Five Things You Need to Know to Start Your Day
Goldman faces 1MDB-related criminal charges, government shutdown fight intensifies, and May to attack second referendum calls. Here are some of the things people in markets are talking about today.
Man bites vampire
The long-running scandal surrounding misappropriation of funds from Malaysia’s state-owned investment fund, 1MDB, continues to haunt Goldman Sachs Group Inc. Today, authorities in Malaysia filed the first criminal charges against the bank, alleging that Goldman knew the funds it was raising from investors would be misappropriated. The government is seeking fines well in excess of both the $2.7 billion of allegedly misused funds and the $600 million in fees received by Goldman on the deals. A spokesman said the bank would “vigorously defend” itself against the charges.
Going to the wall
There are just five days left for President Donald Trump and Congress to agree on must-pass legislation that would allow all government services to remain operating. While Republican Senator Susan Collins expressed some confidence that a deal could be reached, top Democrats say it is up to Trump to compromise on his demands for $5 billion for his border wall. If there is a shutdown it would only hit some government agencies, with the Department of Homeland Security among those at risk.
After a busy week in which very little actually changed, British Prime Minister Theresa May is fighting for everything to stay the same again. With support growing for a possible second referendum on the Brexit issue, May is set to tell lawmakers today that such a vote would “break faith” with the British people. Ministers, meanwhile, continue to push for the prime minister to hold a series of informal votes in Parliament to show there is insufficient support for any of the options currently on the table, a move that could force a second referendum.
Overnight, the MSCI Asia Pacific Index gained 0.3 percent, with Japan’s Topix index closing 0.1 percent higher as investors seemed happy to sit on their hands ahead of this week’s Bank of Japan and Federal Reserve decisions. In Europe, the Stoxx 600 Index was 0.3 percent lower at 5:45 a.m. Eastern Time, with U.K. retailers taking a hit after more disappointing news for the sector. S&P 500 futures pointed to little movement at the open, the 10-year Treasury yield was at 2.882 percent and gold was slightly higher.
The economic data calendar today is fairly quiet with Empire Manufacturing at 8:30 a.m. and TIC flows at 4:00 p.m. The big event of the week is Wednesday’s Fed decision, and with markets certain of a rate hike investors will concentrate on officials’ latest forecasts which are due to be published with the decision.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots: How the rise of passive investing could change capitalism as we know it.
- Giuliani says “over my dead body” will Trump meet with Muller.
- China built a global economy in 40 years. Now it has a new plan.
- 14,889,930,106,680 reasons to fear a recession.
- Draghi defends euro as bastion against “illiberal” regimes.
- Americans turn more pessimistic on the economy.
- Scientists did see gravitational waves (probably).
©2018 Bloomberg L.P.