A look at the day ahead in European and global markets from Gregor Stuart Hunter Stocks and commodities are down, the dollar and bond yields are up, and markets have turned firmly risk-off after U.S.
Morning Bid: Be careful what you Warsh for
Market Reactions to Warsh's Potential Fed Nomination
A look at the day ahead in European and global markets from Gregor Stuart Hunter
Impact on Stocks and Commodities
Stocks and commodities are down, the dollar and bond yields are up, and markets have turned firmly risk-off after U.S. President Donald Trump said he has decided who he will nominate to lead the Federal Reserve.
Economic Indicators to Watch
Kevin Warsh's name has rocketed to the top of the prediction markets after the two met at the White House.
Geopolitical Factors Influencing Markets
While Warsh, a former Fed governor, is seen as an advocate of lower interest rates, he is also considered to be one of the less radical choices among the various candidates that have been raised and perhaps more cautious on heavy monetary stimulus than others.
S&P 500 e-mini futures slid 0.4% and Nasdaq e-mini futures were off 0.5% after Reuters reported Warsh visited the White House for a meeting on Thursday, citing sources familiar with the matter. Bloomberg News later reported the Trump administration was preparing to nominate Warsh as the next Fed chair.
With the market weighing the implications of the pick, MSCI's broadest index of Asia-Pacific shares outside Japan tumbled as much as 1.3%, taking the shine off the benchmark's best monthly gain of the past three years.
In early European trade, pan-region futures were last up 0.6%, German DAX futures gained 0.5% and FTSE futures climbed 0.2%.
Brent crude was last down 1.4% at $69.74 as oil markets weighed heightened geopolitical risks, after Trump on Thursday signed an executive order declaring a national emergency and establishing a process to impose tariffs on goods from countries that sell or otherwise provide oil to Cuba. Trump also said he was planning to talk to Iran amid rising tensions.
However, there's been no word yet on what Trump thought of the "Melania" film premiere on Thursday. Speaking on condition of anonymity, a U.S. official told Reuters that attendance at the big-budget documentary about First Lady Melania Trump was seen as obligatory for cabinet officials, many of whom attended the glitzy event at the Kennedy Center in Washington.
Key developments that could influence markets on Friday:
Company results:
Exxon Mobil, Chevron, American Express, Verizon, Regeneron Pharmaceuticals, Aon, CaixaBank
Economic events:
France: Consumer spending and producer prices for December, preliminary GDP for Q4
Germany: Unemployment, preliminary CPI and HICP for January, flash GDP for Q4, import prices for December
UK: Bank of England consumer credit and mortgage lending for December
Euro zone: Flash preliminary GDP for Q4, unemployment rate for December
Debt auctions:
UK: 1-month, 3-month and 6-month government debt
(Reporting by Gregor Stuart Hunter; Editing by Jamie Freed)
