LONDON (Reuters) - With few prospects now of a deal on Britain's future EU ties in time for the EU's October summit, any clues that Brexit Minister Dominic Raab can give in parliament today on its timing will be scrutinised.
He will appear at a rare mid-recess session of the upper house’s EU Committee as concerns mount that time is running out for an accord. Some are talking in terms of a month’s slippage to November, others see the EU’s regular December summit as the outside deadline.
Separately, the opposition Labour party is being distracted by its own troubles. Britain's former chief rabbi Jonathan Sacks has now joined those who accuse its leader Jeremy Corbyn of being an anti-Semite after comments made about Zionists five years ago; and talk of a party schism between Corbynites and centrists is re-surfacing.
Russian President Vladimir Putin plans to make a TV address to the nation later on pension reforms after admitting there had been a "sharp" reaction to the prospect of a higher retirement age.
Polls show around 90 percent of voters oppose a government proposal to raise the retirement age to 65 from 60 for men and to 63 from 55 for women, part of a budget package designed to shore up state finances.
Putin once promised never to raise the retirement age and until now been has careful to distance himself from the reforms. But his own approval ratings have taken a knock, falling to levels last seen before Russia’s 2014 annexation of Ukraine’s Crimea.
Such data can be volatile but the GfK survey released this morning shows the mood among German shoppers deteriorated slightly for the second month in a row heading into September. Its consumer sentiment indicator fell to 10.5 from 10.6 a month earlier, likely because of the unnerving effect of a recent rise in energy prices. Separately, a second reading of France's Q2 GDP figure showed it rising just 0.2 percent.
MARKETS AT 0655 GMT
Bit of a waiting game now. Much of the enthusiasm after the U.S.-Mexico trade deal has fizzled. Wall Street did hit a closing record high for the third day in a row but there is still uncertainty over whether Canada will join the pact and, more importantly, what will happen with China.
The deadline for consultations on the $200 billion tariff round is a week away on Sept. 5. That’s kept world stocks near flat, EM stocks have retreated too and Chinese stocks have fallen more than half a percent. The yuan has snapped a three-day winning streak.
The dollar, having hit a four-week low overnight, is up 0.2 percent while euro and sterling are down by similar amounts. The Mexican peso which surged in the wake of Monday’s deal to 2-1/2-week highs is likewise flat while most emerging currencies are lower, led by a further 1.5 percent loss for the Turkish lira.
It’s a matter of waiting – for progress in the trade talks, and for data. First up today is euro zone consumer confidence (let’s see if the run of improving data prints continues) and later we get U.S. Q2 GDP, where markets are discounting a strong number.
Turkey will post trade data for July, which dates back to before the worst lira losses occurred. The Swedish crown is approaching eight-year lows on signals no rate rises can be expected until next year. The central bank meets next week. Sterling could see some moves when Brexit minister Raab speaks in parliament.
European stocks are expected to open flat to slightly up as very cautious optimism continues to prevail among investors on the trade front. While we’re not far from a two-week high for the STOXX, this is clearly not “irrational exuberance” territory.
If the U.S./Mexican deal was a relief, an agreement with Canada - let alone China - is far from done. Oh, and there’s political risk in Italy too.
— A look at the day ahead from European Economics and Politics Editor Mark John and EMEA deputy markets editor Sujata Rao-Coverley. The views expressed are their own —