Five Things You Need to Know to Start Your Day
Brexit-deal vote day, signs China stimulus is working, and shutdown enters day 25. Here are some of the things people in markets are talking about today.
If you’re a pound trader, the only winning move today could be not to play. That’s according to Citigroup Inc., which sees sterling volatility rocketing as British Prime Minister Theresa May faces almost certain defeat in today’s parliamentary vote on her deal to exit the European Union. Should she lose by a margin of larger than 100 votes, May could find herself facing a leadership challenge or even a new election. The vote, and proposed amendments to it, begins at around 2:00 p.m. Eastern Time, with the final result expected several hours later.
Authorities in Beijing promised more measures to help the ailing economy, including tax cuts “on a larger scale” and support from monetary policy. Stocks in the region reacted positively to the announcement, rebounding from a loss on Monday that was driven by China’s disappointing trade data. Lending numbers for December gave more reasons to be bullish, with aggregate financing coming in at 1.59 trillion yuan ($235 billion), well above expectations for 1.3 trillion yuan.
The partial government shutdown continues to drag on with no resolution in sight. House Democrats plan two votes today on stopgap funding measures which President Donald Trump says he will not sign without the money he’s demanding for the border wall. As the lack of federal funding continues to cut into services, warnings on the fallout are growing larger. Sam Berger, a senior adviser at the Center for American Progress, cautioned that “shutdowns don’t get bad linearly; they get bad exponentially.”
Overnight, the MSCI Asia Pacific Index gained 1.1 percent as investors welcomed the measures announced by China, while in Japan the Topix index closed 0.9 percent higher. In Europe, the Stoxx 600 Index was up 0.1 percent by 5:50 a.m., well off the early session highs with German GDP data weighing on sentiment. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 2.686 percent and gold was lower.
Following Monday’s not-as-bad-as-expected trading update from Citigroup Inc., today sees earnings from JPMorgan Chase & Co. and Wells Fargo & Co., with investors looking to both banks for cost-cutting strategies. In economic data, Empire manufacturing for January and PPI for December are both due at 8:30 a.m. Fed speakers today include Minneapolis Fed President Neel Kashkari, Kansas City Fed President Esther George and Dallas Fed President Robert Kaplan. European Central Bank President Mario Draghi gives testimony to the European Parliament.
What we've been reading
This is what's caught our eye over the last 24 hours.
- BlackRock sees stock-bond correlation deeply negative this year.
- China asks state firms to avoid travel to U.S. and its allies.
- It’s 2012 again as Europe eclipses Latin America in bank risk.
- Caution is the new watchword for the world’s central banks.
- U.S. now says all online gambling, not just sports bets, is illegal.
- The super-secure quantum cable hiding in the Holland Tunnel.
- You’re angry, but you probably won’t do much about it.
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