November 19, 2018 / 7:38 AM / a month ago

REPEAT-GRAPHIC-Take Five: Black Friday shoppers to Brexit wreckage, world markets themes for the week ahead

 (Updates Friday item with end-week Bitcoin data. No other
changes)
    Nov 16 (Reuters) - Following are five big themes likely to
dominate thinking of investors and traders in the coming week
and the Reuters stories related to them.
 
    
1/A (BREXIT) RECKONING 
Prime Minister Theresa May's long-awaited Brexit deal triggered
a wave of ministerial resignations that has rocked her
government and financial markets and raised chances of a snap
election. 
    On Friday, the pound took the hardest beating. Traders who
had hung back from big sterling bets for much of 2018 rushed to
sell it, fuelling its biggest daily drop against the euro since
2016. Gilt yields tumbled too and the FTSE index, which usually
rises when sterling falls, lost that inverse correlation and
closed flat after Thursday's mayhem. 
    One-month implied volatility on sterling -- basically a
gauge of how much traders expect it to swing in a given period
-- has climbed to over 15 percent. Not only is that double the
volatility of the euro and almost triple yen and Swiss franc
levels, it has now entered territory reserved for emerging
currencies such as the Brazilian real and Turkish lira. 
    May might now need to survive a no-confidence vote, possibly
on Tuesday. Even if she does, she has her work cut out to get
the unpopular deal through parliament next month. 
    
- Pound dives as UK PM May fights for survival             
- Hedge funds caught short when Brexit talks surprise
            

2/S-H-O-P-P-I-N-G
The biggest shopping day of the year, Black Friday, is almost
upon us and, according to Refinitiv, retailers are going to have
to discount like crazy because the U.S. Thanksgiving holiday
lands on the early side.
    This year's Christmas shopping period kicks off on Nov. 23
but it gets stretched over five weekends, meaning retailers will
be forced to plan additional promotions, Refinitiv said. So the
festival which supposedly "turns red ink into black on the
ledgers" may make or break fourth quarter results for some
firms, Refinitiv warns.
    A Reuters/Ipsos poll indicates 38 percent of American
consumers plan to shop that day and of those, 37 percent will
shop mainly online. Online spending over the 2018 holiday season
will grow 14.8 percent from a year ago, outpacing the 2.7
percent growth predicted for brick-and-mortar locations, Adobe
Analytics estimates. 
    Black Friday will also focus attention on U.S. retailers'
earnings. These have so far been a mixed bag; Walmart has posted
robust sales and raised its full-year outlook, while Nordstrom
and J.C. Penney were less fortunate. Next week will bring third
quarter results from the likes of Target, Gap, Best Buy and
Dollar Tree.
    Refinitiv data may offer clues as to where shoppers are
heading with their dollars; discount and specialty sectors may
be the strongest performers, with department stores the weakest,
its analysis shows
        
- Ready, set, shop: More than a third of Americans to buy on
Black Friday             
- U.S. online spending set to rise 14.8 percent in 2018 holiday
season             
 
3/CRUDE AWAKENING?
It's been a tumultuous six weeks for oil, sliding into a bear
market and chalking up its longest losing streak on record,
including a 7 percent one-day plunge on Nov. 13. The bleeding
seems to have stopped, but for how long? What's certain is that
any talk of $100-per-barrel oil has ceased.
     The savage selloff has taken oil nearly 30 percent lower
since early October. All else being equal, this should put
downward pressure on inflation in the second half of next year,
just as the economic cycle is expected to be in the process of
rolling over. Throw in a potential equity downturn following the
longest bull run in history, and the scope for higher interest
rates across the developed world looks limited. Central banks
may even be contemplating rate cuts by then. 
    For now, oil markets have steadied, in part thanks to
speculation of an OPEC production cut. But once in a bear
market, it's sometimes very difficult to get out.

- Oil firms on supply cut talk; still set for sixth weekly loss
            
- COLUMN-Oil prices tumble as traders look beyond Iran: Kemp
                  
    
       
4/PAROLE FOR PATEL?
India's financial markets are on edge as the government and the
central bank prepare for what could be an acrimonious RBI board
meeting on Monday. Tensions have been simmering between the
government and the RBI for months, contributing to heavy bond
market outflows and making the rupee the worst performing major
Asian currency this year. 
    RBI Governor Urjit Patel called the meeting amid tensions
with the Modi administration on several issues, from lending
curbs on banks to sharing central bank reserves. The government
threatened to invoke a section of the RBI Act that would allow
it to dictate policy; Deputy Governor Viral Acharya warned
against undermining RBI independence, citing Argentina as an
example of how things could go wrong.
    Very nervous markets are now hoping for a truce. Sources say
 the sides are trying to iron out a deal that lets Patel keep
his job while the RBI eases lending restrictions. 
    Heading into 2019 general elections, the government is
looking to provide some economic stimulus. Yet efforts to
bulldoze the RBI, whose inflation credentials and independence
are highly regarded, could backfire in unforeseen ways. 

EXPLAINER-Why India's Modi wants to increase control over the
central bank-[ nL3N1XB3IL]
UPDATE 3-India says central bank independence "essential" as row
unnerves markets –             
Modi government, Indian central bank set for uneasy truce
-sources –             

5/BITCOIN BITTEN
After weeks of relative calm, the crypto world has witnessed a
shake-up. Bitcoin, the big daddy of digital currencies,
experienced its worst week since the week of Sept. 9. Other,
lesser coins such as ethereum and XRP have also been mauled.
    The sudden return of volatility has disappointed many who
had hoped that violent price swings - a feature of bitcoin in
its first decade - were a thing of the past. Some attribute the
upheaval to breaches of key technical support levels, while
others blame fears that the "hard fork" in bitcoin cash, where
the smaller coin that emerged out of bitcoin split into two
separate currencies, could destablise others.
    Having traded at almost $20,000 last December, bitcoin fell
this week below $5,500, or 70 percent from those peaks. It's
particularly galling for those who hope bitcoin is moving into
the mainstream - after all, price stability is a necessary
feature if it is to ever evolve into a usable currency. 
        
- France hopes to lure crypto-issuers with Gallic stamp of
approval             
- Bitcoin drops to 1-year low as slump persists; ethereum down
sharply             
- GRAPHIC-Bitcoin volatility sinks to lowest in nearly two years
            
    
    
    

    
 (Reporting by Alden Bentley in New York, Vidya Ranganathan in
Singapore, Tom Finn, Jamie McGeever and Tom Wilson in London;
compiled by Sujata Rao
Editing by Gareth Jones)
  
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