November 28, 2017 by Lorcan Roche Kelly
(Bloomberg)
Powell sticks to the script, Brexit headaches mount, and some good news for oil investors. Here are some of the things people in markets are talking about today.
Powell = Yellen
Jerome Powell, President Donald Trump’s nominee to head the Federal Reserve, kept firmly in line with the monetary trajectory set by current chair Janet Yellen in a statement to the Senate Banking Committee ahead of his confirmation hearing today. In the text, released by the Fed on Monday, he offered a robust defense of how the institution operates, regulates and guides the U.S. economy. Powell’s appearance in the Senate may be overshadowed by negotiations over the GOP tax bill with Trump poised to launch a sales pitch in Congress later today with Republican leaders.
Breaking Brexit
U.K. Trade Secretary Liam Fox said his government has done enough to satisfy the EU’s demands for money ahead of a Dec. 4 deadline for Britain to improve its offer on the Brexit bill, the rights of European citizens living in the U.K., and the fraught question of the Irish border. The latter remains the biggest hurdle. Prime Minister Theresa May’s government is propped up by the region’s pro-Brexit Democratic Unionist Party, which insists there should be no special status for Northern Ireland after the U.K. leaves the EU. Adding further complications to the issue is a political crisis in the Republic that could see elections there before Christmas. Liam Fox added that the U.K. was ready to trade with the EU under WTO terms if exit-talks collapse.
Oil outlook
The improving performance of oil producers was reflected in Royal Dutch Shell Plc’s announcement it will pay its entire dividend in cash for the first time in two years. Meanwhile, all OPEC members support extending their production cuts to the end of 2018 ahead of Thursday’s meeting in Vienna, according to people familiar with the matter, with Russia yet to comment on the move. In the market, a barrel of West Texas Intermediate extended its declines from last week’s two-year high to trade at $57.56 a barrel by 5:45 a.m. Eastern Time.
Markets rise
Overnight, the MSCI Asia Pacific Index slipped 0.1 percent, while Japan’s Topix index dropped 0.3 percent as worries about a North Korean missile test rattled investors. In Europe, the Stoxx 600 Index was 0.4 percent higher at 5:50 a.m. in a broad-based rally led by energy stocks. S&P 500 futures added 0.1 percent, the 10-year Treasury yield was at 2.331 percent, and gold was flat.
Uber discount
SoftBank Group Corp. and a group of investors are seeking to buy a $6 billion stake in Uber Technologies Inc. at a level that would cut the ride-hailing company’s valuation by about 30 percent from $69 billion at the most recent round of fundraising to $48 billion. Uber may welcome Japan’s Softbank as a powerful new ally after a miserable year following the resignation of its co-founder, and revelations it concealed a hack that exposed personal data of 57 million users. Speaking of future transport providers, Elon Musk tweeted a denial that he is Bitcoin creator Satoshi Nakamoto.
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