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Abe wins landslide, Catalan crisis rumbles on, and Yellen still in running for the Fed. Here are some of the things people in markets are talking about today.
Prime Minister Shinzo Abe’s ruling coalition maintained its two-thirds majority in yesterday’s election for the 465-seat lower house. The win helped push the country’s stocks higher as investors see it as a green light for further monetary easing from the Bank of Japan. The yen fell to as low as 114.10 to the dollar, the weakest level in three months.
Catalan separatists are meeting today to decide on their response to Spanish Prime Minister Mariano Rajoy’s plan to dismiss Catalan President Carles Puigdemont and his government. The continuing standoff over the future of the region could finally come to a head this week as Puigdemont vows to fight on, with his allies saying he could push through with a declaration of independence in the coming days. The European Union may have gotten another headache over the weekend when Czech voters handed a euroskeptic billionaire a decisive victory in national elections.
“I really like her a lot”
Janet Yellen is still in the running to be the next Fed Chair after President Donald Trump said at the weekend that he liked her and that he is considering three people for the role. Yellen defended her legacy in a speech on Friday in which she said the U.S. economy is much stronger today than it would have been without the Federal Reserve’s strong crisis response. A bigger challenge for the president remains getting a tax plan that can both pass Congress and meet Trump’s promise of benefiting the middle-classes.
Overnight in Asia the post-election rally in Japanese stocks was only enough to lift the regional MSCI Asia Pacific Index 0.1 percent as disappointing China home price data weighed on stocks in Hong Kong. In Europe, the Stoxx 600 Index was 0.3 percent higher at 5:45 a.m. Eastern Time as corporate earnings season continues. S&P 500 futures added 0.1 percent, the 10-year Treasury yield was at 2.385 percent and gold slipped.
While the economic data calendar is quiet for today, this is shaping up to be a big week for investors. On Thursday, the European Central Bank is expected to announce details of how it will extend and taper its asset purchase program, while on Friday advance third-quarter U.S. GDP figures are released. It’s also a huge week for tech earnings with Amazon.com Inc., Alphabet Inc., Microsoft Corp., Facebook Inc., and Twitter Inc. all due to report.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots podcast: ETFs are eating the financial world and they're not done yet.
- Wall Street's biggest stock bull says momentum measure shows rally is overbought.
- Christmas plans face ruin for finance industry as MiFID II looms.
- The crude market may be underestimating China.
- Nobel Group warns of loss topping $1 billion.
- How I learned to stay quiet and become a Brexit negotiator.
- Does domestic uncertainty really matter for the economy?