September 8, 2017
Florida braces for Irma, the euro advance continues, and U.S. consumers are hit by a huge cyberattack. Here are some of the things people in markets are talking about today.
Irma’s on track to wreak havoc on Florida, after tearing through a chain of Caribbean islands, spurring Miami-Dade County’s biggest-ever evacuation effort, and roiling markets from orange juice and natural gas to insurance and catastrophe bonds. The Category 4 storm is forecast to hit Florida directly by Sunday, threatening $1.2 billion of crops in the third-most populous U.S. state. Irma may make its second U.S. landfall next week somewhere near Savannah, Georgia, and Charleston, South Carolina, experts say. Meanwhile, a huge earthquake off Mexico’s southern coast killed at least five people Friday, the biggest in a century to hit the country, according to President Enrique Pena Nieto.
Mario Draghi’s euro headache is intensifying after the single currency extended its march to $1.2059 in early trading, the highest since Jan. 2015. The European Central Bank’s decision to softball concerns posed by the euro’s breakneck appreciation, even as the central bank trims inflation forecasts, gave currency bulls more ammunition. The ECB kept monetary policy unchanged Thursday, and deferred on providing clarity on tweaks to its asset-purchase scheme until October. Expectations are growing that adjustments next year will stay within the parameters of the program. Stock investors are making peace with the expensive euro.
Federal Reserve Bank of New York President William Dudley restated the case for interest-rate increases but noted publicly for the first time that broader forces may be impeding the traditional link between a tighter labor market and price pressures. Hurricane damage in Texas, and potentially Florida, could lead to a slight increase in inflation as the job market for construction workers tightens, he said in a speech in New York. The White House is considering more than a half-dozen candidates to be the next head of the central bank, including economists and business people, according to three people familiar with the matter. That bucks the market narrative that the nomination is a two-horse race between economic advisor Gary Cohn and current Chair Janet Yellen, whose term expires in February.
Equifax Inc., one of the three biggest credit-reporting companies, was struck by a cyberattack that left almost half the U.S. population at risk, one of the most intrusive security breaches in history in both size and scope. Hackers exploited a website application to access data covering as many as 143 million consumers, including names, addresses, Social Security numbers and driver’s license numbers. U.S. Senator Mark Warner said the attack should trigger more aggressive policies to improve the protection of consumer data. Three senior executives at the firm sold shares worth almost $1.8 million in the days after the company discovered the security breach. The trio had not yet been informed of the incident, the company said.
Haven demand continues to fuel U.S. Treasuries, with benchmark yields plumbing a fresh 2017 low at 2.0144 percent before stabilizing while the dollar tumbled to its weakest level since the start of 2015. Gold headed for a third week of gains ahead of a potential North Korean missile launch, and the yen rallied 0.7 percent to 107.68 per dollar, the strongest in 10 months. The Stoxx Europe 600 Index is 0.14 percent lower. S&P futures point to a weak open.