By Joe Easton
It’s all kicking off in Rome. Italian Deputy Prime Minister Matteo Salvini is demanding lawmakers be given a chance to vote out the government as soon as next week as he seeks to capitalize on his surging polling numbers. Prime Minister Giuseppe Conte won’t leave office without a fight, though. The yield premium of Italian bonds over German securities, a key gauge of risk, climbedtoward the widest level in a month on Thursday.
“Common sense” isn’t a phrase widely associated with Brexit, but that’s what U.K. Prime Minister Boris Johnson urged the European Union to show, as he seeks a re-write of the divorce deal he says is unacceptable and steps up preparations to leave the bloc without one. Britain’s “friends and partners” need to “compromise,” he said in an interview with the BBC. Elsewhere, a decision to delay a government spending review has cast more doubt on the health of the U.K. economy.
All that drama seems a long time ago now. There’s no sign of the panic seen earlier this week in Asian markets, even as the yuan dropped to a fresh low versus a basket of trading-partner currencies. Stocks attempted to rise, although sentiment was tempered by a report that the White House is holding off on a decision over licenses for business with Huawei Technologies Co. Bonds were mixed, and while we’re talking yields, here’s why negative interest rates are not as crazy as they seem.
Good things come to those who wait. That’s the message from Goldman Sachs strategists, who are sticking to predictions that European stocks will rally — just not anytime soon. Monetary policy is supportive and a recession is unlikely, they reckon, maintaining a prediction that the Stoxx Europe 600 Index will gain 10% over the next year. Speaking of optimism, check out how positive analystsare about new European stock listings.
Earnings quiet down on Fridays, but we’re still looking out for reports from ad-agency owner WPP Plc and insulin giant Novo Nordisk A/S. Uber Technologies Inc. shares slipped after the U.S. close as the company reported a $5.2 billion loss. In terms of macroeconomic data, we’ll rely on U.S. producer price index numbers for excitement. Overnight, Japanese economic growth continued and Chinese inflation topped estimates.