| Welcome to your morning markets update, delivered every weekday before the European open. Good morning. Trade war optimism proved short-lived. Hurricane Dorian battered the Bahamas and could still hit Florida. And it could be make or break for Brexit this week. Here's what's moving markets. Tariffs Take Effect The trade war optimism at the back end of last week didn't last long, as the White House slapped tariffs on roughly $110 billion of Chinese imports on Sunday, with targeted goods ranging from apparel to Apple Watches. A separate batch of about $160 billion in Chinese goods will be hit in December and China's retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. products. At least Elon Musk's charm offensive is paying off. Devastating Dorian Hurricane Dorian is tied as the most powerful storm to hit land anywhere in the Atlantic, already battering the Bahamas and inflicting colossal damage to property and infrastructure across the chain of islands at maximum sustained winds of 185 mph, according to the National Hurricane Center. The fate of Florida remains uncertain, with the storm just 135 miles away. Its impact will be of particular interest to insurance companies exposed to the damage. Merkel's Relief It was a satisfying weekend for Angela Merkel, as the German chancellor's ruling coalition parties stemmed a surge by right-wing populists in two elections in the former communist east, potentially staving off a deeper political crisis in the 17-month-old governing coalition. Still, the stiff challenge from a protest party is a wake-up call just as Europe's largest nation teeters on the brink of a recession. Equities Lower Most Asian stocks fell with U.S. equity futures after those latest tariffs, while data showed further weakness in China's manufacturing sector and Hong Kong protesters caused major disruptions to the city's international airport at the weekend. The pound was steady ahead of a week that could determine the fate of U.K. Prime Minister Boris Johnson, and Brexit itself. Johnson's plans to meet potential Tory rebels on Monday have been called off. Where did it all go wrong? Coming Up... Several European Central Bank members are due to speak after hawkish commentary last week. Over the weekend, the ECB's newest policy maker added to skepticism over the need for a large stimulus package later this month. Elsewhere, we ease into the week with a very light corporate earnings schedule, while today's economic data includes euro area manufacturing PMI and Turkish GDP. What We've Been Reading This is what's caught our eye over the weekend. And finally, here's what Cormac Mullen is interested in this morning A volatile summer for U.S. equities came to an end Friday with one indicator of negative sentiment reaching its highest in nearly two years. The CBOE Index Put/Call Ratio, which measures the volume of bearish option bets relative to bullish ones for the major U.S. indexes, hit its highest since September 2017. The gauge can often be a contrarian signal and previous spikes were mostly bullish historically for the S&P 500 Index over the next three months, wrote Sundial Capital Research Inc.'s Troy Bombardia in a note to clients. The problem is September could be as volatile, with everything from history to options expiration and buyback calendars likely to come into play. U.S. tariffs on $110 billion of Chinese goods took effect Sunday, as did some retaliatory measures by China. Trade talks between the two countries are still planned to go ahead -- and economic data will be scrutinized for signs of any impact from the dispute. There's a Federal Open Market Committee meeting on Sept. 18, and this week alone will feature speeches from Federal Reserve Chair Jerome Powell as well as numerous other officials. And then there will be the almost inevitable tweets from President Donald Trump. Those looking forward to a quieter autumn may be disappointed.  Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. | 
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