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An OPEC deal remains elusive, U.K.'s Brexit strategy is (possibly) revealed, and UBS says traders have Trump all wrong. Here are some of the things people in markets are talking about today.
Russia has said it will not attend tomorrow's crucial oil talks in Vienna as the chances of a deal to cut production seem to be fading. Goldman Sachs Group Inc. have warned that the price of a barrel of crude may swing $6 on Wednesday, based on options contracts' implied volatility, and have put the chances of a cut agreement at 30 percent. A barrel of West Texas Intermediate for January delivery was trading at $46.38 at 5:06 a.m. ET.
U.K. Prime Minister Theresa May has always insisted that Brexit means Brexit, without adding much in the way of detail. A photograph of scribbled notes in the arms of a Conservative Party aide entering Downing Street yesterday reveals something of the plan, showing the U.K. aim is to “have your cake and eat it.” In testimony to European Parliament lawmakers, ECB President Mario Draghi took a different view, warning that Britain’s economy would be the first to suffer from a so-called 'hard Brexit.'
UBS Group AG’s $2 trillion wealth-management arm predict the yen will strengthen to 98 to the dollar as expectations of a Trump-led fiscal expansion have become overblown. The yen dropped as low as 114 to the dollar on Friday last, capping a sell off that began with the results of the U.S. election. Elsewhere, Bank of Canada Governor Stephen Poloz, warned of heightened uncertainty following the Republican victory in an interview with Bloomberg TV. The President-elect, meanwhile continues to add to his picks for government, with U.S. Representative Tom Price selected as secretary of the Department of Health and Human Services, according to a person familiar with the matter, while Trump tweeted positively following his meeting with retired General David Petraeus who is being considered for the secretary of state role.
Overnight, the MSCI Asia Pacific Index slid 0.1 percent, with Japan's Topix index closing one point lower after a 12-day rally. In Europe, the Stoxx 600 Index was 0.1 percent lower at 5:26 a.m. ET in thin trading as investors watch for news from OPEC and await this weekend's Italian referendum. S&P 500 futures were broadly unchanged.
This is a big week for U.S. economic data. Today at 8:30 a.m. the second reading to third-quarter GDP is released, with S&P CoreLogic home prices numbers coming at 9:00. There are two Fed speakers today, with New York Fed's Bill Dudley speaking at 9:15 a.m. and Governor Jerome Powell due at 12:40 p.m. With a December rate rise practically a certainty, those speeches will be watched for hints as to rate-path projections.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Odd Lots Podcast: How to launch your own form of money.
- Markets and the Federal Reserve finally agree on something.
- What coal tells us about China's one-size-fits-all approach to economic reform.
- Russia's central bank wants you to believe.
- Supersonic is coming back. Will the airlines buy it?
- The U.S. and China are fighting over Mars, but Japan may win the space race.
- Leaning San Francisco tower seen sinking from space.