Irma loses power as it moves along the Florida coast, North Korea doesn't launch, and there’s a Brexit vote in the U.K. parliament. Here are some of the things people in markets are talking about today.
After making landfall in the Florida Keys yesterday morning as a Category 4 storm, Hurricane Irma weakened as it traveled through the state’s west coast, with the latest reports downgrading it to a Category 1 storm with top winds of 85 miles per hour. Estimates for the total damage have dropped to $49 billion from as high as $200 billion. For the Federal Reserve, the storms that have battered the southern United States are making it more difficult to read the economy’s pulse, with William Dudley, president of the New York Fed, warning that it could affect the timing of short-term rate increases.
North Korea doesn't launch
Fears that Pyongyang would launch another missile test over the weekend, which had added to last Friday’s market selloff, proved overblown, with North Korea instead issuing threats against the United States ahead of a vote in the United Nations on further sanctions. While Japan has backed a U.S. proposal to target the country’s oil supplies in the U.N. vote, it remains unclear if China or Russia will veto the proposal. South Korea, meanwhile, continues to push for a diplomatic solution with its poorer northern neighbor.
The less-severe-than-anticipated developments in Florida and North Korea over the weekend have spurred a market rally this morning, with the dollar recovering from a 2015 low, while Treasuries and gold weakened. Overnight, the MSCI Asia Pacific Index gained 0.6 percent, while Japan’s Topix index closed 1.2 percent higher amid a selloff in the yen. In Europe, the Stoxx 600 Index was 0.9 percent higher at 5:40 a.m. Eastern Time, while S&P 500 futures had added 0.6 percent.
Late tonight U.K. time, the House of Commons will vote on the Great Repeal Bill, designed to ease the country’s exit from the European Union. A victory for Theresa May’s government seems likely, presuming her own party members pledge support for the contentious piece of legislation en masse. The vote will kick off what should be a busy week for pound traders, with inflation and retail price data tomorrow, ahead of the Bank of England decision on Thursday.
Producer-price inflation accelerated to 6.3 percent in August, ahead of economist predictions for a 5.5 percent increase in the world’s second-biggest economy. The strong reading comes as Beijing’s policy of limiting capital outflows continues to bear fruit. China is also piling pressure on cryptocurrencies by banning them entirely from exchanges, according to people familiar with the matter, while allowing over-the-counter trading to continue.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots Podcast: How an Austrian economist explains the tulip bubble.
- Europe aims for a bold relaunch.
- China’s latest bond default is a cautionary tale for investors.
- Supply constraints are sending tungsten prices soaring.
- Mueller looks to interview at least four Trump aides.
- India's traffic is so bad it's changing the cars people buy.
- How to solve the biggest mystery in physics.