0.2%). The Euro Stoxx 600 has managed to squeeze out a marginal gain for the day but failed to extend above yesterday’s 10-week high as retailers provided a weight after H&M shares slumped on disappointing results. In fixed, core EU bonds trade lower although German Bunds are well off the earlier lows with German CPI reported this afternoon at +1.8% year-on-year (f/c. +1.8%) – unchanged from the previous month. ECB Villeroy may also have provided some support as he argued that the monetary policy stance should be kept significantly accommodative. US data meanwhile saw a minor upward revision to US Q2 GDP from +3.0% to +3.1% while jobless claims rose to 272K (f/c. 270K) from 260K. We did also hear from Kansas City Fed Governor George argued that further gradual rate hikes are appropriate. The Dollar remains soft with the Dollar Index in the red for the session while Sterling has been one of the better performers in currency space after both Davis and Barnier confirmed notable progress had been made in the fourth round of Brexit negotiations. Oil prices meanwhile have pared earlier gains with US crude futures down over a buck from the highs. Looking ahead, the US Treasury are to sell $28.0 Bln of 7-year notes at 18:00 BST while Atlanta Fed Governor Bostic speaks at 18:30 BST.


Key Headlines/Data:

* ECB’s Villeroy said the ECB must reduce the intensity of net asset purchases while also keeping overall monetary policy significantly accommodative

*  German CPI Data (Sep P):

  • CPI M/M +0.1% versus +0.1% expected, previous +0.1%
  • CPI Y/Y +1.8% versus +1.8% expected, previous +1.8%
  • HICP M/M 0.0% versus +0.1% expected, previous +0.2%
  • HICP Y/Y +1.8% versus +1.9% expected, previous +1.8%

*  US Treasury Secretary Mnuchin says he is committed to getting tax legislation done by year end.

*  White House Economic Adviser Cohn says they think they can get growth above three-percent with deregulation and tax reform, adding that the entire tax cut can be paid for through economic growth.

*  US GDP Annualized Q/Q (Q2 T) +3.1% versus +3.0% expected, previous +3.0%:

  • Personal Consumption +3.3% versus +3.3% expected, previous +3.3%
  • GDP Price Index +1.0% versus +1.0% expected, previous +1.0%
  • Core PCE +0.9% versus +0.9% expected, previous +0.9%

* US Jobless Claims Data:

  • Initial Jobless Claims (Sep 23) 272K versus 270K expected, previous 259K revised to 260K
  • Continuing Claims (Sep 16) 1.934 Mln versus 1.993 Mln expected, previous 1.980 Mln revised to 1.979 Mln

*  US Advance Goods Trade Balance (Aug) -$62.94 Bln versus -$65.1 Bln expected, previous -$63.9 Bln

*  US Wholesale Inventories M/M (Aug P) +1.0% versus +0.4% expected, previous +0.6%

*  Fed Vice Chair Fischer said they shouldn’t underestimate the importance of reversing the temporary policy stimulus measures.

*  House Republicans Budget Committee Chairman Black said they have enough votes to pass a fiscal 2018 budget which is needed to move tax forward with tax reform.

*  Kansas City Fed Governor George argued that further gradual rate hikes are appropriate while also noting that they have seen a significant pick up in business investment.

*  US EIA Natural Gas Storage Change (Sep 22) +58 Bcf versus +65 Bcf expected, previous +97 Bcf

*  Kansas City Fed Manufacturing Index (Sep) 17 versus 14 expected, previous 16

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