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Danske Daily: Focus On US Government Shutdown

ByDanske Markets
Published 10/01/2013, 09:02 AM
Updated 05/14/2017, 06:45 AM

Market movers today

The US government shut down for the first time in 17 years, and focus now turns to how long it will last. Although the market reaction so far has been muted, there is a risk of a further sell-off in stock markets in the coming weeks as the more important battle on raising the debt ceiling comes closer. The lack of ability to approve funding for the 2014 budget is likely to damage the debt ceiling negotiations as well.

We expect US ISM to be broadly flat at 55.6 (consensus 55.2) in September, versus 55.7 in August. Given the fragility of risk markets at the moment it is probably important we don't get a disappointment today.

The UK also releases PMI today. It has risen strongly lately and consensus looks for a further rise in September to 57.5 from 57.2 in August. Final PMIs for the euro area are also released, including details for Spain and Italy. Any revisions are normally a good gauge of next month's PMI. Hence, if we see an upward revision of the final number relative to the flash estimate, it suggests PMI is increasing further in October.

Also, continue to keep an eye on the political crisis in Italy where prime minister Enrico Letta is working to keep the coalition together.

To Read the Entire Report Please Click on the pdf File Below.

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