Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. China makes more moves to shore up its economy, virus fears are showing few signs of abating and the U.K. will set out its aims for its future ties with the EU. Here’s what’s moving markets.
China's Response
China has pledged the roll-out of more effective monetary stimulus policies to counter the impact of the new coronavirus on its economy, including a move to cut rates on one-year loans to support the banking sector. The stimulus measures China pursues will be essential for the direction of monetary policy across the world and for the fortunes of all the economies and industries that have been bruised globally by the hit the virus has dealt to factories, tourism, shipping and commodities. Emerging-market traders, too, will be crossing their fingers that China’s steps are indeed effective.
Virus Fear
Fears about the virus itself are showing few signs of abating. Travelers who have been trapped on cruise ships for the past couple of weeks are starting to head home and, as has to be expected in the midst of this kind of outbreak, are fueling fears of potential further contagion in all the countries where they’re bound. There’s a similar level of fear in markets. Traders are sufficiently fixated on the virus that they are piling into hedges to guard against potential Federal Reserve rate cuts later in the year, the attraction of Treasuries is undimmed and the euro’s vulnerability to global shocks was made abundantly clear. The dollar, by the way, has started the year in rude health.
Negotiations
The U.K.'s chief Brexit negotiator is ready to outline the goals the country has for its future relationship with the European Union on Monday. Prime Minister Boris Johnson's office has said the U.K. doesn't want special treatment but a deal similar to those the EU has struck with other countries. The red lines set by both sides will be closely monitored. Trade deal or not, British consumers are going to face higher prices for any goods coming from the EU, according to a retail industry group. And this all starts at a time when Johnson's government faces a stern test domestically with a new chancellor and very high interest in whether that’s going to lead to the spending taps being turned on.
IPO Surge
This could be Europe's busiest week for initial public offerings this year, as five companies start trading. If the floats go according to plan, they could raise as much as $686 million between them. Norwegian oil firm BW Energy Ltd., due to list on Wednesday, had to slash its IPO price and offer size and extend its bookbuilding period twice. Two investment trusts will come to market in London, but the most interesting deal comes from Paris with the debut of Paulic Meunerie SA, which makes wheat flours not just for human consumption, but also to feed insects raised for protein.
Coming Up…
Asian stocks had a mixed start to the week, with China’s steps to shore up its economy boosting domestic stocks and the yuan, while shares in Japan’s market slipped on weak GDP figures. European stock futures are pointing to a positive open. Eurozone finance ministers will meet to discuss economic growth targets and, though Monday will be light on data, this week will get busier with a raft of hard numbers in the U.K. that will make clear whether a post-election bounce occurred, as well as a meeting of G-20 finance chiefs in Saudi Arabia. The U.S. is shut on Monday for Presidents’ Day.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- The world's best burgers.
- ‘Sonic the Hedgehog’ topped the box-office.
- Superyachts are going green.
- HQ Trivia is shutting down.
- Used cars are a hot asset class in Turkey.
- The U.K. will spend $1.6 billion on a climate supercomputer.
- Reunited with a mixtape 25 years after losing it.
To contact the editor responsible for this story: Tom Lavell at tlavell@bloomberg.net
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