Good morning! Here are the 10 things you need to know in markets on Monday.
The International Monetary Fund (IMF) is set to add the Chinese yuan to its reserves basket on Monday, the biggest shake-up in more than three decades. By acknowledging the yuan as a major global currency alongside the dollar, euro, yen, and pound, as is widely expected, IMF members will endorse the efforts of China’s economic reformers and by doing so hope that will spur fresh change in China.
The US Federal Reserve Board will consider on Monday a proposal to curb its emergency lending powers, a change demanded by Congress after the central bank’s controversial decision to aid AIG, Citigroup, and others in 2008. A proposed rule, to be considered by the Fed’s Washington-based board in an open meeting, would require that any future emergency lending be only “broad-based” to address larger financial market problems, and not tailored to specific firms.
More than half a million people around the world took part in climate change marches over the weekend, a co-organiser said on Sunday, as protesters urged politicians to take action. The global protests come ahead of the COPA21 climate summit of around 50 world leaders, beginning in Paris on Monday. US President Barack Obama, China’s Xi Jinping, India’s Narendra Modi and Russia’s Vladimir Putin are all among the attendees.
Lloyds could have to rein in its dividend payouts as a result of the Bank of England’s stress tests, according to The Telegraph, if the regulators order the bank to build up its financial resources further. Officials are testing the seven biggest banks in the country to see how they would cope with a fictionalised economic crash beginning in China and other emerging markets and spreading around the world. The results of the annual test will be published on Tuesday.
Asian markets are mixed this morning. Japan’s Nikkei is off 0.69% at time of writing (6.30 a.m. GMT/1.30 a.m. ET), the Hong Kong Hang Seng is up 0.20%, and China’s Shanghai Composite is down 0.13%.
BHP Billiton renewed its commitment on Monday to do all it can to help, following the deadly collapse of a waste water dam in Brazil. The mining giant and partner Vale are facing a huge lawsuit. The Brazilian government announced on Friday plans to sue the two companies for $5.2 billion (£3.4 billion) in clean-up costs and damages after the November 5 collapse of the dam at the Samarco iron ore mine.
Britain’s borrowing is under the microscope this morning. Individual lending, mortgage approvals, and money supply figures for October are all due at 9.30 a.m. GMT (4.30 a.m. ET).
German and Italian inflation data is coming. Italy puts out numbers at 10.00 a.m. GMT (5.00 a.m. ET), while German figures are due at 1.00 p.m. (8.00 a.m. ET). Economists are forecasting an uptick in German price growth in October, predicting a 0.1% rise on September and a 0.4% rise on the same month last year.
Japan’s factory output expanded again in October, data showed Monday, boosted by production of memory chips and electronic devices, in a rare bright spot for the recession-hit economy. Economists were generally upbeat on the 1.4% expansion in activity — the second consecutive monthly rise — and said it signalled Japan’s second recession in as many years would likely be short lived.
The European Union and Turkey agreed on a deal to stem the migrant crisis including a €3 billion (£2.1 billion, $3.2 billion) aid package for Syrian refugees in Turkey, EU president Donald Tusk said after a summit in Brussels on Sunday. Tusk said: “Our agreement sets out a clear plan for the timely re-establishment of order at our shared frontier.”
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