- Treasury warns of US default risks
- US ISM non-manufacturing
- US initial jobless claims
- Eurozone, UK and Chinese PMIs
- Draghi asks for LTRO review
FTSE 100: 0.06%
CAC 40: -0.74%
FTSE MIB: -0.44%
IBEX 35: -0.61%
Stoxx 600: -0.44%
European stocks finished mixed as the US government shutdown moved into its third day.
The government has been in lockdown since it failed to come to an agreement over the budget by Monday's deadline.
Republican leaders have failed to support President Barack Obama's controversial healthcare bill and the Democrats are unwilling to budge.
The US Treasury has warned of the consequences of the failure to reach an agreement by the debt ceiling deadline on October 17th when resources are near exhausted.
"Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation," the Treasury said.
The government reached its $16.7trn debt ceiling in May and since then has been using emergency measures to conserve cash. Treasury will have about $30bn in cash on hand by October 17th.
"The general consensus in the markets continues to be that a last minute deal between the Democrats and the Republicans will be struck before the debt ceiling deadline," said Craig Erlam, Market Analyst at Alpari.
"That said, investors are clearly concerned by how far away both parties are on a deal. US President Barack Obama is refusing to offer any concessions in relation to Obamacare, while the Republicans are insisting on it. With neither side budging, there is a chance that no deal will be agreed, and the closer we get to the deadline, the more negativity we'll see in the markets."
The closure of the government meant the publication of most US economic reports were cancelled on Thursday with the exception of data from the Institute for Supply Management (ISM) and initial jobless claims.
The US ISM non-manufacturing index for September has come in at 54.4, versus 58.6 one month ago and the 57.0 forecast. However, the all-important new orders sub-index barely fell by 0.9 percentage points to 59.6, while the new export orders gauge actually surged to 57.5 from 50.5 previously.
Initial jobless claims rose by 1,000 to 308,000 in the week ended September 28th. Economists had expected claims to climb to 313,000.
Eurozone and Chinese PMIs
Markit's Eurozone Composite PMI, a measure of services and manufacturing growth, rose to 52.2 in September from 52.1 in August, beating forecasts for a reading of 52.1 and the 50 level that signals expansion.
The data comes a day after European Central Bank (ECB) President Mario Draghi said Europe was recovering albeit at a slow pace and the monetary authority announced its decision to keep its benchmark interest rate unchanged at 0.5%.
Separate PMI data showed activity in China's services industry grew at the fastest rate in six months as government stimulus efforts continued to support growth in the world's second-largest economy.
The Chinese services PMI for September jumped to 55.4, up from the prior month's reading of 53.9.
In the UK, services PMI fell to 60.3 in September from 60.5 in August, falling short of analysts' expectations for a reading of 60.5.
Draghi asks panel to review another LTRO
Draghi has asked a panel to study options for new bank funding, according to two euro-region central bank officials, who spoke on condition of anonymity, Bloomberg reported.
The ECB has undertaken technical studies in preparation for the possible roll-out of new bank funding measures, which may include fresh long-term refinancing operations (LTRO).
It will lay the ground work should the central bank be called upon to provide cash operations to lenders, in case the US Federal Reserve's move to roll-back quantitative easing lead to an undue rise in money market rates.
However, no date has been set yet for delivering a verdict.
Schibsted ASA, BP
Schibsted ASA gained after Goldman Sachs gave the Norway media group a 'buy' rating, saying it expects earnings-growth for its online classifieds business.
BP advanced after a US appeals court halted some payments related to claims against the company over the Gulf of Mexico oil spill in 2010.
Gerresheimer slumped after Credit Suisse downgraded the producer of pharmaceutical and health-care equipment to 'neutral' from 'outperform'.
Aviva rallied after the insurer said it received $2.6bn from the sale of its US life-insurance and annuities business to Apollo Global Management.
Unicredit jumped after the Italian bank said it offered to buy Rabobank Groep's Polish unit Bank Gospodarki Zywnosciowej.
Sports Direct International declined following reports Chief Executive Dave Forsey and Finance Director Bob Mellors each netted 6.4m pounds after selling shares
from a bonus plan.
The euro rose 0.37% to the 1.3629 US dollar.
Brent crude futures fell $0.174 to $109.000 per barrel on the ICE.