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Five Things to Know in World Business Today


By Lorcan Roche Kelly

U.S. looks to hit Europe with tariffs, mega-IPO is back on, and the bond market is still in rally mode. Here are some of the things people in markets are talking about today.

This again

The never-ending dispute between the U.S. and Europe over support to subsidy-reliant aircraft manufacturers Boeing Co. and Airbus SE took another turn when Washington added $4 billion of EU goods that could be targeted as part of the tiff. Needless to say, the Europeans have their own list of retaliatory measures ready should the situation get more serious. Shares in Airbus dropped as much as 1.4% in Paris this morning, with the company calling the whole thing a lose-lose situation. One positive bit of news on the tariff front is that President Donald Trump said measures against Mexico are off the table after the country’s response to immigration flows.
 

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And this again

The super mega-amazing IPO is back and this time it might actually happen. Maybe. Saudi Arabia is restarting preparations for an initial public offering of oil giant Aramco, the world’s most profitable company. The history of this plan has already shown there is many a slip between cup and lip for the Saudi Crown Prince’s goal of a $2 trillion valuation, but nevertheless it’s what Mohammed Bin Salman expects to happen by early 2021.

Also this is still happening

Bond bears are continuing to have a terrible time. This morning the yield on Italian two-year debt turned negative for the first time in over a year.  The German bund yield continues to hit new lows, with the 10-year yield closing in on the ECB’s deposit rate of -0.4% as policy makers at that central bank hint at even more easing. U.S. Treasury yields are also holding near recent lows as Federal Reserve policy makers see the need for interest rate cuts.

Markets mixed

Overnight, the MSCI Asia Pacific Index climbed 0.4% while Japan’s Topix index closed 0.3% higher as technology companies extended yesterday’s gains. In Europe, the Stoxx 600 Index was broadly unchanged at 5:50 a.m. Eastern Time as investors rotated into more defensive stocks. S&P 500 futures pointed to a lower open, the 10-year Treasury yield was at 2.015% and gold was rising.

Coming up…

It’s a quiet day on the data front today, with only auto sales numbers due. There is some policy stuff to watch out for though, with OPEC and its allies agreeing to extend production cuts and update their relationship status to something more formal. European Union leaders are trying again today to break the impasse over the distribution of top jobs in the bloc. Federal Reserve Bank of Cleveland President Loretta Mester is due to speak on the economic outlook later.



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