LONDON (Reuters) - With Brexit uncertainty set to continue, a Deloitte survey released this morning underlines some of the deeper economic impact.
Some 81 percent of chief financial officers it questioned now expect Brexit to lead to a long-term deterioration in Britain's business environment, the highest since the question was first asked at the time of June 2016's referendum on leaving the European Union.
The survey was conducted between March 26 and April 7, just after it became certain Britain would not leave on the long-planned date of March 29, and before British Prime Minister Theresa May secured a delay of up to six months.
Finland's leftist Social Democrats scraped a victory in Sunday's general election but the bigger picture was that it was practically a three-way tie with the nationalist Finns and centre-right National Coalition.
Underlining the fragmentation of much European politics these days, not a single party got over 20 percent of the vote. Finland has one of the most rapidly ageing populations in the world and urgently needs fixes to its comfortable yet expensive public services - whether the next coalition will have the sense of purpose to make decisive policy choices remains to be seen.
France's Emmanuel Macron is due to address the nation on the main TV news bulletin this evening, announcing new policies as a reaction to the "yellow vest" protests.
Prime Minister Edouard Philippe last week presented the conclusions of the town-hall-style debates around the country that Macron called after the protests, saying they had highlighted issues ranging from tax cuts to climate change. Not that any of this is stopping the hard-core yellow vests - several hundred of them clashed with riot police in the southern city of Toulouse this weekend.
MARKETS AT 0655 GMT
Which is it - gloom and doom or growth and boom? Early signs today were that markets have shrugged off the weekend communique from the International Monetary Fund, warning of downside risks to global growth.
Instead they are focusing on positive signals from U.S.-China trade talks (especially after the Reuters exclusive citing U.S. officials on watering down demands on China), improved data from China last week, Friday's robust earnings from JPMorgan and Walt Disney and tentative signs of an economic data pick up in Europe.
But initial euphoria seems to be wearing thin; world stocks are now up only slightly, though holding at six-month highs, and Chinese blue chips have given up early gains. Europe is opening higher after approaching six-month highs. The S&P500 is within touching distance of record highs from last September, though futures are in the red this morning.
Today Goldman Sachs and Citigroup will report quarterly earnings. All in all it’s an important week for data - from Germany’s ZEW survey, Chinese gross domestic product to flash PMIs everywhere - so we should get some clues later this week on whether the world economy is indeed turning around.
Currencies and bonds are in tune with the risk-on mood - we have the Aussie dollar, a proxy for China risk at seven-week highs, while the dollar has retreated, heading back towards last week’s three-week lows.
However, the U.S. 10-year Treasury yield is just off four-week highs. German yields have stabilised somewhat following their biggest daily rise since June on Friday.
In the UK, Brextension has becalmed sterling, which is steady around $1.31. Emerging-market currencies are broadly flat, taking cues from the yuan and the uncertain growth picture. Indonesian and Indian units currencies are waiting for election news.
European shares are starting the week on a positive note. The STOXX 600 is expected to climb back towards its mid-August highs after fresh trade optimism and encouraging Chinese data lifted shares in Asia overnight. Futures on main country benchmarks are up 0.1-0.2 percent.
In corporate news, results have started to trickle in. Vivendi posted higher first-quarter revenue and said it was making progress on the planned sale of up to 50 percent of its UMG music arm. Its shares are up 2 percent in premarket trade.
In M&A, Publicis said it would pay $4.4 billion to acquire Alliance Data's Epsilon marketing unit. Elsewhere, Daimler is expected to fall at the open on reports that Germany's motor vehicle authority is investigating the carmaker on suspicion that 60,000 Mercedes cars were fitted with software aimed at tricking emissions tests.
Other stock movers: Regulators press Deutsche Bank to shrink U.S. investment unit - FT; Acacia Mining backs full-year production forecast; Moncler CEO says no one has asked to buy company - FT; IG Group Chairman Andy Green to step down; Barclays activist Bramson in fresh letter to investors over board seat; Regus operator IWG to sell Japan operations for 320 million pounds; Rio Tinto commits extra $302 mln for Resolution copper project; Italy's Mediaset, ProSiebenSat.1 deny merger talks.
Emerging-market equities are up 0.2 percent, but staying off last week’s 10-month highs. Turkey’s lira continued its slump, falling 0.8 percent. Moody’s said on Friday that a reform package that Turkey presented provided little detail and was vague on a timetable for helping revive an economy plagued by inflation and recession.
The Russian rouble and South African rand were both weaker. The Indonesian rupiah, which is at a more than one-month high against the dollar, gained again ahead of elections on Wednesday.
— A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Sujata Rao. The views expressed are their own —