By Lorcan Roche Kelly
British Prime Minister Boris Johnson’s first attempt to get his Brexit deal through Parliament on Saturday failed, and he has been forced to ask the EU for an extension to the Oct. 31 deadline. He will try again today to get lawmakers to agree in principle to his withdrawal agreement, while the government will attempt to fast-track legislation that would deliver the deal. Traders have shrugged off the Saturday setback, driving the pound above $1.3000 this morning, as optimism that a deal will get done remains firmly intact.
Joy of six
People’s Bank of China Governor Yi Gang emphasized that the country’s policy focus remains on keeping its debt load under control, hinting that there may not be much more stimulus in the pipeline after last week’s 6% GDP growth print. Two major policy meetings are scheduled for the coming weeks, with little sign yet that there will be a push to ensure growth remains at around 6%. China’s issues are far from unique, as the trade war continues to erode the global economy. The latest data on exports from South Korea and Japan showed further declines, with finance ministers and central bankers gathered at the IMF pledging to use all their tools to help support growth.
President Donald Trump’s embattled acting chief of staff, Mick Mulvaney, said he hasn’t offered to resign as the White House grapples with the fallout from a difficult week that ended in the president withdrawing Trump National Doral golf resort in Miami from hosting next year’s G7 meeting. There was better news on the trade front when Vice Premier Liu He, China’s top negotiator, said on Saturday that “substantial progress” had been made, laying an “important foundation” for phase one of an agreement.
The positive trade comments are helping to lift markets this morning. Overnight the MSCI Asia Pacific Index added 0.3% while Japan’s Topix index closed 0.4% higher. In Europe, the Stoxx 600 Index had gained 0.4% by 5:50 a.m. Eastern Time with cyclical stocks leading the advance. S&P 500 futures pointed to a higher open, the 10-year Treasury yield was at 1.771% and gold posted a small gain.
It’s election day in Canada, with expectations that no one party will capture a parliamentary majority. Some traders favor a minority government led by Conservatives leader Andrew Scheer over one led by Prime Minister Justin Trudeau. The economic data slate is clean for the U.S. today, while Halliburton Co. is one major company announcing earnings results.