NEWS STORIES OF NOTE FROM OVER THE EU & US SESSIONS: US equity markets finished mostly higher with DJIA further advancing above 23,000, while broader tech weakness weighed on Nasdaq 100

UK

EU’s Tusk said there is promising progress in Brexit talks with London and that he will recommend the start of internal preparations for the next phase of Brexit talks. However, Tusk later added that he doesn't expect any breakthrough in Brexit talks on Thursday and that concrete proposals are needed from the UK. (Newswires)

 

EU

Catalan leader reportedly told party meeting that he would formally declare independence if Spain suspends regional autonomy. (Newswires)

ECB's Villeroy said ECB must adequately reduce its QE programme. (Newswires)
 

US

Fed Beige Book noted modest-to-moderate wage growth (unchanged from the prior assessment) and noted modest price pressures. Beige Book added that there was a moderate to modest expansion on Manufacturing activity. (Newswires)

US Republican Senator Cornyn said GOP has votes to pass measure that advances tax reform. (Newswires)

Fox reported that the Alexander-Murray Healthcare Bill will fail in the House as many in the GOP want a full repeal and replace, while a White House press spokeswoman stated President Trump is not to support the bill in its current form. (Newswires)

Fed's Kaplan (Voter, Soft Hawk) reiterated sees neutral rate around 2.5% and noted the potential for a lower neutral rate given potential declines in long-term GDP growth. (Newswires)

Fed's Dudley (Voter, Soft Dove) said US economy is quite good and labour market is tight, while he added he doesn't feel US is vulnerable to a recession. (Newswires)

US Housing Starts (Sep) 1.127M vs. Exp. 1.180M (Prev. 1.180M, Rev. 1.183M)
US Building Permits (Sep) 1.125M vs. Exp. 1.245M (Prev. 1.272M)

Notable Earnings
American Express (AXP) Q3 EPS USD 1.50 vs Exp USD 1.48 and Revenue USD 8.40bln vs Exp USD 8.19bln
Ebay (EBAY) Q3 EPS USD 0.48 vs Exp USD 0.48 and Revenue USD 2.41bln vs Exp USD 2.31bln
US Bancorp (USB) Q3 EPS USD 0.88 vs. Exp. USD 0.88, revenue USD 5.61bln vs. Exp. USD 5.60
 

COMMODITIES

US EIA Weekly Crude Stocks (w/e) -5.731M vs. Exp. -4.242M (Prev. -2.747M). (Newswires)
US crude production -11.3% to 8.406mln bpd

Sources stated that OPEC are leaning towards a 9-month extension of the output cut deal. (Newswires)

Kuwait's oil minister said that extending the OPEC deal may be unnecessary. (Newswires)


MARKET RECAP

US stocks finished mixed on Wednesday, although all 3 major indices posted fresh intra-day record highs and the Dow managed to stay above the 23,000 level for most of the session spurred by IBM, which reported decent numbers after the bell yesterday. However, other tech stocks struggled, and the Nasdaq went negative in late trade. Financials were the best performer, as they took cue from a steeper Treasury curve. On the other end of the scale, energy stocks were weighed on by a choppy session for crude, which was negative for much of the session following the weekly energy inventory data. At the close, S&P 500 +0.08% at 2,561, DJIA +0.70% at 23,157, Nasdaq-100 -0.13% at 6,114.

The US Treasury curve bear-steepened, though some of the major curves saw further flattening: the gap between 5s30s fell to the lowest since November 2007, 2s10s flattest since August 2016. Additionally, the spread between US and German 2-year paper rose to the highest since February 2000. Analysts were content to attribute the weakness on expectations of a December hike, which is now around 80% priced-in, according to money markets while today’s Fed speakers – voters Robert Kaplan and William Dudley – offered little by way of new information. The 10-Year T-Note Futures settled 9+ ticks lower at 125-04+.

18 Oct 2017 - 22:10- EnergyBank Speaker- Source: Newswires

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