By Lorcan Roche Kelly
A Chinese Ministry of Commerce spokesman said that trade teams from his country and the U.S. remain in close contact as Sunday’s deadline for higher tariffs approaches. Officials from China are expecting a delay to the measure to give more time to reach an interim deal, according to people familiar with the discussions. There may be some news on that later today as President Donald Trump is expected to meet his trade team.
There is no change in policy expected at today’s European Central Bank decision, announced at 7:45 a.m. Eastern Time. At 8:30 a.m., Christine Lagarde will host her first press conference as president with investors likely to watch closely for hints as to how she will address policy issues differently from her predecessor. Today’s meeting will also see an update to the bank’s economic forecasts, which will stretch into 2022 for the first time. Speaking of forecasts, yesterday Fed Chairman Jerome Powell signaled a long pause in rates, saying the U.S. can sustain much lower unemployment than previously thought.
Voting has started in the U.K. election, with the final polls suggesting that the Conservative lead over the Labour Party may have narrowed in the closing days of the campaign. FX traders seem to be confident of a Boris Johnson victory, with the pound holding close to $1.32 this morning, the highest level since March. Voting ends at 5:00 p.m. Eastern Time, with broadcasters releasing their exit polls at the time and counting getting underway almost immediately. The result should be clear around midnight.
Yesterday’s Fed decision has been viewed as slightly bullish by markets, and equity investors are acting accordingly. Overnight, the MSCI Asia Pacific Index climbed 0.6% while Japan’s Topix index closed 0.1% lower. In Europe the Stoxx 600 Index was broadly unchanged at 5:50 a.m. as investors in the region awaited the ECB decision. S&P 500 futures pointed to a small gain at the open, the 10-year Treasury yield was at 1.802% and gold was flat.
November U.S. PPI and weekly jobless claims data land at 8:30 a.m., with the latter expected to show an increase from last week’s seven-month low of 203,000. As well as the ECB, there are rate decisions in Turkey, Switzerland and Peru today. Companies reporting earnings include Oracle Corp., Broadcom Inc. and Adobe Inc.