Feb 12, 2019, by Lorcan Roche Kelly
Two out of three ain’t bad
Congressional Republican and Democrat negotiators reached an agreement on border security that would see $1.375 billion allocated to increased barriers along the frontier with Mexico. For the tentative deal to prove sufficient to avoid another partial government shutdown on Friday, President Donald Trump will have to accept the figure which is far below the $5.7 billion he wants in order to build a wall along the border. Speaking at an event in El Paso, Texas, the president insisted that “we’re building the wall anyway.”
The White House said that Trump still wants to meet China’s Xi Jinping in an effort to end the trade war, with adviser Kellyanne Conway saying “the president wants a deal” in an interview on Fox News. Negotiators from both countries are meeting in Beijing later this week in an attempt to come to an agreement ahead of the March 1 deadline, after which Trump has threatened to double the rate of tariffs on $200 billion in Chinese imports. If sufficient common ground is found at this week’s talks, the thinking is that the deadline will be extended in order to clinch a deal.
British Prime Minister Theresa May said that the U.K. needs to “hold our nerve” in order to get Brexit delivered on time. She is due to update parliament today on where negotiations are, and is expected to request more time to renegotiate the deal with the European Union – a deal which the European Union continues to say is not up for renegotiation. Around the time May is talking to Parliament, Bank of England Governor Mark Carney will discuss “risks to the outlook” in a speech in London.
Markets are having another risk-on session as trade optimism lifts all boats. Overnight, the MSCI Asia Pacific Index climbed 0.9 percent, while Japan’s Topix index ended its first session of the week 2.2 percent higher. In Europe, the Stoxx 600 Index had gained 0.6 percent by 5:50 a.m. Eastern Time, with all sectors advancing in the broad-based rally. S&P 500 futures pointed to a jump at the open, the 10-year Treasury yield was at 2.681 percent and gold was higher.
It is a fairly quiet session from an economic data perspective, with JOLTS job openings at 10:00 a.m. the highlight. There is, however, a decent showing from Fed speakers to tide people over, with Fed Chairman Jerome Powell, Cleveland Fed President Loretta Mester and Kansas City Fed President Esther George all making an appearance later.