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It’s U.S. versus the rest at G-7, emerging-market problems continue, and U.K. government infighting trundles on over Brexit. Here are some of the things people in markets are talking about today.

G-6 + 1

French President Emmanuel Macron has joined Germany in warning that he will not sign a joint statement at this week’s G-7 leaders summit in Quebec unless the U.S. makes major concessions on trade, the Iran nuclear deal and the Paris climate accord. German Chancellor Angela Merkel made a forceful pitch for Europe to become more assertive in global affairs at a political event in Munich. On the U.S. side, President Donald Trump’s top economic adviser, Larry Kudlow, described the tensions ahead of meeting as a “family quarrel.”  Trump is expected to attend the summit on Friday and Saturday before flying to Singapore for his meeting with North Korean leader Kim Jong Un. 

Emerging-market woes

Brazil seems to have become the center of a crisis that has rattled through emerging markets recently, with the real dropping towards a two-year low against the dollar, despite an intervention from the country’s central bank yesterday. The widespread truckers’ strike in Brazil, which ended after the government made concessions to the unions, has cost the country billions of reais and damaged the administration’s reputation. Elsewhere, investors will be watching this morning’s rate decision from the Turkish central bank to see if there is more policy tightening following last month’s lira rout. 

Brexit infighting

Speculation is growing that U.K. Brexit Secretary David Davis might quit his position over Prime Minister Theresa May’s plan to tie the country to European Union customs rules for an open-ended period after Britain exits the bloc. Foreign Secretary Boris Johnson, Trade Secretary Liam Fox and Michael Gove, the environment secretary, also object to the latest version of the customs plan. The infighting among cabinet members means that ambitions for material progress at this month’s EU leaders summit have been scaled back. 

Markets rise

Overnight, the MSCI Asia Pacific Index rose 0.6 percent while Japan’s Topix index closed 0.6 percent higher after hawkish European Central Bank comments helped drive the yen lower. In Europe, the Stoxx 600 Index was 0.1 percent higher at 5:45 a.m. Eastern Time with cyclical stocks the best performers. S&P 500 futures pointed to a small gain at the open, the 10-year Treasury yield was at 2.986 percent and gold was higher. 

Half-way

China has said it is willing to boost imports if the U.S. meets it half-way on trade. The country had previously warned that should Trump impose import tariffs on June 15, it would withdraw all commitments to increase purchases of American goods. Gao Feng, a spokesman for China’s Ministry of Commerce, said that Beijing doesn’t want to escalate trade tensions with the White House. 

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