The European market opened up after a strong rally in oil prices. The FTSE 100 is up 10 points and the DAX is up 70 points.
UK News
The British Chamber of Commerce reported findings in its 1Q Quarterly Economic Survey, saying:
“Growth in the UK economy continued to soften in the first quarter, with most key survey indicators either static or decreasing. Several key indicators for the services sector – the UK’s main driver of economic growth – fell slightly this quarter, with domestic sales and orders reaching their lowest level for over three years. For manufacturing, domestic sales fell again, and remain low in historical terms (…) with potential downside risks for UK economic growth ahead.” (Bloomberg)
The Lloyds Bank of England and Wales Regional PMI report said:
“Growth in output and employment was slightly higher in March compared to the month before, but the first quarter as a whole was the worst in almost three years (…) The business activity index for England (…) registered 53.7 in March, up from February’s 34-month low of 52.9 but rounded off the worst quarter of output growth since the second quarter of 2013. Behind the recent slowdown has been a softer trend in new business, which showed the weakest increase since February 2013. (…) Wales maintained its outperformance of the UK as a whole, recording a stronger increase in activity than all English regions in March. At 55.4, its business activity index was at a three-month high.” (Bloomberg)
The Bank of Scotland PMI posted 48.5 in March, down from 49.2 in February. The report pointed out:
“March survey data pointed to a sharper deterioration in business conditions in Scotland’s private sector. Output declined and staffing levels continued to decrease, while the volume of incoming new business fell for the second successive month, driven by the sustained downturn in the oil and gas industry. Faced with fewer new projects, firms worked further through their backlogs of work.” (Bloomberg)
Daily Mail and General Trust is discussing a possible bid for Yahoo Inc with several private equity firms, according to the Wall Street Journal.
Moody’s downgraded Shell (LON:RDSa)’s rating to “Aa2” from “Aa1”, outlook “negative”. The rating firm pointed out:
“The ratings downgrades and negative outlook reflect Shell’s elevated leverage following the BG acquisition. We view BG as a strong contributor to Shell’s longer term business positioning, but under a low oil price scenario we expect Shell to generate negative free cash flow at least through 2017. Low oil and gas prices will compound Shell’s challenges in delivering substantial asset sales to help reduce debt and in integrating and restructuring the upstream portfolio.”
Fitch Ratings revised the CRH’s outlook to “stable” from “negative”, saying:
“The revision of the Outlook and affirmation reflects Fitch’s expectation that CRH’s financial performance will meet our guidance for the ratings within the next 12 to 18 months, driven by CRH’s strong operating performance and successful integration of its large acquisitions in 2015. We expect the recovery in core North American and European countries in 2016 to benefit the group. Its growth exceeded that of its peers in 2014 and 2015.”
Vedanta Resources (LON:VED) reported 4Q production – average gross production for Q4 FY2016 was 197,039 boepd, 9% than Q4 FY2015, primarily due to lower volumes from Ravva on account of its natural decline. Average gross production in FY2016 was 203,703 boepd, 4% lower than FY2015 on account of lower production from Rajasthan and offshore assets.
Global News
In Asia, stocks fell as persistent strength in the yen pressured exporters, while investors shrugged off early signs of stabilisation in capital spending. The Nikkei index fell 1.4% to 15,607.77, ignoring data showing Japan’s core machinery orders fell less than expected in February. Chinese stocks were higher in early trading, with the blue-chip CSI300 index up 1.8%, while the Shanghai Composite Index added 1.9%.
The dollar fell as far as 107.63 yen , surpassing last week’s trough of 107.67 and extending last week’s 3.3% decrease. The EUR/USD stood at $1.1410, not far from a six-month peak of $1.1454.
Oil prices were higher today, extending a sharp rally seen at the end of last week after a fall in U.S. inventories and drilling, while outages and hopes that exporters could freeze output also supported prices. U.S. crude rose above $40 a barrel in early trading but eased to $39.91, up 19 cents from Friday’s close. Brent was up 16 cents at $42.10 a barrel. Brent was lifted by production outages in the North Sea and West Africa, and by hopes that a meeting of exporters planned for April 17 would lead to an agreement to rein in ballooning overproduction – estimated at about 1 million bpd in excess of demand. Gold rose to $1,251.70 an ounce, its highest since March 22.
In US stocks a sharp rally in crude oil and energy stocks lifted U.S. stocks on Friday. The S&P 500 gained 0.28%, to 2,047.6. Valeant Pharmaceuticals (NYSE:VRX) fell 5.2% after Bill Ackman said that the Canadian drugmaker would not sell Bausch and Lomb. Gap (NYSE:GPS) lost 13.8% after the company’s disappointing same-store sales for March prompted Citigroup (NYSE:C) to cut its price target on the stock.
Economic Calendar
- No major data today
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