Hong Kong and Italian asset rally, U.K. politics turn messier and central banks send mixed messages. MPs Take ControlNow that the dust has settled from Prime Minister Boris Johnson's dramatic Tuesday defeat, it's time for Parliament to kick it up again. Johnson's first test in a Commons vote ended poorly for him Tuesday as lawmakers voted to take control of the parliamentary schedule, an initial step toward forcing a delay to Brexit by three months. In response, Johnson made clear that the more than 20 Conservatives who defied him would be thrown out of the party and proposed a motion to trigger a general election, setting up even more turmoil in the months ahead. So what now? Lawmakers may vote on two measures Wednesday -- one to block a no-deal Brexit and then potentially one on whether to hold a general election. Meanwhile, it's not the prospect of a rough divorce from the European Union that has some of Britain's most affluent worried -- it's the rising odds of a victory by Jeremy Corbyn's Labour Party that is the more worrisome development. Breakthroughs Hong Kong stocks soared, with the MSCI Hong Kong Index surging 5.4%, after embattled leader Carrie Lam told officials that the controversial extradition bill which kicked off weeks of protests will be withdrawn. The rally was also seen in European luxury goods producers, with those companies reliant on sales to Chinese consumers visiting the city. Also in Europe, Italian assets added to gains after Prime Minister-designate Giuseppe Conte won backing to form a new government, with the country's 10-year yield falling to a new low of 0.85% this morning. Monetary outlookThe next couple of weeks see major decisions at both the Federal Reserve and the European Central Bank. The list of ECB policymakers pushing back against a resumption of asset purchases is growing daily, with Francois Villeroy de Galhau the latest to add his skeptical voice to the choir. Incoming-President Christine Lagarde faced lawmakers in Brussels this morning and pledged to act with "agility" when she takes charge on Nov. 1. From the Federal Reserve there have been mixed messages, with St. Louis Fed President James Bullard saying an aggressive 50 basis-point reduction is warranted, while Federal Reserve Bank of Boston President Eric Rosengren is unconvinced that the bank needs to cut rates at all at the upcoming meeting. Markets mixedOvernight the MSCI Asia Pacific Index climbed 0.9% while Japan's Topix index closed 0.3% lower after investor sentiment turned sour following worse-than-expected U.S. manufacturing data. In Europe, the Stoxx 600 Index was 1% higher at 5:45 a.m. Eastern Time as political developments and some relief in composite PMI numbers helped boost confidence. S&P 500 futures pointed to a strong start to the session, the 10-year Treasury yield was at 1.486% and gold was lower. Coming up…At 8:30 a.m the U.S. trade balance for July is published, with expectations for the deficit to tighten to $53.4 billion. At 10:00 a.m. the Bank of Canada is expected to open the door to further cuts, while not actually making any changes to the 1.75% policy rate. It's a big day for Fed speakers with New York Fed President John Williams, Dallas Fed President Robert Kaplan, Fed Governor Michelle Bowman, St. Louis Fed President James Bullard, Minneapolis Fed President Neel Kashkari and Chicago Fed President Charles Evans all due to address various events. Also, look out for the the Beige Book coming at 2:00 p.m. Devastation from Hurricane Dorian, which left large swathes of the Bahamas under water, may not be over yet. The storm is picking up speed as it is forecast to skirt Florida and Georgia through this evening before heading north along the east coast for the rest of the week. What we've been readingThis is what's caught our eye over the last 24 hours. And finally, here's what Joe's interested in this morningBank of America's David Woo says it's time to start betting that a trade deal between the U.S. and China will happen. His argument is simple: Going into an election year, it's unlikely that Trump would let trade uncertainty hurt the economy, so he'll get a deal. I find the argument to be fairly persuasive. That said, I mentioned this on TV yesterday and a viewer reached out to suggest I read up on a game known as Lodden Thinks. The premise, which was developed by poker pros Phil Laak and Antonio Esfandiari (both staples of televised poker in the mid-aughts), is that two people are asked a question like "How much is the Chinese stock market up over the last 20 years?". The goal isn't to answer the question accurately, but rather to guess how a third individual ("Lodden") will answer. Whoever guesses closer to Lodden's response wins. Thus to perform well, the guesser has to occupy the headspace of Lodden to figure out, based on what they know about that person's life experience and logic, how they'll answer. The implication here is that Trump is Lodden, and everyone is assuming that Trump thinks like they do. ("Of course it makes sense to do a deal in an election year.") But the problem is that Trump thinks like Trump, and not necessarily like you, me, or David Woo. Maybe a deal is obviously good electoral politics, but maybe he does not think that. Most market participants are familiar with the concept of a Keynesian Beauty Contest, where the game is not to pick the most beautiful contestant, but rather to pick who you think everyone else will think is the most beautiful contestant. That's usually how the market works, except these days it's about anticipating the thinking of a single individual.  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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