• The dollar edged higher against the euro on Monday, close to a 10-week high hit last week, on news German Chancellor Angela Merkel would not seek re-election as head of her CDU party.
More broadly, the dollar added to recent gains against other major currencies, supported by robust U.S. consumer spending data on Monday.
The dollar index, which measures the greenback against a basket of six major currencies, was up 0.24 percent at 96.594, just shy of the 10-week high hit on Friday.
While the euro EUR= down 0.15 percent to $1.1384.
• Merkel said she would not seek re-election as party chairwoman, heralding the end of a 13-year era in which she has dominated European politics.
“Currency markets considered her the Iron Lady of Europe,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
“This is certainly not positive for the euro’s political backing,” he said.
• Merkel’s weakness at home may limit her capacity to lead in the European Union at a time when the bloc is dealing with Brexit and a budget crisis in Italy, said Schamotta.
Schamotta cautioned against reading too much into the euro’s weakness on the day.
“I would not suggest that this might have a permanent impact on the euro area. She is still chancellor and there is every possibility that she moves on up to an European Council position,” he said.
• The United States is preparing to announce tariffs on all remaining Chinese imports by early December if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, Bloomberg reported on Monday, citing unnamed sources.
The Bloomberg report sent stocks lower on Monday afternoon. The Dow Jones Industrial Average .DJI ended down 1 percent, while the Nasdaq .IXIC fell 1.6 percent, also on weakness in technology and internet shares.
Trump has long threatened to impose tariffs on all remaining Chinese imports into the United States, which exceed $257 billion, if Beijing fails to meet U.S. demands for sweeping changes to Chinese trade, technology transfer and industrial subsidy policies.
Trump has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. goods.
• BlackRock's Jeff Shen said the escalation of trade tensions and the imposition of tariffs between Washington and Beijing have exacerbated China's financial woes as it works to modernize its economy.
"I think tariffs were a bit of a catalyst. China is going through a deleveraging process, is going through a repositioning of its economy. ... It's a bit of a transition and the tariff certainly doesn't help," Shen, Blackrock's co-head of systematic active equity, said during an interview with CNBC's Leslie Picker.
• U.S. Federal Reserve Board Chairman Jerome Powell will testify on the outlook for the economy before the congressional Joint Economic Committee on Dec. 5, the panel said on Monday.
The United States urged European Union governments on Monday to reflect on whether it was really in their interest to go ahead with a trade dispute over U.S. metals tariffs, and said it was hopeful of settling the issue with Mexico and Canada.
The U.S. tariffs attracted an unprecedented seven requests for WTO adjudication, as well as a slew of criticism, at a fractious WTO dispute settlement meeting, while the United States hit back with legal actions against its critics.
U.S. Ambassador Dennis Shea said he was not surprised by China’s opposition, since it had massive overcapacity in metals production and was a non-market economy, but that Washington was “deeply disappointed” with the EU’s stance.
• Jair Bolsonaro, the far-right former Army captain who won Brazil’s presidential weekend election, said on Monday he would press ahead with loosening gun laws this year and planned to visit Washington D.C. after a friendly call with U.S. President Donald Trump.
Bolsonaro, who early in his legislative career declared he was “in favor” of dictatorships and demanded that Congress be disbanded, has vowed to adhere to democratic principles while holding up a copy of the country’s constitution.
Trump said he had an “excellent call” congratulating Bolsonaro and tweeted about their plans to “work closely together on trade, military and everything else!”
Investors were quick to cheer Bolsonaro's victory, sending Brazil's benchmark Bovespa stock index .BVSP to an all-time high in early trading before stock prices fell as traders booked profits following a sharp rally this month.
• Italy’s parliament will begin debating the government’s 2019 draft budget by Wednesday, two government sources said.
The budget, which targets the fiscal deficit at 2.4 percent of gross domestic product, must be approved by both houses of parliament by the end of the year.
• Oil prices edged lower on Monday, with futures on track for the worst monthly performance since mid-2016, after Russia signaled that output will remain high and as concern over the global economy fueled worries about demand for crude.
Brent crude LCOc1 futures fell 28 cents to settle at $77.34 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 55 cents to settle at $67.04 a barrel.
Global benchmark Brent was on track to drop about 6.6 percent for the month. U.S. crude was on course to fall about 8.5 percent. Both were set for the steepest monthly decline since July 2016.
Even with U.S. sanctions on Iranian exports due to come into force on Nov. 4, oil prices have fallen about $10 a barrel since four-year highs reached in early October.
• The United States said on Monday it will send over 5,200 troops to help secure the border with Mexico, a far larger-than-expected deployment as President Donald Trump hardens his stance on immigration ahead of Nov. 6 mid-term elections.
The deployment will create an active-duty force comparable in size to the U.S. military contingent in Iraq, as Trump’s administration draws attention to a caravan of migrants that is trekking through Mexico toward the United States.
Reference: Reuters, BBC, CNBC
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