Five Things You Need to Know to Start Your Day

(Bloomberg) --

Hong Kong to ban face masks, looming U.S. labor-market figures, and slight relief in the markets. Here are some of the things people in markets are talking about today.

No More Masks

Hong Kong will use a rare emergency rule for the first time in more than a half a century to ban face masks at public gatherings, according to local media outlets including the South China Morning Post. Reports on the latest step by authorities to contain the unrest saw Hong Kong stocks jump in afternoon trading Thursday, erasing an earlier decline. A spokesman for Chief Executive Carrie Lam’s office wasn’t immediately able to comment. Meanwhile, a recent decision by Apple’s App Store to reject a Hong Kong app designed to track police activity in the midst of the increasingly violent protests is being reviewed. The app was deemed as one which “facilitates, enables, and encourages an activity that is not legal,” Apple told the developer, according to the rejection notice. 

Labor Lamentations

Fears are cementing about the impact of the trade war and global slowdown on the U.S. labor market, ahead of Friday’s key monthly employment report. Among the causes for concern: a gauge of manufacturing jobs has already hit the lowest since 2016, and other figures have shown a slowdown in private-sector payroll gains. There’s been a sharp drop in small-business hiring plans, and the latest data point is the worst U.S. services-employment index in five years, or nine years (depending on which measure you prefer). That last indicator sent Treasury yields tumbling, and stocks with them, until Wall Street caught the “bad news is good news” bug. Analysts are bracing for more downbeat figures Friday, with their pessimism on par with times when hurricanes slammed the country in 2017 or when the federal government shut down in 2013.

Markets Relief

Stocks in Asia looked set to end the week with a reprieve, as the wave of poor economic data increased expectations for the Federal Reserve to cut rates this month. Futures edged higher in Japan and Australia, with contracts little changed in Hong Kong. Earlier, the S&P 500 rose the most in a month after climbing back from a drop of more than 1% sparked by the weakest reading on the U.S. services sector in three years. Odds the Fed eases policy further at its next meeting spiked as the data came just after the worst factory numbers in a decade. The yield on 10-year Treasuries dropped for the sixth straight day and the dollar dipped. Elsewhere, oil fell 0.6% to $52.31 a barrel and gold was at $1,505.10 an ounce.

Missiles Ahead

President Vladimir Putin said Russia is helping China to develop an anti-missile early warning system, as he criticized the U.S. for abandoning the 1987 Intermediate-Range Nuclear Forces Treaty (INF) and compromising stability.  “This is a very serious thing that will dramatically increase China’s defense capability, because only the U.S. and Russia have such a system now,” he said at a conference of foreign-policy experts in Sochi Thursday. The U.S. has accused Russia of breaching the INF treaty, a charge Moscow denies. In his own way, Trump was also focusing on China Thursday. After reiterating his call for Ukraine to launch an investigation into the Biden family, he then suggested Xi Jinping do the same.

BOJ Battles

Fighting against the Bank of Japan may not be crazy after all. Some bond market analysts think the Bank of Japan will fail to steepen the yield curve. The analysts from Morgan Stanley MUFG Securities Co. in Tokyo argue that the BOJ’s toolkit is designed to push down yields, rather than lift them. And even if the central bank succeeds for a time, as it did this week, a tide of money seeking yields in a slowing global economy will prove stronger. One strategist pointed to how Japanese institutions are waiting to snap up bonds with maturities of 20 years or more whenever yields climb. The BOJ may be the only major central bank trying to actively fight a global collapse in bond yields. It signaled deep cuts in bond purchases for October, and indicated it may even stop buying debt of more than 25 years ⁠— a big step for a central bank that pioneered ultra-loose monetary policy.

What We’ve Been Reading

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

• Job cuts are coming at WeWork, according to the bosses.
• Boris Johnson has a plan B.
• Apple's new iPhones deserve to be called Pro.
• The Taiwanese tycoons behind China’s gadget factories are preparing for an exit.
• Hong Kong and Shenzhen: two cities grappling over China's future.
• Amazon and Google are facing a tax test as Indonesia reins in e-commerce.
• Over in New York, Uber’s making sure you can fly a helicopter to work, if you want.

To contact the editor responsible for this story: Chris Anstey at canstey@bloomberg.net, Alex Millson

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