Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. Here’s what we are watching ahead of the market open in Europe:

Slower Hikes?

U.S. Federal Reserve Chairman Jerome Powell, facing a barrage of criticism from his president earlier in the week, opened the door to a possible slowdown in the rate-hiking path. Powell said the series rate increases by the central bank had brought monetary policy to “just below” neutral. The change in language sent U.S. stocks surging, trimmed yields on Treasuries and sparked gains in commodities and emerging market currencies, so watch for that to feed through into the European session.

Carney’s Warning

The Bank of England one-upped the U.K. government in its doomsday warnings about the impact of Brexit. The central bank sees a much more rapid pace of decline in the economy and an unprecedented drop in the pound to below parity with the U.S. dollar. Domestic bank would be okay, though. The other moving part to watch? The opposition Labour Party, which is seeking to reject both a no-deal scenario and Prime Minister’s Theresa May’s proposed divorce agreement. The party has said it will try to force a general election and, failing that, could even support a second referendum. Expect more chaos.

Showdown in Amsterdam

Having sent shockwaves through the auto industry with the ousting of Carlos Ghosn, the Renault-Nissan-Mitsubishi Alliance is due to meet in the Dutch capital on Thursday in order to hammer out what the future of the partnership is going to look like. Also to watch in the auto industry, Donald Trump raised the prospect of putting further tariffs on imported cars on Wednesday, citing the “chicken tax” as as model.

E-Cigarettes

U.S. tobacco firm Altria Group Inc is said to be in talks to make a significant investment in Juul Labs Inc., the controversial e-cigarette maker which has drawn scrutiny from U.S. regulators. Altria making an investment like that could further increase the competition in the space for creating new tobacco products, so watch for any reaction in shares of British American Tobacco Plc and Imperial Brands Plc in the U.K.

Buses and Pubs

A couple of interesting names still to update the market in the U.K. that can provide a little more insight into the state of the economy. Go-Ahead Group Plc, which runs London’s bus network, should provide a glimpse into public transport usage and Greene King Plc, one of the country’s biggest pub chains, should offer up some insight into how much Brits are spending on roast dinners and pints of beer.

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