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Good morning. The Fed’s definitely turned dovish, a fire has been lit under the feet of Brexit negotiators and we have a mixture of trade optimism and tariff threats. Here’s what’s moving markets this morning.

Reasons to be cautious

The U.S. Federal Reserve’s minutes from its latest policy meeting confirmed a range of reasons that Chairman Jerome Powell and cohort turned dovish. There was widespread agreement that completing the roll-off of assets from the Fed's balance sheet should end this year, but policymakers were uncertain about whether any more rate rises will be forthcoming in 2019. U.S. stocks fluctuated, Treasuries dipped and the dollar trimmed gains after the announcement, but the reaction was relatively muted and equities ended higher. European futures are bathed in green, though primarily due to the trade story, which has sent Asian stocks and U.S. futures higher.

Reasons for optimism?

U.S. and Chinese negotiators are working on a series of memorandums of understanding that would form the basis of a final trade deal between the pair. Note, though, that former Chinese officials have said any deal their country does with the U.S. cannot place entirely on Beijing the burden of proof that the agreements are being kept. Still, signs of progress toward a deal may calm nerves after U.S. President Donald Trump said he’ll slap tariffs on European car imports if a deal can’t be done between trade negotiators from both sides. This as we still sit awaiting details from the Commerce Department report on whether imported cars pose a security risk to the U.S.

Vote demanded

We are hurtling towards some key dates in the Brexit diary. The European Union wants U.K. lawmakers to vote on any changes to the withdrawal deal Prime Minister Theresa May agrees before they will sign off themselves. That means the next meaningful vote, which may come next week for a new-look Parliament, is going to be darn meaningful and May will want to get it done before any more Tories defect. Spain’s foreign minister says the accord is in the process of being hammered out, so we could get to see in the very near future what kind of changes have been made to the legal wording on the controversial Irish backstop.

Banks and telecoms

It’s been a mixed week for British banks, with HSBC Holdings Plc disappointing but Lloyds Banking Group Plc pleasing investors with a share buyback. Barclays Plc is next up, with the focus on how its investment bank is faring amid activist pressure on its boss. It will report in the shadow of two significant bank fines in two days, for UBS Group AG and Standard Chartered Plc, respectively, and in a sector mostly on a comeback. Telecoms will also be keenly in focus with Germany’s Deutsche Telekom AG, Spain’s Telefonica SA and France’s Orange SA all out with updates.

Coming up...

There’s a host of central bank speakers and a bevy of economic data to chew over on Thursday. Euro area composite PMIs are due, along with U.K. public finances, then jobless claims from the U.S. later in the day. Speakers from the Fed, the European Central Bank and the Bank of Canada are all on the slate and note that Elon Musk’s SpaceX will launch the Falcon 9 from Cape Canaveral, Florida. Also keep a watch on the reviews rolling in for Samsung Electronics Co.’s new flagship phones.

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