Five Things You Need to Know to Start Your Day

(Bloomberg) --

Trade hopes spring eternal, Hong Kong forecasts first annual recession since financial crisis, and Labour looks to nationalizations. Here are some of the things people in markets are talking about today.

Final stages

White House economic adviser Larry Kudlow said that negotiations over a phase one trade deal with China are down to the final stages, with both sides in communication every day. Talks are focusing on details such as the timeline of Chinese purchases of agricultural goods and Beijing’s demand for the removal of existing tariffs as part of a deal. This morning global shipping giant A.P. Moller-Maersk A/S added its voice to those warning about the fallout from the trade war, saying it is less optimistic about growth as the standoff dents the economic outlook.

Revising lower

Hong Kong is now forecasting an economic contraction of 1.3% for 2019 with the government citing an “abrupt deterioration in the third quarter” which it blamed on “local social incidents.” There is little sign the driver of the slowdown is easing, with protesters gathering in the city’s financial district again today. Chinese President Xi Jinping, in a rare remark on the demonstrations, said bringing the violence to an end is Hong Kong’s “most urgent task.” There’s also urgency for the city’s bankers who have started to shorten their day amid the protests, with deals closing much earlier than usual this week. 

Electioneering

The campaign for the Dec. 12 U.K. election is stepping up a gear with the Labour Party pledging to nationalize BT Group Plc’s Openreach broadband unit to give free internet to everyone in Britain. The party said it would pay for the nationalization with government debt. Shares in BT dropped as much as 3.7% in London trading. Bankers in London don’t see much prospect of a Labour-led government, but have started some contingency planning in case it does come to pass. With the Conservative Party holding a clear lead in polls, it currently seems like the nationalization policy has little chance of coming to pass. 

Markets rise

Larry Kudlow’s positive comments about trade progress have been enough to give global equity markets a small Friday lift. Overnight, the MSCI Asia Pacific Index added 0.5% while Japan’s Topix index closed 0.7% higher, which wasn’t enough to avoid its first weekly drop since early October. In Europe, the Stoxx 600 Index had gained 0.1% by 5:50 a.m. Eastern Time. S&P 500 futures pointed to positive open, the 10-year Treasury yield was at 1.834% and gold had slipped. 

Coming up…

U.S. October retail sales data at 8:30 a.m. is expected to show a rebound from the previous month’s negative number. At 9:15 a.m. Industrial Production and Manufacturing numbers for October are forecast to show a further slowdown. Today’s impeachment hearing is likely to focus on Rudy Giuliani's back-channel efforts to pressure Ukraine's president. J.C. Penney Co. Inc. reports earnings. 

What we've been reading

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

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