Good morning! Here’s what you need to know in markets on Thursday.
It’s European interest rates day. The European Central Bank (ECB) will announce its latest interest and deposit rate decisions at 12.45 p.m. BST (7.45 a.m. ET), followed by a statement and press conference from ECB head Mario Draghi. The headline deposit rate is expected to remain unchanged at -0.4% but markets will be watching closely for Draghi’s comments on the impact of Brexit on Europe’s economy.
Mark Johnson, the global head of foreign exchange cash trading at HSBC, was arrested at John F. Kennedy International Airport late on Tuesday. He will appear in federal court in New York on Wednesday and has been charged with conspiring to defraud a client of the bank. He has been charged, along with former colleague Stuart Scott, with “front-running” a client order. Scott had been head of foreign-exchange cash trading for Europe, the Middle East, and Africa.
Morgan Stanley Chief Executive James Gorman said on Wednesday he has “no clue” how the bank should allocate employees in Europe following Britain’s vote to leave the European Union. Speaking on CNBC following Morgan Stanley’s second-quarter earnings, Gorman said there remains a great deal of uncertainty on the impact of Brexit, and the bank is “not having a knee-jerk reaction.”
UK retail sales are coming. Economists are expecting retail sales excluding fuel to have fallen by 0.6% in June, as the referendum on EU membership loomed. Official figures will be released at 9.30 a.m. BST (4.30 a.m. ET).
Asian stock markets are close to 9-month highs. China’s benchmark Shanghai Composite is up 0.72% at the time of writing (6.25 a.m. BST/1.25 a.m. ET), while the Hong Kong Hang Seng is up 0.62%, and Japan’s Nikkei is 0.56% higher. In the US, the Dow Jones closed up for the 9th straight day, setting a new all-time high.
Goldman Sachs’ work with Malaysian sovereign wealth fund 1MDB is under the spotlight over US government allegations that billions of dollars were diverted for the personal use of officials in the southeast Asian country. The Wall Street bank helped 1MDB raise $6.5 billion (£4.9 billion) in three bond sales in 2012 and 2013 to invest in energy projects and real estate to boost the Malaysian economy. Instead, more than $2.5 billion (£1.8 billion) was misappropriated by high-level 1MDB officials, their relatives, and associates, US Department of Justice civil lawsuits filed in court on Wednesday said.
Tesla published an update to its “top secret master plan” on Wednesday. The new plan includes solar car roofs, an autopilot feature that’s “ten times better” and car-sharing, which allows Tesla owners to rent out their vehicles for money.
Peter Thiel, the billionaire cofounder of PayPal and first outside investor in Facebook, has increased his investment in German fintech startup Deposit Solutions. He and existing investor FinLab are both increasing their holdings, as part of a €15 million (£12.5 million, $16.5 million) investment round. Deposit Solutions, founded in Hamburg in 2011, provides a platform that lets people access the best rates from multiple banks without having to open up new accounts with each lender.
Goldman Sachs has led a second round of investment to inject around 35 million reais (£8.3 million, $11 million) into Brazilian technology startup CargoX, a sign of investor confidence despite the deepest recession in decades. The Brazilian logistics firm is using mobile technology to connect companies that need freight services to more than 100,000 independent truck drivers. CargoX began to operate last March and expects 50 million reais (£11.6 million, $15.4 million) in revenue in the first year.
Shares of Japan’s McDonald’s Holdings Co jumped to their highest level since 2001 in early trade on Thursday after the company said it would collaborate on the Pokemon GO game “soon.” The stock jumped as much as 7.4% to 3,775 yen, its highest since December 2001. It gained 5.3% and 9.8% on Tuesday and Wednesday, respectively, on a media report that the fast-food chain would become the game’s first sponsor.
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