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Five Things You Need to Know to Start Your Day

Five Things You Need to Know to Start Your Day

(Bloomberg) --

Good morning. The Federal Reserve will have much to chew over as its latest meeting starts, oil prices are being dragged around and the field of Conservative Party leadership candidates will be trimmed down again in the U.K. Here’s what’s moving markets. 

Policy Path

This is another central bank-heavy week with the ECB Forum ahead of decisions from the Federal Reserve and the Bank of England, among others. The Fed’s latest meeting kicks off today, with the outcome to be announced tomorrow, and markets want to see policymakers are ready to act. The New York Fed factory gauge hit a two-year low and U.S. homebuilder sentiment dropped for the first time this year, creating a pretty dour picture for the Fed to assess. Markets may ignore even a hawkish-sounding policy statement on Thursday from the Bank of England, meanwhile, to keep the bond rally going.

Oil Drivers

Those softer U.S. economic numbers hit the oil price as crude traders continue to balance out supply assurances and demand concerns. The International Energy Agency says the OPEC cartel has a heck of a job on its hands keeping oil prices at a suitable level, and it appears OPEC is having enough trouble agreeing when it will meet next. Iran is facing pressure to agree to a meeting date soon but it has plenty to keep it occupied as it faces yet more criticism from U.S. politicians following its threat about breaching enriched uranium caps and as the U.S. sends more troops to the Middle East.

Paris Moxy

The many billions of dollars it takes to buy a fleet of passenger jets are flying around at the Paris Air Show, which enters its second day. The consensus thus far appears to be that Airbus SE is dominating the proceedings as Boeing Co. works to restore its reputation after the problems with the 737 Max, a grounded jet the U.S. manufacturer is now said to be open to renaming. General Electric Co. also struck an aircraft leasing deal for a new low-cost airline in the U.S. from entrepreneur David Neeleman, code named Moxy. Watch for many more deals as the show goes on.

Tory Field

The field of candidates in the race to replace Theresa May atop the Conservative Party will be thinned down a bit further ahead of the second debate this evening among those left competing. Boris Johnson remains the frontrunner but outsider Rory Stewart appears to have made waves and has at least given the big players in the battle something to think about. Brexit will dominate the topics but pay mind also to a Bloomberg survey showing economists expect a stagnant U.K. economy in the second quarter, plus any headaches for the candidates caused by U.S. President Donald Trump’s spat with London Mayor Sadiq Khan.

Coming Up...

As is so often the case, markets in Asia were drifting ahead of the Fed decision, with U.S. Treasuries flat and the dollar steady. The ZEW expectations survey is due in Germany for watchers of the European economy. U.S. housing starts data will come in the European afternoon and could be closely scrutinized given recent concerns raised about the state of the U.S. residential construction market. 

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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