US Government Shutdown Looms
Riskier assets where mixed on Friday, as stocks in Europe and the US where trading under pressure. February has experience mixed returns after record returns for US stocks in January. In fact, the January returns on the S&P 500 index where the best in 30-years. The two parties in the US continue to work to avoid another shutdown as the February 15, deadline is quickly approaching.
Democrats and Republicans are Working to Avoid a Shutdown
The two US parties are still working to avoid another government shutdown. Funding is good through February 15. Now it appears that a deal Monday would allow enough time to pass. Ranking Republican Senator Shelby said he believes Trump will sign the deal presented to him. Trump reportedly laid out his demands for a deal that includes border wall funding. However, press reports suggest that lawmakers of his own party will not let the government shut down again. Nor will they reportedly support a declaration of a state of emergency.
RBA delivered a dovish Statement of Monetary Policy. In its quarterly update of forecasts, the bank cut its growth and inflation forecasts significantly. Rather than solely blaming global factors, the RBA pointed to weakness in the housing market and the implications that lower prices might have for construction activity and households’ spending decisions. The RBA did note that downside risks to global growth has increased.
Gas Inventories Decline in Line with Expectations
The Energy Information Administration reported that working gas in storage was 1,960 Bcf as of Friday, February 1, 2019. This represents a net decrease of 237 Bcf from the previous week. Expectations where for a decline in stockpiles by 230 Bcf according to Estimize. Stocks were 135 Bcf less than last year at this time and 415 Bcf below the five-year average of 2,375 Bcf. At 1,960 Bcf, total working gas is within the five-year historical range, but hovering near the very lower end of range for this time of year.
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