Five Things You Need to Know to Start Your Day
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Senate takes another shot at health-care legislation, oil gets a lift from Saudi Arabia, and Goldman downplays risks from a strong euro. Here are some of the things people in markets are talking about today.
Washington will see U.S. Senator John McCain return to Capitol Hill today as Republicans and President Donald Trump appear determined to push ahead with a debate on health-care legislation. Unusually, it will begin without lawmakers knowing what they'll be voting on, as it remains unclear if the GOP leadership has the support to pass a stripped-down version of a bill that would repeal Obamacare with a two-year delay. Emotions are running high on the floor, with GOP Rep. Blake Farenthold of Texas saying that, were some of the Republican opponents not women, he would settle the matter "Aaron Burr-style."
A barrel of West Texas Intermediate for September delivery was trading at $46.81 by 5:20 a.m. as crude prices were boosted by a Saudi promise to implement deep cuts to its oil exports next month. OPEC's largest producer said it would cap shipments at 6.6 million barrels a day in August, one million fewer than a year earlier, after a meeting between the organization and its allies in Russia yesterday. In the market, differences are emerging between the views of -- largely bearish -- speculators, and refiners, physical buyers and sellers of the commodity, who say the outlook is more bullish.
Don't fear the euro
Goldman Sachs Inc.'s Christian Mueller-Glissmann says that strong global growth will continue to trump the threat posed by the rising euro for the region's stocks. Data this morning appear to back up this view as the German IFO business climate index rose to 116.0, a record high, while business confidence in France rose to the highest level in six years. The euro was trading at $1.1651, by 5:30 a.m. ECB Executive Board member Yves Mersch said that stimulus was still needed to support headline inflation as underlying price pressures remain muted.
Overnight, the MSCI Asia Pacific Index slipped 0.2 percent, while Japan's Topix index dropped 0.3 percent as major regional gauges traded in narrow ranges. India's NSE Nifty 50 Index hit a record high, briefly breaking through the 10,000 mark amid better-than-expected earnings. In Europe, the Stoxx 600 added 0.6 percent by 5:40 a.m. as stocks in the region rebounded from three days of losses. U.S. market futures were also indicating gains today.
The two-day Federal Reserve meeting begins in Washington today, and while investors expect rates to be kept unchanged when the announcement is made tomorrow, any changes to the the bank's outlook on growth, or hints about balance-sheet normalization have the potential to move markets. Former Federal Reserve Governor Daniel Tarullo said that weak inflation is likely to weigh on discussions about the pace of future interest-rate hikes.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Can John Cryan save Deutsche Bank from itself?
- Zombie companies littering Europe may tie the ECB's hands for years.
- America's biggest oil port wants to be a two-way street.
- Elon Musk's tunnel plan isn't as crazy as SpaceX or Tesla.
- China and India locked in 'eyeball-to-eyeball' border standoff.
- Greece is back.
- The ultimate bad-decision asset.