Florence frightening gale
Hurricane Florence is expected to flirt with Category 5 strength as it approaches the U.S. East Coast this week, with landfall expected late Thursday or early Friday somewhere between Charleston, South Carolina and Norfolk, Virginia. With risk modelers suggesting the damage could run to $20 billion in insured losses and more than 1 million people told to evacuate, Florence has the potential to become a record-breaking weather event.
Unemployment in the U.K. remained at a 43-year low of 4 percent for the three months through July, with the continuing tight labor market showing up in wages that rose a more-than-expected 2.9 percent. While pay is now growing faster than inflation, real wages remain below their pre-crisis level. The data appears to fly in the face of continued Brexit risk, with U.K. companies upping their warnings on the fallout from a messy exit from the European Union.
Tax cut forever
House Republican lawmakers introduced legislation yesterday that would make the 2017 tax cuts for individuals permanent as the party moves to highlight their signature legislative achievement ahead of November’s midterm elections. Separately, Republicans and Democrats in Congress said they had reached a deal on the first of a series of funding packages aimed at averting a shutdown next month. President Donald Trump has backed away from an earlier threat that would have linked a funding deal with the Mexico border wall, agreeing to push the fight beyond the midterm votes.
Overnight, the MSCI Asia Pacific Index slipped 0.1 percent with Japan’s Topix index closing 0.7 percent higher while Hong Kong’s Hang Seng fell into a bear market after ending the session more than 20 percent below its January high. In Europe, the Stoxx 600 Index was 0.4 percent lower at 5:45 a.m. Eastern Time. Equities were hit following a report China is set to ask the WTO to authorize trade sanctions against the U.S. in relation to a 2013 dumping dispute. S&P 500 futures pointed to a lower open, the 10-year Treasury yield was at 2.952 percent and gold slipped.
There’s a few things worth keeping an eye on. At 10:00 a.m., U.S. wholesale inventories data for July is released, with Jolts data for that month published at the same time. At 11:00, the EIA releases the short-term energy outlook for September. The central bank of Argentina is unlikely to change the key rate from the current 60 percent when it announces its latest monetary policy decision at 4:00 p.m. Elsewhere, keep an eye on the U.K. where Chancellor Philip Hammond is speaking at two events today as investors await possible news on Mark Carney’s future at the Bank of England.