European market opened mixed following from falling oil prices and news from Asia as hopes grew that more central banks will join Singapore in easing monetary policy in the coming months. The Monetary Authority of Singapore said it will set the rate of appreciation of the currency’s nominal effective exchange rate policy band at zero percent. However, Luxury Goods were under scrutiny again with Burberry’s results showing further signs of weakness, dragging down the upbeat tone set in Asia. Burberry is currently down 7%. FTSE 100 is down 0.13% and the DAX is up 0.37%. S&P 500 Futures are currently trading down 0.29%.
UK News
U.K. House Price Balance dropped to a 9-month low of +42 in March (vs +50 expected) from +50 in February, reported the Royal Institution of Chartered Surveyors.
Burberry Group (LON:BRBY) posted a 2H trading update – Total revenue £1,410M, down 1% underlying. Impacted by continuing weak footfall, comparable sales in Hong Kong declined by over 20% for the third successive quarter. “We currently expect FY 2017 adjusted profit before tax to be around the bottom of the range of analysts’ expectations.”
Unilever (LON:ULVR) issued a 1Q trading statement – Turnover declined -2.0% to E12.5B including a negative currency impact of -7.1% – Underlying sales growth 4.7% with emerging markets up 8.3% – Underlying volume growth 2.6% and pricing up 2.0%
Persimmon (LON:PSN) published a year-to-date trading update – We brought forward a healthy order book into 2016 and our strong sales performance over the period has resulted in total forward sales revenue, including legal completions taken so far in 2016, being 8% higher than last year at £2.15B (2015: £2.00B). Our weekly private sales rate per site over this period was 6% ahead of last year. We have 7,598 new homes sold forward into the private sale market for 2016 with an average selling price of c. £220,000, an increase of 5.8% over the prior year.
Debenhams (LON:DEB) announced 1H results: Group revenue increased by 0.1% to £1,327.2M. Reported profit before tax increased by 5.5% to £93.8M (2015: £88.9M).
Legal & General Group (LON:LGEN) and Swiss Re (SIX:SRENH) are among firms considering bidding for Deutsche Bank's (LON:0H7D) unit Abbey Life Assurance Co, reported Reuters citing sources familiar with the matter.
Global News
In Asia, stocks rose to their highest levels as hopes grew that more central banks will join Singapore in easing monetary policy in the coming months. The Monetary Authority of Singapore said it will set the rate of appreciation of the currency’s nominal effective exchange rate policy band at zero percent. The Nikkei index rose 2.5% to end the morning session at 16,782.02.
The dollar was broadly firmer as an improvement in global sentiment led investors to trim bearish dollar positions. The euro edged down about 0.1% to $1.1265, while the dollar added about 0.1% against its Japanese counterpart to 109.41 yen.
Oil prices fell as OPEC warned of slowing demand and Russia hinted that there would only be a loose agreement with little commitments at the upcoming exporter meeting to rein in ballooning oversupply. Brent crude futures fell 1% to $43.66 a barrel. U.S. WTI futures were also down 1% at $41.60. Crude inventories rose by 6.6 million barrels in the last week, compared with analysts’ expectations for an increase of 1.9 million barrels. Gasoline stocks fell by 4.2 million barrels, while distillate stockpiles, which include diesel and heating oil, rose by 505,000 barrels. U.S. crude imports rose last week by 686,000 barrels per day.
In the US stocks rallied for a second straight day on Wednesday, led by gains in financial stocks after JPMorgan’s quarterly results. The S&P 500 gained 1%, to 2,082.42. JPMorgan (NYSE:JPM) reported a quarterly profit that topped low market expectations. Its shares rose 4.2% and gave the biggest boost to the S&P 500.
U.S. Treasury long-dated yields fell as a strong 10-year note auction and weak U.S. economic data boosted demand for government debt at the long end of the curve. In late trading, U.S. 30-year bond prices rose 14/32, yielding 2.584%, from 2.604% late on Tuesday. Benchmark 10-year Treasury yields fell close to two basis points to 1.763%. Prices on shorter-dated maturities were little changed, with yields on two-year Treasury notes at 0.7504%.
Economic Calendar
- 12:00 GMT+1 UK MPC Official Bank Rate Votes
- 12:00 GMT+1 UK Monetary Policy Summary
- 12:00 GMT+1 UK Official Bank Rate
- 13:30 GMT+1 US CPI m/m
- 13:30 GMT+1 US Core CPI m/m
- 13:30 GMT+1 US Unemployment Claims
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