Good morning! Here’s what you need to know in markets on Monday.
It’s a big week ahead in the US economy. The Federal Reserve will make its latest interest rate announcement, and a whole heap of data — including services PMI and New Home Sales — will drop. It’s also another big week for earnings.
The oil industry is facing a crisis, according to a major CEO. On an earnings call last week, Schlumberger CEO Paal Kibsgaard said “Activity fell sharply in the first quarter, as the industry displayed clear signs of facing a full-scale cash crisis,” adding that: “We experienced activity reductions worldwide, with the rate of disruption reaching unprecedented levels.”
British high street retailer BHS could go into administration on Monday. Sources close to BHS say that “things don’t look good” for the company and that it could file as early as Monday morning, the BBC reports. A spokesman told the BBC that BHS will make a statement about its future. The company employs more than 11,000 people.
Asian stocks are in the red. Asian stocks are lower across the board Monday ahead of policy decisions by the U.S. Federal Reserve and the Bank of Japan as well as major earnings reports and economic data from Japan and China expected later in the week.
China’s government debt has reached record levels. Debt in the world’s second largest economy rose to a record 237% of GDP in Q1 of 2016. That has substantially increased the likelihood of a major recession in the country, economists warn, according to a Financial Times report.
The European Central Bank is reconsidering its stance on coco bonds. So-called coco bonds — correctly known as convertible contingent bonds saw an explosion followed by a collapse last year after a mini-panic. They are designed to bolster the capital of banks, and the ECB has encouraged lenders to issue them in recent months. However, the bank is now taking stock of that belief.
Saudi Arabia’s over reliance on oil could ruin the country’s vision for the future. The Vision for the Kingdom of Saudi Arabia, released on Monday, is expected to include plans for an IPO of its state oil company Saudi Aramco, and the creation of a $2 trillion investment fund. However, plans could be affected by Saudi’s oil dependence, Bloomberg reports, citing numerous experts.
Goldman Sachs is offering a bank account for normal people. Goldman, probably the world’s most well-known investment bank will now allow customers to open an online savings account with as little as $1, the Financial Times reports.
President Obama is set to emphasise the importance of US-Europe relations. Barack Obama will set out his vision of relations with Europe with a speech in the northern German city of Hanover on Monday, trying to frame a relationship that has been less than easy throughout his presidency.
The far-right could be about to take power in Austria. The candidate for Austria’s far-right Freedom Party won more than 36 per cent of votes cast in Sunday’s presidential election, according to first projections from public broadcaster ORF, Reuters reports. This could lead to a presidential run-off