The Daily Update - Trump and the debt ceiling

We start with some trivia today as we enter the long weekend here in London. Yesterday was the anniversary of the Mount Vesuvius eruption which destroyed Pompeii, Stabiae and Herculaneum back in AD79, and no team, I don’t remember it that well.

Markets, with typical holiday weakened volumes being traded largely priced in a holding pattern ahead of Fed Chair Yellen and ECB President Draghi’s speeches at the Jackson Hole symposium at 3pm BST and 8pm BST respectively.

US President Trump continued to tweet away regarding the debt ceiling debate, last night he blamed the Republican Congressional leadership for what he tweeted as "could have been so easy – now a mess". However, House Speaker Ryan sounded upbeat that the borrowing limit will be raised.

Rating agency Fitch have warned that the AAA rating the US now bears would be in jeopardy if Congress can't get a deal done before the deadline to raise the borrowing limit. "If the debt limit is not raised in a timely manner prior to the so-called 'x date' Fitch would review the US sovereign rating, with potentially negative implications."

The ceiling needs to be raised before the first week of October to avoid another government shutdown as last seen in October 2013 which lasted 16 days. It is estimated that without the ceiling being raised a payment of around $81bln due on the 2nd October to the Military Retirement Fund could be the catalyst for a further government closure.

With congress not back from recess until the 5th September the next six weeks could be a little bumpy.

And finally some more trivia.

Today in 1875, Matthew Webb, a 27-year-old merchant navy captain, became the first known person to successfully swim the English Channel. Captain Webb accomplished the 21-mile crossing, which really entailed 39 miles of swimming because of tidal currents, in 21 hours and 45 minutes and no don’t remember that either, but do remember in 1991 Michael Schumacher’s debut in Formula one at Spa in the Belgian Grand Prix where he retired with clutch problems on the first lap.