World Markets Live - March 31 - CNBC Live Events

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World Markets Live - March 31

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

    The South African rand has trimmed its earlier losses but continues to trade slightly lower against the dollar:
    Comment ()
    Sir Martin Sorrell, CEO of WPP, shares his view on South Africa, where finance minister Pravin Gordhan has been sacked in a cabinet reshuffle.
    Maybe this is a signal there’s going to be (a change in leadership). It sounds rather desperate, doesn’t it?
    The question is about whether it’s going to result in a change in leadership.
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    Here are your top headlines at this hour:
    • President Zuma sends South African assets into free fall after he sacks Finance Minister Pravin Gordhan along with 8 other ministers, prompting an outcry from the business and political community. 
    • Here in Europe, stocks with South African exposure sell-off, with Old Mutual and Investec trading sharply lower in London, and Steinhoff under pressure in Frankfurt. 
    • Donald Trump tweets that talks with China's Xi Jinping will be 'very difficult', saying the American economy can no longer cope with massive trade deficits. 
    • Former National Security Adviser Michael Flynn agrees to testify in the Russia investigation in exchange for immunity, as President Vladimir Putin tells CNBC claims of election meddling are 'fictional'.
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    The European Union is ready to talk to Britain on a future free trade deal before the two sides agree final terms on Brexit, draft EU negotiating guidelines issued on Friday show.

    As part of a "phased approach", Britain would just have to show "sufficient progress" on its divorce settlement in a first phase of negotiations and EU states could release a lock and agree to launch trade talks in a second phase.

    But that concession to Theresa May two days after she triggered a two-year countdown to withdrawal was accompanied by elements in the draft circulated by EU summit chair Donald Tusk that the British prime minister may find less palatable.
    They include an insistence that during a transition period likely to follow Britain's departure in 2019 and before a free trade pact can be finalised, the British must accept EU rules, including budget contributions and judicial oversight, that are some of the main reasons a majority voted for Brexit last June.

    If Britain remains a part of the EU single market for a time after Brexit, it would also have to respect all "four freedoms", which would mean accepting free immigration from the continent.

    The draft guidelines, seen by Reuters after European Council President Tusk distributed them to the 27 other governments in the bloc on Friday, may be somewhat revised over the next month before being endorsed by the 27 leaders at a summit on April 29.
    Comment ()
    Here are some market reactions after South African Finance Minister Gordhan's exit:
    • Shares in companies with exposure to South Africa fall 
    • Old Mutual bottom of Stoxx 600, -6.4% in volume, with Investec -4.6%, Mediclinic and Mondi both down ~2%
    • South Africa's rand and government bonds weakened on Friday
    • Move follows days of speculation that has rocked the country's markets and currency; Gordhan replaced with home affairs head Malusi Gigaba
    • New finance minister Gigaba an unknown quantity, analysts say
    Comment ()
    Lithuania has recently announced it will increase defense spending to meet NATO requirements of 2 percent. 
    Linas Linkevičius, foreign minister of Lithuania, discusses the decision and if the Trump administration is pressuring NATO members to increase defense spending
    It’s more and more understanding that we have to pay our part and frankly it’s not normal when the United State, our key strategic ally, is paying 70 percent of NATO’s bills.
    We have to share. 
    He says Lithuania’s decision was not asked by anyone, but because the NATO alliance needs to be strong.
    Comment ()
    Timothy Ash, Economist at The Bluebay Asset Management reacts to the news coming out of South Africa:
    SA (modest) market moves are frankly bizarre (ZAR only off less than 1% on overnight developments) given the long term importance of on-going developments but likely reflect the broader supportive global market backdrop and I think the consensus still to look for the silver lining in almost any development on the ground. This could in the end serve to help support Zuma in his political play book to retain power.
    This was a totally out of consensus move. The prior near universal consensus (market and political analysts) was that, after Nenegate last year, Zuma had been fatally wounded and simply lacked the power to counter the reformers within the administration. Arguably there was something of a stalemate, but in any scenario Zuma would leave office in 2019. He was likely to try a cabinet reshuffle but this was likely to be half hearted, and ultimately fail, but that this would be about extracting leverage, to take into the elective congress at year end and ensuring a succession to a Zuma leaning candidate going into the 2019 elections. The consensus seems to have underestimated Zuma's strength and determination, and even now still seems to be doing that.
    Comment ()
    David Bowers, co-founder of Absolute Strategy Research, says investors are still on board with the reflation trade.
    They’re still looking for the cycle to improve, they’re still looking for earnings to pick up, they still think stocks will beat bonds and the question is how sustainable is the cycle going to be?
    I think, in the short term, we’re going to get some mixed signals there will be still some more positive surprises coming through. Our concern is very much what happens in the second half of the year.
    David says China and the U.S. are key places to watch this year.
    Comment ()
    South Africa 5-year CDS jump 24 basis points to 223 basis points, highest in 15 weeks after Finance Minister Gordhan sacked. 
    Comment ()
    Sterling slipped against the dollar on Friday, as investors readied for the European Union's official response to Britain's letter of exit from the bloc, as well the final verdict on Britain's economic output last year.

    EU Council President Donald Tusk will send leaders of the other 27 member states his proposed negotiating guidelines for Brexit talks before presenting the main points in Malta two days after British Prime Minister Theresa May formally triggered the two-year withdrawal process.
    Comment ()
    South Africa's Treasury says former minister of Finance Pravin Gordhan will brief media at 0900 GMT. That's according to Reuters.
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    The German seasonally adjusted unemployment figure for March was 2.556 million, a drop of 30,000, according to the country's Labour office.
    This is a larger fall than a Reuters forecast of 10,000.
    German's adjusted unemployment rate is now 5.8 percent.
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    The euro spiked against the dollar after the EU guidelines and the German unemployment data hit the wires:
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    Norway's March unemployment rate is 2.9 percent, according to the country's Labour Agency.
    Reuters forecast it would be 3 percent. 
    The number of unemployed or on job training is 97,847.
    Comment ()
    Stocks exposed to South Africa are trading sharply lower, after the country's finance minister was sacked in a cabinet reshuffle.
    Here's a look at some of the stocks taking a hit.
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    Speaking in Malta, Donald Tusk, the President of the European Council, is laying out the guidelines for Brexit negotiations with the U.K. 
    We must prevent a legal vacuum for our companies that stems from the fact that, after Brexit, EU laws will no longer apply to the U.K.
    We need to make sure that the U.K. honours all financial commitments and liabilities it has taken as a member state. It is only fair to all those people, communities, scientists, farmers and so on to whom we we, all the 28, promised and owe this money.
    by luke.graham edited by Spriha Srivastava 3/31/2017 8:11:10 AM
    Comment ()
    Karen Olney, head of European thematic strategy at UBS, says the process of unwinding the U.K. from the EU is complex.
    Does anyone really know what is going to happen?
    But I can say that there’s this misunderstanding: we’ve been living in this sweetspot, haven’t we? We haven’t triggered Brexit yet, none of the companies trading internationally have suffered in any way and I think we’ve seen investment, inward investment, slow a little bit, but I think once we get into the Brexit negotiations, we are leaving the EU, I think inward investment will slow a little bit and that’s a worry.
    Comment ()
    President of the European Council Donald Tusk says parallel talks on Brexit and a future trade deal are not possible. This could prove to be a major blow for the U.K.'s Theresa May.
    Among the guidelines the EU will pursue in Brexit talks are the prevention of a hard border between Northern Ireland and the Republic of Ireland, in order to support the peace process.
    Tusk says talks will be difficult and confrontational, but the EU will not take a punitive approach. He adds that in the Autumn the EU will assess whether talks have made sufficient progress.
    Tusk earlier in the week, holding a letter from the U.K. invoking Article 50.
    Comment ()
    Uganda's inflation rate is 6.4 percent year on year, according to the country's stats office.
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    Several people were injured outside the Turkish embassy in Brussels as supporters, and opponents, of President Erdogan's government clashed over the country's upcoming referendum. Taking to twitter, Belgian Prime Minister Charles Michel condemned the incident saying his government had "zero tolerance for spillovers from the referendum."
    The scuffle comes as Turkish expats in Belgium begin voting ahead of next month's poll on a new constitution aimed at strengthening the president's powers. 
    Comment ()
    The euro is rising against sterling as the EU sets out its guidelines for Brexit negotiations.
    Comment ()
    Here are the top headlines right now.
    • President Zuma sends South African assets into free fall after he sacks Finance Minister Pravin Gordhan along with 8 other ministers, prompting an outcry from the business and political community.
    • Here in Europe, stocks with South African exposure sell-off, with Old Mutual and Investec trading sharply lower in London, and Steinhoff under pressure in Frankfurt.
    • EU negotiators say they're willing to discuss a free trade deal with the U.K. -- but warn Britain would have to continue to accept free immigration from the continent. 
    • Former National Security Adviser Michael Flynn offers to testify in the Russia investigation in exchange for immunity, as President Vladimir Putin tells CNBC claims of election meddling are 'fictional'.
    Comment ()
    Lots of U.K. data hitting the wires.
    Q4 GDP grew 1.9 percent year on year. Last estimate was 2 percent.
    Q4 services output was 0.8 percent quarter over quarter, while industrial output was 0.4 percent.
    The current account deficit for 2016 was 4.4 percent of GDP, versus 4.3 percent in 2015.
    Q4 business investment declined 0.9 percent over the quarter.
    In terms of personal finances, real household disposable income dropped 0.4 percent over the quarter. That's the biggest fall since Q1 2014.
    The household savings ratio was 3.3 percent, the lowest savings ratio since records began in 1963.
    Comment ()
    Talks between the European Union and Britain to negotiate the country's exit will be difficult and sometimes confrontational, EU Council President Donald Tusk said on Friday, adding that there would be no parallel talks on issues outside of that.

    "The talks which are about to start will be difficult, complex and sometimes even confrontational. There is no way around it," Tusk said after a meeting with Maltese Prime Minister Joseph Muscat in Valletta.
    Starting parallel talks on all issues at the same time, as suggested by some in the UK, will not be happen, he added.
    Among the guidelines the EU will pursue in Brexit talks are the prevention of a hard border between Northern Ireland and the Republic of Ireland, in order to support the peace process.
    Tusk says talks will be difficult and confrontational, but the EU will not take a punitive approach. He adds that in the Autumn the EU will assess whether talks have made sufficient progress.

    Tusk said he would meet with British PM Theresa May in London before an April 29 summit in Brussels.
    by Spriha Srivastava edited by luke.graham 3/31/2017 8:38:00 AM
    Comment ()
    Oil prices are dropping today. Over the quarter, oil has lost around 7 percent on concerns about the OPEC production cut and a persistent global oversupply.
    Comment ()
    In contrast to oil, gold prices are up almost 8 percent over the last quarter.
    Frank Holmes, CEO of U.S. Global Investors, tells CNBC why he is bullish on the precious metal.
    I’ve always advocated you should have a 10 percent weighting in a portfolio and rebalance once a quarter, because there will be massive imbalances between governments’ fiscal monetary policies and we’re witnessing these big clawbacks and the biggest thing people talk about is the fear trade, and that is real interest rates.
    He says that when negative real interest rates occur, gold prices rise in that country's currency.
    Comment ()
    The dollar is up more than half a percent against the South African rand, following President Zuma's decision to reshuffle the cabinet and sack the country's finance minister.
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    French far-right candidate Marine Le Pen is neck and neck with Emanuel Macron to win the first round of Presidential elections.
    According to the latest Ifop poll, Macron leads the race with 26 percent of the votes, while Le Pen is slightly behind with 25 point 5 percent.
    Comment ()
    Markets will be closely watching the outcome of the French elections. The first round of voting will take place in just a few weeks.
    Check below for the key dates in watch in the presidential election.
    Comment ()
    The EU says it's open to discussing a free trade deal with Britain before final terms on a Brexit are agreed. The EU added this would only happen if there was "sufficient progress" on the divorce settlement during the first phase of negotiations, and if Britain continued to adhere to EU rules 
    Roland Rudd, chairman of Open Britain, says it’s become clear the U.K. will have to deal with its bill to the EU first in negotiations.
    The sensible way to deal with this is to say, look, we have our international obligations and we’ve got to fulfill those. We can have a discussion about what the exact amount is, but we know that has to be fulfilled.
    He says it would be silly to play politics with these obligations and the prize for dealing with it is to get a trade deal similar to the current single market access.
    He adds that it is important to hold the U.K. government to account.
    Comment ()
    The U.K. GDP reading for Q4 came in at 0.7 percent quarter over quarter earlier today.
    Agate Freimane, Senior Investment Director at BrickVest, says the latest growth and inflation figures show the Bank of England measure following the Brexit vote, which included cutting interest rates and boosting quantitative easing, are working.
    If this trend continues, the Bank of England will start to raise interest rates, which is likely to have a negative impact on real estate. Higher inflation means higher construction costs, leading to an increase in real estate prices. However since Brexit, the demand for real estate has softened and it is unlikely that developers will immediately pass on the higher inflationary costs to the end customer.
    Since the Brexit vote in June, we’ve seen a 72 percent increase in the number of investors joining the platform. We expect to see the highest level of volatility from the office sector as many international firms currently headquartered in the UK may put decisions on hold over their long term office space requirements.
    Indeed our recent research showed that 20 percent of property-focussed institutional investors believe the office sector will present the biggest European real estate investment opportunity over the next 12 months.
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    President Zuma has appointed capable ministers, says the ANC's deputy secretary-general Jessie Duarte.
    She says the new finance minister, Malusi Gigaba, is "no fool".
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    Euro zone core inflation for March slowed to 0.7 percent year on year, versus 0.9 percent in February and below expectations, according to Eurostat.
    The ECB's Benoit Coeuré says the latest data has shifted the balance of risks from growth towards neutral territory in his view.
    Comment ()
    The spokesman for the U.K. prime minister says it is clear both sides wish to approach Brexit negotiations constructively.
    The U.K. invoked Article 50 earlier in the week. This morning, the EU laid out the guidelines for its strategy for the upcoming divorce talks.
    Comment ()
    More details are coming out around the sacking of South Africa's finance minister Pravin Gordhan.
    South Africa's Deputy President Ramaphosa says firing Gordhan is unacceptable, according to Reuters citing the ENCA.
    Ramaphosa says Gordhan as fired over a dubious intelligence report, which made unsubstantiated allegations against the finance minister.
    Ramaphosa told President Zuma he did not agree with the decision.
    Comment ()
    European stocks exposed to South Africa continue to fall sharply today, after the country's president decided to sack the finance minister Pravin Gordhan.
    Comment ()
    European stocks are slipping today, down around a quarter of a percent.
    The fall is partly related to the South African political drama, which has heavily impact stocks exposed to the country.
    Comment ()
    Pravin Gordhan, South Africa's former finance minister, is speaking to the media about his side of the story.
    He says he only saw on television that he had been fired by President Zuma, according to Reuters.
    You can listen in live on YouTube here.
    Comment ()
    Gordhan was fired following an intelligence report that made accusations against him. He calls the report "absolute nonsense".
    Comment ()
    Pravin Gordhan was called away from an international road show earlier in the week by President Zuma ahead of a cabinet reshuffle.
    He says the rising cost of servicing South Africa's debts are a result of recent events concerning his firing.
    Comment ()
    U.K. GDP for Q4 came in at 0.7 percent for the quarter and 1.9 percent year on year.
    Shilen Shah, bond strategist at Investec Wealth & Investment, says the figures show the U.K. economy ended 2016 with some momentum.
    The year-on-year was marginally weaker than the consensus with a print of 1.9 percent versus a consensus estimate of 2.0 percent.
    The uncertainty created by Brexit led to some weakness in business investment during the quarter, however the weakness in sterling did lead to an improvement in the current account, with the trade component leading the charge.
    Comment ()
    Pravin Gordhan says he is sickened by allegations that he had secret meeting to undermine the South African government.
    The former finance minister is speaking to the media live. You can listen in live on YouTube here.
    Comment ()
    Gordhan says he has congratulated the new finance minister, and will meet with him on Monday to talk him through the issues and challenges ahead.
    He says, no matter what has happened, they will be professional and act in the interests of South Africa.
    Comment ()
    Gordhan's supporters are cheering and applauding many of his comments. He is now starting his final comments.
    Our souls are not for sale. They are not for sale.
    We hope that more and more South Africans will make it absolutely clear that our country is not for sale.
    Comment ()
    Over in Brussels, the U.S. Secretary of States Rex Tillerson is visiting.
    Tillerson says the U.S. is committed to ensuring NATO has capabilities to support collective defense. He adds the U.S. will uphold agreements it has made to defend its allies.
    Comment ()
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