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Comey memo shakes Trump administration, the euro climbs above $1.11, and U.K. real wages fall for the first time since 2014. Here are some of the things people in markets are talking about today.
Donald Trump is facing his deepest crisis yet after a memo written by then-FBI Director James Comey surfaced on Tuesday, alleging that the president asked him to drop an investigation of former National Security Adviser Michael Flynn. Democrats say that, if true, Trump's request could amount to obstruction of justice. Noah Feldman, a professor of constitutional and international law at Harvard University, says that while it may not be a legal crime, that would still be an impeachable offence.
The latest scandal to embroil the White House is moving markets, with the dollar bearing the brunt of the initial reaction. The euro traded over $1.11 this morning for the first time since early November, and the yen was trading at 112.41 to the dollar by 5:28 a.m. Eastern Time. Gold rallied. Overnight, the MSCI Asia-Pacific Index declined 0.3 percent, while Japan's Topix index dropped 0.5 percent. In Europe, the Stoxx 600 Index was 0.3 percent lower at 5:35 a.m., with banks among the worst performers. S&P 500 futures slid 0.6 percent.
Real wages drop
Unemployment in the U.K. fell to 4.6 percent, the lowest level since 1975, according to data released by the Office for National Statistics this morning. It wasn't all good news, however, as regular pay adjusted for inflation dropped 0.2 percent in the first quarter, with a 0.5 percent drop in March alone. The data this morning confirms Bank of England Governor Mark Carney's recent warning that the U.K. consumer is in for a challenging time.
The weakening dollar is not enough to keep the price of oil in positive territory, with a barrel of West Texas Intermediate for June delivery trading at $48.52 by 5:45 a.m. For OPEC and its partners, maintaining and extending production cuts into 2018 may prove more difficult as seasonal factors which helped boost compliance in the first half of this year fade away. Saudi Aramco said it is planning to sign at least 10 energy deals on May 20 when Donald Trump visits the region.
At 11:00 a.m. this morning the New York Federal Reserve will release its first-quarter Household Debt and Credit Report. The previous report showed total consumer debt at $12.58 trillion, just below the all-time high reached in 2008.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Fed's cut in its big bond hoard is likely to begin at glacial pace.
- Wider laptop bans could cost airlines $1 billion.
- China's copy of Manhattan is no longer a ghost town.
- There's a big technical factor behind the low volatility in stocks.
- Goldman builds China financial stress index -- and it's risen.
- Seven charts illustrate why Rhouhani could lose Iran presidency.
- Deutsche Bank's chairman builds a private power haus in Munich.