Five Things to Know in World Business Today

Theresa May announces her resignation, Trump administration may have more tariff targets, and oil’s having a bad week. Here are some of the things people in markets are talking about today.

May over (in June)

British Prime Minister Theresa May announced that she will step down as Conservative Party leader on June 7, while staying on as PM until the leadership contest is concluded. Initial market reaction to the not-unexpected move has been relatively muted, with the pound fluctuating around $1.27.

More targets

The White House is seeking to cast its tariff net wider, potentially eyeing countries deemed to have undervalued currencies. The latest proposal would let U.S. companies seek anti-subsidy tariffs on imports from nations the Treasury Department finds to be engaged in competitive devaluation of their currencies. While no nation currently meets that criteria, the focus on “undervalued” exchange rates may signal a push in the wider trade war. On that note, President Donald Trump said that China’s Huawei Technologies Co., which was recently blacklisted on security concerns, could become part of a trade deal between the two countries.

Crude mess

Oil had its worst day of the year yesterday, dropping almost 6% as the commodity got caught in the stampede out of risky assets. Tensions in the Middle East had helped to shelter crude from some of the worst fears on global trade as investors balanced demand concerns against a possible supply disruption. Clearly that balance broke yesterday amid the renewed global growth concerns. While oil is 1.2% higher at $58.62 a barrel this morning, the damage is clear.

Markets recover some losses

Overnight, the MSCI Asia Pacific Index gained 0.2% while Japan’s Topix index closed marginally higher, recovering from a drop of as much as 1% earlier in the session. In Europe, the Stoxx 600 Index was up 0.7% at 5:50 a.m. Eastern Time as the gauge recovered some of the losses yesterday, with miners leading the gains. S&P 500 futures pointed to a bounce at the open, the 10-year Treasury yield was at 2.327% and gold was lower.

Coming up…

U.S. durable goods orders for April are due at 8:30 a.m., with a 2% decline forecast. The Baker Hughes rig count comes at 1:00 p.m. With most investors looking to get out early for their Memorial Day weekend, Sifma is recommending the bond market close at 2:00 p.m. today. It is also a quiet day in earnings, with Foot Locker Inc. about the only notable name reporting.