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Good morning. The European Union is giving the U.K. a little delay to avoid a no-deal Brexit, central banks have nested in dovish territory and China’s influence is causing some jitters. Here’s what’s moving markets.
Deep breath. It looks like the EU will give the U.K. a two-week delay to the exit date to allow Theresa May to get the situation sorted out and avoid crashing out of the bloc with no agreement, which would incidentally probably look a little like this. Those jitters are clobbering the pound and a petition to revoke Article 50 has comfortably secured seven-figures of signatures. And EU leaders are apparently losing faith in May and comparing the process to Beckett. Oh, and more companies are triggering their Brexit plans too, according to the Bank of England.
There’s much to digest if you’re an avid central bank watcher this week. The clear pattern has been a tilt towards dovish policy, demonstrated most visibly by the Federal Reserve and the Swiss National Bank, with Norway’s central bank the only one letting its hawkishness out. Now the question is whether the dovishness, particularly the striking shift from the Fed, will start to bite into the good times enjoyed by vanilla stock and bond funds as fears about growth begin to take hold. Bond traders, are meanwhile, are waiting for what happens when the curve is no longer inverted.
The world has been left feeling a touch uneasy by Italy cozying up to and doing deals with China this week, with concerns about sovereignty and the influence China will have in Europe. It leaves other European leaders having to negotiate how to engage with China and where it will fall in the global pecking order. Hong Kong’s also contending with China problems, notably any collateral damage the trade war with the U.S. could cause.
Yep. IPOs Are Back
If anyone was doubting that public listings are back in vogue after a dismal start to the year, think again. Uber Technologies Inc. is said to have selected the New York Stock Exchange for what could be one of the five biggest listings ever. Its ride-sharing rival Lyft Inc. expects to begin trading next week, jeans giant Levi Strauss Inc. has a barnstorming start to its listed life and image-sharing site Pinterest Inc. is moving up its plans. Europe’s picture is a bit more mixed--with payments house Network International confirming its plans but hospital chain VPS Healthcare LLC said to be more cautious--but still promises a busy quarter ahead.
Asian stocks were mixed and bond yields globally have slumped on central bank dovishness. European futures look a touch negative going into the session. Watch sports apparel companies Puma SE and Adidas AG for a reaction to Nike Inc.’s results, which missed expectations. Russia will round off the eventful week for central banks and is all but certain to stay on hold, with watchers looking out for signs of easing ahead.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Europe’s $1 trillion stock rally is on thin ice.
- Inside the most archaic corner left in London’s finance world.
- Could a $130 billion bond fix Venezuela?
- One of four women running a central bank in Europe.
- Germany is running out of bottles to put its wine in.
- Why oil traders are tracking refinery workers’ cellphones.
- Here are the places trying to end daylight savings’ time.
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