Russia probe threatens to overshadow Trump’s Fed pick, HSBC’s Asia bet pays off, and it’s a big week for bond markets. Here are some of the things people in markets are talking about today.
U.S. President Donald Trump stoked yet more intrigue around who he will chose for Fed chair on Friday with a video teaser in which he said he had “somebody very special” in mind. The president is leaning toward appointing Federal Reserve Governor Jerome Powell, according to three people familiar with the matter. For all the build up, the selection may end up being overshadowed by the first actions from a probe into Russian election meddling. Multiple reports say at least one person has been charged and could be arrested as early as Monday morning. A series of tweets from Trump suggest the news has his full attention.
Earnings season picks up pace this week with profit reports due from some of the world’s largest companies. HSBC Holdings Plc reported a third-consecutive quarterly increase in revenue on Monday, driven by profits from Asia, a sign that the bank’s $100 billion bet on the region in 2015 is bearing fruit. Nomura Holdings Inc.’s profit fell for the first time in three quarters amid a drop in fixed-income trading. The rest of the week will be dominated by more tech earnings, with Facebook Inc. due Wednesday, followed by Apple Inc. and Alibaba Group Holding Ltd. on Thursday.
Catalonia continues to grab attention in Europe after Barcelona’s streets flooded with hundreds of thousands of pro-unity demonstrators over the weekend. The first stage of the takeover of the regional administration passed off smoothly on Saturday with a new chief installed in the Catalan police force. Over the coming days, civil servants in Barcelona will also have to decide whether to follow the banished Catalan leaders’ calls to resist their Spanish masters or acquiesce to the new regime. For now markets seem optimistic: Spanish stocks and bonds climbed.
The MSCI Asia Pacific Index advanced 0.3 percent overnight, while Japan’s Topix index and the yen were little changed. In Europe, the Stoxx 600 Index was unchanged at 5:50 a.m. Eastern Time as investors await the next development in Catalonia. S&P 500 futures were 0.2 percent lower, the 10-year Treasury yield was at 2.399 percent and gold was down 0.2 percent.
While the economic data calendar is quiet for today, this is shaping up to be a big week for markets. U.S. central bankers are preparing to meet on Wednesday for a rate decision, House Ways and Means Chairman Kevin Brady is planning to unveil a sweeping tax bill to remake the U.S. economy, and the Treasury will unveil plans to issue more debt to make up for lost funding from the Fed. There’s also jobs market and inflation data due.