Bond sell-off deepens, CO2 progress and good news from Iraq

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Donald Trump’s election victory continued to ripple through the markets on Monday, intensifying a global bond market rout. Investors were betting that the president-elect’s mix of economic stimulus and protectionism will herald faster growth and the return of inflation in the US.

The 30-year US Treasury jumped above 3 per cent for the first time since January, 10-year gilt yields regained pre-Brexit vote levels while the yield on the German 30-year bond rose above 1 per cent for the first time since early May.

Mr Trump’s first appointments have given a hint that his new administration will try to appeal to his popular base while at the same time reassuring the Republican party establishment. On Sunday he announced he had chosen Reince Priebus, the establishment head of the Republican National Committee, as his chief of staff, and named Steve Bannon — his campaign chair who ran Breitbart News, a website associated with the alt-right and white supremacists — as his chief strategist and counsellor.

World leaders are still grappling with the implications of a Trump presidency. China’s President Xi Jinping told Mr Trump in a phone call on Monday that co-operation was the “only correct choice” for relations between the two countries. Britain and France snubbed an EU emergency meeting following the election, highlighting the difficulty the bloc faces co-ordinating a response to Mr Trump’s victory. In France, meanwhile, the youngest scion of the rightwing Le Pen family has announced she is to “collaborate” with Mr Trump’s new strategy chief. Mr Bannon has described 26-year-old Marion Maréchal-Le-Pen as a ”new rising star”. (FT, Reuters, Politico)

In the news

C02 progress Global carbon dioxide emissions from burning fossil fuels have stayed almost flat for the third year in a row in what scientists say is a “clear and unpredicted break” that could mark a turning point in the world’s efforts to curb climate change. It comes as reports emerged that Donald Trump is seeking the quickest way to withdraw from the Paris climate agreement. The growing isolation of the US position was highlighted when fossil-fuel producer Saudi Arabia said it would stick to its Paris pledges even if Mr Trump pulls out. (FT, Reuters)

India’s cash backlash In a bitter twist, it has emerged that India’s new Rs2,000 ($30) note, with which the government intends to replace some of the 22bn currency notes summarily demonetised on Tuesday, are slightly smaller than existing notes and incompatible with the nation’s approximately 200,000 ATMs. (FT)

Japan grows The world’s third-biggest economy smashed expectations with annualised growth of 2.2 per cent in the third quarter of 2016. The unexpected rise gives a boost to Prime Minister Shinzo Abe and reduces pressure on the Bank of Japan for further monetary easing. (FT)

Assange questioned A Swedish prosecutor is interviewing WikiLeaks founder Julian Assange in Ecuador’s London embassy today, more than four years after he sought asylum there to avoid being extradited to Sweden over allegations of rape. He denies the charges and claims he would be vulnerable to extradition to the US over WikiLeaks releases of classified US cables if he left the embassy. (Guardian)

Job losses to hit London A private report by EY has been circulated among UK lawmakers and government estimating 83,000 related job losses over the next seven years if euro-denominated clearing is forced out of London into continental Europe. (FT)

It’s a big day for

Theresa May The British prime minister will give her first big foreign policy speech at the City’s Mansion House on Monday, with Brexit and trade at the top of the agenda. It comes as Britain’s net contribution to the EU budget next year is set to rise by hundreds of millions of pounds because of the drop in sterling. (WSJ, FT) 

Hate crime The man accused of killing UK member of parliament Jo Cox will stand trial in London on terror-related charges. (Huffington Post)

Keep up with the important business, economic and political stories in the coming days with the FT’s WeekAhead.

Food for thought

The perilous taming of Donald Trump Ed Luce on how the man who vowed a hostile outsider takeover is now surrounding himself with insiders. (FT)

Trump: the aftermath Sixteen writers muse on what Mr Trump’s victory means for the US and the world. (New Yorker)

Cuba’s last Rolex repairman Waldo Fernández Longueirae’s first day of work was in 1957. He is the Swiss watchmaker’s longest-serving repairman. Despite its socialist austerity, the country that can seem stranded in 1959 has a penchant for fine timepieces. (FT)

Good news from Iraq As Iraqi troops battle Isis jihadis in Mosul, some 50 miles away a German-led archaeological team has discovered a bronze-age settlement dating back to 3,000BC. The find underscores just how much history lies underground in the war-torn country. (Foreign Policy)

A TPP sans US? The Trans-Pacific Partnership is dead. But could it be revived without the US ? (NAR)

Video of the day

A look at the week ahead Vanessa Kortekaas highlights the key stories to watch for in the coming week, including UK prime minister Theresa May’s foreign policy speech, European economic data and results from US retailer Walmart.