By Lorcan Roche Kelly
Not off to a good start
Any hopes of a major breakthrough at this week’s high-level trade talks between the U.S. and China in Washington are looking increasingly forlorn after the Trump administration blacklisted eight Chinese technology giants. China indicated it would hit back against the move, with foreign ministry spokesman Geng Shuang telling reporters to “stay tuned.” With the delegation from Beijing already trying to temper expectations, the latest tit-for-tat promise signals the uphill battle to secure meaningful progress on cross-border trade.
President Donald Trump’s surprise announcement that U.S. troops would stay out of the way of a Turkish invasion of northern Syria has caused consternation and confusion among his Republican allies. Senator Lindsey Graham and former ambassador to the United Nations Nikki Haley were among those questioning the decision, which was seen as abandoning the country’s Kurdish allies. For the president, who attempted to change course via Twitter, the support of Republican senators may be essential for defeating any impeachment proceedings.
The chances of a Brexit deal seem to be hurtling towards zero, with British Prime Minister Boris Johnson telling German Chancellor Angela Merkel that an agreement is essentially impossible. An unnamed official from the prime minister’s office told the Spectator magazine that the government is preparing for talks to collapse, which they will blame on Irish and European leaders. The pound fell against the dollar.
Overnight the MSCI Asia Pacific Index gained 0.6% while Japan’s Topix index closed 0.9% higher. China’s Shanghai Composite Index added 0.3% in the first session after a week-long holiday. In Europe, the Stoxx 600 Index was 0.6% lower at 5:50 a.m. Eastern Time with every sector of the gauge posting a loss. S&P 500 futures pointed to a drop at the open, the 10-year Treasury yield was at 1.539% and gold was higher.
At 8:30 a.m., producer price data for September is published which may shed some light on Thursday’s inflation number. Chicago Fed President Charles Evans, Minneapolis Fed President Neel Kashkari and Fed Chairman Jerome Powell all speak at various events today. One thing that is not coming up is U.S. basketball on China’s state TV network CCTV after it said it would halt broadcasts of NBA games given the intensifying backlash over a tweet sent by Daryl Morey, general manager of the Houston Rockets, in support of the Hong Kong protests.