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Macron fails to convince Trump, it’s decision day at the ECB, and Deutsche Bank turns its back on Wall Street. Here are some of the things people in markets are talking about today.
French President Emmanuel Macron told journalists yesterday that he thinks President Donald Trump will pull the U.S. out of the Iran nuclear deal “for domestic reasons.” Iranian Foreign Minister Mohammad Javad Zarif told the Associated Press that should the U.S. abandon the agreement, “Iran would reciprocate and withdraw." The possibility of a standoff in the Middle East has helped support oil prices, with a barrel of West Texas Intermediate for June delivery holding above $68 this morning despite data yesterday showing expanding U.S. stockpiles and production.
At 7:45 a.m. Eastern Time the European Central Bank will announce its latest rate decision, and give an update to its quantitative easing plans. Economists surveyed by Bloomberg expect no policy changes to be announced, so all eyes will turn to the press conference with ECB President Mario Draghi at 8:30 a.m. where he will be questioned on his outlook for a euro-area economy with sagging business confidence and falling industrial output. Earlier this morning, Sweden’s central bank delayed plans to raise interest rates for the first time in seven years as inflation remains elusive.
Deutsche Bank AG announced this morning that it will scale back its Wall Street presence by reducing U.S. rates sales and trading, cutting back on its corporate finance business, and putting its global equities business under review. The bank said the measures, which effectively abandon its ambitions to become a top global securities firm, will lead to a “significant reduction” in staff levels. Shares in the bank plunged as much as 4.2 percent before reversing losses to trade higher by mid-morning in Europe. Shares in Barclays Plc are also higher after the bank announced a better-than-expected first-quarter performance.
Overnight, the MSCI Asia Pacific Index was flat, while Japan’s Topix index closed 0.3 percent higher. In Europe, the Stoxx 600 Index was 0.4 percent higher at 5:57 a.m. amid a deluge of earnings ahead of today’s ECB decision. S&P 500 futures pointed to a higher open, the 10-year Treasury yield was at 3.005 percent, and gold was broadly unchanged.
Facebook Inc.’s earnings yesterday reassured investors that the fallout from recent data controversies has been contained, with advertising revenue and user numbers both increasing. Shares gained more than 6 percent in premarket trading. Following Ford’s results yesterday, where the company announced it would stop making several car models and increase cost-cutting, this morning it is the turn of Fiat Chrysler Automobiles NV and General Motors Co. to update the market. After the bell the focus switches back to tech, with Amazon.com Inc. due to announce results.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Citi says U.S. may become the world’s top oil exporter next year.
- Tencent wipeout topping $118 billion shows depth of tech gloom.
- One of the hottest short dollar trades just fell into the red.
- The next nine days will teach us a lot about the U.S. economy.
- Grandma working as day trader shows what Russians do to survive.
- Brexit fuels talk of a united Ireland.