LONDON (Reuters) - Eurosceptic UK ministers will today urge PM Theresa May to "stare down" the EU over the vexed question of a post-Brexit Irish border, according to media leaks ahead of the weekly cabinet meeting.
They are unimpressed by yesterday's offer by Ireland's Leo Varadkar that there could be a joint UK-EU review of the "backstop" guarantee of an open Irish border: their concern is still that Britain will remain permanently in thrall to EU rules.
For her part, May will warn them that time is running out and that business is desperate for an end to the uncertainty that is already costing millions of pounds.
The stand-off between Rome and Brussels over Italy's budget hardens as euro zone ministers yesterday backed the European Commission's demand for Italy's government to come back with a revised fiscal plan more in keeping with deficit-cutting rules; Rome immediately insisted its budget would not change.
Italy now has until next week to change its mind and submit a new plan, before the Commission pronounces on the budget on Nov. 21. In an indication of the mood among some fellow eurozone countries, French Finance Minister Bruno Le Maire said the future of the euro was at stake over this.
Positive news for the wider euro zone economy as German industrial orders rose unexpectedly in September, largely driven by higher demand from domestic and other euro zone clients.
Contracts for German goods edged up 0.3 percent after an upwardly revised jump of 2.5 percent in the previous month, beating expectations for a fall of 0.6 percent. That could bolster third-quarter German growth, a first estimate is due out next week.
MARKETS AT 0755 GMT
It’s like a see-saw – up one day and down the rest. Today, it seems like the fresh signs of détente between China and the United States are boosting sentiment a little bit on news that a top-level security summit will be held on Friday.
So a meeting between Presidents Trump and Xi at the G20 summit later this month may be back on the cards. Remarkably, given the volatility and negative headlines in October, world stocks are up for a sixth consecutive day, on course for their longest winning streak since February.
But there are other factors holding back the stock markets. One is the U.S. midterm elections today – the first big test for Trump’s tax cutting and hostile trade policies.
The other, possibly greater, worry is the tech sector, whose rally is losing steam. Fast. Apple shares dropped almost 3 pct last night in New York following a 6.6 pct decline on Friday, dragging the Nasdaq down almost 0.5 pct. That took a toll on Asian tech shares almost across the board led by the likes of Taiwan’s Hon Hai.
Then there is the Fed meeting that ends on Wednesday where investors will look for clues on the tightening path in its post-meeting statement. Chances are - after last week’s jobs numbers – that the steady move up in rates is going to be confirmed.
While Treasury yields slipped yesterday on pre-election nerves, the 10-year is back above 3.20 pct, following a soft auction of 3-year debt - an ominous portent for the 10- and 30-year debt sales later this week.
On currency markets, the dollar treaded water before the mid-terms, and sterling remains comfortably above $1.30 as the ebb and flow of Brexit headlines continues apace. Italian yields are a touch higher again after the Eurogroup meeting yesterday showed how far Rome and Brussels are on Italy’s budget – euro authorities want Italy to revise the draft while the coalition government there is digging its heels in.
Futures for Europe’s biggest stock benchmarks were rising 0.1 to 0.5 percent on Tuesday – but early gains could evaporate during the session, as they did on Monday, with investors cautious ahead of U.S. midterms, the results of which are expected from 2300 GMT.
Results dominated the day again with some poor showings likely to hit shares. Traders saw shares in Pandora falling 10 to 15 percent after the jewellery maker slashed its 2018 sales outlook for the second consecutive quarter, saying it would review its strategy and launch a new cost-cutting programme. British bookmaker William Hill could slide 4 to 5 percent after it warned that regulatory and tax changes would hit online profit this year and next.
In gainers, staffing firm Adecco was seen rising 2 percent after its results beat earnings estimates. Postal and logistics firm Deutsche Post was also expected to gain 2 percent after its profit decline was less steep than analysts had expected, and beat the Reuters poll consensus.
Traders saw asset manager GAM’s shares jumping as much as 7 to 10 percent on news CEO Alexander Friedman quit the company hit by huge fund outflows after the suspension of a top manager. British supermarket group Morrisons could fall 2 percent after its rate of growth slightly missed forecasts.
— A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own —