Another mixed day for European markets
UK shares managed to end the day in positive territory, as investors shrugged off Moody’s downgrade of China’s credit rating. The FTSE 100 edged higher while the FTSE 250 recorded yet another closing high. But with the euro holding steady, European markets were more subdued, dipping lower by the close. The final scores showed:
- The FTSE 100 finished up 29.61 points or 0.4% higher at 7514.90
- Germany’s Dax dipped 0.13% to 12,642.87
- France’s Cac closed down 0.13% at 5341.34
- Italy’s FTSE MIB fell 0.21% to 21,369.73
- Spain’s Ibex ended 0.08% lower at 10.907.4
- In Greece, the Athens market lost 2.17% to 766.03
On Wall Street, the Dow Jones Industrial Average is currently up 27 points or 0.13%.
On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow.
Back with Moody’s downgrade of China’s credit rating, and Capital Economics says it is not surprised the market reaction has been limited. The forecasting group’s Daniel Christen and Mark Williams said:
There was no particular trigger for the move, other than ongoing concerns about the lack of reform momentum in the country’s financial markets...
Ultimately, as is often the case with such downgrades, the announcement contained little, if any, “news”: China’s struggles to bring down leverage, while maintaining rapid economic growth are well-documented, and Moody’s had lowered its outlook for China in March 2016.
Bond prices barely moved. Most are purchased overwhelmingly by domestic, state-owned banks, and held to maturity. There was therefore little chance of a spike in yields. And in any case, an A1 rating still puts China well within “investment grade” status.
Admittedly, excessive credit growth raises the risks of a government bailout out of the financial sector in the event of a severe downturn, which could plausibly add around 35%-pts to the debt ratio. But with only a tiny fraction of China’s debt denominated in dollars, there is little chance of an outright default: the People’s Bank of China (PBOC) can theoretically inflate away the debt. Moreover, while we expect a slowdown in GDP growth, we do not expect a “hard-landing”.
Equity markets dropped initially – the Shanghai Composite fell by about 1% on the news – but had recouped their losses by the end of trading. We have long argued that Chinese equities might face a downward correction once the economy starts to slow, and as the crackdown on leverage begins to bite. But there is little chance of a slump, as P/E ratios are nowhere near the levels reached just during the bubble in the first half of 2015 and not particularly high relative to levels seen at other times in the past.
Finally, there appears to have been little pressure on the renminbi. While it might weaken a little this year, we then see it rising again to ¥6.8/$ in 2018, and ¥6.5/$ in 2019, as the dollar starts to come under pressure against the other “major” currencies, and as the authorities in China permit some appreciation of their currency in trade-weighted terms.
Chinese markets barely reacted to Moody's downgrade. Slowing growth, not valuations, will hold back equities in 2017https://t.co/OtNTlJBENv pic.twitter.com/QnRNGtLehJ
— Capital Economics (@CapEconMarkets) May 24, 2017
The jump in the oil price has not lasted long.
With the key Opec meeting on Thursday, some caution has returned to the market after the positive price move after the bigger than expected drop in US crude stocks. Brent is now down 0.15% at $54.07 a barrel. Chris Beauchamp, chief market analyst at IG, said:
US crude stockpiles dropped by an impressive 4.4 million barrels last week, according to data released this afternoon. While the news did cause a spike in the price of crude, traders then remembered that the Opec meeting is tomorrow and reversed course. Now we all wait for Opec, although tomorrow’s schedule suggests that we have a whole day ahead of us before Opec announces its decision to the world.
On the stock market he said:
‘Off the lows’ is about the best that can be said of a very dull session in London... For the time being, we are still stuck with a market that doesn’t want to go down, but it doesn’t want to go up, either.
US crude stocks fall by more than expected
Ahead of the Opec meeting on Thursday, which could well see production cuts extended for nine months, comes data showing a bigger than forecast decline in US crude stocks.
They fell by 4.43m barrels last week to 516.34m, compared to expectations of a 2.4m barrel drop. Byt gasoline stocks fell by a smaller than expected 787,000 barrels.
US COMMERCIAL CRUDE STOCKS fell -4.4 million bbl to 516 million bbl in the week to May 19 (seasonal draw down occurring earlier than normal) pic.twitter.com/47JKKniCjL
— John Kemp (@JKempEnergy) May 24, 2017
The news has pushed oil prices higher, with Brent crude now up 0.7% at $54.53 a barrel. Before the US figures, it was sitting at $54.33, up 0.33%.
Updated
The earlier speech by European Central Bank president Mario Draghi has given some support to the euro. Dennis de Jong, managing director at UFX.com, said:
There was little in Mario Draghi’s speech to indicate when the European Central Bank might start to reduce its policies of quantitative easing and low interest rates, but there was enough to boost investors’ hopes that the eurozone’s finances can remain stable.
Draghi’s confirmation that it will be business as usual for the ECB has seen the euro strengthen initially, with the financial stimulus provided by the bank looking set to continue for the foreseeable future. However, Draghi should be wary that the low inflationary pressure, caused by muted wage growth across the continent, doesn’t stamp out the green shoots of recovery that he has helped to sow.
Updated
Over to the US, and some disappointing housing figures.
Existing home sales fell by a higher than expected 2.3% in April, due to a shortage of houses on the market. They fell to a seasonally adjusted annual rate of 5.57m units, compared to expectations of a 1.1% decline. Lawrence Yun, chief economist at the National Association of Realtors, said:
Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March at 4.2 percent, and new and existing inventory is not keeping up with the fast pace homes are coming off the marke.
Demand is easily outstripping supply in most of the country and it’s stymieing many prospective buyers from finding a home to purchase.
Updated
Opec monitoring committee recommends extension of output cuts
Ahead of Thursday’s Opec meeting in Vienna - where there are hopes of an agreement to extend the production restrictions agreed in November - comes a recommendation from Opec and non-Opec monitoring committee.
The committee said it believed the cutbacks should be extended by nine months:
The [monitoring committee] took note of the current market conditions, including the level of global inventories, and concluded that it is necessary to extend the production adjustments. The Committee also took note of the fact that the duration of the anticipated extension should be longer than the originally stated period in the Declaration of Cooperation of six months. The [monitoring committee] then considered several scenarios presented by the [technical committee] regarding the extension of the Declaration of Cooperation and decided to recommend that the production adjustments of the participating countries be extended for nine months commencing 1 July 2017. In this regard, the [monitoring committee] should continue monitoring conformity levels as well as market conditions and immediate prospects, and recommend further adjustment actions, if deemed necessary.
Updated
More from the European Central Bank, and governing council member and head of the Bank of Slovenia Bostjan Jazbec:
ECB’s Jazbec: Too Early To Conclude That Inflation Has Been Revived, ECB Should Maintain Stimulus For Now
— LiveSquawk (@LiveSquawk) May 24, 2017
Wall Street edges higher
US markets have opened marginally higher, helped by a positive start for technology stocks.
Ahead of the latest Federal Reserve minutes, the Dow Jones Industrial Average is currently up around 6 points, while the S&P 500 and the Nasdaq Composite opened around 0.1% and 0.2% higher respectively.
Anglo Irish's Sean Fitzpatrick acquitted as trial collapses
He was one of the masters of the Irish financial universe whose bank almost bankrupted Ireland.
But on Wednesday the former chairman of the Anglo Irish Bank Sean Fitzpatrick walked free from a Dublin court after being acquitted of misleading the bank’s auditors about multi-million euro loans.
After the longest trial in Irish criminal history Fitzpatrick stood on the steps of the Republic’s Criminal Courts of Justice to declare:
“It’s wonderful day.”
Twenty four hours earlier Mr Justice John Aylmer had told jurors he was going to direct them to acquit Fitzpatrick. The former Anglo Irish Bank executive had pleaded not guilty to misleading the bank’s auditors about loans to him and people connected with him.
Today, the 126th day of at bewildering and complex trial, Fitzpatrick’s defence had argued that the case should not go before the jury because of flaws in the investigation process and in the prosecution case....
We’ll have more details shortly....
Updated
Euro area recovery increasingly solid, no need to deviate from guidance - ECB's Draghi
Investors searching for clues as to when the European Central Bank might start gradually reducing its stimulus measures will find little in president Mario Draghi’s latest comments.
In a speech in Madrid on financial stability, Draghi said there was no need to change its current guidance, saying the euro area was seeing “an increasingly solid recovery driven largely by a virtuous circle of employment and consumption, although underlying inflation pressures remain subdued.”
No sign of Draghi deviating from current guidance. If anything, QE is more likely to produce side-effects than negative rates ("so far"). pic.twitter.com/sRM9aFamfE
— Frederik Ducrozet (@fwred) May 24, 2017
He said:
The macroeconomic environment is improving. The monetary policy measures put in place in recent years have proven to be effective at sustaining a resilient recovery that is increasingly broad-based across countries and sectors. This recovery in turn contributes to greater financial sector resilience...Nonetheless, we remain vigilant.
Negative rates may also have unwarranted side-effects, but those have so far remained limited. Our current assessment of the side effects suggest therefore that there is no reason to deviate from the indications we have been consistently providing in the introductory statement to our press conferences.
Updated
It’s been a tough few months for Tiffany & co, with regular protests close to its flagship store in New York (it’s right next to Trump Tower...).
And the upmarket jewellery chain has just delivered more bad news, with quarterly sales missing expectations in the last quarter.
Shares in Tiffany have dropped almost 5% in pre-market trading, after it posted a 2% drop in comparable sales across the globe.
Like-for-like sales in the America shrank by 4%, due to “lower spending by both foreign tourists and local customers”. They fell by 3% in the Asia-Pacific region, and also in Europe, and by 1% in Japan.
Moody’s downgrade has made a small dent in the copper price.
Copper traded on the London Metal Exchange has fallen 0.6% to $5,678 a tonne. Back in February it was trading at $6,200.
Two successive down days now for #copper. Not helped by Moody's China downgrade
— DailyFXTeamMember (@DailyFXTeam) May 24, 2017
Why markets took Moody's downgrade in their stride
Why hasn’t Moody’s warning about China’s slowing economy and rising debts caused more alarm?
I think it’s because canny investors (who have the same information as Moody’s) already understood the challenges facing Beijing. They’d already priced its debt accordingly.
Secondly: institutional investors are often forced, by their own rules, to sell sovereign debt after a downgrade because it is officially riskier. But Chinese debt is mainly held by Chinese investors, who wouldn’t feel the same compulsion.
Alan Siow of BlueBay Asset Management explains:
- Downgrade largely expected and priced in, with China IG [investment grade] spreads trading wider to equivalently rated developed market and emerging market peers prior to the announcement.
- China IG issuance is largely owned by Chinese end investors (some estimates are as high as 80%), and foreign investors are underweight, so limited forced selling.
- Downgrade rational is uncontroversial and highlights well understood vulnerabilities (i.e. not new news)
Analysts: Downgrade is bad for sentiment
After being rattled by Moody’s, China’s stock market managed to recover its losses by the close of trading.
The Shanghai Composite Index closed up 1 point, or 0.06%, as investors digested the news that China had been downgraded by one notch to A1 (the fifth-highest rating).
Vishnu Varathan, Asia head of economics and strategy at Mizuho Bank, believes the one-notch downgrade will cause some angst, as Beijing deals with some of the bad debt incurred by state-owned enterprises (SOEs).
“It’s going to be quite negative in terms of sentiment,particularly at a time when China is looking to de-risk the banking system (and) when there’s going to be some potential restructuring of SOEs.”
David Cheetham, chief market analyst at brokerage XTB, says China has now been bumped back up the list of worries.
“After being very much at the front and centre of global risk sentiment at the beginning of last year, the Chinese slowdown story has been almost forgotten, with politics throughout Europe and the U.S. taking the limelight.”
Updated
The price of iron ore traded in the Chinese city of Dalian slumped by 7% today, partly thanks to Moody’s downgrade.
Local reports also blamed signs that stockpiles are building up (suggesting a dip in demand).
The wider iron ore prices also fell, but less steeply, adding to recent losses in the last few months.
Spot iron ore down heavily, but not as much as Dalian futures.
— David Scutt (@David_Scutt) May 24, 2017
MBIOI-62 -2.4% to $60.52
MBIOI-58 -2.7% to $40.02https://t.co/Wk3Q4ZgdYi pic.twitter.com/EMAWqxAc44
RBS case adjourned until June 7th
Fred Goodwin might still get his day in court, whether he likes it or not.
A high court judge has agreed to adjourn the case brought by thousands of Royal Bank of Scotland customers who say they were misled into supporting its rights issue in 2008, before the financial crisis.
The case was due to begin on Monday, with Goodwin (RBS’s former CEO) expected to face questions over the bank’s collapse. But RBS then made a last-ditch offer to settle, which has split the investors.
Both sides have now asked for a formal adjournment until June 7th, to allow talks to continue.
From the high court, Jill Treanor explains:
Jonathan Nash QC, representing the shareholders, told the judge on Wednesday that while prospects of a settlement remained good more time was needed.
Asked by Hildyard what the impediments to a deal were, Nash said the shareholder group was not able to contact all its members. There were a “small number of shareholders whose current address does not appear to be correct”, he added.
The judge set a court hearing for 4pm on Thursday for an update and will require written updates next Tuesday and Thursday when the court is not sitting.
This is from the BBC’s Simon Jack:
RBS case adjourned. Fri was day off anyway. Scheduled break for 2 wks after that. Plenty time to do deal/decide to press on/see group split?
— Simon Jack (@BBCSimonJack) May 24, 2017
UBS’s Paul Donovan has a refreshingly blunt take on the Moody’s downgrade:
One of the credit rating agencies – no one cares which one – lowered China’s credit rating from something to something else – no one cares what. There was a flicker of interest in Asian markets (an unusual reaction to a credit rating agency move), but there is no real new information.
Solid summary of the China downgrade from Paul Donovan at UBS pic.twitter.com/Y06By2RGFu
— David Keohane (@DavidKeo) May 24, 2017
Karishma Vaswani, the BBC’s Asia business correspondent, has explained why Moody’s downgrade will have irked the Chinese leadership:
Remember - this is a critical year for President Xi Jinping, who faces a key political congress towards the end of the year. A strong economy gives him credibility and legitimacy - China observers tell me that the perception of stable growth is crucial for him at this time.
This is why negative assessments from international financial institutions like Moody’s on Chinese debt are unlikely to go down well in Beijing.
Currently, China’s debt stands at something like 260% to GDP. Higher debt levels usually mean a higher level of risk.
But it is worth noting that most of this debt is held by Chinese state-owned enterprises or “quasi-state” like entities - not international investors - so it is less likely to have a spillover effect into other economies.
All the same, as the world’s second largest economy, what happens in China matters to the rest of the world.
Updated
Over in Sofia, European Central Bank policymaker Peter Praet has warned that Europe’s recovery could falter if the ECB tightens policy too quickly.
Praet told his audience that Europe’s economy was recovering, thanks to domestic demand (thanks to the actions taken by the ECB!). But wage growth is still muted, meaning inflationary pressure is low.
Praet struck a cautionary note, saying:
While we are certainly seeing a firming, broadening and more resilient economic recovery, we still need to create a sufficiently broad and solid information basis to build confidence that the projected path of inflation is robust, durable and self-sustained.
First, underlying inflation pressures still give scant indications of a convincing upward trend as domestic cost pressures, notably wage growth, remain subdued. And, second, the economic recovery and the outlook for price stability remain conditional on the very substantial degree of monetary accommodation, including our forward guidance. Without this support, the progress towards a sustained adjustment that we see in our projections will likely be slower or even stall.
That might disappoint those who are pushing the ECB to start normalising monetary policy, and raise interest rates from their record lows.
The problem lies in the demand, not in supply; thus QE is unlikely to prove inflationary, chart Peter Praet @ecb https://t.co/NHlpTSjCZ7 pic.twitter.com/SnwGQ7U2bj
— ACEMAXX ANALYTICS (@acemaxx) May 24, 2017
Mining shares in London have been hit by the Chinese downgrade.
Rio Tinto has shed 1.2% while Anglo American is down 0.8%, following the drop in commodity prices (as China is a huge consumer of iron, nickel, copper, etc).
Ipek Ozkardeskaya of London Capital Group explains:
The heavy sell-off in commodities following China’s debt rating downgrade has taken its toll on the UK’s mining stocks (-1.10%). Copper futures cheapened by 1.29%, as iron ore future slid more than 5%.
The wider FTSE 100 has gained 13 points, back to 7499 points.
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Marks shines, but Kingfisher takes a bath
Over in the City, shares in Marks & Spencer have hit their highest level in 12 months.
That’s a little surprising, as the retailer reported a 10% fall in underlying profits (and a 65% slump on a pre-tax basis) this morning, and another fall in clothing sales.
But investors are hoping that CEO Steve Rowe is turning the business around;.
He’s been talking up M&S’s sales of full-price clothing, after removing “excessive discounting”.
Trying to judge which M&S clothing numbers matter most. Total sales fall or full price sales growth for instance? Each tells different story
— George MacDonald (@GeorgeMacD) May 24, 2017
But @marksandspencer CEO Steve Rowe is confident the business is on track. Market share full-price gains are name of the game for him
— Harriet Russell (@IC_HRussell) May 24, 2017
M&S's Steve Rowe is actually an incredibly impressive media performer. Plays the "I'm just an honest guy" role to perfection.
— Simon Neville (@SimonNeville) May 24, 2017
But DIY chain Kingfisher is having a rough morning.
Shares are down 6% after reported a small fall in like-for-like sales, mainly due to a 5.5% slump in France in the last three months (was everyone too busy voting to put any shelves up?)
Newsflash: Moody’s has just downgraded 26 Chinese organisations, following today’s sovereign credit rating downgrade.
They’re all classed as GRIs, or “non-financial corporate and infrastructure government-related issuers”.
Moody’s says:
The 26 issuers comprise 1) 17 GRIs and rated subsidiaries that are ultimately owned by the central government (central GRIs), and 2) nine GRIs and rated subsidiaries that are ultimately owned by regional and local governments (local GRIs).
The list includes China National Petroleum Corporation, China Three Gorges Corporation, Guangzhou Metro Group, and Dongfeng Motor Group Company.
Luc Froehlich, head of investment directing for Asian fixed income at Fidelity International, believes China has got a grip on its economic problems.
He says:
“Today’s downgrade is yet another sign of the challenges faced by China, which is juggling rising leverage issues, declining economic growth rates and ongoing structural reforms.
“Despite these mounting pressures, we are confident that China’s central bank and its regulators are firmly in control of the situation. In particular, China’s recent regulatory tightening should help deflate the country’s credit markets and lead to long-term market stabilization. ”
Moody’s downgrade has hit the price of commodities in China.
Iron ore shed 6%, with steel and coke prices also suffering, as traders anticipated weaker demand for metals and energy.
Losses seen across industrial #commodity futures in #China, led by #IronOre tumbling 6.74% by noon; #steel rebar down 3.1% & coke down 2.3% pic.twitter.com/nrV4bqQ918
— YUAN TALKS (@YuanTalks) May 24, 2017
It’s easy to be dismissive of credit rating firms, given their shortcomings in the run-up to the financial crisis.
Today’s downgrade doesn’t tell us anything massively new; it’s no secret that China is facing rising debts, slowing growth, and a tricky tightrope from an industrial economy to a service sector one.
But Moody’s downgrade will matter to Chinese firms; they’ll probably end up paying higher borrowing charges, now that Beijing itself is seen as riskier.
The Wall Street Journal explains how Chinese banks already piggy-back on the country’s sovereign credit rating (which is higher than their own).
Moody’s gives the broader sector a baseline credit assessment of Baa3 based on indicators like loan-to-deposit ratios and counterparty risk. But because the government owns much of the banking system and—it is assumed—would provide it with support in a crisis, banks are in practice able to issue debt at higher ratings. Bank of China , one of the country’s big four banks, has a base rating of Baa2, but any debt it issues is rated at A1, four notches higher.
By this logic, a notch down in China’s rating should push down those of issuers that rely on government backing. In July 2007, when Moody’s upgraded China, it simultaneously upgraded seven Chinese banks. Currently, Moody’s deems about half of the state-owned entities it rates as being in the “moderate credit risk” bucket. Thirteen of those companies would fall into junk territory if their ratings were lowered a notch.
Good analysis of impact of China downgrade: will make it more expensive for Chinese firms to borrow https://t.co/fjO4bytWUn
— Simon Nixon (@Simon_Nixon) May 24, 2017
China downgrade: What the experts say
Christopher Balding, an associate professor at the HSBC School of Business at Peking University in Shenzhen, believes Beijing won’t be happy about Moody’s move:
“It is a psychological blow that China will not take kindly to and absolutely speaks to the rising financial pressures.
“it doesn’t matter much in the grand scheme of things because so much of Chinese debt is held by state or quasi-state actors and minimal amounts are international investors.”
Kit Juckes of Societe Generale says that investors won’t be badly alarmed.
Moody’s downgraded China’s credit rating overnight, to A1 with a stable outlook, from Aa3. There was an initial risk-averse reaction but this has been mostly reversed in the last few hours.
The stable outcome and the fact that rating agencies are more market-following than market-leading, not to mention recent Chinese equity market under-performance, all argue that there’s no new news in this move. And so, the market reaction is to buy the dip, yet again.
Analysts at Macquarie Group point out that Moody’s downgrade brings them into line with Fitch; so will Standard & Poor’s be the next to downgrade China?
S&P has had China on outlook negative since February 2016, indicating there is a potential downgrade brewing. But S&P currently rates China one notch above Moody’s and Fitch, so a cut would not break new ground.”
The last time Moody’s downgraded China was November 1989, a few months after the Tiananmen Square protests were crushed.
Deng Xiaoping was the boss when China last got a downgrade form Moody's https://t.co/q5erjBFTL8 pic.twitter.com/RT1GP7CGkW
— Andrew Peaple (@andypeaps) May 24, 2017
The Chinese government has tried to dismiss Moody’s downgrade.
It claims the move is based on an inappropriate, “pro-cyclical” approach, that is too gloomy about China’s current situation and future potential.
In a statement, the Minister of Finance says:
“These viewpoints overestimate the difficulties facing the Chinese economy and underestimate the capabilities of China to deepen supply-side structural reform and expand overall demand.”
China hit by Moody's downgrade
Big news from China this morning. Moody’s has downgraded the country’s credit rating for the first time in almost three decades.
Moody’s warned that China’s financial strength is likely to deteriorate in the coming years, as its economy slows and its national debt keeps rising.
It’s a one-notch downgrade, from Aa3 (the fourth-highest rating) to A1.
In a statement, Moody’s explains that Beijing is likely to drive borrowing levels higher as it tries to transform China into a consumer-driven economy.
And it fears that Beijing’s reforms will not fully offset the rise in economic and financial risk,
As Moody’s put it:
The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows.
“While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.”
The agency added that debt levels across the Chinese economy are likely to keep climbing:
“Moody’s expects that economy-wide leverage will increase further over the coming years. The planned reform program is likely to slow, but not prevent, the rise in leverage.
The importance the authorities attach to maintaining robust growth will result in sustained policy stimulus, given the growing structural impediments to achieving current growth targets. Such stimulus will contribute to rising debt across the economy as a whole.”
The move hit shares in China, sending the Shanghai Composite Index down to its lowest level since last October.
#China stocks and currency got hit by Moody's rating downgrade. Shanghai Comp drops to lowest since Oct. pic.twitter.com/YUxL4xGZuw
— Holger Zschaepitz (@Schuldensuehner) May 24, 2017
More reaction to follow...
Updated
The agenda: US dollar; Greek fallout; ECB speeches
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today we’ll be watching the US dollar. After being buffeted by Donald Trump’s travails, the greenback is clawing back some ground as investors wonder whether the Federal Reserve could raise interest rates again in June.
The minutes of the Fed’s meeting are due out tonight (7pm BST), and could give some new clues about its next step.
CMC Market’s Michael Hewson explains:
The US dollar appears to have caught itself a bit of a break yesterday ahead of the release of the latest Fed minutes.
In the last week or so market odds of a June rate rise have fluctuated quite sharply, though the consensus still remains that it remains more or less a done deal. I still have doubts about that but the Fed do appear to have boxed themselves into a corner for a move in June, and one that they may find difficult to extricate themselves from if things do go a bit pear shaped in the next few weeks.
Another central bank will also be in focus; European Central Bank president Mario Draghi is giving a speech on Financial Stability in Madrid this lunchtime.
The ECB’s chief economist Peter Praet is also on duty, and speaking at an event on “25 Years of the Association of Banks in Bulgaria” in Sofia, Bulgaria.
There may be developments in Greece, where the government has returned empty-handed from Monday night’s eurogroup meeting. Pressure to unlock its next bailout payment in time for debt repayments in June is intensifying.
In London, the court battle between Royal Bank of Scotland and irate shareholders who supported its 2008 rights issue continues. Will the investors accept RBS’s last-minute compensation offer, or will they insist on seeing ex-CEO Fred Goodwin in court?
The City of London remain subdued in the aftermath of the Manchester bombing, with the FTSE 100 not expected to move much.
Our European opening calls:$FTSE 7492 +0.08%
— IGSquawk (@IGSquawk) May 24, 2017
$DAX 12654 -0.04%
$CAC 5342 -0.11%$IBEX 10932 +0.14%$MIB 21426 +0.05%
And it’s a big day for retail news, with Marks & Spencer, Kingfisher and Dixons Carphone all reporting results (more on that shortly).
Updated
