Trade war opens up on multiple fronts as Trump touches down in London and markets are getting more nervous. Here are some of the things people are talking about today.
Donald Trump arrives in London but has already made his presence felt for days, dominating weekend headlines by commenting on the contest to replace Theresa May, potentially backing a no-deal Brexit and touting Nigel Farage as a suitable negotiator. Saturday saw his remark to the Sun newspaper that former Foreign Secretary Boris Johnson would make an “excellent” prime minister. A packed schedule with royal hosts promises to be a distraction, with White House advisers seeking to keep the president focused on the pomp and circumstance of meeting Queen Elizabeth. Talks with the prime minister, in her last week in the job, may be used to build support for exerting further pressure on the Chinese telecommunications firm Huawei Technologies Co. Ltd.
MAGA or Not, Here I Come
An interview with Britain’s Queen wasn’t the only thing on Trump’s mind over the weekend. Tariff Man ended India’s status as a developing nation, an arrangement that lets the country export almost 2,000 products to the U.S. tax free, days after his threat to levy Mexican goods. His main trade adversary, China, said the impasse between the world’s two largest economies hasn’t “made America great again,” in a white paper that asserted its right to development and sovereignty. Beijing also said it’s investigating FedEx after the company failed to deliver items to the correct addresses, possibly a reaction to packages destined for Huawei that wound up in the U.S.
Deal-makers were busy at the weekend. Cypress Semiconductor Corp. is rallying in pre-market trading after Germany’s Infineon Technologies AG agreed to buy its chip-making rival in a deal that has a $10 billion enterprise value. Meanwhile, Blackstone Group LP said it would buy $18.7 billion of U.S. logistics assets from Singapore’s GLP Pte. Goldman Sachs Group Inc.’s merchant banking unit will acquire Capital Vision Services, an operator of optometry centers, in a deal the Wall Street Journal says is valued at $2.7 billion including debt.
U.S. equity futures are indicating another down day as tariff concerns continue to hurt sentiment. Europe’s Stoxx 600 benchmark fell 0.3% at 5.50 a.m. Eastern Time, following Asia’s lead lower with sectors most exposed to trade wars, like autos and tech, among the biggest decliners. Crude oil futures erased a 2.6% loss in New York having neared bear-market territory earlier, while the yield on U.S. ten-year Treasuries slipped again, breaking below 2.1%.
Today’s manufacturing data will be scrutinized for clues on the outlook for rates. Markit manufacturing PMI is due at 9:45 a.m., while ISM data follows at 10 a.m. Richmond Fed President Thomas Barkin, St. Louis Fed President James Bullard and San Francisco Fed President Mary Daly are all speaking. All eyes will be on the Fed’s annual framework review conference in Chicago starting tomorrow. Tuesday also brings a rate decision from the Reserve Bank of Australia, while Thursday sees decisions from the European Central Bank and the Reserve Bank of India. Meanwhile, the Apple Worldwide Developers Conference kicks off in San Jose, California, and the U.S. employment report lands Friday.