November 1, 2017 / 8:37 AM / a year ago

Daily Briefing: Catalonia - back to elections

LONDON (Reuters) - Attention in Catalonia is now switching to the snap regional elections called by Madrid under newly imposed direct rule. Catalan leader Carles Puigdemont has said he will accept the elections in the hope that they will give a new boost to the independence cause. Less certain, however, is whether he and other leading pro-secessionists will be able to take part in them.

Demonstrators wave banners and flags as sacked Catalan leader Carles Puigdemont leaves a news conference at the Press Club Brussels Europe in Brussels, Belgium, October 31, 2017. REUTERS/Yves Herman

After Puigdemont was holed up yesterday in a modest 70-euro-a-night hotel on the outer rim of Brussels’ European Quarter, his current whereabouts and plans have not been made public. He is in theory due to testify in a Spanish court on Thursday after a state prosecutor recommended charges for rebellion and sedition against him; a no-show could prompt a an arrest warrant that in turn could prevent him from standing in the December vote.

The irony - which may yet prove to be significant - is that while the leadership of the independence movement is in chaos, a new poll shows support for their cause is at a three-year high of 48.7 percent.

As New York comes to terms with a new attack on its soil, France today officially ends a two-year state of emergency imposed after militants killed 130 people in coordinated attacks across Paris. The rub is that it is being replaced by a stringent new anti-terrorism law which critics say undermines civil liberties.

The legislation gives the police greater powers to search properties, conduct electronic eavesdropping and shut down mosques suspected of preaching hatred. Emmanuel Macron, who knows the law is deeply unpopular with sections of the French left, will defend it again today when he meets security forces for a photo-op at the Eiffel Tower.

The Harvey Weinstein sexual harassment scandal in the United States has led to a growing body of allegations and revelations about improper sexual conduct at the heart of British politics. Now Prime Minister Theresa May's deputy, Damian Green, has been referred to the cabinet secretary after an allegation that in 2015 he made inappropriate advances towards a Conservative Party activist three decades his junior. Green denies the allegation.


After months of investors fretting about a year-end shakeout in sky-high world stock markets, the opposite appears to be happening. MSCI’s World index climbed to another all-time record on Wednesday as November gets underway, and year-to-date gains in the global equity index are now close to 18 percent.

The combination of robust economic and corporate earnings growth from the third quarter is giving the long-running bull market a new lease of life. And with inflation subdued and central banks’ monetary tightening commensurately restrained, long-term bond yields remain low. While attention is shifting to Thursday’s expected appointment of centrist Federal Reserve governor Jerome Powell as the new Fed chair, the central bank is not likely to make any big changes in its outlook after its latest policy meeting ends.

Hopes the U.S. Congress will agree a budget and tax-cut plan as soon as this week continue to help sentiment. The dollar index and U.S. Treasury yields were marginally higher overnight.

Japan’s Nikkei225 led the way higher overnight with gains of almost 2 percent as Sony Corp climbed 12.3 percent to a nine-year high after it forecast its best-ever annual profit. Korea’s Kospi also gained more than 1 percent to set a new record high as South Korea exports recorded 12 consecutive months of growth in October and were seen as evidence Asia's fourth largest economy is stepping up a gear.

MSCI’s emerging markets index added almost 1 percent, with the Asia ex-Japan index at a new 10-year high. Apple’s stock and the tech sector at large helped U.S. indices advance late Tuesday, with Facebook earnings later today closely watched. European stocks are expected to open up smartly on Wednesday, too, with futures up almost 0.5 percent. So far, 45 percent of MSCI Europe companies have reported results for the third quarter, of which 66 percent have either beaten or met expectations.

Sterling pushed to two-week highs against the dollar early on Wednesday, just shy of $1.33, as traders awaited the widely expected first Bank of England interest rate rise in 10 years on Thursday and after some indications on Tuesday of a speeding up of Brexit negotiations.

Bitcoin’s blistering rise this year – it has more than doubled in value since mid-September alone – got another leg higher on Tuesday as the Chicago Mercantile Exchange announced plans for a futures contract on the crypto-currency, stoking speculation that Bitcoin will gradually be brought into the mainstream financial world.

Editing by Larry King

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