World Markets Live - March 29 - CNBC Live Events

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World Markets Live - March 29

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

    Flybe has announced it is expecting to make a small loss in the year ending 31 March 2017 due to additional costs and non-cash write downs as it plans a major upgrade to its IT system. The company says the last quarter has been characterised by weak demand in an uncertain consumer environment, together with price competition arising from overcapacity amongst airlines and competition from rail operators. Its load factor fell by 1.4 percent in the last three months. However it says its summer trading is in line with expectations.
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    Edmund Shing, global head of equity derivative strategy at BNP Paribas, says the triggering of Article 50 is not a major moment for markets.
    No, because what do we know today that we didn’t know yesterday? Not a lot more. We have two years ahead of us that, I think, will be interesting. We won’t even see the EU’s response for another month, and then negotiations might actually start, so this is a lot of phony war.
    Okay, we trigger it today, but so what.
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    Sterling has recovered a little bit, moving up to $1.24 after equity markets opened positively. Here's how sterling is trading against the dollar:
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    UK Finance Minister Hammond says we have plans for day one after we leave the EU in a huge variety of different outcomes. Finance Minister Hammond says I am absolutely confident that we will negotiate a deal with the EU. That's according to Reuters citing a BBC interview.
    UK's FinMin Hammond also says it is not in anyone's interest in Europe to see lines of trucks at borders after Brexit. 
    I am very confident we will not get a worst-case outcome.
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    EU Commission President Donald Tusk in his latest tweet has laid out the plan for the rest of the day. Note that at 13:20CET Donald Tusk will be handed the Article 50 notification letter: 
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    Seb Dance, Labour MEP for London, discusses the implications of Brexit on the capital.
    London obviously relies very, very heavily on the services sector. We’re a hub not just for financial services but a whole range of services that are linked into networks not just in Europe but across the world, but that European network is incredibly valuable to London. 
    Dance questions the “relaxed attitude” of Theresa May towards Britain’s membership of the single market, saying the benefits of the market are vital for London and the U.K. government. 
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    UK Finance Minister Philip Hammond in a BBC interview says can't cherry pick in Brexit talks. He says Britain is confident of negotiating a customs arrangement that makes borders are frictionless as possible after Brexit. 
    Hammond says nobody wants to see hard border between Northern Ireland and Irish Republic after Brexit. PM May's letter will go further in setting out how UK wants to conduct Brexit talks. That's according to Reuters citing a BBC radio interview.
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    Edmund Shing, global head of equity derivative strategy at BNP Paribas, says the FTSE 100 is little bit boring at the moment.
    It is very sensitive to the level of sterling. And if sterling were to strengthen that would actually be a bit of a headwind for the FTSE 100, given that a lot of the benefits are due to translation effects.
    Really, it’s not a U.K. index. It has nothing to do with the U.K. It is a global index: you have miners, you have oil, you have health-care. These are largely global companies, so actually the fate of the U.K. economy has surprisingly little bearing on the FTSE 100.
    Shing says the more interesting index is the Eurostoxx 50. He also says there is value in U.K. small caps.
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    Here are your top headlines at this hour:
    • Time to pull the trigger. Sterling retreats as UK Prime Minister Theresa May prepares to deliver her letter to Brussels, confirming Britain's exit from Europe and starting the 2 year countdown to the divide. 
    • In Brussels, Europe readies its response after Theresa May calls Angela Merkel, Jean-Claude Juncker and Donald Tusk to agree a strong EU is in everyone's interest. 
    • No to indyref two. The UK shoots down a second Scottish independence referendum. We speak to Alex Salmond from the SNP
    • The skies should be high. Ryanair calls for aviation to top the Brexit negotiation agenda, warning CNBC that no trade deal could mean all flight to the EU are halted. 
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    Thirty minutes since the start of the European trading session and European equities continue to trade higher as markets wait for the trigger of Article 50:
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    UK Finance Minister says we understand that we will have to do some 'give and take' to get best Brexit deal for Britain. That's according to Reuters citing Sky News.
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    Alex Salmond, international affairs spokesperson and former leader of the SNP, says it is not time to accept Brexit for Scotland.
    We want to maintain our millennium long connection with Europe as a trading nation and that’s what we’ll do.
    The Prime Minister has got herself into a situation, through her own arrogance and insensitivity, she’s divided everybody else against her.
    I mean it’s not just Scotland who are looking for a referendum: the Welsh are alienated, Northern Ireland’s in deadlock, England’s split down the middle, MP’s are stalking out of committees because they don’t like the reality of which they’re staring into, and this is the time she decides to invoke Article 50 
    by luke.graham edited by Spriha Srivastava 3/29/2017 7:40:28 AM
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    Here's a look at the top 5 big banks that are currently a bit cautious as investors look at uncertainty surrounding the trigger of Article 50:
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    UK'S FTSE 100 is trading higher this morning as investors look ahead to UK triggering Article 50. Equities have had a tough week and saw falling sharply lower at the start of the week after the failure of US President Donald Trump's health-care bill:
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  • These are the top headlines for this hour.
    • Time to pull the trigger. Sterling retreats as UK Prime Minister Theresa May prepares to deliver her letter to Brussels, confirming Britain's exit from Europe and starting the 2 year countdown to the divide.
    • Europe readies its response after Theresa May calls Angela Merkel, Jean-Claude Juncker and Donald Tusk to agree a strong EU is in everyone's interest.
    • Blue sky thinking. Ryanair calls for aviation to top the Brexit negotiation agenda, warning CNBC that no trade deal could mean all flights to the EU are halted.
    • A step closer to a trial. The wife of French Presidential candidate Francois Fillon is placed under formal investigation, accused of being paid state funds for work she did not do.
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    Nick Clegg MP, Lib Dem Europe Spokesperson and former U.K. Deputy Prime Minister, agrees there is a move to shut down opposition and dissent to Brexit.
    For those who don’t live in this country, it’s very difficult to describe. There’s this very bizarre atmosphere that we had this very, very finely won referendum, 51 percent as opposed to 48 percent, over 16.1 million people, almost half of the voting public voted for a different future.
    Seventy percent of youngster, who are perhaps the most important of all as they’re going to have to live with the consequences of all of this, voted for a different future.
    And yet if you dare say any of that now you get yelled at for being a “remoaner”. It’s ridiculous.
    Clegg says in a normal democracy, the losing side doesn't have to cut off their tongue and not speak about the things they believe.
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    What are the next steps for Brexit?
    This Friday, the 27 EU countries will send negotiation guidelines to the European Council to create a draft document.
    After a summit in Brussels on the 29th of April, the EU Commission will prepare the final document outlining the rules for the talks with Britain. 

    French and German elections will also take place this year, testing the stability of the bloc.
    A final Brexit deal is expected by late 2018 and Britain should officially divorce from the European Union by May 2019.
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    Ryanair has called for aviation to top the Brexit negotiation agenda, saying that UK travellers could be left in limbo if an agreement is not reached.
    Kenny Jacobs, the CMO of RyanAir, told CNBC that there's hope Brexit will not impact the Irish borders.
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    CNBC has compiled U.K. media reactions as the country prepares to officially trigger Article 50 and begin the process of leaving the European Union.
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    There was a stream of Fed speak yesterday and 'gradual' seemed to be word of the day.
    Kansas City Fed President Esther George again called for deliberate, gradual rate rises.
    That echoed comments from Dallas Fed President Robert Kaplan, who warned that aggressive rate hikes could push the economy into recession and patience was needed.
    Meanwhile, Fed Governor Jerome Powell said the current parth of 'gradual' rate hikes was appropriate.
    These comments gave a boost to the dollar.
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    Maya Bhandari, director of multi asset allocation at Columbia Threadneedle investments, says U.S. equities don’t look like a great bet.
    In our asset allocation, we downgraded U.S. equities to dislike about three weeks ago. That really is because we see the full positives of Trump, all the tax cuts and so on, are priced in pretty fully, without any of the downside being reflected in prices.
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    Blackrock is overhauling its active stockpicking business. The world's largest money manager said it will rebrand or adjust investment strategies on about 11 percent of its active stock fund business.
    The move will see jobs cut, fees dropped and investment increased in data-mining technology to pick stocks. 

    Reuters reports that over forty staff will be laid off, including some portfolio managers. The revamp marks Blackrock's biggest attempt to rejuvenate its actively managed equities business, which has seen record outflows.
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    U.S. regulators have approved Sanofi's new drug to treat severe forms of eczema. The French pharmaceutical company developed the treatment with Regeneron and will market the product jointly. 

    The two companies announced that the drug will have a list price of $37,000 which is less than other products of the same kind.
    Shares in Sanofi are up eight tenths of a percent on the news.
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    Lots of French election news today.
    There was another major setback for Francois Fillon's presidential campaign. Just two weeks ago, Fillon was put under formal investigation, accused of paying his wife from public funds for work she did not do.
    Yesterday, his wife Penelope Fillon was also put under formal investigation after she was questioned by magistrates. 
    Meanwhile, the former socialist Prime Minster Manuel Valls says he will vote for Emmanuel Macron in the presidential election. 
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    The number of mortgage approvals in the U.K. in February fell to 68,315 versus 69,114 in January, according to the Bank of England.
    This was below expectations of 69,900.
    Consumer credit grew £1.441 billion in February from £1.609 billion the month prior.
    Mortgage lending grew to £3.489 billion in February, versus £3.226 billion in January.
    Lending to non-financial businesses also fell by £1.758 billion.
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    Kallum Pickering, senior U.K. economist at Berenberg, warns the Brexit negotiations could take 5 to 7 years realistically.
    Probably 2 years for the deal as specified by Article 50, then a transitional period of 3-5 years.
    How it matters for businesses depends on how quickly the EU and the U.K. get going with the real meat of negotiations, which is the post-Brexit trade deal.
    Pickering says it is likely the services sector of the U.K. economy will take a hit, and the underlying growth trend will fall due to a supply shock.
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    Nigel Farage, former UKIP Leader, says "hard Brexit" is an invention by those who don't accept referendum result.
    Let's be clear, we voted to leave the European Union, full stop. That was it. That was the vote. Everybody made it clear that meant leaving the single market as well, so it's now for us to negotiate a deal.
    Farage claims no deal is better than a bad deal with the EU.
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    Sterling climbs almost half a cent in 15 mins to hit day's high of $1.2460, reversing earlier losses. 
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    EU antitrust regulators have formally blocked a merger between Deutsche Boerse and the London Stock Exchange.
    The regulators says the merged exchange would have been a de facto monopoly for clearing fixed income instruments and would have squeezed out its competitor Euronext.
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    Martin Kelly, CEO and co-founder of programmatic agency Infectious Media, says Brexit will not be the death of London's tech sector.
    The city’s international links are too strong and I’m confident London will continue to be one of the world’s leading tech hubs for years to come.
    One technology industry which has particular potential for the country, whether we’re inside or outside of the EU, is advertising technology. Ad-tech is software that automates the buying and selling of online advertising. It’s a booming, global industry set to be worth almost $40 billion by the end of this decade, plus it’s one the UK could take a leading role in. One study found ad-tech companies make up a fifth of Britain's fastest-growing businesses.
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    Investors are cheering the decision to block the merger of the LSE and Deutsche Boerse. Shares in both companies have risen on the news.
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    BlackRock's Scott Thiel has told reporters he remains long sterling, despite Brexit. He says the main concerns is the timeline for Brexit negotiations.
    Thiel added that the possibility of a "hard Brexit", where no deal or agreement is achieved between the U.K. and EU, has gone up, according to Reuters.
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    French drinks company Pernod Ricard raised the prices on its products in the U.K. in March due to Brexit, company slides have revealed.
    Pernod hiked prices in order to account for the depreciation of the pound relating to the country leaving the European Union, Reuters reports.
    "Brexit is leading to a strong pound depreciation, with inflation expected higher as a reaction. In that context, Pernod Ricard increased prices in March," the slides said.
    Shares in the company are firmer today.
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    Deutsche Boerse is terminating its merger agreement with the LSE after EU regulators announced they would prohibit the deal.
    The company said it regrets the European Commission's decision. Joachim Faber, chairman of the Supervisory Board of Deutsche Börse AG, in a statement said the prohibition was a setback for Europe.
    The prohibition is a setback for Europe, the Capital Markets Union and the bridge between continental Europe and Great Britain. A rare opportunity to create a global market infrastructure provider based in Europe and to strengthen the global competitiveness of Europe’s financial markets has been missed
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    The London Stock Exchange Group has released a statement saying it regrets the European Commission's decision to block a merger between it and Deutsche Boerse.
    This was an opportunity to create a world leading market infrastructure group anchored in Europe, which would have supported Europe’s 23 million SMEs and the development of a deeper Capital Markets Union.
    LSE had planned to pay a special dividend to investors on completion of the merger with Deutsche Boerse. However, it promised to honour its comittment to shareholders.
    Although this special dividend is now not required, LSEG intends to honour the capital return commitment, consistent with its capital allocation framework and reflecting its leverage at the low end of its targeted range.
    Accordingly, LSEG now plans to initiate an on-market share buyback of £200 million, an amount broadly equivalent to the return it would have made had the merger with Deutsche Börse proceeded as planned.
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    The pan-European Stoxx 600 goes flat as the official triggering of Article 50 approaches.
    Several European markets, including the FTSE 100, are now trading in negative territory.
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    Nigel Farage, a major supporter of Brexit, claims the U.S. and U.K. could agree on a trade deal by the end of the year, if not for the fact that the EU leaders won't allow Britain to sign any deals.
    If the British government went to Trump today and said right, let's crack on, I think that certainly by the end of this year if not a considerable time before, a trade deal could be done

    But the problem is we are not allowed to, because Mr. (Jean-Claude) Juncker says we can't do it until we have left the European Union.
    For more on this story, click here.
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    Margrethe Vestager, EU competition commissioner, explains why the commission has blocked the proposed merger between the LSE and Deutsche Boerse
    We were quite advanced in the process, but we had the issue of getting solutions to our problems. It was very late in the process that we got the first answer to out concerns and then market testing it.
    And in the market test, asking competitors, customers and other market participants, we found that the solution they we were offered was not viable.
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    Margrethe Vestager, EU competition commissioner, answers criticism that the merged Deutsche Boerse-LSE Group could have challenged the U.S. giants.
    There’s nothing that talks against both things being achieved. You can have European giants and you and have competition at the same time and it’s our obligation to make sure that if you want the giants, they are also met with competitors in the market. 
    And that was the basically the main problem here, that we couldn’t find, or the parties couldn’t give us that part of the parcel that enabled competition with them in these markets in the future.
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    Marine Le Pen is expected to get 25 percent in the first round of the French presidential election, tying with Emmanuel Macron, according to the latest polling data from Opinionway.
    Macron is seen beating Le Pen in the second round by 64 percent to 36 percent of the vote.
    Francois Fillon is also seen beating Le Pen if he got through to  the second round, although by a more narrow result of 60 to 40 percent.
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    A mixed day for sterling as Britain prepares to trigger Article 50 today.
    The currency fell sharply early in the session, but has since pared losses against the dollar.
    It's also positive against the euro, rising 0.3 percent to hit a day's high of 86.57 pence per euro, before paring back.
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    Fitch says the proposed U.S. border adjustment tax poses a rick to global sovereigns.
    Fitch believes the tax would cause the dollar to "appreciate markedly," which would raise the dollar-denominated debt burdens of emerging markets and create strains on dollar-linked exchange rate regimes, Reuters reports.
    The tax could also worsen current account balances and GDP growth for major exporters to the U.S. and reduce flows of foreign direct investment, according to the ratings agency.
    The tax would lower company profits from exports to the U.S., leading to a loss in corporate tax revenues.
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    Kerim Derhalli, CEO at invstr, says triggering Article 50 will suppress economic activity.
    Uncertainty is the enemy of investment, and the Brexit process is bringing it in truckloads.
    There are, however, a number of factors that could alleviate this downturn: big changes in the price of relative goods for example, and especially the value of currency. Productivity gains could also have a particularly positive effect. Of course, policy responses on the part of the government that would attract investment would also help. 
    Derhalli says that a lack of progress in negotiations will stoke uncertainty, causing investment to suffer.
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    U.S. markets recorded strong gains yesterday, boosted by economic data.
    However, futures have turned this morning, and are now pointing to a negative opening for U.S stocks.
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    The triggering of Article 50 is in focus today, but Hartwig Kos, co-head of multi-asset and vice-CIO at SYZ Asset Management, says it is likely to be a non-event.
    One could see a bit of volatility in GBP, which might well be skewed to a stronger Sterling given inflationary pressures in the UK and increasing questions about the Bank of England’s ultra-loose monetary policy stance.
    Having said that, given the broader context of markets right now, Mrs May’s letter to Donald Tusk might well be the spark that lights the fire in financial markets.
    Either way, the bulk of “Brexit pain” is only going to be seen in a few months from now, when Theresa May’s cabinet finally realises that negotiating with the Europeans is going to be much harder than anticipated
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