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OPEC optimism fades, it's PMI day, and the U.K. Chancellor of the Exchequer presents a mini-budget. Here are some of the things people in markets are talking about today.
Deal or no deal
A barrel of West Texas Intermediate was trading near $48 this morning with optimism over an OPEC deal to curb production fading as the question of Iran and Iraq's participation in the plan remained unresolved. For Saudi Arabia, the world's largest crude producer, the resistance of Iran and Iraq to the deal shows its waning power in the group it once dominated.
Euro-area economic growth accelerated to the fastest pace this year, with a Purchasing Managers’ Index for manufacturing and services rising to 54.1 in November, according to IHS Markit, the strongest level in 11 months. In France, a drop in manufacturing PMI was offset by a rise in services, while in Germany, composite PMI slipped slightly to 54.9, remaining well in expansion territory. Yields on German two-year bonds slid to a record low this morning.
U.K. Chancellor of the Exchequer Philip Hammond is expected to outline a series of measures to help the less well-off when he makes his mini-budget Autumn Statement to parliament during the U.K. afternoon. One company getting hit in trading this morning is Foxtons Group Plc which has fallen the most in four months as Hammond is expected to confirm the scrapping of letting-agent fees. The chancellor is also expected the reveal the cost of the U.K. vote to leave the European Union, with an extra £110 billion of borrowing likely to be needed over the next four years. Currency traders predict a volatile session for the pound.
Market rally fading
Yesterday's record high close in U.S. stocks fed through to Asia overnight, where the MSCI Asia Pacific Excluding Japan Index rose 0.7 percent, with commodity producers leading the gains. Japanese markets were closed for a holiday. In Europe, the Stoxx 600 gave up earlier gains to trade 0.3 percent lower at 5:30 a.m. ET as financials slipped. S&P 500 futures slipped 0.1 percent.
There's a lot to look for in the U.S. today ahead of the Thanksgiving break. At 8:30 a.m. ET durable goods orders are due, with expectations for a jump to 1.7 percent for October. Weekly initial jobless claims data will be released at the same time. At 9:45 a.m. Markit manufacturing PMI is due, and then at 10:00 a.m. new-home sales and University of Michigan's sentiment gauge is published. Finally, at 2:00 p.m. the minutes of November's FOMC meeting are published.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Investors have hit the pause button on a number of 'Trump trades.'
- European stock volatility underprices rising political risk.
- Goldman: Hedge funds are poised to get beaten for the eighth year straight.
- How Apple lost China to two unknown local smartphone makers.
- Big western companies are pumping cash into Russia.
- Zara's recipe for success: more data, fewer bosses.
- Washington won't have the last word on climate change.
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