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US OPENING NEWS INCLUDING: Stocks traded lower in Europe, with bond yields higher

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US President Obama is to name Lawrence Summers as the next Chairman of the Federal Reserve, according to sources. 

Syria's Assad has said that he expects Syria to start handing over information on chemical weapons to international groups one month after Damascus joins anti-chemical weapons convention. US's Kerry says he and Lavrov agreed to meet again in NY around September 28th to try to agree date for Geneva 2 conference.

There were reports that Twitter confirmed filing for an IPO and Goldman Sachs is said to be a lead underwriter.

Market Re-Cap

Stocks traded lower in Europe, with bond yields higher, following reports citing sources that US President Obama is to name Summers as next Fed chairman as early as late next week, after the Federal Open Market Committee meeting. Profit taking related flows also said to have contributed to the move lower in equities. The fact that the majority of analysts see Summers as having a hawkish stance encouraged further speculation of QE tapering, which consequently supported the greenback and weighed on the commodities complex. In addition to that, constructive talks between US’s Kerry and Russia’s Lavrov prompted markets participants to scale back expectations of a military intervention in Syria which in turn saw front month WTI crude futures move back below the 21DMA line. As a result, oil & gas, as well as basic materials sectors are seen as the worst performing stocks in early trade.

Going forward market participants will get to digest the release of the preliminary U.Michigan survey reading, as well as the latest Fed's Outright Purchase op. Also of note it is Yom Kippur today which may be reflected in lighter trading volumes stateside as the session progresses.

Asian Headlines

The Japanese government have upgraded their economic assessment in September and said the economy is headed towards gradual recovery.

EU & UK Headlines

ECB's Asmussen said rates will not be raised in foreseeable future and that the ECB sees no danger of inflation. 

ECB's Noyer said ECB's accommodative monetary policy is appropriate for the Eurozone's economic situation. Noyer also went on to add that the normalisation of Fed's monetary policy is necessary even though it is weighing on some emerging markets. 

Eurozone Employment (Q2) Q/Q -0.1% (Prev. -0.5%, Rev. to -0.4%)

Eurozone Employment (Q2) Y/Y -1.0% (Prev. -1.0%)

Morgan Stanley raises UK 10yr Gilt yield forecast to 3.70% in Q3 2014. In other UK related commentary, according to the RICS, the Bank of England should limit house price rises to 5% gains per year. 

UK Construction Output SA (Jul) M/M 2.2% vs. Exp. 2.1% (Prev. -0.7%, Rev. to -1.1%)

UK Construction Output SA (Jul) Y/Y 2.0% vs. Exp. 1.3% (Prev. 1.9%, Rev. to 2.2%)

According to the ONS, Q2 construction revision has minimal impact on GDP.

US Headlines

US President Obama is to name Lawrence Summers as the next Chairman of the Federal Reserve, according to sources. Treasury Undersecretary Brainard will likely be named vice chairman, according to the report. The White House is expected to make an announcement as early as late next week. The article notes that some members of Congress have expressed doubts about putting Summers in charge, which could delay the official announcement.

Equities

Stocks traded lower in Europe, with bond yields higher, following reports citing sources that US President Obama is to name Summers as next Fed chairman as early as late next week, after the Federal Open Market Committee meeting. In addition to that, constructive talks between US’s Kerry and Russia’s Lavrov prompted markets participants to scale back expectations of a military intervention in Syria which in turn saw front month WTI crude futures move back below the 21DMA line. As a result, oil & gas, as well as basic materials sectors are seen as the worst performing stocks in early trade.

There were reports that Twitter confirmed filing for an IPO and Goldman Sachs is said to be a lead underwriter for the Twitter IPO. 

**Note: Please refer to the European Equity Opening News on the website

FX

USD/JPY trended higher overnight, with the ongoing speculation that the Fed will make an announcement regarding tapering of its QE program next week supporting the price action. Even though the pair is largely flat for the week, USD/JPY 3m R/Rs have fallen to lowest level since late July, however implied vols are only marginally bid. 

Firmer USD, which benefited from this morning's reports citing sources that US President Obama is to name Lawrence Summers as the next Chairman of the Federal Reserve, meant that both EUR/USD and GBP/USD traded heavy this morning. The move lower by the majors was also driven by touted profit taking flows, which in turn helped the Greenback edge back towards the 21DMA line.

Commodities

Goldman Sachs commodity research head says gold slide to reappear into 2014 and that commodity outlook quite benign. ANZ sees 2013 avg. gold price at USD 1424 and 2014 at USD 1436, silver in 2013 to avg. USD 24.6 and in 2014 at USD 25.10

Syria's Assad has said that he expects Syria to start handing over information on chemical weapons to international groups one month after Damascus joins anti-chemical weapons convention. Assad also called for Israel to dispose of its WMDs. Later, a spokesman for the UN confirmed that the UN had received documents from Syria's government concerning joining chemical weapons convention.

- US Secretary of State Kerry held talks in Geneva with Russian foreign minister Lavrov about Syria toxic arms plans, which concerned the logistics and process of the Syria proposal and resulted in both sides agreeing on goal of finding a path forward.

China to raise fuel prices tomorrow with Gasoline prices to rise by CNY 90 per tonne and Diesel price by CNY 85 per tonne.

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