Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Theresa May is staring down the barrel of a long Brexit delay, pontificating about the Fed will peak and trade jitters make a return. Here’s what’s moving markets.
A New Deadline
Sure, there isn’t going to be another meaningful vote on Brexit today. But that doesn’t mean there isn’t excitement to be had. The European Union is likely to give Theresa May until mid-April to decide whether to extend Brexit to 2020 or leave the bloc without a deal at the end of June. Michel Barnier said any delay has to serve a purpose, France said it won’t approve a delay without a plan to get the deal through the U.K. Parliament or to hold another referendum, and pro-Brexit U.K. ministers just plain hate the idea. Another day, another cavalcade of headaches for the prime minister. Yet from the pound to stocks, markets are getting optimistic.
Fed Day
It’ll arrive after European markets close but the Federal Reserve’s latest interest decision is the event of the day. Fed Chairman Jerome Powell and his cohort will have a tough balancing act to perform as inflation moves to the center of policy. The Fed has said it’s willing to tolerate an inflation overshoot, but could be in a bind if inflation softens. Traders will be forensically examining the decision for clues on whether a bias towards hikes remains, how the new “dot plot” will look and the approach to balance sheet run-off.
Cars and Leather
Two excellent indicators for how trade-sensitive sectors are scheduled to report in Europe. German carmaker BMW AG and French luxury goods house Hermes International both already announced most of their financials. Attention will instead be on the outlook and how both groups are faring in China, just as Nissan Motor Co. said it’s cutting its China targets. For BMW, watch too for more details on its electric vehicle plans and for Hermes be on the lookout for any indication of how France’s Yellow Vest protests are hitting business.
Trade Jitters
U.S. President Donald Trump remains optimistic about how the trade talks with China are faring, but that's not a view held across the board. Some trade negotiators are concerned China is pushing back on the demands being made, reportedly because it hasn’t received assurances that the tariffs slapped on Chinese goods will be removed. The noise on the U.S.-Europe side of the trade war doesn't sound too happy either.
Coming Up...
Those trade concerns stopped U.S. and Asian stocks and oil in their tracks. European futures are pointing to a negative start, potentially signaling an end to five days of gains. There are two emerging market central bank decisions to digest. Thailand is likely to stay on hold but could signal a cut is coming, while a stagnating economy in Brazil is expected to push potential hikes further out. U.K. inflation data is also due, as is a likely rowdy Prime Minister's Questions for Theresa May to get through.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Currencies need a “proper crisis” to get them going.
- Hong Kong has set aside $80 billion for artificial islands.
- Instagram is getting into the e-commerce game.
- Rich countries are filled with anxious, alienated folks.
- A Harvard dropout’s plan to fix college admissions.
- Splurging on vacations is in vogue for those undergoing midlife crises.
- Why some people get addicted to running.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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