Five Things You Need to Know to Start Your Day

(Bloomberg) --

Mueller gets a new boss, it’s decision day at the Fed, and the EU tells Italy its budget is a non-starter. Here are some of the things people in markets are talking about today.

Fired?

The question as to whether Jeff Sessions resigned or was fired from the position of Attorney General is more substantive than may appear at first blush. President Donald Trump appointed Matthew Whitaker, who has been openly critical of Special Counsel Robert Mueller’s Russia investigation, as acting AG. Should Mueller be able to show in court that Sessions was fired then it would remove Trump’s power to appoint an acting AG without Senate confirmation. The president also promised a “war-like posture” if the Democrats use their control of the House to launch new investigations into his administration. 

Fed day

The Federal Open Market Committee is widely expected to keep the benchmark target for rates unchanged in a 2 percent to 2.25 percent range when its decision is announced at 2 p.m. today. With no press conference scheduled, and no updated forecasts released today, investors will only have the statement to read for any signs of a change to the outlook ahead of a predicted December hike. Speaking of rates, one challenge that has emerged for the central bank recently is how close the fed funds rate has moved to the top end of the target range, something the Fed is keen to maintain control over

No good

In a report published as part of an overview of the region’s economy, the European Union has slammed Italy’s budget plan accusing Rome of too-optimistic assumptions about the impact of its spending program. The standoff is fueling speculation in Italy that there may be an early election called as pressure on the governing coalition mounts. Italian bonds dropped in trading this morning, with the 10-year yield rising by seven basis points

Markets mixed

Overnight, the MSCI Asia Pacific Index added 0.9 percent while Japan’s Topix index closed 1.7 percent higher as investors followed the lead from U.S. stocks. In Europe, the Stoxx 600 was 0.2 percent higher at 5:50 a.m. Eastern Time as market nerves over the dispute between Italy and the EU weighed on some positive earnings news. S&P 500 futures pointed to a lower open, the 10-year yield was at 3.223 percent and gold slipped. 

Coming up…

Weekly initial jobless claims are expected to come in slightly below last week’s 214,000 total when the data is released at 8:30 a.m. Bloomberg consumer confidence is published at 9:45 a.m. At 12:00 p.m., the Department of Agriculture publishes the WASDE report, with soybean production and stocks likely to get some attention. In earnings news, Bombardier Inc., The Walt Disney Co., and Hertz Global Holdings Inc. are among the companies reporting today. 

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