World Markets Live - April 27 - CNBC Live Events

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World Markets Live - April 27

We’ll be updating you throughout the day with essential breaking news, data alerts, earnings reports and all the major market movements.

    Deutsche Bank shares are lower, despite the lender topping analyst estimates on profit in the first quarter. Net profit surged to 143 percent, coming in at 575 million euros.
    CNBC's Annette spoke to Deutsche Bank CFO Marcus Schenck about the results.
    The most important point for us was, in the first quarter, to really see that in the different business lines we see the turn and exactly that has happened.

    We have 5 billion of new money in asset management. We have 4 billion of new money in wealth management. We have a substantial increase in activity in our retail business.
    Our markets business on the debt side, even relative to the first quarter last year, we are up more than 10 percent. In equities, substantial improvement over the fourth quarter of last year. And our corporate finance business is up about 10 percent.
    Shenck added that the only business which is slightly down is the transaction banking business, which is the result of leaving a number of countries.
    Comment ()
    Despite some strong earnings releases today, the pan-European Stoxx 600 has slipped around half a percent lower in the first hour of Thursday trading.
    Comment ()
    Nokia beat analysts' forecasts with a better than expected quartely profit before interest and taxes of 341 million euros. 

    The company says it expects sales at its networks unit to decline this year in line with the market. 
    Shares in the Finnish telecom are near the top of the Stoxx 600, as the company's chief executive Rajeev Suri told reporters in a conference calls that there were opportunities in China and gave an update on the company's progress, Reuters reported.
    We slowed the rate of topline decline and generated healthy orders in what is typically a seasonally weak quarter for us... We saw encouraging stabilisation in Mobile Networks topline.
    by luke.graham edited by Spriha Srivastava 4/27/2017 8:20:25 AM
    Comment ()
    First quarter revenue growth slowed at advertising giant WPP, dragged down by a few major account losses and declining ad-spend by clients in the U.S. and Asia. Like-for-like sales rose 0.8 percent in the quarter, roughly in line with analyst expectations. 

    CEO Sir Martin Sorrell earlier told CNBC the Chinese market remains under pressure. 
    U.K. and Western continental Europe did quite well, but…North America was much more challenging and Asia-Pacific was flat, China probably being the toughest market for us.
     Shares are down  2 percent today.
    Comment ()
    Lots of German Q1 earnings are moving markets today.
    Deutsche Börse shares are trading higher after the group announced plans to launch a 200 million euro share buyback. The stock price move also comes after the company posted quarterly revenue and profit figures which beat analysts' expectations.
    Lufthansa has posted a wider net loss than expected. The company says demand at it air freight division and maintenance unit has taken off and that it's seeing improved price trends at its airlines. The airline reported adjusted earnings before interest and tax of 25 million euros, against a loss of 53 million euros a year ago.
    Bayer has raised its guidance for 2017 after posting a 38 percent rise in first quarter net profit. Earnings and sales at the German drugmaker topped analyst estimates, with its Covestro business providing a perfomance boost. The company announced that its CFO, Johannes Dietsch, will leave the company in May 2018.
    BASF, the world's largest chemical group by sales, posted a 29 percent rise in EBIT in the first quarter, topping analyst expectations.  The German firm said it remains cautious on its 2017 outlook, but expected full-year profit to come in at the top end of its forecast range.
    Comment ()
    Lia Quartapelle, Italian politician and member of PD, told CNBC’s Willem Marx that she saw Russia as a major threat to Italian politics.
    The way the Russia’s are getting close to movements that want to divide European unity, the European integration progress, is very threatening and I think that we can subscribe the 5-Star movement to that part of the European political spectrum. 
    I think that it’s not in the interest of Russians to have a weakened European Union. Having a strong European Union is more convenient for them.
    Comment ()
    The ECB is set to keep its ultra-loose monetary policy unchanged when members meet later today. However, stronger growth prospects, and easing European political risk, could lead to a more hawkish tone from President Mario Draghi and set the stage for future action.
    Thu Lan Nguyen, FX analyst at Commerzbank in Frankfurt, says she does not believe Draghi will present any news today.
    This still might have an impact on markets because recently speculation regarding an imminent exit from the ultra-expansionary monetary policy that we are currently seeing have increased.
    In my view, some of the expectations and speculations are a little bit overdone.
    Comment ()
    We'll be covering the EBC's latest policy announcement and Mario Draghi's subsequent press conference later today from 13:30 CET.
    Comment ()
    The pan-European Stoxx 600 is down around 0.5 percent today. This after Asian shares softened from near two-year highs and U.S. markets closed lower - risk sentiment appears to be souring after President Trump's tax plan announcements yesterday were light on detail. 
    Here's how the individual European markets are performing. Bear in mind, depsite today's falls the markets have enjoyed a good start to the week, especially with Monday's big market rally.
    Comment ()
    Richard Mylles, political analyst at Absolute Strategy, says the U.K. general election in June will increase Theresa May’s authority and give her a personal mandate.
    Five of the last seven polls have shown her 20 points plus ahead of Labour, which is landslide majority territory. It doesn’t necessarily strengthen her hand vis-à-vis the EU, what that does is strengthen her hand vis-à-vis the Euro skeptics within her own party, which gives her extra flexibility to make concessions to the EU agenda, which should hopefully get a better deal, but there’s a lot that could go wrong on that front.
    Comment ()
    Iraq's oil minister says the OPEC-led production cut is gradually leading to a long awaited balance in the market.
    The minister says the country is fully committed to OPEC and is in full compliance with the cuts. Iraq has reached about 97 percent of its OPEC cut. 
    The minister adds that the OPEC deal does not mean countries should halt efforts to develop their oil industries.
    Oil prices have dropped today. They are down around 1 percent.
    Comment ()
    BMI Research says it does not expect any changes to the European Central Bank's policy framework at today's meeting, in a research note published Tuesday.
    Subtle changes to the ECB's statement last month, along side rising headline inflation and improving macroeconomic data, fuelled speculation that a tightening of policy was imminent in the form of a tapering of the asset purchase programme.
    We may get slightly more clarity on the outlook for the envisaged path of rates and the ECB's balance sheet at the April conference.
    In particular, the market-friendly outcomes of the Dutch and French elections in March and April, respectively, as well as continued improvement in economic growth data, may spur more talk of tightening policy sooner rather than later.
    Comment ()
    U.S. markets are set for a cautious open, according to future value.
    U.S. stocks shed gains and ended yesterday's session negative after President Trump's tax proposals were light on detail.
    Comment ()
    The European Central Bank is meeting Thursday but expectations are that it will not announce any policy changes. The first round of the French election is over but the country has yet to make a final decision between the centrist Emmanuel Macron and the far-right candidate Marine Le Pen.

    Even assuming Macron secures his victory in the second round, it is also important that he will garner sufficient support in parliament, de Groot noted, in relation to the upcoming parliamentary vote.

    Carsten Brzeski, chief economist at ING, said the ECB is "highly unlikely" to do anything in between the first and second rounds of the French election.

    The timing of this week's ECB meeting could have been hardly more unfortunate. Even though the economic data since the March meeting has supported the view of brightening economic prospects, slowly paving the way for a very gentle exit from the current ultra-loose monetary policy, this week's meeting simply comes too early for any change, he said.
    Comment ()
    European shares retreated from 20-month highs on Thursday with financials and commodity-related stocks the main drag on the benchmark index.

    The pan-European STOXX 600 index was down 0.4 percent in early trading, after having hit a fresh 20-month high in the previous session. France's CAC 40 also fell 0.5 percent, just off Wednesday's nine-year high.
    Comment ()
    Amazon says to create 1200 new jobs in UK in 2017 with new fulfillment center in Warrington.  That's according to Reuters.
    Comment ()
    Unilever CEO says is in contact with the UK government to talk about getting best situation for British companies after Brexit. That's according to Reuters.
    Comment ()
    The pan-European Stoxx banking sector is trading 0.6 percent lower as financial stocks dragged after Deutsche results disappointed markets:
    Comment ()
    Paresh Davdra, CEO and Co-Founder of RationalFX analyses the move in the euro ahead of ECB:
    The euro’s gains made during the week’s rally have shown signs of fading ahead of today’s ECB meeting. Despite the currency’s weakness in recent months, the days since the French Election and renewed confidence in a Macron victory has driven the euro back to strength. Analysts will be watching closely today to see if there are any signs of any shift in the ECB’s controversial monetary policy, as the ECB will be reluctant to detract from the euro’s strong run, but it will likely not be enough to dissuade a significant change in policy.
    In the UK, the pound has risen on the back of a dollar weakened by disappointment over the President Trump’s tax reform plan. The pound is also benefitting from optimism over the result of the UK election, as the prospect of a softer Brexit still proves attractive to investors.
    Comment ()
    Spokesman for British PM May says state opening of Parliament will be on June 19.
    Comment ()
    German consumer inflation bounced back in April and came close to the European Central Bank's price stability target of just under 2 percent, regional data suggested on Thursday.

    The figures from several German states hinted that price pressures in Europe's biggest economy - partly due to a rise in transportation costs - are slowly building up as an economic upswing continues and the labour market booms.

    The German data followed Spanish price figures that showed consumer inflation prices rose more than expected to 2.6 percent on the year in April.
    Comment ()
    EU Trade Commissioner Malmstrom says will reach free trade deal with UK after Brexit "for sure". 
    Comment ()
    Markets in Europe are trading morning as investors waited to hear from European Central Bank President Mario Draghi and digested fresh corporate earnings.
    Comment ()
    Oil prices fell on Thursday, weighed down by oversupply, but losses were limited by expectations that major exporters would agree to extend production cuts to try to rebalance the market.

    Traders reported ample supplies in all key markets despite efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to cut output by 1.8 million barrels per day (bpd) in the first half of the year to tighten the market and prop up prices.
    Comment ()
    Gold prices edged down as global risk sentiment ebbed, but scepticism over U.S. President Donald Trump's tax reform plan curbed further losses.
    Gold is being pulled down by descending global risk sentiment... But the market is still worried about whether (U.S. tax cut) policy would be carried out as the rate cut is too steep..., a trader with a Shanghai-based bullion bank said.
    Comment ()
    Comcast earnings: 53 cents per share, vs expected EPS of 44 cents
    Here's what the Street was expecting:
    • EPS: 44 cents, according to Thomson Reuters analysts' consensus.
    • Revenue: $20.124 billion, according to Thomson Reuters.
    Comment ()
    Commerce Secretary Wilbur Ross appeared on CNBC's "Squawk Box" on Thursday.

    President Donald Trump is set to sign a memo Thursday afternoon, authorizing an investigation into whether a flood of aluminum imports from China and elsehwere jeopardize national security. The move is similar to one launched last week regarding steel.

    In January, the Obama administration filed a complaint with the World Trade Organization, alleging that Chinese aluminum producers receive artificially cheap loans, contributing to the country's excess capacity.

    Meanwhile, despite earlier indications, Trump agreed in Wednesday afternoon phone calls with Mexico and Canada not to terminate the NAFTA "at this time." Instead, the president said the U.S. would try to renegotiate the trade treaty.
    Comment ()
    Howard Archer, Chief European and UK Economist at IHS Markit previews the ECB rate decision. Here's what he has to say:
    • The ECB is expected to sit tight in all respects of its monetary policy at its 28 April meeting. It will be relieved by Macron’s performance in the first round of the French presidential poll and will also be pleased with latest Eurozone surveys which point to ongoing healthy activity after Eurozone GDP growth likely improved to 0.5% quarter-on-quarter in the first quarter of 2017.  However, there currently remains little evidence of rising underlying Eurozone inflation.
    • Assuming Macron comes through the second round of the French presidential election in May, it looks very possible that the ECB will drop the reference to lower interest rates in its forward guidance at its June meeting.
    •  Recent Speeches by ECB President Mario Draghi and Chief Economist Peter Praet have downplayed the likelihood of the ECB diverging from its current planned policy path or adjusting the indicated sequencing when it does exit is highly accomodative monetary policy.
    • We suspect the ECB will announce late in 2017 that it is extending its monthly asset purchases into 2018, but at a slowing rate from January rather than suddenly stopping it. It could well aim to end the asset purchases by mid-2018.
    • It looks likely that the ECB will start the process of gradually normalising interest rates in the latter months of 2018, starting with a lifting of the deposit rate from -0.40%. The first increase in its refinancing rate (currently 0.00%) could come just before the end of 2018. 
    Comment ()
    Derek Halpenny, European Head of Global Markets Research previews the ECB rate decision:
    Possibility of some further subtle hints of increased confidence within the ECB Council may well be evident tomorrow. So any changes in rhetoric likely to be on the side of expressing greater optimism. However, we do not expect any fundamental shift in message or forward guidance. That is much more likely to take place on 8th June when we see a change to the formal guidance of keeping rates “low, or lower” until “well past” the end of QE. We expect a change in this statement in June.
    Comment ()
    Ahead of the latest ECB policy announcement, it's worth looking at how the euro is performing.
    So far today, the single currency is down  against sterling, up against the Japanese yen and flat against the dollar and Swiss franc.
    Comment ()
    Following comments from Commerce Secretary Wilbur Ross saying Canada and Mexico appear ready to start renegotiating NAFTA, the president has weighed in.
    President Donald Trump posted on Twitter to confirm he has spoken with the leaders of both countries.
    Comment ()
    These are the top headlines ahead of the ECB's latest policy announcement.
    • The ECB is set to make its latest policy stance known in about 15 minutes time. Investors would like to see clues about the possible timing of stimulus reduction
    • The Bank of Japan attempts to strike a balance by lowering its inflation expectations, and keeping monetary policy steady while also raising its economic outlook
    • Deutsche Bank shares fall after Germany's biggest lender misses on first quarter revenue.
    • Oil prices fall on reports of oversupply in the market, but losses are held on further talk of an extension to the OPEC cut deal.
    Comment ()
    The ECB is set to keep its ultra-loose monetary policy unchanged. 

    However, stronger growth prospects and easing European political risk could signal a more hawkish tone from President Mario Draghi and
    set the stage for future action.
    On the other hand, Daniel Lenz, lead market strategist for fixed income at DZ BANK AG, says he does not expect any change in tone today from Draghi.
    The economic data at the start of the beginning of the year were really good and the hard data were also good, but this was not really so much in the focus of the market.
    Everybody was watching what was happening in France and as you know there is still a second round to go, and I expect the ECB and Draghi to wait for this first.
    Comment ()
    The ECB is set to drop its policy decision in a few minutes time.
    Carsten Brzeski, chief economist at ING, explains the difficult position facing the central bank.
    The ECB remains stuck between a solid economic recovery and a clearly diminished deflation risk on one side and a still (though since yesterday slightly less) fragile political environment and an incomplete set-up of the monetary union on the other side.
    Consequently, the ECB’s road towards an exit from its ultra-loose monetary policy will remain winding and difficult.
    Comment ()
    The ECB announces it is leaving rates unchanged, as expected.
    The refinancing rate is left at 0.00, the interest rate on lending at 0.25 percent and the interest rate on deposits at minus 0.4 percent.
    Comment ()
    The euro hits a day low versus the dollar following the ECB decision.
    Comment ()
    Regarding its not-standard monetary policy measures, the ECB's governing council confirms that the net asset purchases, at 60 billion euros a month, are intended to run until the end of December, or beyond if necessary. 
    Comment ()
    Charles Diebel, Head of Rates, at Aviva Investors joins us live on air to analyse the ECB rate decision:
    The key challenge is how Draghi addresses sustainability of inflation. Any change to do with the symmetry of the outlook and more belief in the sustainability of inflation will be the key signal for the June meeting that they will start to signal more activity. 
    The biggest fear is that if they move too early then it all collapses back down on itself again. There are other concerns that the EU faces such as the Brexit scenario and that is a major drag on European situation.
    Comment ()
    The ECB says the governing council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time and well past the horizon of net asset purchases.
    Comment ()
    The European Central Bank left its interest rates and policy stance unchanged as expected on Thursday, keeping its unprecedented stimulus in place as inflation is still below its target, even if growth is finally accelerating.

    Fighting negligible inflation for years, the ECB has kept its deposit rate in negative territory since 2014 and plans to buy 60 billion euros worth of bonds each month at least until December.

    Meeting between the two rounds of the French presidential election, the ECB was expected to take a cautious stance, staying largely on the sidelines even after pro-euro centrist candidate Emmanuel Macron appeared to be in pole position to win next weekend.

    The majority of economists polled by Reuters expect the ECB President Mario Draghi to maintain the bank's bias for policy easing at least until June, when a small shift in tone is possible.
    Source: Trading Economiccs
    On Thursday, the ECB repeated its standard guidance that it expects its key interest rate to remain at present or lower levels for an extended period of time and well past the horizon of its asset purchases.

    It also affirmed that its asset buys, which have been cut by a quarter to 60 billion euros this month, could be increased or extended if the outlook for the euro zone becomes less favourable.

    The ECB kept its rate on bank overnight deposits, which is currently its primary interest rate tool, at -0.40 percent.
    Comment ()
    Charles Diebel, head of rates at Aviva Investors, weighs in on the Eurozone economy
    It’s clear from a global point of view, having been a distinct laggard; the Eurozone is catching up, whilst the U.S. has sort of plateaued at a reasonable pace. For the time being, we are seeing ongoing  acceleration within the Eurozone. 
    Are there risks to that? Clearly the currency is one if that continues to appreciate a lot. That could be an issue. There are geopolitical risks from the French and potentially the Italian elections, and obviously the Brexit scenario.
    But these are central bankers, they have to respond to the economics
    He adds that the ECB has to time it correctly, as stopping the easing too early would undo all the work it has done.
    Comment ()
    How does the ECB decision affect your investment picks?
    David Stubbs, global market strategist at J.P. Morgan Asset Management, says the central question for investors is when to rotate out of the U.S. into other parts of the world which have more upside risk.
    He says emerging markets and Europe are the obvious candidates.
    As political risk fades, hopefully, in Europe, I think the recent bounce in flows you’ve seen in Europe could start to accelerate and we’ll look back at this year and probably into next year as a slow turn from people being systemically underweight Europe an equities in favour of the U.S.
    What’s going to drive it is earnings growth. Earnings growth is already rising in Europe.
    Comment ()
    Lee Hardman, currency analyst for global markets research at Bank of Tokyo-Mitsubishi UFJ, shares his reaction to the latest ECB policy decision..
    The main take away so far is that the ECB has maintained its forward guidance that rates are unlikely to rise  until well after the end of QE. The development has weighed modestly on the euro although it is not really a surprise.
    If there are to be any hawkish shifts in communication today it was always more likely to be over how the ECB describes the performance of the euro-zone economy  and assesses the balance of risks to growth.
    We will have to wait for the press conference on that front.
    Comment ()
    Changing topics to U.S. economy, Kallum Pickering, senior U.K. economist at Berenberg, discusses the impact of regulation.
    There’s been a growing web of regulations in the U.S. If you can rein that in, it’s something the models can’t estimate, that can have meaningful effect on long-term growth.
    The key issue is if you raise supply at the same pace you raise demand, you don’t get the inflation. That is extremely difficult. It’s more likely through tax cuts that you’ll get that, but the encouragement is to actually spend a little more and when you spend you create demand.
    Comment ()
    Lena Komileva Floyd, chief economist and director at G+ Economics, shares her views on the latest ECB policy decision, saying markets are open to a shift in guidance from the central bank.
    This leaves policy makers in a difficult position. Failure to show any hawkish tilt in the ECB’s forward guidance today would be seen as a politically motivated tactical move, signalling that Le Pen “tail-risk” at the second round of the elections in France is causing President Draghi to remain cautious.
    Meanwhile, a change in the ECB’s language today would be seen as a sign that the German “hawks” are getting the upper hand over “doves” on the Governing Council, which could cause an unwanted sharper tightening in market conditions.
    On balance, with President Draghi already pre-signalling a hawkish direction in the ECB’s forward guidance last month, and the markets in agreement, with economic confidence showing little response to EU and global political uncertainties, an updated language from the ECB todays is warranted.
    Faced with a mammoth task of a smooth QE & NIRP exit over the next year, it’s time for the ECB to re-assert its independence from political influences and take the market’s training wheels off while taking back command of the steering wheel on financial conditions. 
    Comment ()
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