Five Things You Need to Know to Start Your Day

(Bloomberg) --

U.S.-China trade talks could be over before they begin, another Nafta deadline, and counting the cost of Florence and Mangkhut. Here are some of the things people in markets are talking about today.

Disharmony 

China is considering declining the offer of trade talks, according to the Wall Street Journal, after President Donald Trump told aides on Thursday to proceed with tariffs on about $200 billion more in the the country’s products. The disunity within the U.S. administration over the approach to China means there’s a lack of confidence in Beijing over whether any trade deal would be honored. Markets in Shanghai continue to slip amid the uncertainty, with the benchmark index there closing at the lowest level in almost four years. 

Deadline

The off-again, on-again Nafta talks between the U.S. and Canada are set to resume this week, with Thursday now seen as the deadline for an agreement which could be formalized by the end of the month. The U.S. already dropped some of its most high-profile demands amid opposition from Congress to a Mexico-only deal and mounting pressure ahead of the midterm elections. The uncertainty caused by slow progress on Nafta and the stand off with China is hurting prices of base metals, nearly all of which are trading lower again this morning.

Damage

The assessment of damage from Hurricane Florence is proving difficult as flood waters continue to rise in rivers throughout North and South Carolina. Officials don’t yet know how hard the regions’ farms were hit, or how long it will take to restore power to 708,000 customers who were cut off by the storm which left 15 dead. In Asia, a cleanup is underway from Typhoon Mangkhut after a weekend of high winds and flooding which saw casinos in Macau closed for the first time. 

Markets slip

Overnight, the MSCI Asia Pacific ex-Japan Index fell 1.2 percent amid heightened trade concerns and falling casino and airline stocks in the wake of Mangkhut. Japan was closed for a holiday. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:45 a.m. Eastern Time, with miners among the hardest hit sectors. S&P 500 futures were little changed, the 10-year Treasury yield was at 2.996 percent and gold was higher.

IPO

There’s a huge public offering coming to the oil market, just maybe not the one people have been talking about. Abu Dhabi is pushing ahead with an initial public offering for Spanish oil company Cia Espanola de Petroleos SAU, which could raise about 3 billion euros ($3.5 billion), making it the largest oil IPO in a decade. Crude remains range-bound, with a barrel of West Texas intermediate for October delivery trading at $69.58 by 5:45 a.m. Brent and WTI futures continue to drift further apart as worries about Iran help drive bullish bets on the global benchmark. 

What we've been reading

This is what's caught our eye over the weekend.

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