Welcome to your morning markets update, delivered every weekday before the European open.
Good morning. Boris Johnson isn’t backing down, Chinese exports are struggling and there was a big change made at the Saudi Arabian oil ministry. Here’s what’s moving markets.
U.K. Prime Minister Boris Johnson, having suffered through a woeful week of defeats and a wave of resignations that continued with another heavy-hitting departure at the weekend, is still planning to push ahead with his plan to make sure the U.K. leaves the European Union on Oct. 31. Given MPs told him to seek an extension last week, that is unlikely to go down well with lawmakers so expect further showdowns to come. It’s going poorly enough for Johnson that pound traders already prefer Labour’s Jeremy Corbyn. Still, at least high helium prices mean he won’t see a blimp of himself flying over the city.
Chinese exports unexpectedly contracted in August, demonstrating once more the impact the of the trade war with the U.S. Ask Chinese analysts, however, and they’ll say that while China has made a few changes to market access and trademarks in order to further open up to the world, it’s not enough for a country with the kind of global clout it now possesses. In Hong Kong, the violent protests which have rocked the city are showing little sign of slowing down even after the concession made by leader Carrie Lam last week. Keep watching banks and luxury stocks in Europe as Hong Kong protests risks are baked back in.
The World Energy Congress, kicking off on Monday in Abu Dhabi, will have a little more attention paid to it than in the past following the decision in Saudi Arabia to put one of the country’s princes in charge of the energy ministry. What this means, if anything, for oil policy from the most important nation for crude is not yet clear nor what the implications could be for the eventual IPO of Saudi Aramco, the most awaited flotation in the world. Crude prices extended gains into Monday following the ousting of the energy minister and ahead of the OPEC+ committee meeting taking place this week.
Mario and Apple
Two very significant events that will grab a lot of attention this week. The European Central Bank will announce its latest policy decision on Thursday and President Mario Draghi is expected to unleash a barrage of stimulus measures to shore up economic growth, a move likely to impact foreign exchange markets. On Tuesday, Apple Inc. will launch its new iPhones and the reception the devices get will be important for the U.S. group’s huge supply chain. Accusations it broke labor laws in China to build the new phones may sour the mood.
Asian stocks were mixed on Monday as traders considered the new stimulus measures announced on Friday in China and took in the weak trade data. Treasuries and the dollar were little changed, the yuan dipped and European stock future are pointing to a moderately positive open. We’ll have some trade data from Germany, following on from the very downbeat factory orders last week, plus U.K. GDP data. Also keep an eye on Associated British Foods Plc’s trading update and how its Primark discount fashion business is faring.
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