Good morning! Here’s what you need to know in markets on Thursday.
Australia’s Macquarie Group shed close to 15% of its US investment banking workforce this month to replenish its ranks with star performers in North America, according to people familiar with the matter. The action comes as other international banks reconsider their US investment banking strategy. Earlier this week, Japan’s Nomura laid off more than two-thirds of the bankers working at its leveraged buyouts group.
ITV is pursuing a takeover of Canadian film distributor Entertainment One, according to people with knowledge of the situation. Bloomberg reports that the London-based broadcaster has held talks with Entertainment One about a possible deal, the people said, asking not to be identified as the discussions are private. Entertainment One, which distributed Oscar-winning film “Spotlight” and owns licensing rights to kids’ cartoon Peppa Pig, has a market valuation of about $964 million (£682.6 million).
George Osborne will have to consider selling the public stake in Royal Bank of Scotland at a loss because keeping it in the public sector is bad for the bank and the economy, the outgoing head of the Treasury has claimed. Sir Nick Macpherson said in an interview with the Financial Times that it was “going to be tricky” for the state to sell all of its £19.2 billion ($27.1 billion) stake in RBS before the next election — a sale intended by Mr Osborne to deliver “the largest privatisation proceeds of all time.”
The Bank of England makes its latest call on interest rates today. The rate is expected to remain unchanged at 0.5% when announced at 12.00 p.m. GMT (7.00 a.m. ET). Minutes from the Monetary Policy Committee meeting and a Monetary Policy statement will be released at the same time.
European inflation is coming. Consumer price index changes for March are expected to show Eurozone prices still in deflation, with a -0.1% change on last year’s figure forecast. CPI is expected to show 1.2% growth on last month’s figure.
US stocks rallied on Wednesday to close near their highest levels of the year. The Dow ended up 1.1% at 17,908.3, the S&P 500 was up 1% to 2,082.4, and the Nasdaq closed 1.6% higher at 4,947.4.
Japanese shares are outperforming the rest of Asia. Japan’s Nikkei stock market continues its recovery, up 2.69% at the time of writing (6.35 a.m. GMT/1.35 a.m. ET). But China’s Shanghai Composite is down 0.01% and the Hong Kong Hang Seng is up 0.86%.
Oil is pulling back from recent 2016 highs after more warnings of oversupply and weak demand. OPEC warned of slowing demand and major exporter Russia hinted that there would only be a loose agreement with little commitments at the upcoming exporter meeting to rein in ballooning oversupply. UK Brent is down 1.43% at $43.55 (£30.84) at the time of writing (6.35 a.m. GMT/1.35 a.m. ET) and US crude is down 1.34% at $41.20 (£29.17).
McDonald’s is targeting private equity firms, including Bain Capital, MBK Partners, TPG Capital Management and Chinese state-backed conglomerate China Resources (Holdings) for its planned sale of 2,800 restaurants in North Asia, people familiar with the matter told Reuters. The US fast food giant is adopting a new business model in Asia, which is now the most intense battleground for global restaurant chains, by planning to bring in partners to own the restaurants within a franchise operation.
US annual spending on prescription medicines will increase 22% over the next five years, climbing as high as $400 billion (£283.2 billion) in 2020, according to a report released by health care information company IMS Health Holdings on Thursday. Those figures, which take into account anticipated discounts, rebates and other price concessions that have become common, represent an annual growth rate of 4% to 7% through 2020, according to the report.