World Markets Live - June 15 - CNBC Live Events
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World Markets Live - June 15

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

  • The BOE's Monetary Policy Committee has come closest to voting for a rate rise since 2007.
     
    This after three policymakers for a total of 8 voted to raise interest rates.
     
    Members Ian McCafferty and Michael Saunders joined "hawk" Kristin Forbes in voting for a rate rise.
     
    It should be noted that Kristin Forbes is set to stand down from the committee.
     
    Bank of England governor Mark Carney joined 4 other members in keeping the rates unchanged.
     
    Sterling rising nearly a cent versus the dollar since the decision.
     
     
     
    by david.reid edited by Spriha Srivastava 6/15/2017 11:09:22 AM
  • Welcome to Thursday's edition of World Markets Live. We'll begin full coverage at 0600 GMT. For now, here are the opening calls for European markets.
     
     
  • These are the top headlines this morning.
     
    • The Fed moves to normalise, hiking rates the second time this year and unveiling plans to trim its balance sheet, despite another soft inflation reading.
    • In a stunning turning point in the Russia probe, U.S. special counsel Robert Mueller reportedly opens an investigation into whether President Trump attempted to obstruct justice.
    • WTI steadies after falling nearly four percent on the latest inventory data, as it shows a smaller than expected drop in US crude stocks.
    • Sky Italia scores against Mediaset - winning the exclusive rights to the Italian Champions League matches from next year.
  • Mary Pieterse Bloem, global head of fixed income at ABN AMRO, says markets were a little bit surprised by the Fed’s hawkish tone.
     
    But if you look at what bond yields did, they actually fell so how much of the inflation story of Janet Yellen did they actually believe?
     
    They want to normalise rates and I definitely think they are leaning towards the lower unemployment numbers. That’s what they’re looking at and they feel very much that inflation is transitory as they call it, so temporary in other words. The market yet has to see that.
     
    Mary Pieterse Bloem says falling bond yields actually give the Fed more opportunity to start reducing its balance sheet.
     
     
     
  • U.K. inflation may have hit a four-year high of 2.9 percent in May, but the Bank of England is expected to leave rates unchanged when it meets today.
     
    CNBC’s Gemma Acton reports from outside the central bank in London.
     
    It’s only a few short weeks since the Bank of England last met, but there’s been such a raft of economic and political news in those few weeks that we don’t expect any movement in terms of them becoming more hawkish. If anything, we’re going to see quite a bit more dovishness.
     
    Gemma says this is because inflation has overshot the bank’s predictions, while wage growth has been very weak. This is concerning because the U.K. economy relies on consumer spending, but inflation rising faster than wages puts pressure on consumer’s purchasing power.
     
     
  • The Dow Jones achieved a record close on Wednesday after the Federal Reserve decided to hike rates. Meanwhile, the S&P and Nasdaq pulled back.
     
     
    Meanwhile, Asian stocks also pulled back following the latest Fed rate hike. The markets are concerned that the Fed committee members appear to be sticking to its previous plan for three rate hikes this year, despite weaker U.S. inflation. 
     
     
  • U.S. Congressman Steve Scalise remains in critical condition after he and three others were shot at a charity baseball game practice in Virginia.  
     
    US Representative Roger Williams was injured by diving for cover during the shooting.
     
     
    The gunman, identified as 66-year old James T. Hodgkinson of Illinois, died of his wounds after being shot by Capitol Police.  
  • President Trump is reportedly under investigation for possible obstruction of justice. The Washington Post reports that special counsel Robert Mueller is expanding his probe into Russian election interference to include the president.
     
    The report says 3 top U.S. intelligence officials will be interviewed by Mueller's investigators as soon as this week.  
     
     
    A spokesperson for President Trump's legal team had this to say:
     
     
  • At least 12 people are known to have died in the fire that tore through a west London tower block Wednesday. The tower was still burning some 16 hours after it first caught fire. Authorities say it's too early to determine what caused the inferno. Prime Minister Theresa May promises a full inquiry.
     
     
  • Here's a round-up of U.K. political news.
     
    • British Prime Minister Theresa May is moving closer to clinching a deal with the Democratic Unionist Party that would allow her to stay in power. May resumed talks with the Northern Irish party to form a coalition government. But talks slowed because of the deadly fire in a London residential tower.
    • Tim Farron is stepping down as leader of the Liberal Democrats. His resignation comes after a disappointing election performance of the pro-EU party. The Lib Dems failed to achieve any significant increase in support.
    • British chancellor Philip Hammond is expected to roll out his vision for a more business-friendly Brexit at an address tonight. He's speaking at the annual Mansion House gathering of London's financial elite. There had been speculation that Prime Minister May might replace Hammond, who's seen as a strong supporter of Britain's banking industry.
  • As financial firms consider their options in the face of Brexit, Luxemburg is hopeful it can attract some of them.
     
    Tom Theobald is deputy CEO of Luxembourg for Finance. He says Luxemburg is a natural partner for U.K. firms which will wish to continue to access the EU if the U.K. leaves the single market and loses its passporting rights.
     
    That’s the role we have been playing for non-European financial institutions for many decades now.
     
    Luxemburg is a very multi-national, multi-cultural, multi-lingual country. I think that’s perfect for any company that wants to access several markets in the European Union.
     
     
  • A blockbuster fight is set for August. Undefeated boxer Floyd Mayweather will take on mixed martial arts champ Conor McGregor.
     
    (Floyd Mayweather)
     
    This fight is an unusual crossover, pitting some of the biggest stars of different sports in one ring. The showdown has been in the works for some time, with each fighter demanding a $100 million payday.
     
    (Conor McGregor)
     
    Financial terms weren't disclosed for the fight, which Showtime pay TV is broadcasting.
  • Here's a round-up of top news which may move markets today.
     
    • Deutsche Bank is reportedly set to restructure its corporate and investment banking businesses. According to a Bloomberg report, the German lender plans to create a separate unit for its equity, debt and leveraged capital markets operations. Deustche Bank has not commented on the report.
    • A U.S. Department of Justice lawyer said regulators could be "weeks or months" away from deciding whether or not to approve a software fix for Fiat Chrysler's diesel vehicles. Speaking at court hearing, the lawyer said uncertainty remains about whether the proposed solution will be approved. 
    • More pressure from European leaders on Volkswagen. Following a meeting with Europe's consumer affairs chief, VW agreed to extend warranties to European owners of its diesel cars by two years. But no compensation was included in the deal.  The German automaker has come under fire after it admitted to cheating on emissions tests in 2015.
  • China's central bank has left interest rates unchanged, unlike its move in March when it raised rates within hours of the Federal Reserve's rate hike.
     
    The yuan rose against the dollar after the Fed's decision. Here's how the pair has performed this week.
     
     
  • These are the top headlines for the hour:
     
    • The Fed moves to normalise, hiking rates the second time this year and unveiling plans to trim its balance sheet, despite another soft inflation reading.
    • In a stunning turning point in the Russia probe, U.S. special counsel Robert Mueller reportedly opens an investigation into whether President Trump attempted to obstruct justice.
    • WTI steadies after falling nearly four percent on the latest inventory data, as it shows a smaller than expected drop in US crude stocks.
    • Sky Italia scores against Mediaset, winning the exclusive rights to the Italian Champions League matches from next year.
  • Tim Drayson, head of economics at Legal & General Investment Management, says the Fed rate hike was anticipated, but the amount of detail on the central bank’s plans to trim the balance sheet was a surprise.
     
    Then later on in the press conference, this clear signal from Chair Yellen that they’re prepared to initiate this programme relatively soon, so for me that’s a signal that they’ll go ahead in September and begin this gradual, but very much on a set path.
     
    They’ve described it as letting paint dry so it’s going to be very predictable, very transparent and not really a tool for active monetary policy, so they’ll stick with the rate changes to guide the economy overall.
     
     
     
  • H&M sales rose 4 percent in May, missing expectations. The company says sales improved in the second half of the month; the first half of the month was affected by tough market conditions.
     
  • Majestic Wine reports full year sales rose on strong U.S. performance.
     
    Full year underlying profit before tax was £10.9 million versus £15.3 million the year before. Underlying revenue was £461.1 million versus £413.9 million in 2016.
     
    The retailer says it remains confident about the medium term outlook, and said it expects the rate of sales growth to slow in 2018.
  • French President Emmanuel Macron is calling on Gulf states to solve their issues.
     
    Qatar's Arab neighbors have cut ties and blocked transportation links, accusing it of supporting terror. During a visit to Morocco, Macron said he'll hold talks with leaders of Saudi Arabia, UAE and Qatar.
     
     
    Meanwhile, a dispute over where to list seems to be slowing down the planned IPO of Saudi Aramco. The Wall Street Journal reports that powerful Saudi figures differ on whether to list shares in London or New York. Company executives reportedly want to list on the London Stock Exchange.
     
    But key Saudi royals appear to prefer the NYSE. Both exchanges are fighting hard for the listing that could value Saudi Aramco at $2 trillion.
  • Oil prices continue to struggle after yesterday's EIA data showed a surprise build in stockpiles. Prices were knocked by the news yesterday, as traders feared OPEC would struggle to rein in oversupply.
     
    Today, Brent is recovering a little, while WTI crude remains subdued.
     
     
  • Travelers heading through Brussels are in for a rough time today. A power outage hit the airport this morning. In a statement on its website, the airport says it's up and running again, but there will be delays throughout the day.
     
    This is the message the airport posted on its website.
     
     
  • Tim Farron is stepping down as leader of the Liberal Democrats. His resignation comes after a disappointing election performance of the pro-EU party. The Lib Dems failed to achieve any significant increase in support.
     
    Tim Drayson, head of economics at Legal & General Investment Management, says it is a surprise the political party did not do better in the election last Thursday.
     
    They could of attracted a few of the remainers. The election result was not purely a protest against May’s hard Brexit stance, it was a broader discontent with the austerity and welfare reforms.
  • French May EU-harmonised inflation grew 0.9 percent year on year, matching forecasts. CPI inflation was unchanged month-on-month.
  • Italian economy minister Pier Carlo Padoan has confirmed the rescue of struggling Italian lenders Popolare di Vicenza and Veneto Banca will not involve a so-called "bail in". 

    The attempt by the Italian government to reassure investors comes just days after the rescue of Spanish lender Banco Popular, which wiped out the company's shareholders.

    Gianluca Corradi, head of U.K. banking practice Simon-Kucher & Partners, says the situation is still dynamic.
     
    It has evolved a lot in the last couple of weeks, but in order to judge whether the conclusion will be positive or not we have to consider a couple of scenarios. First one is do we let those banks go on default?

    In that case, of course there is the interbank fund of deposits that has to protect deposit holders below 100,00 euros and the bill in that case will be around 11 billion. In this case, the other option is to allow the other banks as a systems solution to foot a very lower bill of 1 billion or even less, according to what the negotiations with Europe are going.
     
     
  • Shipping firm Maersk Line says it has been informed by the U.S. coast guard about the threat of a "dirty bomb" on board the Maersk Memphis container vessel in the port of Charleston, South Carolina.
     
    Maersk says the vessel was immediately evacuated and all crew are safe and on shore.
  • Markets to the downside but only just.
     
     
  • Turkey's February to April unemployment rate came in at 11.7 percent, according to the Statistics Institute.
     
    Earlier this morning, the Dutch unemployment rate for May came in at 5.1 percent, unchanged from April.
  • Individual bourses look like this: 
     
     
  • Foreign direct investment in China for the period January to May is down 0.7 percent on the year at 341.08 billion yuan. In May alone, foreign direct investment is down 3.7 percent on the year at 54.67 billion yuan.
     
    Tim Drayson, head of economics at Legal & General Investment Management, comments.
     
    China really needs those FDI inflows to help stabilize the renminbi. Now it has been relatively flat on the capital outflow front for the last few months, but if the U.S. does raise rates, then those pressures could build again and you don’t really want to be putting off those inflows.
  • Here are the best and worst performers across Europe.
     
     
     
  • Monthly sales at Swedish retailer H&M rose 4 percent in local currency sales in May, shy of analyst expectations of a 6 percent rise. Meanwhile quarterly sales topped 51 billion Swedish kroner, up from 47 billion a year ago. H&M said sales in the first half of the month were affected by tough market conditions, but improved in the latter half of the month.
     
    Nokia has unveiled new network routers which it says are the fastest products of its kind. The routers are expected to ship in the final quarter of this year. However, the product announcement received a mixed reception from investors, with Wells Fargo commenting that Nokia stil has an uphill battle to get its network business back to growth.
     
     
    Deutsche Bank is reportedly set to restructure its corporate and investment banking businesses. According to a Bloomberg report, the German lender plans to create a separate unit for its equity, debt and leveraged capital markets operations. Deustche Bank has not commented on the report.
     
    Activist investor Cevian Capital has increased its stake in Swedish telecom equipment maker Ericsson. It now owns 5-point-5 percent of the firm, up from a stake of just over 5 percent held at the end of May. 
  • Anja Hochberg, global head of investment services at Credit Suisse, says they still like emerging market assets, but from a structural point of view.
     
    On a more tactical basis, we have decided, especially on the equities side, just to step aside and, after a significant rally at the beginning of the year, to wait for a better re-entry.

    But we recommend very strongly to our investors to keep emerging markets as part of their strategic asset allocation. For the longer term, you have to be invested there, because that’s where the growth actually is.
     
     
     
  • The SNB has told UBS and Credit Suisse that they must draft credible plans for a potential insolvency.  
     
    In its annual financial stability report -- the Swiss National Bank wrote it is essential that further progress be made in drawing up robust resolution plans.  The combined balance sheets of the two banks are more than two-and-a-half times the size of the Swiss economy.
     
     
  • The Swiss National Bank has held its deposit interest rate at -0.75 percent. In commentary the bank says it will remain active the foreign exchange market.
     
    The SNB maintains its stance the Swiss Franc is still overvalued.
     
     
  • The Swiss National Bank holds its deposit rate unchanged at -0.75 percent, and kept the 3-month LIBOR band unchanged at -1.25 percent to -0.25 percent.
     
    The central bank says negative interest rates and its willingness to intervene in the forex market are intended to make Swiss franc investments less attractive, in order to ease pressure on the currency. The bank adds that its cautiously optimistic baseline scenario is subject to downside risks due to political uncertainty and structural problems in several advanced economies.
     
    Yields on Swiss bonds fell on the announcement. 
     
     
  • UK inflation may have hit a four-year high of 2.9 percent in May, but the Bank of England is expected to leave rates unchanged when it meets today.
     
    CNBC's Gemma Acton is now on air giving her analysis of what the Bank Of England Governor Mark Carney may say as he takes his turn in the central bank spotlight.
     
    Gemma says the bank is willing to look through the recent rise in inflation and consider it purely a function of sterling weakness.
     
    30 seconds to live Gemma!
     
    Gemma says the MPC committee is mostly made up of doves and that bias to easing is likely to strengthen as Kristin Forbes, an external member of the Bank's Monetary Policy Committee, complete her three-year term on the committee.
     
    Forbes is seen as an outlying hawk on the BOE's MPC.
  •  
      
    A member of the Saudi royal family is reportedly investing in a rival to Uber. This according to FT reporter Simeon Kerr.
     
    Al-Waleed Bin Talal bin Abdulaziz al Saud is a Saudi businessman, investor and philanthropist and a member of the Saudi royal family.
     
    More on that story here:
     

    Billionaire Prince Alwaleed buys $62 million stake in ride-hailing firm Careem

    CNBCSaudi Arabia's Kingdom Holding, the investment firm owned by billionaire Prince Alwaleed bin Talal, said on Thursday it had bought a 7.11 percent stake in ride-hailing firm Careem for $62 million.
  • The Bank of England is expected to leave rates unchanged when it meets today.

    Sam Hill, senior U.K. economist at RBC, says bank governor Mark Carney will make full use of the flexibility in his remit.
    He was as explicitly clear as he could be in January this year when he gave a rather technical speech… the message from that speech was ‘we appreciate that this is going to be a difficult year where inflation is overshooting the target, but our remit does allow us to look at other things and to look at the risks to growth and the stabilization of employment’ and so on and to take account of that and look through a temporary period of inflation overshooting and I think they’re going to push hard on that message.

    Hill says the bank will resist the temptation to follow the hawks. 
     
     
  • President Trump is reportedly under investigation for possible obstruction of justice. The Washington Post reports that special counsel Robert Mueller is expanding his probe into Russian election interference to include the president. 
     
    A spokesperson for President Trump's legal team says "The FBI leak of information regarding the president is outrageous, inexcusable and illegal."
     
    Peter Trubowitz, professor of international relations and director of the United States Centre at the London School of Economics, says the big story is that Trump is being investigated.
     
    If this story holds up it runs directly counter to Trump’s own claim when he fired James Comey on May 9th which was that he was not under investigation personally.
     
    This matters for two reasons. First, it will make it much harder for the White House and for Trump to fire Robert Mueller, who is the special counsel that is investigating the Trump-Russia matters, and secondly, this is going to turn up the heat on Capitol Hill. 
     
    There will be more calls from Democrats for impeachment, but more significantly this turns the heat up on Republicans, especially Republicans from swing states and districts where voters are not necessarily in the tank for Trump.
  • As the Federal Reserve gradually begins tightening monetary policy, its next task is reducing the $4.5 trillion balance sheet.
     
    I late 2008, the Fed began large-scale purchases of assets such as U.S. treasuries and government-supported mortgage-backed securities to stave off a collapse of the financial system.
     
    In October 2014, when Fed Chair Janet Yellen announced the end of the bond-buying program, the Fed's balance sheet had reached $4.48 trillion.
     
    By reinvesting principal payments and maturing securities, the balance sheet has remained at around that level.
     
    Now Yellen is looking to reduce that level by lowering the amount it reinvests by $6 billion a month in bonds and $ billion a month in mortgage-backed securities.
     
    Its tarts this year, but an exact date is as yet unknown.
     
     
  • Kerim Derhalli, who spent 35-years in investment banking, is offering his take on the Federal Reserve rate raise.
     
    Derhalli says it no surprise that Janet Yellen and the Fed have elected to raise rates for the second time in three months:
     
    The United States’ economy has been in constant growth since the financial crash of 2009, experiencing its third longest expansion on record, and the signs are that growth will continue.
     
    But the former Lehman, JP Morgan and Merrill Lynch employee says Yellen's task of raiing rates further won't be easy.
     
     
    “Inflation may well have been subdued in the years and months since the lows of the crash, but the world��s largest economy is now benefitting from low unemployment rates and the markets are booming.
     
    “Fed Chair Yellen’s task now is to ‘normalize’ interest rates and get them closer to the three to four percentage point levels that we saw pre-crash. This won’t be easy, with reasons such as low wage inflation holding the Fed back from making further interest rate hikes.
  • U.K. retail data figures for May have come in showing a -1.2 percent month-on-month and +0.9 percent year-on-year.
     
    The forecast figures were -1.0 percent m/m and +1.5 y/y.
     
    In essence, a miss.
     
    Sterling has fallen to a session low.
     
     
  • A war is raging in the UK supermarket sector.
     
    The traditional big four retailers, Tesco, Sainsbury's, Morrisons and Asda, are facing increased competition from German discount retailers Aldi and Lidl, as they increasingly eat into U.K. market share.
     
    Aldi has 520 U.K. stores and Lidl has 600.
     
     
    Stacey Widlitz, President of SW Retail Advisors and also a CNBC Retail Analyst says on air that during the recession Aldi and Lidl took advantage of consumers looking for bargains.
     
    Widlitz claims that the two German insurgents could hit 20 percent share in the next few years.
     
    Aldi and Lidl currently hold 7 and 5 percent of the UK market respectively. 
  • The South African Mining Minister has just conducted a press conference in Pretoria in which he has stated that any new mining right in the country must have a 30 percent black shareholding.
     
    According to Reuters, the mining index was lower by 2.4 percent before the meeting.
     
    Minister Zwane says the mining companies in the country have 12 months to meet the target. 
  • U.S. government debt prices are mixed this Thursday morning as investors respond to the Federal Reserve’s decision to hike interest rates by a quarter of a percent and begin reducing its bond and security holdings.
     
    AT last print, yield on the benchmark 10-year Treasury note, which moves inversely to price, was higher at around 2.1411 percent, while the yield on the 30-year Treasury bond was lower at 2.7790 percent.
    In oil markets, Brent crude traded at around $47.11 a barrel on Thursday morning, up 0.21 percent, while U.S. crude was around $44.78 a barrel, up 0.13 percent.
     
    Equity futures for U.S. markets look are suggesting a negative open at this early stage.
     
     
    On the data front, Thursday will see a host of data releases, including jobless claims, the Philadelphia Fed manufacturing outlook survey, the Empire State manufacturing survey, and import and export prices. Later in the morning, industrial production figures, the housing market index and natural gas inventories will also be released.
     

     
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