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McConnell Abandons Obamacare Replacement Bill

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The health-care bill doesn't make it, U.K. inflation surprises, and cracks appear in OPEC's deal to cut output. Here are some of the things people in markets are talking about today.

Dead before arrival

Senate Majority Leader Mitch McConnell abandoned efforts to get a Republican health-care bill passed after two more GOP senators announced their opposition. A Bloomberg News poll published yesterday showed that health care ranked as the most important issue facing the country, ahead of jobs, terrorism and immigration. Investors seem to see the failure to pass the bill as a warning sign for President Donald Trump's legislative agenda, with the dollar and U.S. equity futures falling after the outcome became clear. 

U.K. inflation

Price growth in the United Kingdom unexpectedly slowed to 2.6 percent in June, weakening the case for a Bank of England rate hike in the near future. The pound dropped from a 10-month high to trade at $1.3026 after the data was released. Core inflation -- which excludes food and energy prices -- dropped to 2.4 percent from 2.6 percent in May. Factory-import price gains slowed to 9.9 percent from 12.1 percent, as the post-referendum pound effect is set to fade from year-on-year data. 

First OPEC domino?

A blow has been dealt to OPEC unity after Ecuador announced it will start increasing oil production this month, saying it needs the money. The announcement comes as the deal to cut output among members of  the Organization of Petroleum Exporting Countries was already coming under pressure, with compliance falling below 100 percent in June. A barrel of West Texas Intermediate for August delivery was trading slightly higher at $46.16 at 5:35 a.m. Eastern Time.

Markets drop

Overnight, the MSCI Asia Pacific Index added 0.1 percent, while Japan's Topix index slipped 0.3 percent as the yen gained against the dollar. In Europe, the Stoxx 600 Index was 0.4 percent lower at 5:35 a.m. after the euro strengthened to its highest level in 14 months ahead of this week's ECB meeting. S&P 500 futures were broadly unchanged.

Earnings

Bank of America Corp. and Goldman Sachs Inc. both report before the bell, with earnings-per-share estimates of 43 cents and $3.43 respectively, with investors closely watching trading revenue at Goldman. Netflix Inc. saw shares rally as much as 11 percent in after-market trading when the company reported international subscriptions that far exceeded expectations. Johnson & Johnson, International Business Machines Corp. and UnitedHealth Group Inc. are among the other companies reporting today. 

What we've been reading

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