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Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Trade talks creep forward, the U.K. election is falling into old habits and the Federal Reserve chairman is upbeat. Here’s what’s moving markets.
Inching Forward
U.S. and Chinese negotiators held a phone call and reached a degree of consensus about resolving the issues standing in the way of a phase one trade deal between the two, in addition to committing to remaining in touch as they continue working through their disagreements. That’s helped to create a little further optimism that a deal is going to get done, albeit the progress has been piecemeal. Good timing, too, as trade momentum rose in September for the first time in four months, according to the CPB World Trade Monitor.
Attack Lines
The manifestos have been published so voters in the U.K. know what they’ll be voting for, or at least what’s being promised to them. Now the old attack lines are starting to flow, with the Conservatives warning about a possible Labour-Scottish National Party coalition and Labour claiming the Tories can’t be trusted to look after the elderly. More problematically for Labour, the U.K.’s chief rabbi has suggested voters should avoid the party, once more bringing the specter of anti-Semitism to the campaign. Within the minutiae, one question will be how individual big names fare within their respective constituencies. Note for example Dominic Raab, the former Brexit Secretary, who is now facing serious competition for his seat.
More Than Half Full
Federal Reserve Chairman Jerome Powell struck an upbeat tone in a speech Monday, saying that even at the current point in the economic cycle he sees the glass “as much more than half full.” In combination with the extra optimism about trade, his words could lift the mood, as he also indicated he is confident on policymakers’ ability to extend the U.S. expansion and as he signaled interest rates are likely to remain on hold. Market watchers also see scope for a steeper yield curve, predicting 2020 will mark a return to normality after the inversion this year.
Revoked
There is likely to be plenty more talk about the impact of Uber Technologies Inc. having its license revoked in London, most notably as to what the company intends to do to remedy the concerns regulators have in order get its business in the U.K. capital back on a firm footing. Analysts covering the company were not overly concerned, however, because Uber gets to appeal the decision and the company has faced similar problems in London before, though they cautioned that losing its biggest European business would be a seismic blow to the ride-sharing giant.
Coming Up…
Asian stocks were mixed and European stock futures are pointing to a slightly positive open after closing at the highest since May 2015 on Monday. WTI crude continues to hover near the $58-a-barrel level amid the trade optimism and a forecast for the first U.S. crude inventories drop in five weeks. German consumer confidence data will arrive later in the morning and we’ll have earnings from catering giant Compass Group Plc and Irish building materials firm CRH Plc.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- England’s renters are paying much more than they can afford.
- Coal is not dead yet.
- British universities are dealing with strikes.
- Shrinking martinis are taking over.
- Investors penalized companies for adding women to their boards.
- The Dutch plan to shrink their pig industry.
- Some Brazilian schools are going vegan.
To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net
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