Five Things You Need to Know to Start Your Day
Good morning. Boris Johnson lost his first key vote as U.K. prime minister, a crucial U.S. data point missed expectations, the trade scenario is still not much clearer and another European rate setter is sounding a little hawkish. Here’s what’s moving markets.
Six weeks into the top job and U.K. Prime Minister Boris Johnson is staring into the abyss. Members of the House of Commons voted 328 to 301 Tuesday to take control of the parliamentary agenda, and now plan to put forward a draft law that would force Johnson to delay Brexit until Jan. 31. If that vote passes, the PM says he’ll call a general election. Here’s a roundup of the equity sectors and stocks to watch if he follows through on his pledge.
If you were glued to events in Westminster yesterday, you might have missed it. But from a global markets perspective, something possibly even bigger was happening, as a key U.S. factory gauge unexpectedly contracted for the first time since 2016. The Institute for Supply Management’s purchasing managers index was weaker than all forecasts in a Bloomberg survey of economists, falling below 50 to indicate the manufacturing economy is shrinking. The dollar tumbled, and it failed to recover overnight.
Investors aren’t yet getting the trade clarity they seek. U.S. President Donald Trump warned China on Tuesday that any trade deal will be much tougher on the Asian nation if it happens after he wins the 2020 U.S. presidential election. Meanwhile, China’s largest technology company, Huawei Technologies Co., was in focus again, accusing Washington of orchestrating a campaign to intimidate its employees and launching cyber-attacks to infiltrate its internal network. The recent tariff fallout has led some economists to cut their forecasts for Chinese economic growth in 2020 to below 6%.
Asian stocks were mixed Wednesday on low volumes amid focus on the ISM number. The euro was steady as European Central Bank policy maker Francois Villeroy de Galhau added to skepticism over the need for renewed asset purchases and in Italy, Prime Minister-designate Giuseppe Conte is set to form the next government after getting the backing of supporters of the Five Star Movement. Oil futures in New York edged higher after closing 2.1% lower on Tuesday.
Bank of England Governor Mark Carney’s appearance before the Treasury Committee today could be one of his last chances to publicly address lawmakers before the Halloween Brexit deadline. On the data front, we await the services purchasing managers’ index from the euro area and the U.K. French aerospace and defense firm Dassault Aviation SA and U.K. home-builder Barratt Developments Plc are among companies scheduled to report earnings.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- South Korea’s imports of Japanese beer plunge amid feud.
- Pence under fire for staying at Trump’s golf resort.
- One year on from the White House resistance op-ed.
- Are laid-off bankers abandoning expensive bikes?
- The Ugandan pop-star trying to topple the president.
- Your next holiday might be in Saudi Arabia.
- Bahamas asks jet-ski owners to help with post-Dorian rescues.
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