10 things you need to know in markets October 1

Chancellor Philip Hammond
in Downing Street
Toby
Melville/Reuters

Good morning! Here’s what you need to know in markets on Monday.

1. Trade negotiators for the US and Canada on Sunday evening put
the finishing touches on a deal to reshape the 25-year-old North
American Free Trade Agreement, known as NAFTA, sealing
the largest trade-deal rewrite of President Donald Trump’s
tenure. The agreement came just
hours before a deadline set by the Trump
administration, will pave the way for a vote in Congress to
approve the deal after more than a year of negotiations among the
US, Canada, and Mexico over the trilateral agreement.

2. The UK would crash out of the EU without a deal rather than
pursuing a soft Brexit, Dominic Raab will warn
today. Speaking at the Conservative conference
in Birmingham, the Brexit secretary will warn the UK will be
“left with no choice” but to pursue a no-deal Brexit if the EU
fails to offer a favourable agreement. “Our willingness to
compromise is not without limits,” Raab is expected to say.

3. Brexit is already reportedly costing Britain £500 million
($651.6 million) a week. 
New research
suggests the UK economy is already 2.5% smaller than it
would have been had Britain voted to remain in the
EU. 

4. Separately, the UK has the fiscal capacity to cope with
leaving the European Union without having first secured a deal,
British finance minister Philip Hammond said on
Monday. When asked about health spending,
Hammond said that voters would have to accept that if they wanted
an expanding health service they would have to pay a little more
tax.

5. The Canadian dollar and the Mexican peso rose on Monday on
hopes of progress in negotiations over a renewed North American
Free Trade Agreement (NAFTA) deal, but Asian shares got off to a
slow start amid further signs of weakness in China.

Casting a shadow in Asia, two surveys showed on Sunday that
growth in China’s manufacturing sector sputtered in September as
domestic and export demand softened..

6. Facebook may be fined as much as $1.63 billion by an EU
privacy watchdog for a recent data breach announced Friday that
compromised the personal information of more than 50 million
users. 
According to the Wall
Street Journal, Ireland’s Data Protection Commission,
Facebook’s lead regulator in Europe, said on Saturday it demanded
more information about the nature and scope of the hack, which
may have violated the EU’s new privacy law called the General
Data Protection Regulation. 

7. In an email, Elon Musk told Tesla employees on Sunday they
have “one more day of going super hardcore” to close the quarter
and the company is “very close to achieving profitability and
proving the naysayers wrong.” Musk assured
investors that Tesla would turn a profit in the third quarter in
a conference call in August. The company has never turned an
annual profit, and has had only two profitable quarters in its
history.

8. US President Donald Trump said he and North Korea’s Kim Jong
Un “fell in love” through “beautiful
letters.”

 Trump lauded his recently
improved relationship with Kim during a West Virginia
rally.

9. Saudi Arabia has shelved a $200 billion plan with SoftBank to
build the world’s biggest solar-power-generation project, the
Wall Street Journal reported on Sunday, citing Saudi government
officials. No one is actively working on the
project, and instead, the Saudi kingdom is working up a broader,
more practical strategy to boost renewable energy, to be
announced in late October, the WSJ reported.

10. China has canceled a security meeting with U.S. Secretary of
Defense Jim Mattis that had been planned for October, a senior
U.S. official said on Sunday, days after a top Chinese official
said there was no reason to panic over tensions between the
countries. The official, who is involved in
China policy and spoke on condition of anonymity, said it was not
clear if or when the meeting would be rescheduled.