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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) --

Good morning. The world is poring over the rough transcript of Trump’s Ukraine call, tit-for-tat tariffs are rearing their heads and U.K. lawmakers are back in business. Here’s what’s moving markets.

Rough Transcript

Plenty to ponder in the rough transcript of the call between U.S. President Donald Trump and Ukraine’s president, an issue now very likely to drag attention away from other government work and to overshadow the 2020 election. To some, the conversation involving the president pushing Ukraine’s leader to investigate Joe Biden is damning while Trump, for his part, called the impeachment inquiry a “joke.” For traders, figuring out how this moves assets is going to cause an almighty headache.

Tit-for-Tat

If nothing else, the debate around the Ukraine call and possible impeachment is likely to distract from the main topic on markets’ minds in recent weeks: the trade war. The U.S. is set to get World Trade Organization authorization to impose tariffs on about $8 billion worth of European goods in reaction to state aid given to airplane maker Airbus SE. That’s in opposition to the European Union imposing $4 billion worth of tariffs on U.S. exports in a clear tit-for-tat move more in line with the aggressive stance the Trump administration has taken. Both steps are unlikely to prove reassuring to too many folks watching events unfold.

Return to Work

British lawmakers got back to work on Wednesday and are unlikely to see many calmer days in the weeks to come. Prime Minister Boris Johnson, fresh from his defeat in the Supreme Court, remains defiant in the face of calls to resign and will once again push for a new general election, which needs to be approved by a Parliament in which Johnson has no majority and in which opposition parties have shown no appetite for an election in the immediate future. Now attention turns back to where it was before the prorogation that never happened, namely how lawmakers can definitively prevent a no-deal Brexit.

Not-So-Big Tobacco

The great reunion is not happening. Altria Inc. and Philip Morris International Inc., two tobacco giants and formerly the same entity, couldn’t reach an agreement to get back together. The deal would have created an even larger big tobacco force in a sector facing constant pressure to adapt to a new world and one now facing serious regulatory and health concerns about vaping. British American Tobacco Plc and Imperial Brands Plc, the U.K.’s two biggest tobacco companies, both rose on the news that an even larger competitor will not be formed, though the deal won’t stop the talk of potential further consolidation across the industry.

Coming Up...

Trump saying that there is a “good chance” that the U.S. and China will reach a trade deal seemed to overshadow the impeachment rhetoric, helping stocks in Asia higher even if European and U.S. futures look somewhat mixed. The European Central Bank’s monthly bulletin will be released and President Mario Draghi will speak in Frankfurt, all after the board of the ECB suffered the surprise resignation of Sabine Lautenschlaeger. Not much on the European earnings front, though keep an eye on results from SSP Group Plc and Autogrill SpA, two rivals who run kiosks, concessions and restaurants in airports and train stations.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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