Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Judgement day is upon us in the U.K. Supreme Court, central bank policy pontificating continues and one of Thomas Cook’s rivals will update on trading in the aftermath of the group’s collapse. Here’s what’s moving markets.
Supreme Day
The U.K. Supreme Court left Brexit watchers waiting but the decision on the legality of Parliament’s prorogation is due mid-morning on Tuesday, with the question being how Prime Minister Boris Johnson will react and how the pound will take it. It’ll arrive after the Labour Party backed the wait-and-see approach to Brexit of their leader, Jeremy Corbyn, meaning the priority will be to secure a second referendum and then to decide how to campaign on the issue once that’s done. The party also wants to cut the length of the working week, take over private schools and pump billions into social care.
Central Bank Corner
It’s a busy week of speeches from central bank policymakers, so a quick catchup of what was said just yesterday is probably in order. European Central Bank President Mario Draghi defended his new stimulus package while also saying the bank needs to consider new ideas. His successor, Christine Lagarde, said the trade war is the biggest challenge to global growth. At the Federal Reserve, the dovish James Bullard thinks more rate cuts may be needed, John Williams said the repo challenges faced last week raise questions about bank reserve levels and former New York Fed boss William Dudley says the Fed is likely to examine new tools to control short-term rates.
Collapse
The fallout from the collapse of Thomas Cook Group Plc will move into its second day as all involved assess the damage and holidaymakers are airlifted home. There are plenty of other companies exposed, not just those boosted by the removal of a competitor from the extremely competitive airline market but also a further examination of who will have made a tidy return from the failure. To compound it, the company most likely to benefit from Thomas Cook’s failure, tour operator rival TUI AG, will issue a trading update likely to include a line on any impact it faces from its rival’s demise.
Chinese Policy
Yi Gang, the governor of China’s central bank, has said the country is not in a rush to add further stimulus to the economy, out of step with what policymakers are doing around the world, and reiterated it will continue to take a prudent stance. That message that may contrast a little with what the European Union Chamber of Commerce in China thinks, which is that state-run businesses in China risk harming the country’s economy further by eating up financial resources for private firms and by damaging supply chains.
Coming Up...
A mixed day for Asian stocks as investors weigh up upcoming trade talks with mixed global economic data. Treasuries were a touch higher and European stock futures are pointing toward a mildly positive open. Oil prices edged higher on mixed reports about the pace of recovery for Saudi Arabia in restoring lost production. U.S. President Donald Trump and France’s Emmanuel Macron will speak at the United Nations, facing the unenviable task of following Greta Thunberg, and we’ll have business confidence data from Germany and France.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- How climate change is scaring central banks.
- The world’s richest families are stockpiling cash.
- AB-InBev priced its Asia IPO at the bottom of the range.
- Google will listen to your conversations, but it’ll ask first.
- Municipal bond yields are at the lowest since the 1960s.
- Europe has approved its first cannabis-based medicine.
- The controversial use of rap lyrics as evidence in court.
To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net
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