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Harvey damages rise by the hour, Kim issues missile warning, and the euro might be getting too strong for Draghi. Here are some of the things people in markets are talking about today.
Analysts are struggling to keep their estimates of the damage from Harvey up to date as the effects from the tropical storm continue to be felt in Texas following catastrophic levels of rain. President Donald Trump visited the region yesterday promising an effective government response to the disaster, which has left at least 15 people dead and could cost as much as $100 billion in repairs. Rainfall from the storm is expected to reach the Texas-Louisiana border later today, with the largest oil refinery in the U.S. at Port Arthur said to be closing ahead of Harvey making landfall. Gasoline futures are rising again this morning, while a barrel of West Texas Intermediate for October delivery was trading at $46.10 at 5:10 a.m. Eastern Time.
North Korean leader Kim Jong Un said the missile that crossed over Japan was a "meaningful prelude" to containing the American territory of Guam. The United Nations said in a statement that it “strongly condemns” the action, but did not seek to escalate sanctions against the the Pyongyang regime. Donald Trump said yesterday that all options are under consideration in response to the latest provocation. South Korean companies with exposure to the north, or manufacturing facilities close to the border, continue to be hardest hit in markets as the latest standoff continues.
After the euro broke through $1.20 yesterday for the first time in more than two years, expectations are rising that European Central Bank President Mario Draghi may stage a verbal intervention to try to cool the currency at next week’s monetary policy meeting. The currency was trading around $1.1950 this morning. There were more signs of continuing robustness in the euro area today as economic confidence rose to a decade-high in August.
Overnight, the the MSCI Asia Pacific Index gained less than 0.2 percent, while Japan’s Topix index closed 0.6 percent higher as stocks in the region recovered the post-Korean missile losses. In Europe, the Stoxx 600 Index was 0.5 percent higher at 5:40 a.m. as markets rebounded from a six-month low, while S&P 500 futures added 0.1 percent. Gold was broadly unchanged and the U.S. 10-year Treasury yield stood at 2.134 percent.
Economists expect the second reading of U.S. second-quarter GDP to be revised slightly higher to 2.7 percent when the data are published at 8:30 a.m. Along with GDP, we also get quarterly core personal consumption expenditure data, and consumption updates. A survey conducted by Bloomberg showed that economists expect Hurricane Harvey to shave a 0.2 percentage point off third-quarter growth.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Wall Street readies debt-limit war room.
- The drop in the pound is another test for Carney.
- Looks like 2017 is the year of the dictator bond.
- China's $2 trillion of shadow lending throws focus on rust belt.
- The battle for India’s $45 billion gold industry has begun.
- This restaurant is taking insects to the next level.
- What we get wrong about technology.