Five Things to Know in World Business Today

Results are trickling from the EU Parliament vote, stocks in Asia look like stabilizing amid the trade war, and Fiat Chrysler and Renault are said to be readying a tie-up. Here are some of the things people in markets are talking about today.

EU Elections

Mainstream European Union parties are mostly holding their ground against the assault from populists in elections for the bloc’s Parliament, according to the first set of exit polls. With voting still going on in some countries, the parties who rally against foreigners, want to rein in the EU and despise the cozy relationship between centrist groups, aren’t performing as well as some establishment politicians feared. The Liberals and the Greens set to post the biggest gains in the first EU-wide test of public opinion in five years. But Brexit wrought more havoc on Britain’s main political parties. With two thirds of vote counts complete, Nigel Farage’s Brexit Party, which wants the U.K. to leave the EU without a deal, was in first place, with 32% of the vote.

Sumo Before Trade

U.S. President Donald Trump and his Japanese counterpart Shinzo Abe sit down Monday in an attempt to resolve tensions over trade and defense ties. Trump acknowledged on Sunday a trade deal wouldn’t occur during the trip, saying that nothing would be finalized until after Japan’s elections in July. The two leaders spent much of Sunday together, golfing, attending a Sumo match and dining, while trade negotiators have been meeting separately to hammer out a deal after Trump threatened to raise auto tariffs.
 

Markets Open

Asian stock futures are narrowly mixed after U.S. shares eked out pre-holiday gains Friday that weren’t enough to keep the Dow Jones Industrial Average from a fifth week of losses. Treasury yields ticked higher, oil jumped and gold climbed. There was muted reaction in the euro to European exit polls. The dollar ended last week on the back foot over concerns that the U.S.-China trade spat will hurt global growth. Coming up this week,  China provides the first peek at its May economic performance on Friday with economists anticipating the official manufacturing PMI will contract amid the trade war. U.S. jobless claims and GDP are due Thursday, followed by April consumer spending and the Federal Reserve’s preferred core-price gauge Friday, which forecasts show will increase. The Reserve Bank of New Zealand publishes its financial stability report Wednesday.

Fiat Chrysler, Renault Deal

Fiat Chrysler Automobiles NV is poised to announce an operational tie-up with Renault SA as soon as Monday that could lead to a full merger of the French and and Italian-American companies, creating the world’s third-biggest automaking company. The deal could involve an initial exchange of equity, the people said, asking not to be identified because the discussions aren’t public. Renault’s existing alliance partners, Nissan Motor Co. and Mitsubishi Motors Corp., aren’t involved, although they would be invited at a later time to join forces with the merged Fiat-Renault, the people said.

China Warns Against Shorting Yuan

China told traders that they face a “huge loss” shorting the yuan, after a recent slide took the currency to the brink of the critical 7 per dollar level.  Guo Shuqing, head of China’s banking and insurance regulator, said in a speech that speculators “shorting the yuan will inevitably suffer from a huge loss.” The speech, delivered by a spokesman for the agency on Saturday in Beijing, also included comments on the trade war, making Guo the highest-level financial official so far to publicly comment on the issue since tensions between China and the U.S. escalated this month.