Market movers today
In the UK, there will be no vote on PM Theresa May’s Brexit deal today after May decided to postpone the vote, see below and Brexit Monitor: Brexit clash postponed to January, at the earliest , 10 December 2018 . Parliament will hold a three-hour emergency debate on Tuesday on May’s decision to defer the vote.
In Germany, we will get ZEW expectations in December. The index is at the lowest level since 2012.
The UK jobs report for October is due and the US is due to release the small business optimism from NFIB for November.
Norway is due to release the monthly GDP estimate for October ahead of the Norges Bank meeting on Thursday, where we expect no changes to the policy rate but a confirmation that it is on track to deliver a hike in March (see page 2).
Selected market news
US stock markets staged a late rebound last night, pulled higher by a rally in tech stocks. Chinese stocks are also slightly higher overnight. Apple faced further headwinds yesterday as a Chinese court ruled in favour of Qualcomm in a case about intellectual property rights.
US Treasury Secretary Stephen Mnuchin and China’s economic tsar Liu He yesterday discussed the next stage in the trade talks on a phone call. It shows the two countries are progressing with trade talks despite the arrest of Huawei’s CFO in Canada, which has sparked significant protests in Beijing. Both sides have indicated they want to keep the trade talk on a separate track from the clashes on the tech front. The bail hearing in Canada on Huawei’s CFO was adjourned to Tuesday.
In the UK, Theresa May’s decision to postpone the Brexit vote sent GBP sharply lower , In reality, it does not change much for our expectation, as she was expected to lose the vote anyway. The EU reacted coolly to the decision, with European Council President Donald Tusk saying that the EU was ready to discuss how to smooth ratification, but that neither the withdrawal agreement nor the Irish backstop would be renegotiated.
Oil prices dropped back to USD60 per barrel yesterday on doubts on whether the production cuts by OPEC and Russia would be enough to head off a glut in the market and worries over weaker-than-expected Chinese imports data.
Yesterday, India’s central bank governor Urjit Patel resigned after only a little more than two years in the seat. The resignation comes after a rift between the government and the central bank as the former has pushed for more capital to be transferred to the government. The rift has weakened the confidence in India’s economic governance and the INR took a beating on the news.
