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Good morning. Brexit delays look highly likely, substantive progress at the U.S.-North Korea summit does not and the Fed’s chairman is a patient man. Here’s what’s moving markets this morning.

Can meets road

U.K. lawmakers will be given a chance to vote on whether to take a no-deal Brexit off the table, or to delay the U.K.’s departure from the European Union, should Prime Minister Theresa May fail to secure a tweaked agreement from the EU by March 12 that meets parliamentary approval. All past experience suggests Parliament won’t support a no-deal scenario, so a delay to the planned March 29 exit and more time in Brexit purgatory seems inevitable. How would it all work? That’s another matter.

Summit 2

The sequel to the meeting between U.S. President Donald Trump and North Korean leader Kim Jong Un will be closely watched but is unlikely to yield much beyond the same symbolic gestures the last meeting provided. The White House expectations are apparently low for the hastily arranged summit and the two sides have yet to even agree on what denuclearization means. Follow the developments here.  At home, Trump’s former fixer is apparently set to lay out a series of allegations against the president, so eyes will be trained there too.

Patient Powell

The Federal Reserve is in no rush to make judgments on future policy and decided to take a patient stance in its January meeting due to some “crosscurrents and conflicting signals,” Chairman Jerome Powell told the Senate Banking Committee on Tuesday. Powell also expressed a distaste for modern monetary theory and said there’s still some slack in the U.S. labor market. He’ll make further statements on Wednesday and they’ll be just as closely watched for pointers on the future policy path. Note too that Goldman Sachs  thinks the global economy may have already bottomed out and early gauges are showings signs of recovery in China.


Pharmaceutical sector investors may be relieved by the lack of fireworks at the Senate hearings on U.S. drug pricing. The highly anticipated event ultimately proved only to demonstrate how complex the American health-care system is and that no quick fixes are going to present themselves. Wall Street shrugged off comments about “unaffordable” list prices as the executives at the hearings, including representatives of Sanofi SA and AstraZeneca Plc, were able to put the blame onto the patchwork system. Still, the threat of action in the U.S. on drug pricing isn’t going away any time soon.

Coming up...

There will be more votes on the direction of Brexit on Wednesday, including an amendment to prevent no-deal. A couple of Brexit-sensitive U.K. stocks will update too, broadcaster ITV Plc for some insight into how TV advertising is holding up and more from the housebuilding sector with Taylor Wimpey Plc. Watch too for U.S. Trade Representative Robert Lighthizer testifying to the House Ways and  Means Committee.

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