Five Things You Need to Know to Start Your Day
Nafta deal on track, Barnier’s Brexit warning, and Iran threatens an oil shock. Here are some of the things people in markets are talking about today.
The timing is very tight, but both President Donald Trump and Canadian Prime Minister Justin Trudeau have signaled a new tri-party North American trade deal could be reached ahead of tomorrow’s deadline. Should the talks come to a positive conclusion, any deal could be signed before Mexico’s president-elect, Andres Manuel Lopez Obrador, takes office on Dec. 1. Elsewhere on the trade front, U.S. tariffs on Chinese imports continue to have knock-on effects for American companies.
The pound had a setback this morning after EU Chief Negotiator Michel Barnier warned that the union must prepare for a disorderly Brexit. Yesterday sterling rose to its highest level in more than three weeks, breaking through the $1.3000 mark, after Barnier said the European coalition was ready to offer the U.K. an unprecedented partnership. In an attempt to show it has some power in the negotiation, the U.K. has warned the EU side that rejecting Prime Minister Theresa May’s offer would risk a no-deal Brexit.
Iran has warned that if it isn’t allowed use the Strait of Hormuz for oil exports, it will halt the movement of all oil out of the region. While it’s not the first time Iran has threaten to close the Strait, the strategic importance of a choke point which sees 30 percent of all seaborne-traded crude oil every year means traders have to be wary of such threats. A barrel of Brent crude for October delivery was trading at $77.34 by 5:45 a.m. Eastern Time, while West Texas Intermediate for October delivery was at $69.66.
Overnight, the MSCI Asia Pacific Index lost 0.3 percent while Japan’s Topix index closed marginally lower after Trump accused China of undermining U.S. efforts in North Korea. In Europe, the Stoxx 600 Index was 0.4 percent lower at 5:45 a.m. as stocks drifted on very little news flow. S&P 500 futures pointed to a small drop at the open, the 10-year Treasury yield was at 2.879 percent and gold was lower.
There’s a rush of economic data at 8:30 a.m. this morning. Initial jobless claims numbers are expected to continue their strong run, with expectations for 212,000 new claimants last week. July personal income and spending data for the U.S. is due at the same time, with both expected to have expanded 0.4 percent. At the same time, north of the border, Canada reports second-quarter GDP, with growth forecast to come in at 3.1 percent.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Trump blames China for stalled nuclear talks.
- The search for battery riches starts here.
- Chinese built port evokes dreams of El Dorado.
- Nestle wants your DNA.
- Short bets on world’s biggest tech stocks surge to $37 billion.
- China arrests private fund chief after $2.6 billion goes missing.
- How beer revolutionized math – and just might save humanity.
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