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Good morning. Trade talks are happening all over the place, dovishness is everywhere among central bankers and it’s been a mixed start to the bank earnings season. Here’s what’s moving markets.
European negotiators got the green light this week to get started on trade negotiations with the U.S., with a target of getting something done by September. Meanwhile, the U.S. and China continue to talk and the latter is considering a request from the former to shift some tariffs on agricultural goods to other products, just as U.S. soybean shipments slump. All in all, the four biggest economies in the world are now gripped by trade negotiations.
Not that anyone was in any doubt, but the Federal Reserve’s dovish turn is consistently being confirmed. Chicago Fed President Charles Evans said he can see the central bank keeping rates where they are until late 2020. And there are indications that as the Fed studies what it may have gotten wrong in its policy moves regarding inflation, the review is also starting to consider its employment mandate. Any changes or review of Fed policy will presumably be music to the president's ears. The European Central Bank, meanwhile, continues to argue that negative rates have been positive.
U.S. bank reporting season is in full swing. JPMorgan Chase Co. was a little better than anticipated, but Goldman Sachs Group Inc. saw equity trading slip in what was a relatively subdued first quarter and said the backlog for its investment bank shrank. Citigroup Inc.’s consumer unit stalled, overshadowing a better-than-expected bond trading performance. Overall, much for investors to chew over before European banks start updating in the next few weeks and Bank of America Corp. announces on Tuesday.
Italian payments company Nexi SpA will start trading on Tuesday, the biggest IPO in Europe this year. A flurry of deals have already graced markets in the second quarter and investors also will be girding themselves for another potential float to come in the shape of Nordic buyout house EQT Partners, which has advisers on board. It could all result in a hangover for investors, but perhaps the cure is fewer unicorns and more unicorn IPOs.
A mixed session in Asian markets and European futures are pointing to a moderately positive start. More will follow from France after the Notre Dame fire, with vows already made to rebuild. The first FANG of the earnings season arrives in the shape of Netflix Inc., and French cosmetics behemoth L’Oreal SA updates just after European markets shut for the day. Pharmaceuticals and consumer products group Johnson & Johnson, advertising house Omnicom Group Inc. and investment manager BlackRock Inc. all report too. Pencil in Thursday as another key day for the week too, as that’s when Robert Mueller’s report is likely to be released.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- The century’s best U.S. stock is running into headwinds.
- Beware a potential volatility storm in FX markets around the corner.
- Tiger Woods caused some serious headaches for bookmakers.
- Starbucks is investing heavily in green power.
- ‘Flash Boys' are running wild on crypto exchanges.
- Spicy hotpots have created a couple of Chinese billionaires.
- Linguists say English is one of the weirdest languages.
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