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Five Things You Need to Know to Start Your Day

Five Things You Need to Know to Start Your Day

(Bloomberg) --

Frustration in Hong Kong is growing, parts of the U.S. economy may already be in recession and Boris Johnson tries again to secure an early U.K. election. Here are some of the things people in markets are talking about today. 

‘Have Mercy’ 

Hong Kong’s government is growing increasingly frustrated by the leaderless protest movement disrupting the streets. Some demonstrators say the unrest would end if Chief Executive Carrie Lam met even two of their five demands, but nobody the city’s officials meet with can guarantee that the rest of the protesters will stand down. The quandary isn’t stopping the city’s richest man from calling for reconciliation between the government and the protesters. “If it continues, it will be very bad, and I am concerned,” 91-year-old Li Ka-shing said. “We hope young people can consider the big picture, and government leaders can also have mercy on the masters of our future.” Here’s how Hong Kong’s sky-high home prices have fed the unrest.

U.S. Recession 

For all the debate on whether the U.S. is headed for a recession there’s plenty of evidence that certain corners of the economy may already have tumbled into one. After two boom years, America’s factories are starting to suffer. Rising uncertainty has put a damper on capital expenditures, and a range of data points are starting to look ugly. From his trade policy to tax cuts and deregulation, President Donald Trump’s grand economic vow was to bring factories home. But as he bids for a second term there are signs he may have shot his own manufacturing recovery in the foot and undermined his own best argument for reelection — a strong economy.

Market Open

Asian futures pointed to a mixed start to trading Tuesday after U.S. stocks snapped three days of gains, while sovereign bond yields rose in Europe and America. U.S. stocks that had driven a recent rally such as health-care, tech and real estate retreated. German bunds led the drop in sovereign debt, and rates on longer-dated Treasury notes climbed more than those on shorter-dated securities, reversing an inversion in the yield curve. Investors are biding their time this week ahead of the ECB meeting on Thursday and Federal Reserve gathering next week that will throw light on the path of monetary policy. On the trade front, Treasury Secretary Steven Mnuchin said earlier that the U.S. and China have made “lots of progress” on talks.

Nissan Scandal 

Less than a year since the dramatic downfall of Carlos Ghosn, Nissan is losing another leader. Chief Executive Officer Hiroto Saikawa was asked by the board on Monday to step down by Sept. 16. Saikawa distanced Nissan from his larger-than-life predecessor, but earnings deteriorated and a mega-merger with Fiat Chrysler collapsed after relations with top shareholder Renault soured. Reports last week that Saikawa and other Nissan executives were paid more than they were entitled to dealt a final blow to the under-siege CEO. Saikawa will be replaced by Chief Operating Officer Yasuhiro Yamauchi until a permanent replacement is named by the end of October.

U.K. Goes Prorogue 

The British parliament voted against Prime Minister Boris Johnson’s bid for an early election, and will be suspended at the end of Monday’s business.  A bill designed to block a no-deal Brexit has now become law, but the government is seeking loopholes to get around it, according to a person familiar with the matter. House of Commons Speaker John Bercow earlier surprised MPs by announcing plans to step down by Oct. 31. The pound — which has plunged 17% since the vote to leave the EU in mid-2016 — pared gains from earlier in the session after the announcement by Bercow, who has been a thorn in the government’s side and has given opportunities to opponents of a no-deal Brexit to have their say and take action in the Commons to prevent it. 

What We’ve Been Reading

This is what’s caught our eye over the weekend.

To contact the editor responsible for this story: Alex Millson at amillson@bloomberg.net

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