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Mnuchin, Schaeuble Seek to Diffuse Tensions Over Trade

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The pound rallies, stocks lose steam, and the Trump administration meets the world. Here are some of the things people in markets are talking about today.

Fair trade

After yesterday's "extremely productive" talks between U.S. Treasury Secretary Steven Mnuchin and his German counterpart Wolfgang Schaeuble, Mnuchin heads to the Black Forest town of Baden-Baden for the G-20 finance ministers' meeting. He's said to plan to use his debut to insist that the U.S. won’t tolerate countries that devalue their currencies to gain an edge in trade. Fresh from making friends, President Donald Trump moves to influencing people when he meets with Chancellor Angela Merkel in Washington today. 

May's balancing act

With the Brexit mantra of "take back control" now finding favor in Scotland, U.K. Prime Minister Theresa May is going to try to neutralize trouble in the north with a speech today, in which she'll unveil a "plan for Britain." As of 5:19 a.m. Eastern Time, the pound was trading at its highest levels this month, after Bank of England policy maker Kristin Forbes caught markets by surprise by voting for an interest-rate increase. The central bank kept the benchmark rate at a record-low 0.25 percent in an 8-1 vote yesterday.

Energy markets

OPEC may extend oil-supply cuts if stockpiles stay above the five-year average, Saudi Energy Minister Khalid Al-Falih told Bloomberg TV this morning. That was one factor helping crude toward its first weekly advance this month, after U.S. stockpiles eased from a record. Meanwhile, billionaire investor Carl Icahn is betting against the renewables market that he wants President Trump to overhaul.

Stocks lose steam

Global equities are still on course for the best week since January even though, by 4:32 a.m. in New York, the rally spurred by the Federal Reserve’s outlook was losing some of its momentum. With emerging markets among the strongest gainers, Jakarta's benchmark index touched an all-time high. While a gauge of volatility on the Euro Stoxx 50 Index plunged 26 percent on Thursday — the most on record — it may rise in Europe today when some options expire. The Bloomberg Dollar Spot Index was little changed after a two-day loss.

Coming up...

Secretary of State Rex Tillerson arrives in Beijing on Saturday, having declined to rule out a pre-emptive strike against North Korea during the early leg of his tour. Both Theresa May and Scottish First Minister Nicola Sturgeon end two-day conferences, with Brexit and Scottish independence set to rule the agendas.

What we've been reading 

This is what's caught our eye over the last 24 hours.

  • Hedging politics is becoming a pain in Europe.
  • Cape Town risks running out of water.
  • French asset managers display sangfroid in the face of political risks....
  • Vladimir Putin's French gambit backfires.
  • The market is acting like the Fed just cut rates.
  • China's hidden protectionism nabs Peppa Pig.
  • Bob Diamond has a U.K. comeback plan.