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Five Things to Know in World Business Today


By Phil Serafino

(Bloomberg) Good morning. Protests are under way in Hong Kong again, European stocks are stuck in neutral and the U.S. and China look to be close to a trade deal. Here’s what’s moving markets.

Hong Kong

There’s no sign of an end to the demonstrations that have shaken Hong Kong for more than five months, with protesters gathering in the city again today. A 70-year-old man died late Thursday after appearing to be hit by a brick thrown by protesters, according to the government and police. Chinese President Xi Jinping, on a trip to Brazil, called an end to violence Hong Kong’s “most urgent task.” Given the seriousness of the situation, it seems callous to talk about luxury timepieces, but here’s some evidence of the protests’ economic impact:  Hong Kong is about to lose its decade-long position as the largest market for Swiss watch exports, according to one industry executive.

Market Malaise

European stocks are finishing the week about where they started, and it’s hard to see at this point where the fuel will come from for the next big leg up or down. It’s been a banner year for the market, with the Stoxx Europe 600 Index up 20%, but investors have kept their euphoria in check. They’ve been fixated instead on risks — Brexit, trade disputes, Hong Kong, slowing growth— and pulled money out as a result. That cash is one possible source of support for a renewed rally. We may find out in the next few days whether a U.S.-China trade deal can generate enough enthusiasm to push indexes up. Stocks in Asia are modestly higher on the latest hopeful signs on that front, and any rally in Europe today is looking like it will be rather subdued as well.

Trade Optimism

To the extent that stocks do rally today, look for the usual trade-sensitive suspects to lead the way. White House economic adviser Larry Kudlow says talks over the first phase of an agreement with China were coming down to the final stages, with the two sides in close contact. Both sides have been sending signals that they’re intent on a deal; on Thursday, China lifted a ban on American poultry that began in 2015, after the U.S. Department of Agriculture made a similar decision to allow Chinese poultry into the U.S. Kudlow also said President Donald Trump hasn’t yet decided on whether to impose — or delay, as many expect — new auto tariffs on imported cars and parts from the European Union.

U.K. Wages

Does raising a nation’s minimum wage lead to lower employment? The U.K. may be about to find out after next month’s election. Plans set out by both the Conservatives and Labour would take minimum pay to an all-time high and dramatically increase the share of private-sector employees affected, according to a report today from the Institute for Fiscal Studies. While there’s no evidence that recent minimum-wage rises hurt employment prospects, there’s now a risk of triggering a “tipping point,” the IFS said. Prime Minister Boris Johnson and Labour leader Jeremy Corbyn should avoid getting into “a political bidding war” over wages, the institute says. Meanwhile, Johnson is promising cash for “overlooked” towns  as he tries to win over disaffected Labour voters.

Coming Up…

The weekend! But first, we get to hear from some European Central Bank officials, including Executive Board member Yves Mersch and Governing Council member Carlos Costa, and also get a key economic indicator: U.S. retail sales for the month of October. Third-quarter earnings are pretty much over, though a few stragglers are reporting today in Europe, including TalkTalk Telecom Group Plc and Danish shipping giant A. P. Moller-Maersk A/S. Also, keep an eye on BT Group Plc, after the U.K. Labour Party pledged to nationalize its Openreach unit if elected to power next month.



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