Five Things You Need to Know to Start Your Day
Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Asia stocks traded mixed overnight with Federal Reserve Chairman Jerome Powell’s big testimony now upon us, U.K. leadership candidates tussled in a live television debate and there was a shock resignation over in Mexico. Here’s what’s moving markets.
Pow-wow-ell
This week’s main event starts this afternoon as Federal Reserve Chairman Jerome Powell begins his semiannual monetary policy testimony, having faced a level of scrutiny in recent months that is unprecedented for a supposedly independent central banker. Following a barrage of insults from President Donald Trump (here’s a compilation), investors now expect a rate cut at the end of this month, justified by a slowdown in global trade growth and below-target inflation.
Tight-Lipped Boris
Boris Johnson and Jeremy Hunt faced off in a live television debate last night. When pressed by his rival, Johnson declined to say if he would quit if he fails to deliver Brexit by his "do or die" deadline of Oct. 31, presuming he gets the keys to Downing Street. It comes as some lawmakers are warning the bookies’ favorite that they won’t allow him to pursue a no-deal scenario. The pound slumped on Tuesday, just in time to make some of our summer holidays even more expensive.
Adios
Mexico is back on our radar: In a surprise decision, the country’s finance minister, Carlos Urzua, announced his resignation because of disagreements over economic policy with President Andres Manuel Lopez Obrador. The Mexican peso and shares slumped on the news and European stocks with exposure to the country, including Spanish lenders BBVA and Santander and telecoms giant Telefonica, could be in focus today.
Asia Mixed
Stocks in Asia were mixed overnight as all eyes remained firmly on that Powell speech, while U.S. Treasury yields touched a three-week high, offering support to the dollar. Amid the great focus on central banking today, here’s one more sign of how dovish global rate-setters have been of late: Yields are so depressed that even some European junk bonds trade at levels where investors have to pay for the privilege of holding them. That said, investors might still be underestimating the ECB’s dovishness.
Coming Up...
Today’s economic data dump includes U.K. monthly gross domestic profit amid recent forecasts for a contraction in the second quarter, as well as industrial production from Britain, France and Italy. Men’s quarterfinals take place at Wimbledon.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- London ethnic minority workers paid 21.7% less than white employees.
- The new quant billions are hiding in the bond market.
- Won’t somebody please think of the worms?
- Richard Branson’s Virgin Galactic plans to go public.
- Beer just got 30% cheaper in Qatar, host of the 2022 world cup.
- Cool graphics show how global energy consumption has changed.
- Jay-Z gets into marijuana.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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