Want to receive this post in your inbox every morning? Sign up here
Stocks creep higher, Italy forms a bank fund, and UK inflation hits its highest level in 15 months. Here are some of the things people in markets are talking about today.
Stocks rise, bonds fall
The MSCI Asia Pacific Index gained 0.9 percent overnight, with Japan's Topix jumping 1.5 percent as the yen weakened. Equities in Europe were slightly higher, with the Stoxx 600 Index gaining 0.1 percent at 10:18 a.m. London time after falling as much as 0.7 percent earlier in the session. S&P 500 futures were 0.3 percent higher. Euro area bond yield curves are steepening ahead of a sale of French 50-year debt while Treasuries also dropped.
Italy's $5.7 billion bank fund
Italian officials and bank executives have agreed to create a €5 billion ($5.7 billion) fund to help troubled lenders in the country. With an estimated €360 billion of bad loans still outstanding in Italy's banking system, the size of the fund is already being questioned. The fund will get its first test in the coming weeks as UniCredit SpA pushes ahead with the initial public offering of Banca Popolare di Vicenza SCpA it is running. The fund launch comes as Italian Prime Minister Matteo Renzi's efforts to reboot the Italian economy continue.
Deglobalisation at Nomura
Japan's largest brokerage, Nomura Holdings Inc., plans to shut down its European equity operations, according to a person familiar with the matter, with the company confirming that it will close certain businesses in Europe and “rationalize” parts of its operations in the Americas. Shares in the brokerage closed 7.4 percent higher after Bloomberg News reported the move.
U.K. inflation highest in 15 months
Consumer prices in the U.K. rose 0.5 percent from a year earlier for March, exceeding expectations and the highest level since December 2014. Core inflation rose to 1.5 percent. The earlier Easter holidays played a part in the higher numbers as air fares rose 23 percent in the month, compared with 2.7 percent in March of last year. Markets seem to be looking through the seasonality factor, as the pound has extended gains since the data was released. Elsewhere in currencies, hedge funds have cut their net bullish positions on the U.S. dollar to the lowest in almost two years.
Wells Fargo's wrong way oil bet
Wells Fargo & Co. chose the wrong time to expand its oil-lending. The bank targeted some of the least creditworthy borrowers in the shale industry, demanding oil and gas reserves as collateral, a type of financing thought to be low risk. With oil now hovering close to $40 a barrel, the value of those reserves held as collateral has plummeted. This pressure was clearly illustrated yesterday when Chesapeake Energy Corp. pledged almost all of its oil and gas reserves, real estate and derivatives contracts to keep its $4 billion credit line. U.S. shale production, meanwhile, is seen reaching a two-year low.
What we've been reading
This is what's caught our eye over the last 24 hours.
- The global reach of Malaysia's 1MDB fund scandal.
- Goldman Sachs resolves U.S. mortgage probe for $5.1 billion.
- Farmers get biggest U.S. subsidy check in a decade.
- Bloomberg poll: Married women view Trump unfavorably.
- Buffett-backed electric-car maker seeks Tesla's buzz.
- Waxwork Putin show Russia's creeping influence at EU fringe.
- Led Zeppelin loses bid to dodge trial over 'Stairway to Heaven.'