Five Things You Need to Know to Start Your Day
Trump pushes for China deal, Europe has a money-laundering problem, and more bad news for Brexit negotiations. Here are some of the things people in markets are talking about today.
Need a rally
President Donald Trump is pressuring U.S. negotiators to reach a trade agreement with China soon because he’s growing increasingly concerned the lack of a deal will drag down stocks, according to people familiar with the matter. Former Chinese finance minister Lou Jiwei said that China won’t make big concessions to reach an accord, and described some U.S. demands as “just nitpicking.” This morning, the OECD cut its global growth forecast, citing trade tensions.
More European banks have been drawn into the scandal surrounding dirty Russian money. Allegations of suspicious transfers widened further this week to include Austrian and Dutch institutions. The difficulty facing European regulators investigating these crimes, which by one estimate may total $2 trillion globally each year, is that there is no central agency charged with tackling the problem.
The pound is falling for a fifth day as pessimism grows that a deal can be reached in time to stop the U.K. crashing out the EU at the end of the month. Prime Minister Theresa May faces the risk that her withdrawal agreement will be defeated again in parliament next week, while in Brussels talks on a compromise over the Irish border sticking point yielded no progress. Bank of England Governor Mark Carney said the U.K. is better prepared for a no-deal exit, while warning the economic impact would be substantial.
Overnight, the MSCI Asia Pacific Index was unchanged, with Japan’s Topix index closing 0.25 percent lower and China’s Shanghai Composite Index rallying in the last hour of trading as the National People’s Congress continues. In Europe, the Stoxx 600 Index was 0.1 percent lower at 5:50 a.m. Eastern Time in a lackluster session ahead of tomorrow’s ECB decision. S&P 500 futures pointed to a slightly lower open, the 10-year Treasury yield was at 2.713 percent and gold was down.
At 8:30 a.m., the U.S. trade balance numbers for December are expected to show the country’s trade deficit with the rest of world topped $600 billion in 2018. At 10:00 a.m., the Bank of Canada is expected to leave rates unchanged at its monetary policy meeting. Later on, the latest Fed Beige Book will be published at 2:00 p.m., while we will be hearing from New York Fed President John Williams and Federal Reserve Bank of Cleveland President Loretta Mester today.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Trump’s big tax cuts did little to boost economic growth.
- Wall Street titans cut deal to clean up shady CDS trades.
- Death of bond volatility has Pimco fearing for Europe’s future.
- U.S. regulators could take a fresh look at bonuses.
- How did the U.S. stock market get so old?
- Michael Bloomberg: Our highest office, my deepest obligation.
- On the hunt for dark matter.
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