Good morning! Here’s what you need to know in markets on Wednesday.
1. Voters are due to go to the polls across the Netherlands today in a closely watched general election, reports the BBC. The race, dominated by PM Mark Rutte’s centre-right party and that of anti-immigrant politician Geert Wilders, is seen as a test of nationalist feeling.
2. The Federal Reserve is expected to raise interest rates for the second time in three months on Wednesday, encouraged by strong monthly job gains and confidence that inflation is finally rising to its target. A rate hike at the conclusion of the Fed’s latest two-day policy meeting is already baked into bond yields and financial markets overall, with investors putting the likelihood of such a move at 95%, according to CME Group’s FedWatch program.
3. Japan’s Nikkei share average slipped on Wednesday, dragged down by a firmer yen as investors await the U.S. Federal Reserve’s monetary policy outlook later in the day. The stock under the spotlight was again Toshiba Corp , which nosedived 12% after it said it would consider a sale of Westinghouse. The Nikkei ended 0.2% lower at 19,577.38 points, while the broader Topix dropped 0.2% to 1,571.31 points,
4. Christine Lagarde has signalled that the International Monetary Fund will upgrade its UK growth forecasts next month, as she said the global economy was gathering momentum, reports the Telegraph. Lagarde, the fund’s managing director, said the world appeared to be at a turning point, with solid output seen across the world at the end of last year.
5. Support for Scottish independence is at its highest ever but it might not be the best time for Scottish First Minister Nicola Sturgeon to hold a new referendum, a survey by ScotCen’s Scottish Social Attitudes said on Wednesday. The survey showed 46% of the Scottish public backing independence from UK, twice the level of support in 2012.
6. The biggest Wall Street and European banks are still losing market share to local rivals in Asia, after failing to win back business following a difficult 2015, reports the FT. The latest data from industry monitor Coalition showed foreign banks attracted just 19 per cent of the Asia investment banking wallet last year, down from 27 per cent in 2014.
7. The Bank of England’s chief operating officer and Deputy Governor for Markets and Banking Charlotte Hogg resigned from the central bank on Tuesday over questions about a possible conflict of interest. The announcement of her resignation came just minutes after the influential House of Commons’ Treasury Select Committee made clear it did not support her appointment to the deputy governor role.
8. Unilever has urged the UK government to take steps to safeguard national corporate champions and questioned the strength of the country’s takeover code after Kraft Heinz’s audacious £143bn bid for the consumer goods group last month, reports the FT. Although the US company has less than half of Unilever’s annual sales of €53bn, the Warren Buffett-backed bid threatened the survival of the century-old group.
9. U.K. government-bond futures often move sharply in the 24 hours before sensitive economic reports are released, an analysis of trading data shows, a phenomenon that suggests some investors may be trading with knowledge of official statistics before they are made public, reports the Wall Street Journal. The analysis highlights Britain’s unusual practices in the handling of market-moving data: Over a hundred people, from Prime Minister Theresa May to dozens of policy advisers and press officers, can get to see some of the figures a day before they are published.
10. U.S. oil prices rose more than 2% in early Asian trade on Wednesday, recovering from a three-month low after industry data showed a surprise drawdown in U.S. crude stockpiles. U.S. West Texas Intermediate crude was trading up 73 cents, or 1.5%, at $US48.45 a barrel by 2314 GMT, having earlier risen more than $US1 to $US48.87.
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