German coalition talks break down, GOP leaders face tricky tax negotiations, and bitcoin passes $8,000
Walkout
Four-party talks on forging a new coalition government in Germany broke down Sunday after seemingly intractable policy disputes from migration to the environment spurred the liberal Free Democrats to walk out, scuppering Angela Merkel’s chances of an easy road to a fourth term as chancellor. While the euro weakened following the news, the currency recovered those losses in European trading. Fresh elections aren’t
necessarily imminent with Merkel’s options including the formation of a
minority government or a grand coalition with the main
opposition Social Democrats.
Backroom deals
With the Senate tax bill due to be voted on as early as Nov. 30, private negotiations are in full swing to clinch the fiscal overhaul. GOP leaders are
embarking on a tricky balancing act as they write a bill that seeks to
pass the Senate’s strict budget rules while maintaining the 50 votes
needed -- and, at the same time, leaving room for further compromise
when the bill is reconciled
with House legislation. President Donald Trump has expended
much political capital in the fiscal effort but there’s a risk that any
economic boost from the plan is offset by the Federal Reserve.
A better bid?
The U.K. may be poised to increase its payment offer
to the European Union for the so-called divorce bill that is a crucial
part of the exit talks. Britain is “on the brink of making some serious
movement forward,” Chancellor of the Exchequer Philip Hammond said ahead
of today’s Brexit sub-committee meeting. While the government hems and
haws, U.K. businesses are increasingly concerned over the slow pace of progress, while the budget on Wednesday is unlikely to give them cheer.
Markets mixed
Overnight,
the MSCI Asia Pacific Index slipped 0.1 percent while Japan’s Topix
index closed 0.2 percent lower. Stocks in China saw a late-session rally erase much of the losses after the crackdown on shadow banking. In Europe, the Stoxx 600 Index was up 0.3 percent at 5:50 a.m. Eastern Time, with Germany’s DAX Index also turning higher
as markets shrug off Merkel’s political difficulties. S&P 500
futures were 0.1 percent lower, the 10-year Treasury yield was at 2.342
percent, and gold was slightly lower.
$8,000
Bitcoin topped $8,000 for the first time
as investors looked past technology concerns that saw it suffer a 29
percent plunge earlier this month. The cryptocurrency’s resilience to
selloffs has some investors asking whether it can hit $10,000
by the end of the year. While the digital token is still seen by many
as a bubble, one measure of volatility suggests it may have “solid economic fundamentals.”