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US NEWS 
By Lorcan Roche Kelly
(Bloomberg)
U.S.-China relationship is rapidly deteriorating, Trump vows to stonewall impeachment probe, and the Fed’s not-QE balance sheet expansion. Here are some of the things people in markets are talking about today.
Off track
An editorial published in Chinese and English in the China Communist Party-run Global Times newspaper emphasized the low expectations for a trade agreement at talks starting tomorrow in Washington. The paper accused the U.S. of insincerity, saying mutual distrust is growing. Events of the last few days support that, with the U.S. blacklisting Chinese tech companies, discussing investment restrictions and banning travel by some of the country’s officials. Rays of hope do remain, however, with the hit to growth in both countries possibly enough to spur the partial deal authorities in Beijing say they are still open to.
Stonewall Trump
White House efforts to frustrate the Democrats’ impeachment investigation were laid bare in a letter to House Speaker Nancy Pelosi, which declared the inquiry unconstitutional and invalid, adding that neither the president nor his administration would participate in it. Pelosi described the letter as “the latest attempt to cover up his betrayal of our democracy.” Polling shows that, for now, the majority of Americans support the impeachment process, but are wary about removing President Donald Trump from office.
Not QE
Federal Reserve Chairman Jerome Powell said the central bank would resume Treasury purchases in an effort to avoid a repeat of recent turmoil in money markets. He emphasized that just because the Fed may start expanding its balance sheet again, it should not be viewed as a return to crisis-era quantitative easing programs. He also suggested policy makers are inching closer to cutting rates at the next meeting, something investors will look for hints of when the minutes of the most recent FOMC discussion are published at 3:00 p.m. today.
Markets mixed
Overnight the MSCI Asia Pacific Index slipped 0.5% while Japan’s Topix index closed 0.3% lower as markets in the region tracked the selloff in the U.S. In Europe, the Stoxx 600 Index was 0.5% higher at 5:50 a.m. Eastern Time with every sector of the gauge advancing as investors welcomed reports that China is still open to a partial trade deal. S&P 500 futures pointed to a gain at the open, the 10-year Treasury yield was at 1.553% and gold eased.
Coming up…
At 10:00 a.m. U.S. August wholesale inventories data and Jolts job openings numbers are published. Crude inventories at 10:30 a.m. are expected to confirm an increase in stockpiles, which has pressured oil prices lately. Fed Chair Jerome Powell speaks at a Fed Listens event in Kansas City. The IMF will publish the analytic chapters from its global economic outlook.
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