| Welcome to your morning markets update, delivered every weekday before the European open. Good morning. China is taking action to shore up its economy, the U.K. is hoping to move on and Carlos Ghosn already moved. Here's what's moving markets. Chinese Action The first phase of a U.S-China trade deal is due to be signed on Jan. 15 and while more phases will have to follow, the focus will now turn to the health and outlook for the Chinese economy. Authorities there have pledged to remain flexible on monetary policy and they continue to make moves to ease funding conditions for local companies in order to spur investment. Keep in mind Hong Kong too, where pro-democracy protests continued apace over the New Year celebrations, as any further escalation here could continue to hit companies exposed to the market. Ghosn Until the corporate and macroeconomic newsflow starts to heat up again, Carlos Ghosn is likely to remain on the tips of tongues everywhere. Having enlivened New Year's Eve for business reporters the world over, now the fallout of his escape from Japan to Lebanon will begin in earnest. Japan is seeking a meeting with Lebanon to discuss the issue and the questions on exactly how he managed to abscond from Japanese authorities and whether he did so in a musical instrument case will continue. Next Phase With a Conservative government holding a strong-enough majority to at least add some degree of near-term certainty on Brexit, U.K. politics will now be in a process of retooling itself for its next phase, most pertinently who will lead an opposition Labour Party that was battered in the polls. Still true in 2020, however, is that Britain doesn't have a monopoly on political turmoil. France's Emmanuel Macron plans to push ahead with his full pension reform program despite the protests crippling the country, while Spain's Pedro Sanchez is making another attempt at forming a government, but is awaiting the sign off from his prospective Catalan partners, and Austria will get a new coalition government between the conservatives and greens. Embassy Attack The year begins with another geopolitical battle for U.S. President Donald Trump to contend with after the U.S. Embassy in Iraqi capital Baghdad was attacked by an Iran-backed militia. The group broke up its encampment outside the embassy on New Year's Day but it creates an early headache for the president to tackle as the U.S. continues to be the focus of ire for its tactics designed to reduce the influence Iran has over the region. And none of this takes into account North Korea, which has pledged to debut a "new strategic weapon." And all in an election year to boot. Coming Up… The moves by China's central bank to shore up the local economy gave stocks a lift in Asia and European and U.S. futures are also pointing to a positive open. The demand outlook for copper has also brightened, which may give miners the world over a boost given the importance of China to that industry. Other assets that closed out strong performances for 2019 may also be in focus. Crude oil had its best year since 2016 and gold ultimately ended with its biggest advance since 2010, though there are doubts as to whether that can be repeated. What We've Been Reading This is what's caught our eye over the past few days. And finally, here's what Mark Cudmore is interested in this morning One day's move is irrelevant in the context of annual returns, but the powerful 2020 start for Chinese equities may be a theme that lasts all year. The country's stocks began outperforming global peers from the beginning of December, as it became clear that the U.S. would postpone the tariffs on China that had been scheduled for that month. With a presidential election on the horizon, there's reason to believe Trump's commitment to further progress on bilateral trade and that means the geopolitical tailwind can be sustained. The fresh year has already seen the announcement of a cut in the reserve ratio requirement and that's confirmation that the domestic policy tailwind will also persist. And the recent set of China PMIs show that the economy is holding up well. Chinese equities have significantly underperformed most other major stock markets over the past decade but the tide may finally be turning in their favor. The Shanghai Shenzhen CSI 300 Index is on track for its highest close in almost 23 months and there's clear sky above.  Mark Cudmore is a Bloomberg macro strategist and the Managing Editor of the Markets Live blog. Bloomberg Terminal users can follow him there at MLIV 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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