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13/10/2016

Weekly News Bites: Hard core

Our top picks from this week's Morning Chat

Hard core: Sterling is holding up above the $1.21 level following Prime Minister Theresa May's offer to give parliamentarians a "full and transparent" debate on the plan for leaving the European Union and a chance for MPs to "properly scrutinise" that plan before Article 50 is invoked. However, she held that while any deal would aim for "maximum possible access to the single market", she was absolutely clear that the British people wanted "maximum control" over immigration. (13/10)

Upshot yourself in the foot: According to latest polling by Reuters/Ipsos, US Republican presidential candidate Donald Trump has fallen 8% behind Democrat Hillary Clinton among likely voters (45% vs. 37%); they were tied two weeks ago. Echoing this, the “Upshot” election model used by the New York Times now suggests an 88% chance of a Clinton victory, surging up from 70% over the past fortnight. However, Mr. Trump has come back to tie the polls and more evenly balance the Upshot model once before. In late August, he was similarly pressured following comments about a fallen US soldier. (13/10)

Freeze, thawing: Oil prices wobbled yesterday as little detail has emerged over which countries will cut production from current levels to counter oversupplied crude markets. While all major players appear to like the idea of a production freeze, it is far more palatable when someone else is doing the freezing. The "prisoner's dilemma" paradox, where singular pursuit of one's narrow self-interest produces poorer outcomes for all, is reminiscent. Nonetheless, there is still hope, and both main grades of crude have stayed above the $50-level. (12/10)

Return of the frack: One way to survive in a low return world? Start with a massive number. Norway's $882 billion sovereign wealth fund – the world's biggest – generated a 4% return in the third quarter as equity and bond markets were buoyant. This equates to about $30 billion, far higher than the $11 billion generated in the second quarter, and eight times the amount the government withdrew during the third quarter to pay for public expenses. (11/10)

Grabbing your attention: The second of three televised debates between Republican Donald Trump and Democrat Hilary Clinton took place in the early hours. While no candidate delivered a knockout blow, there was a palpable sense of animosity between the two, punctuated by a series of sharp, acrid exchanges. The debate came at the end of a weekend where a bombshell video clip was released showing Mr. Trump making extremely lewd, provocative statements, damaging his political standing. The Mexican peso climbed this morning as markets saw less chance of a Trump victory. (10/10)

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