Investigation

House Speaker Nancy Pelosi announced a formal impeachment inquiry of President Donald Trump, a move which is likely to dominate national politics and the presidential election campaign. At the center of the investigation is Trump’s July phone call with the Ukrainian leader, a transcript of which looks poised to be released by the White House later today. The president has reacted to the decision in his usual style, hitting back at Democrats and saying the process is “bad for the country.” Initial market reaction to the news was negative with stocks falling and Treasury yields hitting a two-week low.

Early return

British Prime Minister Boris Johnson is due back in Parliament this morning, almost three weeks earlier than planned after his decision to close the legislature was overturned by the U.K. Supreme Court yesterday. It is unlikely that the opposition Labour Party will call a confidence vote today, with leader Jeremy Corbyn wanting to wait until after the crucial Oct. 17 EU summit before making his move. While it seems increasingly unlikely that Johnson will be able to keep his promise of delivering Brexit by Oct. 31, the pound is lower today as investors remain highly uncertain over what might come next.

Finally

Saudi Aramco is set to announce the start of its initial public offering next month, with a potential listing on the Saudi stock exchange taking place as early as November, according to people with knowledge of the matter. The company has seen production following the attack earlier this month recover faster than expected, with capacity reaching 11.3 million barrels per day about a week ahead of schedule. In other IPO news, the new CEOs of We Co. said they are “evaluating the optimal timing” of an offering following the exit of Adam Neumann from the executive position.

Markets drop

Overnight, the MSCI Asia Pacific Index slipped 0.6% while Japan’s Topix index closed 0.2% lower as political uncertainty in Washington was balanced somewhat by China’s move to purchase more American agricultural products. In Europe, the Stoxx 600 Index was 1.4% lower at 5:50 a.m. Eastern Time, with all sectors posting losses amid myriad political risks. S&P 500 futures pointed to more weakness at the open, the 10-year Treasury yield was at 1.642% and gold was flat.

Coming up…

At 8:15 a.m., the New York Federal Reserve conducts its latest $75 billion overnight repo operation. U.S. August home sales are published at 10:00 a.m. and crude oil inventories are at 10:30 a.m.  Chicago Fed President Charles Evans, Kansas City Fed President Esther George, Fed Governor Lael Brainard and Dallas Fed President Robert Kaplan all speak at various events today. The U.S. Treasury is scheduled to sell two-year and five-year notes.