World Markets Live - June 7 - CNBC Live Events

CNBC Live Events

World Markets Live - June 7

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

    The Minister of Economy, Industry and Competitiveness for Spain, Luis de Guindos, has offered a statement on the deal which sees Banco Santander buy the ailing Banco Popular.
    The decision announced today by the European authorities in relation to the Banco Popular has been adopted in accordance with the new framework on bank resolution with full transparency and strict compliance with Community legislation.
    For this purpose, the Single Resolution Mechanism, the second pillar of the Banking Union, is applied. It is a good start for the entity, given the situation it got to in recent weeks, as it involves maximum protection to depositors and the continuity of activity.
    The operation is carried out without the use of public resources and, therefore, does not lead to an eventual contagion between sovereign and banking risk, as it happened in the past. The current situation is very different from that of 2012, given the good health of the whole financial sector and the Spanish economy in general. This gives the best circumstances to provide the most appropriate and effective solutions under European authority, with the ultimate goal of preserving the stability of the financial system.
    Ethan Devine, Partners at Indus Capital joins Carolin from the Sohn Conference in Hong Kong.
    Devine says the Japanese markets is on a reasonable to cheap valuation with earnings primed to grow.
    The hedge fund manager offers the caveat that the yen is hugely influential on the Nikkei listed stocks.
    He highlights Toshiba as a company that can raise its income irrespective of the yen if the firm can get past the problems it is currently facing.
    Devine says for the wider Japanese economy to grow further, it will require firms to embark on "robust" capital expenditure. He says that will be crucial if Abenomics are to improve.
    Investors appear to be taking a breather Wednesday, ahead of a slew of events set to take place later this week. 

    On Thursday, British citizens will head to the polling booths to vote in the nation’s general election, with investors currently eyeing the latest polls and moves in sterling for any indications on what the result might be. Ahead of this, political parties are in their final stretch of campaigning on Wednesday, with each group hoping to secure a significant number of parliamentary seats in the election. 
    In Washington, the former FBI director James Comey is expected to testify on Thursday in front of the Senate intelligence committee, marking his first public comment since being dismissed by the U.S. president.
    Thursday will also mark the European Central Bank’s monetary policy meeting, where investors will be examining President Mario Draghi’s rhetoric, when it comes to the future of ECB policy.

    U.S. government debt prices were slightly off on Wednesday, as investors prepare themselves for more data releases ahead of an important election in the U.K. and a meeting by the European Central Bank (ECB). 
    The yield on the benchmark 10-year Treasury note sat higher at around 2.152 percent at 4.30 a.m. ET/ 09:30 a.m. London time. The yield on the 30-year Treasury bond was slightly up at 2.8138 percent. Bond yields move inversely to prices.
    The co-creator of the hit television show, The Wire, has been buying pints for Londoners to apologize for Donald Trump:
    A U.S. strike on pro-Syrian government forces has been described by the Russians as breaking international law, according to the Interfax news agency. 
    Tensions have already been heightened between the two countries as a U.S. B-52 bomber flew over the Baltic.  
    The chairman of Santander is making some comments on the deal to buy debt -ridden Banco Popular.

    He has said he aims to sell about half of Popular's real estate portfolio within 18 months.

    The chair also claiming the deal provides stability to the Spanish financial sector. 
    The so-called Islamic State has claimed via its  AMAQ news agency that the attacks on the Iranian parliament are still ongoing.

    The Islamist group has claimed responsibility for that attack and a separate one on the shrine of the Ayatollah Khomeini.
    US futures point to a flat to slightly lower open Wednesday, as investors prepare themselves for a deluge of news out of the political and economic spheres.

    Banco Santander is taking over Banco Popular. The Spanish bank announced it is buying all shares of its distressed peer for the symbolic price of one euro and plans to carry out a 7-billion euro capital raise as part of the deal.
    Santander shares fell in trade initially on the news of the private rescue but pared losses later on. At around 0848BST, shares were down 0.4 percent but aas at 09:20 BST they had turned positive.
    Spain's state-owned bank fund says the acquisition will not affect deposit holders or imply any cost to taxpayers.
    Kepler Chevreux has removed Santander from its list of Spanish banks that it recommends as a 'buy'.
    On set, Steve highlights that the 12-month share story is rather healthier but he caveats by highlighting that Santander trades on a price to earnings ratio of 11 times and the CET 1 ratio is 10.6 percent.
    Neither figure is particularly inspiring says Steve.
    The Spanish economy minister has described the deal as a very good resolution for Banco Popular.
    He says the deal will have no impact on public finances.
    The Islamic State have reportedly published a video showing gunmen inside the Iranian parliament.

    This according to Reuters.
    As the euro has fallen the Stoxx 600 has in turn risen to a session high.

    Gold has enjoyed a very decent run of late to circle around 7-month highs. The precious metal is lower today though. 

    A media report has sent the euro scurrying lower. It seems traders are acting on a Bloomberg report that says the ECB will cut the euro zone inflation forecast.

    All those people waiting on a hawkish Draghi may have to wait a little longer. I would caution that this is just a report.

    Separately, numbers released Wednesday morning showed new factory orders in Germany dropping more than expected in April. Month-on-month factory orders fell by 2.1 percent in April, raising some questions over the stability of the German economy.

    Germany's foreign ministry has weighed in on the conflict involving Qatar and the other Gulf states, led by Saudi Arabia.
    Saudi Arabia and the other countries cut off ties with Qatar earlier this week, over accusations the country was funding terrorism.
    Sigmar Gabriel, Germany's foreign minister, says he has agreed with the Saudi foreign minister that it is important to avoid escalation in the gulf and to maintain the coalition fighting ISIS. He adds that he is concerned whether the Gulf conflict can be overcome to avoid a long-lasting crisis in the region.
    The ARKit announced by Apple earlier this week will be a "game-changer" for the augmented reality industry. Click here to find out why:
    The euro remains down more than 0.5 percent against the dollar following a report by Bloomberg that says the European Central Bank will cut its euro zone inflation forecast tomorrow at the meeting of its monetary policy committee.
    However, Chris Turner at ING says today's report may have diffused some of the downside risks for the currency from tomorrow's ECB meeting.
    Carsten Brzeski, chief economist at ING, shared his thoughts on what to expect from the central bank tomorrow.
    The combination of stronger growth and very little inflationary pressures should also be reflected in the ECB’s staff projections, which is also due to be published (tomorrow).
    While the effect of a stronger euro exchange rate and lower oil prices should net off each other in terms of growth, it could actually lead to a downward revision of the ECB’s inflation projections for 2017-19 by c.0.2ppt each year.
    Back in March, the ECB projections predicted inflation to come in at 1.7%, 1.6% and 1.7%, respectively, in these three years.
    Christopher Wray is President Trump's pick to become the new director of the FBI.
    Wray served as the assistant U.S. attorney general with the Justice Department from 2003 to 2005. he served on President George W. Bush's Corporate Fraud Task Force and oversaw the Enron Task Force and other major fraud investigations.
    He has been ranked as a leading litigator in white-collar crime and government investigations by several publications. After 2005, he returned to law firm King & Spalding to chair its Special Matters and Government Investigations Practice Group.
    Christopher Wray, left, in 2003.
    President Donald Trump has announced his nomination to replace James Comey as director of the FBI.
    U.S. markets are called to open higher today, according to future values. The stock markets fell yesterday as markets moved into safe-haven assets to brace for several key events taking place this week, including the latest ECB policy decision and the U.K. general election.
    The Muslim Brotherhood, reacting to the Gulf crisis, rejects the "false accusations" made by Saudi Arabia's foreign minister, Reuters reports citing a statement from the organisation.
    The Brotherhood says Saudi Arabia's support for Egypt's President Abdel Fattah el-Sisi harms the kingdom and puts Saudi Arabia's credibility at stake.
    They call on Saudi Arabia to not listen to the "corrupt" "princes of oppression" in the UAE.
    For context, The Brotherhood is a transnational Sunni Islamist organization. It claims to be a peaceful and democratic organisation, but has faced crackdowns around the world for alleged terrorist activities and is deemed a terrorist organisation by some governments.
    It's fairly powerful in Egypt, and in 2011 and 2012 was very successful in parliamentary and presidential elections, but was overthrown by the army, led by then army chief General Abdel Fattah el-Sisi,  in 2013.

    ‘The height of egoism’: North Korea scolds Trump for withdrawing from Paris climate deal

    North Korea lambasted U.S. President Donald Trump for pulling out of the Paris climate agreement on Tuesday.
    The European Central Bank will announce its latest policy decisions tomorrow, followed by a press conference from the central bank president Mario Draghi to discuss the health of the Eurozone economy.
    Mike Bell, global market strategist at JPMorgan Asset Management, says the central bank is likely to remove the statement that risks to Eurozone growth are tilted to the downside.
    Survey data continues to show that risks to the Eurozone growth outlook are instead skewed firmly to the upside. We think a more balanced view of the outlook for Eurozone growth will pave the way for the ECB to announce, at a meeting later this year, that the tapering of its QE programme will commence in January.
    Nevertheless, with core inflation remaining below target we expect the ECB to continue to stress the need for accommodative monetary policy and to seek to quell rumours that it might raise rates before QE has come to an end. We expect that a step towards tapering should lead to higher Eurozone government bond yields.
    Meanwhile today, the euro has fallen on reports that the central bank may cut its inflation forecast tomorrow. The common currency has pared some losses but remains down more than 0.4 percent.
    The U.K. goes to the polls to take part in the general election tomorrow.
    Current Prime Minister Theresa May remains likely to win a majority, according to Carsten Nickel, deputy director of research at Teneo Intelligence.
    In the public debate, a majority of around 50-60 seats is generally understood as the threshold for whether May’s early election project will be rated a success. The better the Tories do on 8 June, the louder will be the talk about May’s leadership being vindicated after a difficult campaign. In substantial terms, however, this debate is overdone.

    The exact size of the Conservative majority will hardly matter for the government’s landmark project Brexit. Regardless of the size of May’s new majority, the difficulties she faced on the campaign trail were further proof of the high levels of societal polarization in the UK pulling the median voter – and with them, Westminster MPs and ultimately the government – towards political fringes.
    Consequently, the initial decision to call snap elections remains a sign of weakness in light of upcoming unpopular compromises in relation to the looming Brexit transition.
    Before we kick off coverage of the U.S. market open, let's check in on Europe.
    The Stoxx 600 is currently up more than half a percent, recovering from yesterday's steep drop.
    The recovery is being driven by stocks in the banking, basic resources and utilities sectors.
    U.S. markets are now open, moving to the upside at the start of Wednesday trade, as predicted by future values.
    Tech stocks are leading while energy stocks lag at the start of U.S. trade.
    Markets are focusing on two key events today: former-FBI director James Comey's testimony to a Senate panel this evening and President Trump's planned announcements regarding health care and infrastructure.
    The S&P and Nasdaq are up, avoiding their first 3-day losing streak in two months. Here are the winners and losers on the S&P 500 this morning.
    Nike is leading the Dow, while Coca-Cola is dragging on the index.
    Today is last trading day before arguably the most important day of the quarter. Tomorrow, the U.K. general election will take place, which will have a big impact on sterling and the FTSE 100, and the European Central Bank will make its latest policy decision announcement, which could impact the euro and government bonds.
    Eurozone bond yields are rising today, ahead of the European Central Bank's latest policy decision. There were expectations the central bank would take a hawkish stance, but a Bloomberg report says the ECB will cut its inflation forecast, which has led to a weaker Euro.
    Steven Major, global head of fixed income research at HSBC, told CNBC that this is no time for the ECB to turn hawkish on interest rates.
    The recent performance of core Eurozone bonds reflects the low inflation prints and fall in expectations. Now would not seem appropriate time to become hawkish, so no moves to terminate stimulus packages expected at 8 June meeting.
    We believe steps can and will be taken to extend asset purchases and source additional bonds where they may become scarce. 
    Oil prices have dropped on concerns about the market glut.
    The chief of Libya's NOC state oil firm says the country is currently production about 835,000 barrels per day and is targeting output of 1.25 million barrels per day by the end of the year.
    Libya's oil production is apparently facing problems due to power shortages and pipeline leaks, but the NOC has taken measures, such as new mobile power units, to help stop shortages halting production. 
    Oil prices are dropping sharply after the release of EIA data showed U.S. stockpiles rose unexpectedly. Crude stocks increased by 3.3 million barrels, compared to a forecast draw of 3.45 million barrels.
    Libya also knocked prices after announcing its aiming to produce 1.25 million barrels per day by the end of the year 835,000 barrels per day.
    Miswin Mahesh, oil analyst at Energy Aspects, says this is an ambitious target.
    A highly ambitious target at this stage given the fluid political situation in the country, and a much slower target than what was previously announced by the NOC.
    In the rare instance it does materialise, it adds more light barrels at a time when U.S. production would also be growing.
    The Stoxx 600 is trading flat half an hour before the close. The index is up just 9 basis points.
    Here's how the individual European bourses are looking. The FTSE 100 is down more than half a percent as the U.K. gears up for a general election tomorrow.
    The U.S. Senate Intelligence Committee is speaking to several intelligence leaders regarding whether or not President Trump interfered with the investigation into Russian election hacking.
    All four of the leader who have testified so far say they are unaware of any attempt by the White House to influence the investigation, according to Reuters.
    The European markets are now closed. The pan-European Stoxx 600 index finished the session flat in a choppy day of trade.
    The U.K.'s FTSE 100 closed down 0.6 percent today, ahead of tomorrow's General Election.
    Ahead of the U.K. general election, sterling has risen against the dollar. The outcome of the election will have a big impact on the U.K. currency, which will have a knock-on effect for the stocks comprising the FTSE 100.
    One last look at U.S. markets. The Dow and S&P have turned flat on the weaker dollar. Meanwhile, the Nasdaq has recorded a gain thanks to its focus on tech stocks.
    Major European bourses closed down, with the FTSE 100 taking the heaviest losses.
    We'll close the blog there. 
    Tomorrow, the U.K. will be going to the polls for the general election. At the same time, the European Central Bank will be making its latest monetary policy decision.
    Join us tomorrow from 06:00 a.m. GMT.
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