Five Things You Need to Know to Start Your Day

(Bloomberg) --

Global finance chiefs urge resolution to trade war, markets remain jittery after last week’s pummeling, and Brexit woes deepen. Here are some of the things people in markets are talking about today.

Work It Out

Global finance chiefs used the closing sessions of talks in the tropical resort of Bali to hammer home the message that simmering trade tensions are already denting global growth and need to be resolved. Bank of Japan Governor Haruhiko Kuroda said it’s essential to have dialogue on trade; Brazil’s central bank President Ilan Goldfajn flagged the tensions as one of the biggest threats to emerging economies; Bank for International Settlements General Manager Agustin Carstens said there’s a risk the global economy goes backwards due to rising protectionism. People’s Bank of China Governor Yi Gang called for a constructive solution to the dispute, adding that China is preparing for the worst. Meanwhile, here are the key takeaways from the International Monetary Fund meeting that has wrapped up in Bali. 

Seeking Answers  

Saudi Arabia is running out of time to explain to the Trump administration what happened to journalist Jamal Khashoggi within its consulate in Turkey. The administration increasingly regards Saudi Arabia’s denial of any involvement of Khashoggi’s disappearance as untenable, and President Donald Trump and his aides are more and more convinced that the Washington Post writer died after entering the Saudi consulate on Oct. 2 to pick up a document for his wedding, said three U.S. officials who asked not to be identified because of the sensitivity of the matter. Despite increasing pressure from Congress, Trump is reluctant to cancel multimillion-dollar arms sales to Saudi Arabia out of concern the U.S. ally will turn to Russia or China instead. But a range of other punishments are under discussion within the administration, from withdrawing U.S. officials from an investment conference in Riyadh later this month to downgrading diplomatic relations or sanctioning Saudi officials. 

Shaky Start

Futures trading point to a mixed to weaker open for Asian stocks on Monday after the biggest weekly slide in global equities in six months left confidence shaken and fragile. The pound slipped as a Brexit deal hung in the balance with just days to go until a critical deadline. U.S. stocks rose the most in six months Friday as a recovery in technology shares pushed major indexes higher. Oil will be closely watched after Trump ratcheted up pressure on Saudi Arabia following the disappearance of Khashoggi, the journalist. 

Coming Up…

Brexit and Italy's budget may be among the pressure points in the coming week as investors look to see whether global stocks can recover from the recent hammering. On the economic front, the Federal Open Market Committee releases minutes from its most recent policy meeting on Wednesday and the Reserve Bank of Australia releases minutes on Tuesday. Chinese inflation figures are due  Tuesday and third-quarter GDP, industrial production, retail sales will be closely watched on Friday. Earnings seasons cranks up with Bank of America, Goldman Sachs and Morgan Stanley among the highlights. European Union leaders may push toward a final Brexit deal at a Brussels summit. And Canada becomes the first G-7 country to begin selling legal recreational marijuana this week. 

Yuan Policy

China’s central bank is considering a range of risks in its currency policy, including a worst-case scenario, Governor Yi Gang said. As the yuan inches closer to the psychologically important level of 7 per dollar amid rising trade tensions with the U.S., the People’s Bank of China governor told Bloomberg in an exclusive interview that the Chinese currency is at a “reasonable and equilibrium level.” Yi’s comments come days before U.S. Treasury Secretary Steven Mnuchin is set to release a report in which he could label China as a currency manipulator and as a trade dispute between the world’s two biggest economies shows no signs of abating.

What we've been reading

This is what's caught our eye over the last 24 hours.

• BOJ’s Kuroda explains signals for stimulus exit. 
• China didn’t want a trade war, envoy says. 
• Emerging-markets bulls are overtaking the bears.
• Buying a second-hand luxury jet is getting harder. 
• A decade from crisis, banks face a litany of risks. 
• South Korea says the North needs to keep promise to Trump.
• The world's longest flight is a better way to travel.

To contact the editor responsible for this story: Adam Haigh at ahaigh1@bloomberg.net

©2018 Bloomberg L.P.