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The euro jumps with bond yields, a ransomware hack goes global, and the oil rally stumbles. Here are some of the things people in markets are talking about today.
The euro rose to its highest level in more than a year against the U.S. dollar, trading at $1.1361 by 5:00 a.m. Eastern Time. The move follows European Central Bank President Mario Draghi's Tuesday speech, in which he downplayed deflation risks. Euro-area government bond yields are also rising this morning, with German bunds adding to yesterday's selloff. Comments from Federal Reserve President Janet Yellen and other Fed speakers about overvalued asset prices also helped take the wind out of the equity market's sails, with weakness at the U.S. close feeding into Asian and European trading. Don't expect a break from central bankers today as the ECB forum in Portugal hosts a policy panel featuring the heads of the euro-area's central bank as well as the Bank of England, Bank of Japan and Bank of Canada.
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A ransomware cyberattack, which started in Ukraine yesterday and appears similar to last month's WannaCry hack, has spread across the globe. India's largest container port was unable to load or unload cargo after A.P. Moller-Maersk was impacted. The hackers are seeking $300 in bitcoin to release files from computers that are affected. The cryptocurrency was up $240 from yesterday's low at $2,514.70 by 5:20 a.m.
The rally in oil failed to hold, with a barrel of West Texas Intermediate for August delivery trading at $44.08 as of 5:30 a.m. after U.S. industry data showed crude stockpiles rose. Traders are warning that the commodity could be due for a violent price rise as bearish bets against crude, which have risen to the highest level in six years, risk a short-covering rally. For consumers, the price fall this year means prices at the pump for gas are the lowest since 2005.
Overnight, the MSCI Asia Pacific Index fell 0.3 percent, with Japan's Topix index also dropping 0.3 percent as tech stocks were hit by the hack attack as well as Yellen's comments. In Europe, the Stoxx 600 Index was 0.4 percent lower at 5:45 a.m. with tech stocks once again amongst the biggest losers. S&P 500 futures were slightly higher.
U.S. bank dividends and buyback plans are set to be approved after markets close today in the second part of the Fed's stress test. Lenders are expected to return $121 billion to shareholders next year. Speaking of dividends and buybacks, Nestle SA made its first concession to activist investor Dan Loeb yesterday when it announced a $21 billion share purchase to boost its stock price.
What we've been reading
This is what's caught our eye over the last 24 hours.
- NYSE president calls short sellers "icky."
- 'Enigma network' rocks Hong Kong markets with sudden 90 percent losses.
- Italy handed bank bondholders a bailout and a bunch of questions.
- Deutsche Bank faces a possible $60 million derivative loss.
- Madoff trustee fetches $370 million after two offshore funds settle.
- How America's aircraft carriers could become obsolete.
- The very profitable business of scientific publishing.