Good morning! Here’s what you need to know in markets on Thursday.
The European Central Bank risks tearing the eurozone apart for the sake “of short-term financial stability,” and the ECB needs to reverse course before it is too late, Deutsche Bank argues.A new note from the bank’s group chief economist, David Folkerts-Landau, says that the ECB has gone badly off course and needs to correct itself before it makes some “catastrophic” mistakes.
Mario Draghi is speaking. The ECB chief will give a speech at the Brussels economic forum at 8.00 a.m. BST (3.00 a.m. ET). He may well address the central bank’s corporate bond buying programme, which kicked off across Europe on Thursday.
Oil is still charging. UK Brent is up 0.42% to $52.73 (£36.34) at the time of writing (6.30 a.m. BST/1.30 a.m. ET) — a fresh 11-month high. US crude is up 0.59% to $51.53 (£35.51).
Vodafone on Thursday announced an effective takeover of leading New Zealand pay TV provider Sky Network in a NZ$3.4 billion (£1.7 billion, $2.42 billion) merger combining digital platforms with entertainment content. Under the complex deal, loss-making Sky will acquire all of the shares in Vodafone NZ for that sum in cash and shares, giving Vodafone Group a 51% stake in the combined group and a cash consideration of NZ$1.25 billion, to be funded through new debt.
Citigroup, the US lender that employs about 9,000 people in Britain, will “rebalance” operations if the UK votes to exit the European Union later this month, according to an internal memorandum.“A vote to leave the EU is likely to have implications for our UK operations,” James Bardrick, Citigroup’s country officer for Britain, wrote in the memo, which was seen by Bloomberg. “To continue to serve our clients and maintain efficient access to those markets currently enabled through the EU passporting regime, we would likely need to rebalance our operations across the EU.”
Legendary investor George Soros is back to making big bets. Soros has returned to trading after a long hiatus, according to Gregory Zuckerman at The Wall Street Journal. He has recently directed a series of large bearish bets, selling stocks and betting on gold, the report said.
British house prices are set for their first fall in nearly four years over the next few months as the European Union referendum and a new tax on landlords turn buyers away, property valuers said on Thursday. Reuters reports that for the first time since November 2012, a majority of members polled by the Royal Institution of Chartered Surveyors said prices over the next three months were expected to fall, though most still saw an increase over a 12-month horizon.
Amazon launched a British version of its AmazonFresh food delivery service on Thursday in a long-anticipated move by the world’s largest online retailer to break into the UK grocery market. Britain has one of the world’s most developed online markets, with the big four supermarkets Tesco, Sainsbury’s, Wal-Mart’s Asda and Morrisons competing with specialist delivery firm Ocado.
Goldman Sachs has cut staff in Russia in the past few months and more cuts are expected by the end of the summer, sources familiar with the layoffs told Reuters. One source said Goldman had sacked traders, back office staff and investment bankers in the past few months. A Goldman stock trader was fired in May, a second source said.
Dominic Chappell, the man who bought BHS for £1 last year, was accused on Wednesday of being a liar and a thief by former members of management. Chappell denied the allegations to MPs, who were hearing evidence on the collapse of the department store as part of a Parliamentary inquiry. Chappell, a former racing driver who has twice been bankrupt, bought the department store from retail tycoon Sir Philip Green’s Arcadia Group last year for a nominal sum.
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