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Dollars surge, Volkswagen will cut as many as 30,000 jobs, and Draghi remains dovish. Here are some of the things people in markets are talking about today.
The dollar is having its longest winning streak against the euro since that currency's debut in 1999. In Asia, the rising greenback sparked interventions as central banks there tried to calm their currencies, while the yen weakened past 110 to the dollar. The Turkish lira dropped to a new record of 3.4084 per dollar. Gold continues to slide, and was at $1,205.60 an ounce at 5:03 a.m. ET.
While emerging-market central banks are intervening to support their currencies against the dollar, European Central Bank President Mario Draghi did nothing to strengthen the euro this morning when he said that the current level of monetary support will remain a "key ingredient" for the economic outlook in the coming years. The ECB will decide on Dec. 8 on the future of the current asset-purchase program that is due to end in March 2017.
VW job cuts
Volkswagen AG has reached an agreement with unions to cut as many as 30,000 jobs worldwide, with 23,000 coming from Germany. Many of the job losses will come through attrition, with no forced layoffs until 2025. Shares in the automaker climbed 1.2 percent after the announcement which is expected to save 3.7 billion euros ($3.9 billion) in expenses.
Overnight, the MSCI Asia Pacific Index retreated 0.5 percent, with Japanese stocks bucking the trend as the Nikkei 225 entered a bull market, rising 0.6 percent as the yen continued to fall against the dollar. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:05 a.m. ET, with energy and utility stocks leading the losses. S&P 500 futures dropped 0.2 percent.
Bonds on a bad run
Bonds around the world have been on their worst two-week run in at least 25 years as President-elect Donald Trump has sent inflation expectations surging. In her testimony to Congress yesterday, Federal Reserve Chair Janet Yellen did nothing to dissuade markets from their near-certainty that a rate rise is coming in December. In Europe, the continuing government bond selloff is again led by Italy, where polls point to Prime Minister Matteo Renzi losing his reform referendum on Dec. 4.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Abe woos Trump with golf, just like his granddad did with Ike.
- China happy to take U.S. tech immigrants that Trump blocks.
- Brexit bulletin: Cooler heads in the City.
- Groundhog Day for iron ore.
- EU sees 'smooth sailing' if Greece implements needed reforms.
- Divorce in the U.S. plunges to 35-year low.
- Globalization’s last gasp.