Harvey's coming back with more rain, North Korea's missile warning, and if the euro gets any stronger Draghi might have to say something.
Apocalyptic flooding
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.
Warning shot
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.
Euro strength
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.
Markets recover
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.
GDP
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.