Five Things World Business Will be Talking About Today

(Bloomberg) 

The euro and the pound rise as investors digest central bank commentary, a U.S. travel ban could be introduced today, and developed-market bonds slump. Here are some of the things people in markets are talking about today.

Policy hawks

The last two weeks of comments from the world’s most important central bankers have prompted investors to reassess the outlook for the second half of 2017. The euro was trading at $1.1420 at 5:20 a.m. Eastern Time, continuing a climb which was briefly interrupted yesterday by a suggestion from the European Central Bank that markets have been over-interpreting Mario Draghi’s speech. The pound briefly traded above $1.30 this morning as it also got a lift from Bank of England policy makers’ increasingly hawkish comments. This marks the seventh day of gains for the currency; its longest winning streak since April 2015. 

Travel ban

The U.S. will institute new restrictions on travel from six Muslim-majority countries at 8 p.m. this evening, according to a person familiar with the matter. For travelers to the U.S. from other countries, the laptop ban won’t be applied, but there will be a broad range of heightened security measures, including more thorough vetting of passengers and enhanced screening of electronic devices. In Washington, GOP holdouts blocking the health-care bill can’t agree what they want changed for it to proceed. 

Bond slump

The message from central bankers that borrowing costs are going to go up has been received by the bond market. The yield on U.S. Treasuries has risen 10 basis points since Tuesday, with German bund yields rising 15 basis points to 0.40 percent over the same time. U.K. gilts are also getting hit, with the yield on the two-year note hitting the highest level since Brexit referendum. 

Markets mixed

Overnight, the MSCI Asia Pacific Index climbed 0.6 percent, with Japan’s Topix index also gaining 0.6 percent as banks in the region rallied. In Europe, the Stoxx 600 Index was 0.3 percent lower at 5:50 a.m. as neither a rally in banks or a decade-high for euro-area consumer confidence managed to lift the wider index. S&P 500 futures were 0.1 percent higher, with markets due to give their assessment of the surprisingly large payouts from U.S. banks after the stress test results.

Coming up…

At 6:30 a.m. Bank of England Governor Mark Carney is interviewed by Bloomberg TV. At 8:30 a.m. weekly initial jobless claims data for the U.S. are released with expectations for a broadly unchanged reading from last week’s 241,000. The third reading of Q1 GDP is due at the same time. Investors can breath a sigh of relief as the packed week of Fedspeak ends at 1:00 p.m. today when St. Louis Fed chief James Bullard speaks in London.