Investing.com - Here are the top five things you need to know in financial markets on Monday, September 2:
1. U.S. futures fall on Labor Day after new round of tariffs
With Wall Street to remain closed for the Labor Day holiday, U.S. futures traded lower on Monday as a previously announced round of tariffs went into effect a day earlier. The U.S. slapped tariffs on roughly $110 billion in Chinese imports on Sunday, while Beijing responded with retaliatory levies.
Chinese state media reported that the government was prepared to stand firm in the dispute and increase economic support if needed.
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Asian stocks closed mixed with the Hang Seng index leading losses as Hong Kong protesters reportedly caused major disruptions Sunday at the Asian financial hub’s international airport.
European stocks traded higher after economic data pointed to a stabilization of manufacturing activity in the region.
The U.K. however saw its manufacturing sector shrink at the fastest pace since 2012 as businesses continued to fret over the impact of the country’s impending departure from the European Union. London’s FTSE 100 jumped more than 1% as the majority of its multinational components benefit from a weaker pound.
2. Argentina imposes capital controls
The government of Argentina authorized capital controls on Sunday in an attempt to stop a slump in its foreign currency reserves and the peso, after the announcement of government plans to reprofile much of its debt stoked fears that the country could again default.
Argentina said that it needed to “adopt a series of extraordinary measures aimed at ensuring the normal functioning of the economy”.
The measure means companies will need permission from the central bank to access the foreign exchange market to purchase foreign currency and make transfers abroad.
The central bank has burned through nearly $1 billion in reserves since Wednesday in an effort to prop up the peso. But the intervention did not have the desired impact and risk spreads blew out to levels not seen since 2005, while the peso extended its year-to-date swoon to 36%.
3. Oil drops after new tariffs; Hurricane Dorian in focus
Oil prices trader lower on Monday after a new round of tariffs from the U.S. and China came into force, raising concerns about a further hit to global growth and demand for crude. Part of Beijing’s retaliatory tariffs include a new 5% levy on U.S. oil.
There was little visible support to prices from Hurricane Dorian, which turned into a category 5 storm, the most extreme level on official scales, as it hit the northwestern Bahamas.
BP (LON:BP), Chevron (NYSE:CVX) and BHP Billiton (LON:BHPB) had all removed workers from some offshore drilling sites over the weekend as a precautionary measure.
4. Boeing (NYSE:BA) 737 MAX may stay grounded into holiday season
Boeing’s 737 MAX may stay grounded until well into the holiday season, according to The Wall Street Journal.
Sources told the WSJ that Boeing needs to resubmit briefing documents that detail its proposed software changes, something that will likely push back approval from the Federal Aviation Administration for several more weeks and keep the 737 MAX grounded during the Christmas holidays.
American Airlines (NASDAQ:AAL) and United Continental (NASDAQ:UAL) have already pushed back the return of the planes to their schedules until December, according to the WSJ.
5. U.K. lawmakers may move to avoid hard Brexit
Members of the British parliament are set to return from their summer recess on Tuesday amid expectations of a new legislation to stop the U.K. leaving the European Union on Oct. 31 without formal transitional arrangements to cushion the impact on the economy.
This week will likely see a combination of legal challenges and political maneuvering to try to overturn Prime Minister Boris Johnson's plans to suspend parliament from Sept. 9 to Oct. 14, - or to force him to ask the EU for an extension to the Brexit deadline.
Also on the table is the possibility of a vote of no confidence that could potentially lead to a snap election.
-- Reuters contributed to this report.