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Five Things You Need to Know to Start Your Day

Five Things You Need to Know to Start Your Day

Five Things You Need to Know to Start Your Day
Jerome Powell, chairman of the U.S. Federal Reserve. (Photographer: Andrew Harrer/Bloomberg)

(Bloomberg) --

Chinese and American trade officials are talking again. Fed chief Jerome Powell heads to Congress with a rate cut in play. And China's push to create a global investment-banking powerhouse creates a big headache. Here are some of the things people in markets are talking about today.

Fed Speak

Jerome Powell and company largely avoided discussing Fed policy a day before he lays out his views on rates and the economy before Congress. The central bank chief and Vice Chairman Randal Quarles defended efforts to make its annual big-bank stress tests more transparent. Philadelphia President Patrick Harker told the WSJ that he sees no need to move rates in any direction. Larry Kudlow says Powell's job is safe, for now. "There is no effort to remove him," the White House economic adviser told CNBC. 

First Contact

American officials have spoken on the phone with their Chinese counterparts, marking the first high-level contact after their presidents agreed to resume trade talks last month. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke to Chinese Vice Premier Liu He and Commerce Minister Zhong Shan on Tuesday. Both sides will continue these talks as appropriate, a U.S. government official said, without offering more details on the next steps. White House economic adviser Larry Kudlow characterized the discussion as “constructive,” and said officials are planning more meetings but that no details have been confirmed.

Boeing Takes a Hit

The global grounding of Boeing's 737 Max is taking its toll. Second-quarter jet deliveries slid 54% from a year earlier to 90 aircraft. Heightened trade tensions and economic uncertainty didn't help either, with sales in the first six months of the year at negative 119.  President Trump said Qatar plans a "large transaction" to purchase the company's aircraft, without indicating whether it's a new deal or following up on a previous one.  

Stocks Mixed

Asian equity futures are mixed after U.S. stocks pulled higher at the close, with help from tech shares. The markets are also braced for Powell's testimony. Treasuries were largely flat, though 10-year yields advanced a tad. The dollar rose against its G-10 peers, with the Aussie faring the worst, while the Mexican peso dropped after that country's finance minister quit. Oil climbed and gold was little changed.

China’s Goldman

China wants its own Goldman Sachs. Instead, it has a big headache. Over the course of a few weeks early this year, nearly all of the executives at Citic Securities Co.’s CLSA unit quit, kicking off a wave of more than 50 resignations that now threatens to upend China’s push to create a global investment-banking powerhouse. Citic Securities bought CLSA six years ago, putting a free-wheeling Hong Kong institution in the hands of a state-owned giant that ultimately answers to China’s Communist Party. The story behind the exodus illustrates the difficulties China faces as it tries to project its financial might abroad.

What we’ve been reading

This is what's caught our eye over the last 24 hours.

To contact the editor responsible for this story: Peter Newcomb at pnewcomb2@bloomberg.net

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