UK Market Snapshot
UK markets ended in the red yesterday, amid mounting concerns over OPEC’s meeting this week to curb crude oil production and as banking shares slumped ahead of the Bank of England’s stress test results. Oil stocks, BP, Tullow Oil and Royal Dutch Shell slipped 0.6%, 1.3% and 1.9%, respectively. Royal Bank of Scotland Group declined 2.6%, on the back of report that the lender might fail to sell its Williams & Glyn division in time. Standard Chartered eased 0.7%, after news surfaced that it would cut about 10.0% of the staff in its corporate and institutional unit. Peers, HSBC Holdings, Lloyds Banking Group and Barclays dropped 1.3%, 1.6% and 1.7%, respectively. Bucking the trend, Polymetal International, Fresnillo and Randgold Resources advanced 3.2%, 3.7% and 4.3%, respectively, tracking gains in gold prices. The FTSE 100 slid 0.6%, to close at 6,799.5, while the FTSE 250 lost 0.5%, to settle at 17,518.3.
US Market Snapshot
US markets closed in negative territory yesterday, amid losses in financial and consumer discretionary stocks. H&R Block plummeted 9.0%, after a leading broker downgraded its rating on the stock to ‘Sell’ from ‘Neutral’. Barnes & Noble declined 2.3%. The company offered a 15.0% discount on an entire online order as part of its Cyber Monday promotion. American Express, Visa and Bank of America fell 1.0%, 1.3% and 2.7%, respectively. On the contrary, Time rallied 15.9%, after news emerged that the company had rejected a takeover proposal from billionaire investor Edgar Bronfman Jr. Cognizant Technology Solutions jumped 7.0%, after activist investor, Elliott Management, stated that the former should enhance its profitability and return more of its cash to shareholders. The S&P 500 dipped 0.5%, to settle at 2,201.7. The DJIA fell 0.3%, to settle at 19,097.9, while the NASDAQ slid 0.6%, to close at 5,368.8.
Europe Market Snapshot
Other European markets finished lower yesterday, dragged down by a plunge in Italian lenders and energy producers. UniCredit, Banco Popolare and Banca Popolare dell'Emilia Romagna tumbled 4.5%, 5.1% and 6.6%, respectively, on growing worries about risks to their financial stability if Prime Minister, Matteo Renzi, lose the forthcoming constitutional referendum on 04 December. Banco Popular Espanol plummeted 7.8%, after a leading broker reduced its target price on the stock. TOTAL, Statoil and Eni fell 0.2%, 0.6% and 1.5%, respectively. Galenica slid 1.6%, despite the US FDA approving its supplemental new drug application for Veltassa. The FTSEurofirst 300 index eased 0.9%, to close at 1,340.1. Among other European markets, the German DAX Xetra 30 shed 1.1%, to close at 10,582.7, while the French CAC-40 slipped 0.9%, to settle at 4,510.4.
Asia Market Snapshot
Markets in Asia are trading lower this morning, mirroring overnight losses in the US equity markets. In Japan, oil stocks, JX Holdings and Japan Petroleum Exploration have fallen 0.1% and 1.3%, respectively. On the flipside, exporters, Toyota Motor, Canon and Nikon have added 0.2%, 0.5% and 2.4%, respectively. In Hong Kong, oil giants, Sinopec Oilfield Service, PetroChina and CNOOC have dropped 0.6%, 0.8% and 1.6%, respectively. Financial firms, Bank of East Asia and China Life Insurance Company have lost 0.3% and 1.1%, respectively. In South Korea, index major, Samsung Electronics has gained 0.4%, after it stated that it will consider whether to transition to a holding company structure. The Nikkei 225 index is trading 0.3% lower at 18,302.3. The Hang Seng index is trading marginally lower at 22,819.5, while the Kospi index is trading 0.2% lower at 1,974.7.
Key Corporate Announcements Today
AGMs
Blancco Technology Group, CAP-XX Limited, City Natural Resources High Yield Trust, Mysale Group, Scotgold Resources (DI), Surface Transforms, Surface Transforms, Volta Finance Limited, Wolf Minerals Limited, Wolseley, Sabien Technology
Interim Dividend Payment Date
Panther Securities, Toyota Motor Corp.
Quarterly Ex-Dividend Date
Canadian General Investments Ltd.
Key Corporate Announcements for Tomorrow
AGMs
Aura Energy Limited NPV (DI), F&C UK Real Estate Investments Limited, Ferrum Crescent Ltd NPV (DI), Genedrive, Oncimmune Holdings, Picton Property Income Ltd, Ruffer Investment Company Ltd Red PTG Pref Shares, Salt Lake Potash Limited (DI), Weatherly International, Work Service, Western Selection, Shore Capital
EGMs
RPS Group, Unite
Final Ex-Dividend Date
General Accident 'A'
Final Dividend Payment Date
Diverse Income Trust (The)
Interim Ex-Dividend Date
BAE Systems, Bankers Inv Trust, BlackRock Smaller Companies Trust, Capita, CQS New City High Yield Fund Limited, Crown Place VCT, Diverse Income Trust (The), Edinburgh Inv Trust, Ediston Property Investment Company, Henderson Far East Income Ltd., Henderson International Income Trust, Kennedy Wilson Europe Real Estate, Polar Capital Global Healthcare Growth & Income Trust, RTC Group, Schroder Oriental Income Fund Ltd., Senior, Standard Life Investments Property Income Trust Ltd., TwentyFour Select Monthly Income Fund Limited, UK Commercial Property Trust
Quarterly Payment Date
City of London Inv Trust, F&C Commercial Property Trust Ltd., Picton Property Income Ltd
Trading Announcements
IG Group Holdings, Merlin Entertainments
Commodity, Currency and Fixed Income Snapshot
Crude Oil
At 0430GMT today, Brent Crude Oil one month futures contract is trading 0.58% or $0.28 lower at $47.96 per barrel, ahead of the American Petroleum Institute’s weekly oil inventory data, scheduled to be released later today. Yesterday, the contract climbed 2.12% or $1.00, to settle at $48.24 per barrel, on signs that OPEC members are making efforts to forge a deal to limit crude production.
Gold
At 0430GMT today, Gold futures contract is trading 0.22% or $2.60 higher at $1193.40 per ounce. Yesterday, the contract advanced 1.05% or $12.40, to settle at $1190.80 per ounce, following a decline in global equity markets and weakness in the greenback.
Currency
At 0430GMT today, the EUR is trading 0.14% lower against the USD at $1.0598, ahead of Germany’s preliminary consumer price index for November, due to release later today. Additionally, the US preliminary annualised GDP growth for the third quarter, set to release later in the day, will be closely monitored by traders. Yesterday, the EUR strengthened 0.27% versus the USD, to close at $1.0613. Meanwhile, the European Central Bank (ECB) President, Mario Draghi, stated that region’s inflation has gradually edged up and the ECB’s monetary stimulus has been an important element of the ongoing recovery.
At 0430GMT today, the GBP is trading 0.12% lower against the USD at $1.2398, ahead of UK’s mortgage approvals and consumer credit, both for October, slated to release in a few hours. Yesterday, the GBP weakened 0.49% versus the USD, to close at $1.2413, reversing its gains from the previous session. In other news, the Organisation for Economic Cooperation and Development (OECD) projected that UK’s growth would fall to 1.0% in 2018 as the nation prepares itself to leave the European Union.
Fixed Income
In the US, long term treasury prices rose and pushed yields lower, with investors closely assessing the possibility of any agreement in OPEC’s meeting scheduled this week. Yesterday, yield on 10-year notes declined 4 basis points to 2.32%, while yield on 2-year notes fell 1 basis point to 1.11%. Meanwhile, 30-year bond yield lost 2 basis points to 2.99%.
Key Economic News
OECD upgraded global economic outlook for 2017
The Organisation for Economic Cooperation and Development (OECD) has indicated that global economic growth will pick up faster than previously expected in the coming months as Donald Trump’s planned fiscal stimulus is likely to provide a boost to major economies. The OECD estimated that world gross domestic product will now expand 3.3% next year, up by 0.1 percentage point from its September forecast. In 2018, the world economy is projected to grow 3.6%, the fastest pace of growth since 2011.
ECB’s Draghi: Stimulus is a key ingredient of ongoing Euro-zone recovery
The ECB President, Mario Draghi at a hearing of the Committee on Economic and Monetary Affairs of the European Parliament stated that the Euro-zone proved to be resilient in 2016, despite uncertainty arising from the global economic and political environment. He further added that inflation has gradually edged up, and that the ECB’s monetary stimulus has been a key ingredient of the ongoing recovery. Regarding the impact of ‘Brexit’ on the Euro-zone, Draghi urged the British government to disclose more information about its Brexit plans and stated that it was difficult to predict the precise economic implications of the event as it would depend on the timing, progress and outcome of the upcoming negotiations.
Euro-zone private sector loans rose in October
On an annual basis, private sector loans in the Euro-zone advanced 1.80% in October. Private sector loans had registered a similar rise in the prior month.
Euro-zone M3 money supply advanced less than expected in October
In October, M3 money supply climbed 4.40% on an annual basis in the Euro-zone, less than market expectations for a rise of 5.00%. M3 money supply had recorded a revised rise of 5.10% in the previous month.
Italian consumer confidence index declined in November
In November, the consumer confidence index dropped to 107.90 in Italy, compared to a reading of 108.00 in the prior month. Markets were expecting the consumer confidence index to fall to a level of 107.60.
US Dallas Fed manufacturing business index recorded a rise in November
In November, the Dallas Fed manufacturing business index rose to a level of 10.20 in the US, higher than market expectations of a rise to 2.00. The Dallas Fed manufacturing business index had registered a level of -1.50 in the prior month.
Japanese household spending fell less than expected in October
In October, on a YoY basis, household spending recorded a drop of 0.40% in Japan, compared to a fall of 2.10% in the previous month. Market anticipation was for household spending to fall 1.00%.
Japanese retail trade fell less than expected in October
Retail trade in Japan recorded a drop of 0.10% in October on a YoY basis, compared to a revised drop of 1.70% in the prior month. Markets were expecting retail trade to drop 1.60%.
Japanese retail trade advanced more than expected in October
Retail trade in Japan rose 2.50% on a MoM basis in October, higher than market expectations for a rise of 1.10%. Retail trade had registered an unchanged reading in the previous month.
Japanese large retailer's sales declined more than expected in October
On a monthly basis, large retailer's sales in Japan slid 1.00% in October, higher than market expectations for a fall of 0.90%. Large retailer's sales had fallen 3.20% in the prior month.
Japanese job to applicant ratio advanced in October
Job to applicant ratio in Japan registered a rise to 1.40 in October, compared to market expectations of a rise to a level of 1.39. In the prior month, job to applicant ratio had registered a reading of 1.38.
Japanese unemployment rate steadied in October
In Japan, unemployment rate remained steady at a level of 3.00% in October, in line with market expectations.