Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. U.K. lawmakers once more failed to find consensus on the way forward for Brexit, Europe’s trade tensions are bubbling and markets are awaiting the response to local election results from Turkey’s leader. Here’s what’s moving markets.
No Majority
Another day of votes in the U.K.’s Parliament, replete with disrobed climate change protesters and a dramatic resignation, and once again lawmakers failed to find a clear majority for any of the alternatives proposed. It leaves Prime Minister Theresa May staring down the barrel of a long delay, which is likely to anger hardline Brexit supporters in her Conservative Party and probably won’t help sapped business confidence. The voting tallies indicate MPs are leaning towards softer options. If that proves an accurate point to the way forward, it could give a short-lived boost to the pound, where Goldman Sachs sees a “big finish” to Brexit creating a good opportunity.
European Tensions
The European Union is struggling to reach a consensus on a mandate to start trade talks with the U.S., potentially risking the ire of President Donald Trump while tensions with China still linger. That comes as the first health check of the week for Europe’s economy raised some concerns. A factory slump in Germany and a further contraction in Italy’s industrial sector came against a backdrop of a brightening picture in Asia, leaving the sluggishness looking even more disappointing. The European Central Bank, in the face of soft-looking inflation, said the economy still needs plenty of support from monetary policy.
Istanbul
Municipal elections in Turkey did not really deliver a clear verdict on President Recep Tayyip Erdogan’s leadership but have definitely created some headaches. Attention will focus on Istanbul, the commercial hub, amid disagreements between Erdogan’s alliance and the opposition over who won that key race. Until there’s clarity, the lira is likely to continue to swing and Turkish assets will remain in limbo while markets wait to see if Erdogan will offer an olive branch to traders he so perturbed last year. But there has been one winner: beer stocks.
Acts to Follow
Plenty of assets had great first quarters that will lead to questions of whether that’ll keep up. Bets on the calm in stocks evaporating into volatility are at the highest since 2012, though a better profit outlook hints the apocalypse could be postponed. Leveraged loans had their best quarter since 2010, but not such a super March. Crude had its best quarter for a decade and has extended those gains into Tuesday as Saudi Arabia deepened cuts and the crisis engulfing Venezuela got worse, and as Iran said keeping the OPEC+ supply cuts going after June should be “easy.”
Coming Up...
The rally in stocks that characterized Monday’s trading lost some steam in Asia as traders consolidated their gains. Australia’s central bank remained on hold ahead of the country’s federal budget. European futures are pointing to a moderately positive start to Tuesday and the pound lost some ground after the Brexit votes. Later, the World Trade Organization will release its forecast report, we’ll have euro-area producer price inflation data and there will be auto sales figures from the U.S.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- What we know about the world's most profitable company.
- China’s $941 billion wealth fund has a new chairman.
- The countess of cannabis leading Europe’s medical marijuana charge.
- On-demand startups are hemorrhaging cash.
- Millennials spent $28 million on Simpsons-inspired art.
- Burger King has started testing plant-based meat.
- The challenge of going off psychiatric drugs.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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