World Markets Live - June 15 - CNBC Live Events

CNBC Live Events

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 Fed has hiked interest rates by a quarter percentage point, citing continued economic growth and labour market strength.
    • The Federal Reserve announced a quarter-point rate hike Wednesday as expected.
    • The central bank last increased its benchmark rate in March.
    • It now believes inflation will fall well short of its 2 percent target this year.
    • The statement gave more detail on how it will unwind its $4.5 trillion balance sheet.

    Viewing recent softness in inflation as temporary, the central bank went ahead with its second rate increase of the year. Fed Chair Janet Yellen said the FOMC sees inflation stabilising over the medium-term. 
    The FOMC stuck to its forecast of one further rate hike this year, with rates gradually moving to around 3 percent in the longer term. It also outlined plans to begin unwinding its $4.5 trillion balance sheet this year.

    The Fed isn't the only central bank making news this week. The Bank of England and the Swiss National Bank make their own announcements today.
    The Russian president Vladimir Putin is holding his annual Q&A session with citizens of his country.
    So far he has said:
    • The Russian recession is over
    • All grounds to believe that Russia can hit a 4% inflation target
    • The economic crisis is over
    • New U.S. sanctions indicative of internal U.S. political struggle
    • If not Crimea, then another reason for sanctions would be found
    Bank of America has now started laying off staff, many of which at its North Carolina headquarters.
    The bank says the losses are mostly in its technology and operations business units.
    America's second-largest bank isn't offering a specific number, according to Reuters reports.
    The Chairman of the Swiss National Bank has said that the Swiss franc remains 'significantly overvalued'. Speaking after the central bank kept policy on hold, Thomas Jordan said the Swiss economy is on the road to recovery but inflation remains very low.
    Speaking to CNBC Jordan says the political situation in Europe has improved but he is not minded to reduce currency interventions. The central bank has been attempting to limit appreciation of the Swiss franc against the euro currency that many of its trading partners use.
    After a quarter point rate rise from the U.S. Federal Reserve and no change from the Swiss National Bank, eyes now turn to The Bank of England.
    It's the same old pressure being cited for oil this morning. 
    A glut of supply accompanied by concerns that OPEC producers won't  stick to output promises. 
     All that adding up to the main oil contracts drifting around 7-month lows. That means that WTI has now given up almost all its gains since OPEC announced its decision in November 2016.
    The London fire death toll is now at 17 according to the London Metropolitan Police.
    Another 17 people are in critical condition in hospital.
    The London police chief has said the death toll is expected to rise further.
    European stocks have slipped to near 2-month lows.
    Crude prices are weighing on the resource sectors and retailers are also falling after data in the U.K. suggested the traditionally robust U.K. shopper spent less at the till in May than in April. 
    Some commentators suggesting that an indication that inflation is biting the purse of British consumers. 
    The Bank of England (BOE) will soon deliver its latest interest rate decision, along with the minutes.
    The main focus of the BOE meeting will once again fall on the accompanying statement with no interest rate movement expected.
    Governor Mark Carney faces something of a tight rope act as weak data is accompanied by rising inflation.
    But with Brexit dominating U.K. minds it seems the BOE is likely to play a "dead bat" until political clarity can be achieved.
    Sterling currently off 0.40 percent.
    Sterling has reacted to the Bank of England interest rate decision by spiking against the dollar.
    The Bank of England has kept its interest rate at 0.25 percent. Sterling surging as we hear that the MPC voted 5-3 to keep rates at its current level.
    U.K. gilt futures fall by as much as 60 ticks after the Bank of England policy decision.
    Gilt yields are ticking higher, meaning the value of the bonds are falling. Here's what the yield curve is looking like.
    The FTSE 100 has extended looses on the BOE announcement. It is now down more than 1 percent.
    Martin Arnold, FX Strategist at ETF Securities says the 5-3 split in BoE's MPC is very interesting and shows the resilience of the UK economy:
    That goes to the underlying economic environment being resilient and seeing some more pressure on the inflation front and not just coming from the weaker sterling that is being highlighted in previous months. So the split is interesting. 
    Sterling has spiked against both the dollar and the euro following the latest BOE minutes, showing the committee is divided, with three members voting to raise rates.
    Paresh Davdra, CEO and Co-Founder of RationalFX analyses the move in sterling following the BOE rate decision:
     The pound remains weak today as analysts anticipate the BoE’s rate decision. The BoE is expected to keep interest rates on hold, but analysts will be watching carefully for the central bank’s response to recent weak data releases which point towards a slowing UK economy. The pound has seen much volatility over the past week following the election outcome and signs of recovery on the back of the prospect of a softer Brexit have been undermined by yesterday’s jobs data and today’s disappointing retail sales data, which portrays a rather reluctant consumer outlook as inflation bites down harder on household budgets.
    Furthermore, a strengthened dollar following yesterday’s much anticipated Fed reserve policy meeting, places new pressures on the pound.
    The Fed raised its key interest rate to 0.25%, the second rise this year. Investors had long expected the rate rise which comes as observers begin to lose faith in President Trump’s ability to deliver his promised economic stimulus. The dollar, which has suffered in recent weeks due to on-going political controversies, has been boosted by the rate rise and pushed down an already vulnerable pound. Analysts will be watching closely to see if this strength lasts as investigations in Washington turn their attention to the President.
    Here is our instant write up on the Bank of England rate decision:

    Bank of England narrowly votes in favor of maintaining record low interest rates

    CNBCThe Bank of England (BOE) held interest rates steady at 0.25 percent on Thursday, however, policymakers appeared increasingly in favor of a rate hike amid soaring inflation.
    Ben Brettell, Senior Economist, Hargreaves Lansdown analyses the Bank of England rate decision:
    Set against a backdrop of disappointing retail sales, slowing growth, shrinking real wages and heightened political uncertainty, it was somewhat surprising that three MPC members voted for higher rates at this week’s policy meeting.
    Economists had expected a 7-1 split, with the soon-to-depart Kristin Forbes the lone voice calling for higher rates. In fact she was joined by Ian McCafferty and Michael Saunders in believing intensifying inflationary pressures justify an immediate 25 basis point increase. 
    It seems the willingness of the MPC to ‘look through’ higher inflation and leave rates on hold is wearing thin, and if inflation continues to surprise we could see higher rates by the end of the summer.
    The minutes show policymakers are more optimistic than many economists about the UK’s prospects. Despite the current weakness in wage growth, they see this picking up sharply over their forecast period, and also believe lacklustre consumer spending will be offset by a pickup in other components of demand – notably exports, which are being helped by the depreciation of sterling and stronger growth elsewhere in the world. The minutes made no mention of last week’s surprise election result.
    The pound jumped significantly on the news, gaining almost a cent against the dollar and three-quarters of a cent against the euro. The FTSE 100, which has seen a negative correlation with the value of the pound of late because of its large proportion of overseas earnings, fell by 30 points or so on the news.
    German Chancellor Merkel says hopes Eurogroup will reach deal that will allow new payments for Greece. That's according to Reuters.
    South Africa's Chamber of Mines says rejects unilateral imposition of charter on industry, says revised mining charter is "seriously flawed". 
    Chamber of Mines says will go to court to suspend implementation of new charter. That's according to Reuters.
    Check out which companies are making headlines before the bell:
    United Technologies – The company raised its quarterly dividend by 6.1 percent to 70 cents per share. The increased dividend will be paid on September 10 to shareholders of record on August 18.
    UBS, Credit Suisse – UBS and Credit Suisse were ordered by Switzerland's central bank to draft credible plans for a potential insolvency. The bank did say that UBS and Credit Suisse were on track to meet upgraded capital requirements.
 – Amazon is interested in possibly buying collaboration software maker Slack Technologies, according to a Bloomberg report which puts Slack's value at $9 billion or more. 
    Alphabet – Alphabet's Google unit struck an agreement on the nature of future tax payments in Indonesia. Early this week, the two sides had resolved a dispute on Google's 2016 tax payments. Separately, the stock was downgraded to "hold" from "buy" at Canaccord Genuity, which cites valuation among other factors.
    Bank of America – The bank is laying off more workers in its operations and technology unit, in a continuing effort to cut costs.
    Apple – Apple is working on turning its iPhone into a one-stop location for all of a user's medical information, according to a report.
    Wells Fargo – Bank officials in its mortgage business were reportedly making unauthorized changes to home loans held by customers in bankruptcy, even as the bank was dealing with its sales practices scandal last year. 
    Click here for a full list of companies.
    London Mayor Sadiq Khan says he is demanding a full and independent public inquiry into the Tower Block fire, need an interim report by end of this summer. That's according to Reuters.
    British Prime Minister Theresa May has ordered a public inquiry into the London Tower Block Fire. That's according to Sky News. 
    British PM May says wants to reassure of London Tower Block that they will be rehoused in London, as close to home. 
    UK Chancellor Philip Hammond has tweeted that he will not be giving his Mansion House speech tonight:
    Commenting on the Bank of England’s decision to leave interest rates unchanged, Shilen Shah, Bond Strategist at Investec Wealth & Investment, said:
    As expected the BoE left monetary policy unchanged, as it aims to look through the spike up in inflation caused largely by the higher oil price and Sterling’s weakness. Despite CPI likely to remain uncomfortably above its 2% target over the course of 2017, the weakest in the underlying economic data (as shown by today’s retail sales release) is likely to mean policy is kept unchanged over the coming quarters. The uncertain election result and its implication for the Brexit negotiations is another area of risk for the central bank.
    In contrast to the BoE unchanged policy stance, the US Fed yesterday increased interest rates by 25bps. The US central bank signalled that it believes the recent weakness in US inflation and a disappointing Q1 2017 GDP print is likely to be reversed over the coming quarters. Despite some scepticism in the bond market, the Fed also indicated that it is looking to further tighten policy in 2017 –however policy action is highly likely to be data dependent.
    US import prices slipped 0.3% in May vs 0.1% drop expected
    Shipping containers at the Port of Philadelphia.
    U.S. import prices were expected to fall 0.1 percent in May, after rising 0.5 percent a month earlier.
    US weekly jobless claims total 237,000 vs 242,000 estimate
    First-time claims for state unemployment benefits were expected to total 242,000 in the most recent week, down slightly from the 245,000 claims reported in the previous week.
    U.S. stock index futures pointed to a lower open on Thursday as traders reacted to the Federal Reserve's latest policy decision and technology stocks slumped for the second time this week.

    Dow futures fell 100 points, while S&P and Nasdaq futures declined 16.5 points and 63 points, respectively. Tech stocks like Facebook, Apple and Amazon all feel at least 1 percent before the bell.
    The idea that factories will be automated and run by robots in five years is "b-------t", outgoing General Electric Chief Executive Jeff Immelt said on Thursday.

    Immelt was addressing the fact that worker productivity remains low, and while technology will play a big part in boosting that, he said warnings about a short-term wipeout of jobs are misplaced.

    Robots taking jobs in five years is BS, GE CEO Jeff Immelt says

    CNBCThe idea that factories will be automated and run by robots in five years is “b-------t”, outgoing General Electric CEO Jeff Immelt said.
    Wall Street stocks are now open for trading. All three major indexes have opened in negative territory as investors digest the Fed rate decision:

    US stocks open lower on renewed tech pressure; Alphabet falls

    CNBCU.S. equities opened lower on Thursday as large-cap technology stocks faced renewed pressure.
    Britain's mid-caps fall further, now down 2.7 percent and set for biggest one-day drop since Brexit vote aftermath in June 2016:
    Nobel Prize-winning economist Robert Shiller isn't getting spooked by rising interest rates or fresh stock market records, at least not yet.

    He's telling investors to stick with stocks and stay away from bonds as the Federal Reserve steps harder on the accelerator.

    Nobel economist Robert Shiller: Despite the Fed rate hike, I like stocks, not Treasurys

    CNBCYale economist Robert Shiller isn't getting spooked by rising rates or fresh stock market records, at least not yet.
    Dollar index rises to highest since May 30, rises nearly 1 percent to 6-day high vs yen, hits 110.58:
    With stubbornly low oil prices hurting the coffers of international producers, Russian President Vladimir Putin is only agreeing to the OPEC-led output cut extension because he's worried about his grip on power, said Daniel Yergin, a leading geopolitical and oil analyst.
    I was in St. Petersburg two weeks ago, and the sense you got is Putin is actually looking at his March 2018 election and wants economic stability. He doesn't want a kind of free-fall in prices, Yergin told CNBC's "Squawk Box" on Thursday.
     Last month, Saudi Arabia and Russia, the world's top two oil producers, agreed to extend production cuts for nine more months until March 2018 in hopes of pushing up prices by reducing the global crude glut and putting more revenue back into their economies.
    Photo published for Putin is motivated to stick with OPEC's output cuts purely by self-interest, oil analyst Yergin says
    Gold fell to a three-week low on Thursday, weighed down by a stronger dollar as investors began to assess the potential for another U.S. rate hike later in the year, supported by data showing a strong U.S. jobs market.

    The losses in gold were limited, however, with bullion underpinned by a myriad of global uncertainties, including a report that U.S. President Donald Trump was under investigation.
    Just like in previous rate hikes, the next day the market starts looking at the probability of the next hike because everything was factored in beforehand, Natixis metals analyst Bernard Dahdah said.
    Oil prices dropped to six-week lows on Thursday, under pressure from high global inventories and doubts about OPEC's ability to implement agreed production cuts.

    Brent crude oil hit a session low of $46.70 a barrel, its weakest since May 5 and just above six-month lows, before recovering a little ground to trade at $46.95, down 5 cents, by 9:27 a.m. ET (1327 GMT).
    Twenty minutes to European close and stocks look like this:
    European markets are now closed for trading. The pan-European Stoxx Europe 600 has closed sharply lower after a day of losses as investors digest yet another Fed rate hike decision:
    Major European indexes have closed sharply lower as investors position themselves after the Fed rate hike:
    And that's all from us here at World Markets Live. Join us form 0600GMT once again for a lot more news, views and analysis. Till then, have a nice evening and see you soon!
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