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Theresa May gets her trigger, Trump writes a letter, and China has the yuan exactly where it wants it. Here are some of the things people in markets are talking about today.
Article 50 vote
Yesterday evening the lower house of U.K.'s Parliament overwhelming voted in favor of giving Prime Minister Theresa May the power to trigger Article 50 of the Lisbon Treaty, an action that would mark the beginning of the two-year process of leaving the European Union. May promised lawmakers that they'd get an early vote on the final agreement, possibly giving a hostage to fortune in order to appease rebels within her own party. The prime minister denied having a weak hand in the coming negotiations.
Trump's letter to China
President Donald Trump, more known for his short social-media messages, has written a letter to China's President Xi Jinping in his first direct communication with the leader of the world's second-biggest economy since he took office. While Trump's China policy is yet to take shape, the country has been in contact with his daughter Ivanka and her husband Jared Kushner as it attempts to gain influence with the new administration.
Yuan sweet spot
With currency wars threatening to raise their head again as President Trump and his advisers criticize trade partners across the world, China has managed to get the yuan exactly where it wants it. The nation's authorities have let the currency rise against the dollar, making it harder for the U.S. administration to accuse it of undervaluing the exchange rate, while at the same letting the yuan weaken against a trade-weighted basket of currencies. With Germany reporting a record trade surplus for 2016 this morning, the White House may avoid further action against China for the time being.
Overnight, the MSCI Asia Pacific Index slipped 0.3 percent, with Japan's Topix index dropping 0.7 percent as the yen held near a two-month high. Chinese stocks in Hong Kong climbed to a 14-month high. In Europe, the Stoxx 600 Index had gained 0.3 percent by 5:40 a.m. ET with banks leading the gains following Societe Generale SA's better-than-expected results. U.S. futures were broadly unchanged.
Weekly jobless claims are due out at 8:30 a.m. ET with expectations for a slight increase to 249,000 for the week ending Feb. 4. Twitter Inc. is due to report before the bell, with investors watching to see if the company can turn presidential publicity into profit. Mexico's central bank is expected to hike rates by 50 basis points when it announces its decision at 2:00 p.m. ET. Also coming to the northeast today: lots and lots of snow.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Five major risks investors think you should worry about.
- The most stubborn Trump trade begins to budge.
- China's vice premier: Punish those who falsify data.
- Florida's once signature crop is shrinking away.
- Monte Paschi's debt overhang: Vineyards in Tuscany it can't sell.
- Trump tweeting will spur reality check on U.S., HSBC says.
- Romance isn't dead, but it's not getting any cheaper.