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 is pointing towards an interest rate cut, European Union leaders are haggling over top jobs and the field of candidates to be U.K. prime minister has thinned down once again. Here’s what’s moving markets.
Impatience
Fed Chairman Jerome Powell opened the door to a rate cut as early as next month, removing language about the bank being patient in its stance and echoing his European Central Bank colleagues in saying uncertainty is plaguing the task of setting monetary policy. Bond markets appear to be telling the Fed to avoid any dawdling on those cuts and get on with the job. President Donald Trump is said to have told confidants only this week that he believes he has the authority to demote Powell from the top job, though the Fed chairman has indicated he has no intention of leaving the post.
Roll On, Carney
The ECB and the Fed have dominated proceedings in markets for the last couple of days, but there are plenty more central banks still to come. The Bank of England’s latest decision has the potential to sound more hawkish than normal, particularly after inflation fell back to its target, though it’s likely Brexit will drown out most of what the BOE does. Norway’s central bank is likely to hike rates again as it continues to stand at odds with a global economic slowdown. The Bank of Japan is standing pat and Brazil’s central bank also kept everything unchanged.
European Haggling
European leaders will meet to haggle over the top jobs at the European Commission and the ECB. One of the frontrunners for the latter, Bundesbank boss Jens Weidmann, sought to distinguish himself from the crowd by tweaking his position on a key policy under Mario Draghi. France is also leaning towards getting the commission job, potentially opening up the path for Weidmann to replace Draghi.
Race for Second
Rory Stewart became the latest contender in the race to lead the Conservative Party to be eliminated from the contest on Wednesday and all the focus now, given the huge lead Boris Johnson has built, is on who will battle him in the final two. The field will be cut to three on Thursday and then to the final pairing a day later. Backers of Johnson are said to be war-gaming an early election in the U.K. if he does indeed become prime minister. That might please Chancellor of the Exchequer Philip Hammond, who has said whomever wins will likely have to consider a new election or, of course, a second referendum.
Coming Up...
U.S. Treasuries extended gains following the Fed decision, with the dollar weaker and gold prices soaring. Asian stocks were mixed and European futures are pointing to a positive open. Data showing tighter U.S. oil supplies has also given crude prices a bump. Canadian Prime Minister Justin Trudeau is set to meet with Donald Trump to discuss trade and Huawei Technologies Co. We’ll also get the ECB’s economic bulletin, retail sales out of the U.K. and U.S. jobless claims later in the day.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Launching a hedge fund? You’ll need at least $250 million.
- Hong Kong’s richest man will pay $14 million for mainland tuition fees.
- Queer artists are still struggling to get their shot in Hollywood.
- Banks are fighting for the business of the poorest of the rich.
- Chefs are waking up to the protein power of moringa.
- A series of court cases could finally shake out who invented Bitcoin.
- An Adam Sandler movie broke Netflix viewing records.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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