EU-UK summit on Brexit, China GDP data, Booker Prize
The FT's Josh de la Mare highlights the key stories to watch for in the week ahead, including a crunch EU-UK summit on Brexit, figures from China on GDP growth showing the impact of the trade war with the US, and who might win the Booker Prize
Written by Simon Greaves, Mehreen Khan, James Blitz, Tom Mitchell, Henry Sanderson and Rebecca Rose. Archive from Reuters and Getty.
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Here are the top stories we'll be watching this week. The UK and the EU aim to agree finally on the first stage of Brexit. GDP figures from China will reveal the impact of the trade war with the US, which will also affect the results of aluminium producer Alcoa out on Wednesday. And the winner of one of the world's leading literary awards, the Man Booker Prize, is announced.
First to the UK. Brexit, migration, and the eurozone will be on the menu for a crunch one and a half day EU leaders' summit in Brussels this week. Diplomats are putting together a draft version of a political declaration on the EU/UK future relationship. The most sensitive issue of the Irish backstop is expected to be thrashed out by EU leaders with the aim of getting a final agreement at a special summit in November. The FT's Whitehall editor James Blitz has this analysis.
Things are always fluid with EU summits. And with Brexit, nothing is ever completely certain. But it looks as though at this week's meeting, Mrs May and the leaders of the 27 EU states will agree the first stage of the Brexit deal.
In other words, the Article 50 negotiation which seals the divorce in which Britain pays £39bn to leave the EU. There was an agreement on EU citizens. And of course, that third and most tricky issue in many ways, the question of what happens over the Irish border. Well, that looks as though somehow that is also going to be resolved.
If all goes well, and the leaders leave with Article 50 signed, then they will move to the next phase which is an emergency summit at some time in November where everything will be brought together, the Article 50 draft that they have. And then, the future framework for EU/UK trade which will be a political declaration, not legally binding, but which will give some idea of where the UK's relationship with the EU will be in future. Difficult to make firm guesses. But at this stage it looks as though Mrs May will come back to the House of Commons at some point in November with a deal. The question then, of course, is whether MPs will give it their approval.
China's National Bureau of Statistics releases its estimate for third-quarter economic growth on Friday. Investors will be looking for any signs of weakness in the numbers stemming from Beijing's escalating trade war with Washington. The Trump administration imposed tariffs on Chinese exports worth $50bn annually in July before targeting another $200bn in September. The dispute has so far had little impact on the world's second largest economy, and Chinese officials are confident they can survive even a fully-blown trade war with the US.
However, with investments and economic growth already slowing because of a government crackdown on risky lending practises and devaluation pressures building on the renminbi, President Xi Jinping has little room for manoeuvre. Investors will also be looking to see how the US/China trade war has affected Pittsburgh-based aluminium producer Alcoa which presents third-quarter results this week and has seen its share price fall by nearly a third this year.
In late May, the Trump administration imposed a 10 per cent levy on imports of aluminium. This comes on top of US sanctions on Russian producer Rusal imposed in April which have caused widespread disruption in the global market for aluminium. Aluminium prices initially shot up by 30 per cent but have since fallen by 20 per cent. The FT's Commodities Correspondent Henry Sanderson has more.
Alcoa shares have fallen by about 30 per cent this year. So investors will be looking for third-quarter earnings for any sign that Alcoa has benefited from turmoil in the global aluminium market following the US sanctions against Russian producer Rusal. Aluminium prices have fallen back from their high level in April. But perhaps more critically, Alcoa is a big producer of alumina, the price of which has surged because Rusal was also a producer, and Rusal's production was cut from the market. So investors will be looking to see that Alcoa's benefited from this rise in the alumina price.
Investors will also be looking at the impact of the deepening US/China trade war. Because not only for its impact on demand for aluminium but also the impact on Chinese supply. China's the biggest producer of aluminium. And the renminbi has weakened quite considerably, making it more - lowering their cost of production. So investors will be listening to see what Alcoa says about both global demand and global supply in the wake of this trade war.
The winner of the leading literary award, the Man Booker Prize, will be announced on Tuesday in London. More than 170 books were submitted for the £50,000 award. The 2018 Man Booker shortlist covers difficult issues from prison life to environmental disaster, incest, war, slavery, and marginalisation. It is also a shortlist in which women outnumber men.
But when it comes to the big reveal on Tuesday night, the thorny question of whether an American will take the prize for the third-year running will be on everyone's lips. Rachel Kushner's tale of female incarceration, The Mars Room, is up against Richard Powers novel about trees and people, The Overstory. And that's what the week ahead looks like from the Financial Times in London.