Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Millions hit the streets of Hong Kong in further protests, debate about central bank policy will be the order of the day and Donald Trump wants credit for the economy. Here’s what’s moving markets.
2 Million
As many as 2 million people filled the streets of Hong Kong on Sunday calling for Hong Kong Chief Executive Carrie Lam to withdraw the controversial extradition bill, rather than just suspending it, and resign. But the existential threat that Hong Kong faces – and the likelihood that further bills will materialize to chip away at freedoms its residents enjoy – is not yet gone. Asian stocks were mixed as markets await the flurry of central bank decisions due this week but big Asia-focused banks and luxury goods merchants are unlikely to be thrilled that the protests are still raging.
ECB Debates
The European Central Bank's forum will take place in Sintra, Portugal, on Monday and one can expect much discussion and debate about the policy outlook. There’s been plenty to chew over already. Vice President Luis de Guindos said the ECB will act should inflation expectations deteriorate and Governing Council member Ewald Nowotny says he favors the bank having more flexibility in reaching its inflation target and that it’s too early to judge the recent dip in inflation expectations. Keep one eye on Japan too, with slowing inflation expected to push bonds yields even lower, and China’s central bank and its “tremendous” toolkit to tackle a slowing economy.
‘Epic’ Crash
President Donald Trump wants credit for how the U.S. economy is performing, even if looking under the surface paints a less rosy picture than a first glance might, and warned that if he’s not re-elected, there will be an “epic” stock market crash. Bond investors have certainly had a bullish period, but some watchers are warning the run may not continue through the Federal Reserve meeting this week, a Fed that at least one person thinks could have a different boss if Trump is indeed put back into office in 2020.
Iranian Tensions
Oil markets have been contending with seriously choppy waters recently. Increasing U.S. tensions with Iran following the tanker incident last week are showing no signs of cooling off, with Secretary of State Mike Pompeo pledging U.S. protection for shipping in the Gulf and Iran planning a further retreat from the terms of its nuclear deal this week. On the OPEC side of the oil conundrum, Saudi Arabia hopes the cartel will agree to further supply cuts at its meeting next month with a view to helping balance supply and demand dynamics in the second half. Oil prices were a little higher on the prospect of those output cuts.
Coming Up...
More barbs are likely to be traded among those vying to lead the U.K.’s Conservative Party following a first debate that was skipped by front-runner Boris Johnson, who was represented by an empty lectern. The field is going to be thinned down further as the week progresses. The Paris Air Show also gets under way with much focus expected on Boeing Co.’s crisis surrounding its 737 Max jet and Airbus SE looking to capitalize on home-court advantage. Public hearings are also due to start in the U.S. on the next round of tariffs proposed on Chinese goods.
What We’ve Been Reading
This is what’s caught our eye over the weekend.
- Alcohol may be on its way to Saudi Arabia.
- Wealthy families are buying up forests.
- A big drugmaker is going herbal to tap China.
- An ex-New York cop now owns $400 million of property in Brooklyn.
- This firm has created an algorithm to help the fashion helpless.
- From chemistry teacher to Asia’s richest self-made woman.
- DNA kits and the death of the family secret.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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