News Summary from Bloomberg:
1) Euro-Area Economic Confidence Rises as ECB Stimulus Kicks In
Euro-area economic confidence rose for a second month in May as the European Central Bank prepares to present updated economic projections that could provide further clues about the impact of its stimulus program. An index of executive and consumer sentiment increased to 104.7 from a revised 104.0 in April, the European Commission in Brussels said on Monday. That’s the highest level in four months.
2) Gold Sinks as Dollar Gets Boost From Yellen; Japan’s Stocks Rise
Gold fell for a ninth day, its longest losing streak in a year, and the dollar strengthened after Federal Reserve Chair Janet Yellen said an interest-rate hike is likely in coming months. Japanese shares led gains in Asia, while European stocks held near a one-month high. Bullion declined with silver and platinum as the prospect of higher borrowing costs in the U.S. damped the appeal of non- interest-bearing assets. …
3) Draghi’s First Good News in a Year Has $267 Billion Cost
Mario Draghimay have bought himself a brief respite from the threat of deflation. The cost? More than a quarter of a trillion dollars. On Thursday, the European Central Bank president should be able to deliver his first snippet of good news for a year on his mandate. Most economists in Bloomberg’s monthly survey predict the central bank’s forecasts for inflation and growth will be left unchanged or increased.
4) Noble Group CEO Alireza Quits as More Assets Put Up for Sale
Noble Group Ltd. said Yusuf Alireza resigned as chief executive officer and announced a plan to sell a business that less than a month ago Alireza himself described as a core asset the trading company wanted to keep. Alireza, 45, decided “the time was right” to leave after shifting the trader toward an asset-light model, selling its agriculture business and securing new financing, Noble Group said in a statement. I
5) Winning Month for Europe Stocks Goes Uncelebrated as Votes Loom
The biggest monthly gain for European stocks since November is doing little to relieve investor anxiety. In most respects the opposite is happening, as a 2.4 percent advance in the Stoxx Europe 600 Index through Friday has been met with falling volume, outflows from mutual funds and an evaporation in price momentum. Weighing on sentiment are votes in the U.K. and Spain, and the onset of a month that has historically been the worst for equities.
World News Briefing
6) Ready or Not, Republicans Prepare for Standard-Bearer Trump
Marco Rubio not so long ago insulted Donald Trump’s tan, made crude insinuations about his anatomy, and dubbed him a “con man” and “the most vulgar person ever to aspire to the presidency.” Yet days after Trump clinched enough delegates to become the presumptive Republican presidential nominee, the Florida senator said he would speak on the billionaire’s behalf if asked, and would release his delegates to Trump at the Republican National Convention in Cleveland .
7) Brexit Rifts Threaten Cameron as Tory Party Civil War Escalates
Splits in the U.K. Conservative Party pose a growing threat to David Cameron’s chances of remaining prime minister after the Brexit referendum as “blue-on-blue” attacks become increasingly acrimonious. Bookmakers cut the odds on Cameron’s ouster this year as former London Mayor Boris Johnson and Justice Secretary Michael Gove, prominent Conservative campaigners to leave the European Union, said the premier’s broken promises on Uk role in the EU.
8) Oil Slips Third Day as Canada Output Returns Before OPEC Meeting
Oil slid a third day as Canadian producers moved to resume output after wildfires and as OPEC delegates prepare to meet in Vienna to discuss production policy. Futures lost as much as 0.5 percent in New York after dropping 0.5 percent over the previous two sessions. Suncor Energy Inc. restarted oil-sands operations in the Regional Municipality of Wood Buffalo as fires eased amid cooler weather.
9) Fed Fusillade Sends Gold to $100 Loss This Month as Dollar Rises
Gold’s on the ropes. Bullion broke below $1,200 an ounce on Monday after losing more than $100 in less than a month as Federal Reserve policy makers land punch after punch by talking up the prospects for a U.S. interest rate rise and reinvigorating the dollar. Bullion for immediate delivery lost as much as 1 percent to $1,199.80 an ounce, the lowest level since Feb. 17, and traded at $1,205.15 at 5:06 p.m. in Singapore.
10) UBS Picks ‘Big Oil’ Stocks Over Crude as Prices Seen Back at $40
Forget about buying oil. Own a piece of the biggest companies that are producing it instead, according to UBS Group AG. “Big oil is what I own now because they’re less sensitive to movement in price and they’re going to pay me a dividend,” said Wayne Gordon, executive director for commodities and foreign exchange at the bank’s wealth management unit. Companies including BP Plc and ConocoPhillips have cut spending and repaired their balance sheets.
11) Top Aussie Bond Forecaster Says RBA Has Clearest Rate-Cut Case
The top forecaster for Australian bonds, the world’s best-performing debt this month after Greece and the U.K., sees further gains as the central bank cuts interest rates. “We have, of all the developed countries, perhaps the clearest view that the official interest rate can come down,” said Stephen Roberts, an economist at Melbourne-based advisory firm Laminar Group Pty, who was the most accurate in forecasting the nation’s benchmark yield last year.
12) June Jitters Rouse Fund Managers to Cast Their Hedging Nets Wide
When you’re global head of rates at a $1.7 trillion fund, you can’t spend a month on the sidelines to avoid risks, no matter how big. Britain’s European Union referendum, a Federal Reserve policy decision, an OPEC meeting and the prospect of another muddled Spanish general election are all due in June. Like it or not, the biggest investors must take positions, particularly to spread their risk, according to David Tanat at JPMorgan.
13) Yellen Hawkish Turn Sees Treasury Futures Tumble on Memorial Day
Treasury 10-year futures contracts fell by the most in more than one week after Federal Reserve Chair Janet Yellen said Friday improvement in the U.S. economy would warrant raising interest rates in the coming months. Ten-year Treasury futures contracts for September delivery slid 14/32, or $4.38 per $1,000 face amount, to 129 9/32 as of 10:25 a.m. in London, based on electronic trading at the Chicago Board of Trade. It was the biggest decline since May 18.
14) Emerging Currencies Pounded by Yellen as Monthly Gains Disappear
Emerging-market currencies and bonds fell, set to halt a streak of monthly gains, as demand wanes amid mounting signs from U.S. central bank officials that they are close to raising interest rates again. South Korea’s won led losses among exchange rates on Monday before reports this week on exports, industrial production and the first quarter economic performance, which could help sway policy makers toward another cut in borrowing costs. China …
15) China Stocks in Hong Kong Rise to Three-Week High on Industrials
Chinese stocks in Hong Kong climbed to a three-week high, paced by a rally in industrial and automobile companies, as cheaper valuations relative to their mainland peers lured buyers. The Hang Seng China Enterprises Index rose 0.3 percent. The Shanghai Composite Index added 0.1 percent after six straight weeks of declines, its longest losing stretch since 2012. The Shanghai and Shenzhen stock exchanges on Friday published rules restricting trading halts in a …
16) Bank Loans to Hungarian Companies Slide to Eight-Year Low
Lending to businesses in Hungary fell to the lowest in at least eight years in the first quarter as the nation’s economy shrank. The slowdown in lending coincided with central bank efforts to scale back the eastern European nation’s reliance on a two-year-old program to provide cheap loans to small- and medium-sized companies. Three interest-rate cuts and forecasts for a pickup in growth may revive lending later this year.
17) Swedish Economy Powers On as Record Stimulus Nears End of Era
Sweden has consolidated its status as one of Europe’s success stories, with annual gross domestic product in the first quarter growing at three times the speed of France’s. Scandinavia’s biggest economy expanded 0.5 percent from the fourth quarter and 4.2 percent from the previous year, according to estimates published Monday by Statistics Sweden. Key Points: * GDP figures were slightly below analysts’ …
18) French Economy Grows Faster Than Estimated as Investment Jumps
The French economy grew faster than originally estimated in the first quarter, lifted by improving corporate investment. Growth accelerated to 0.6 percent, instead of the 0.5 percent estimated April 29, France’s statistics office Insee said Monday. That compares with a 0.4 percent increase in gross domestic product in the previous quarter. The economy expanded 1.4 percent from a year earlier. The improved first quarter represents good news for President …
19) No Slowdown for India Despite Global Uncertainty, Jaitley Says
Despite “considerable” uncertainty in the global economy, India’s growth is set to continue its world- beating pace, according to Finance Minister Arun Jaitley. “I don’t think we have a slowdown in sight for the reason that there is a lot of economic activity generated by increased public funding, foreign investment, and urban demand moving up,” Jaitley said in an interview onMonday while visiting Japan, where he hopes to double the …
20) Brazil Builder Moves Past Bribery Saga, Stoking 23% Bond Surge
Andrade Gutierrez SA, one of several Brazilian construction companies implicated in the nation’s biggest corruption probe, is back in favor with bond investors. The builder has seen its $500 million of notes due in 2018 return 23.3 percent since May 5, when it reached a leniency agreement with prosecutors. As part of the deal, Andrade Gutierrez issued a statement in Brazil’s biggest newspapers apologizing for taking part in a scheme to bribe executives.
21) Brazil Congress Leaders Seek Changes to Govt Measures: Estado
Leaders of 7 biggest Brazilian parties, representing 326 lawmakers in lower house and 58 senators, won’t commit to approving spending cap and pension reform before discussing changes to bills, newspaper O Estado de S.Paulo reports citing interviews. * Pension reform bill faces the highest resistance * Rousseff’s Workers’ Party to vote against all 4 measures proposed by the govt.