August 28, 2018 / 7:33 AM / a year ago

Daily Briefing: Hardliner summit

LONDON (Reuters) - Italian deputy premier Matteo Salvini and Hungarian PM Viktor Orban, the two leaders that most embody the authoritarian tilt that is setting the agenda in much of Europe's politics, meet today in Milan.

FILE PHOTO: Italian Interior Minister Matteo Salvini arrives before the state funeral of the victims of the Morandi Bridge collapse, at the Genoa Trade Fair and Exhibition Centre, August 18, 2018

Both enjoy positions of strength at home that many of their peers can only dream of: critics of Orban say that is in large part because he has made dissent increasingly difficult, whereas Salvini is using his rhetorical and tactical skills to dominate the headlines.

His latest coup is a standoff over a migrants boat in southern Catania port which ended at the weekend when Ireland and Albania agreed to take in some of those rescued at sea.

That plus the fact that a local prosecutor chose to open an investigation into Salvini for holding the migrants against their will has played into his hands, with analysts predicting a further bounce to his poll ratings. Unsurprisingly, immigration will be on the agenda in Milan again today.

British PM Theresa May kicks off a tour of Africa today with a speech in Cape Town. According to local media she will re-commit to a goal of spending 0.7 percent of GDP on foreign aid but - in a concession to the right-wing of her Conservative Party - say that aid should support British national interests in some way.

Second, she will set up the aspiration for Britain to become the biggest investor in Africa, overtaking the United States. Other stop-offs this week include Nigeria.

Expect a few more personnel moves in Greek Prime Minister Alexis Tsipras' government to be announced later in the day. After his interior minister took up a key post in his leftist Syriza party on Monday, a cabinet reshuffle to shore up his waning support ahead of next year's elections is expected.


Markets reacted with joy last night to the announcement that a NAFTA deal had been reached, with Wall street up 1 percent, and the Mexican peso rising 1.2 percent.

That’s one more strand of the trade war taken care of, markets seem to be reasoning, after the EU-U.S. deal and if Canada decides to join the new agreement, there will be only China to worry about.

But some of the momentum seems to have fizzled since yesterday — world stocks rose 1 percent yesterday to 5-1/2 month highs and are just about holding there this morning. Emerging equities leapt 2 percent but again, they have not moved further.

European shares are set to open flat too but yesterday, German carmakers who sell Mexico-assembled cars into the U.S. market, saw shares rally as much as 3 percent.

In Asia this morning, shares rose piggybacking off Wall Street’s new record high. Possibly, the most difficult battle of the trade war, between the United States and China, still lies ahead.

Still, there are positives – China has signalled it is not happy with further yuan depreciation and that is prepared to step in and put a floor under the currency, having raised its daily fixing guidance the most in 15 months.

Jerome Powell has disappointed dollar bulls by sticking to the line of gradual rate rises and data indicates the euro zone economy has bottomed out.

— A look at the day ahead from European Economics and Politics Editor Mark John and Deputy EMEA Markets Editor Sujata Rao. The views expressed are their own —

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