Good morning! Here’s what you need to know in markets on Monday.
The price of oil is rising on Monday. Oil prices edged up in early trading as output falls in Nigeria and worries about political instability in Venezuela tightened the market. At around 6:50 a.m. BST (1:30 a.m. ET) both WTI and Brent are trading up between 1.3% and 1.4%.
Asian stocks are broadly higher on Monday. Gains in Asia’s markets are limited, but nearly all the continent’s major bourses are in positive territory to start the week. At around 6:50 a.m. BST (1:50 a.m. ET) Japan’s Nikkei is up 0.2%, while the Hang Seng in Hong Kong is up 1.1%.
Carl Icahn is getting increasingly bearish. The net short position of an investment fund run by billionaire Carl Icahn sharply increased at the end of the first quarter, meaning he could be one of the biggest beneficiaries if financial markets crash, Barrons reports.
Risk on — risk off behaviour is back in the markets. “Risk on — risk off is once again the single most important driver of markets,” HSBC said in a recent note to clients.
Norway’s sovereign wealth fund plans to sue Volkswagen over the impact of its emissions scandal, the Financial Times reports. The $850 billion oil fund is expected to join the class-action lawsuits filed against Volkswagen in German courts in the coming weeks.
Another automaker is getting a fine for cheating emissions tests. South Korea’s environment ministry said on Monday that it plans to fine Nissan Motors 330 million won ($279,920) after finding that the Japanese automaker manipulated emissions tests on its Qashqai model, Reuters reports.
The European Central Bank has become too powerful. The ECB has become too powerful, but largely because politicians have foisted an increasingly political role onto it, Isabel Schnabel, one of the German government’s key economic advisors said in a newspaper interview Sunday.
Bank of England governor Mark Carney has defended the bank’s stance on Brexit. “The issue is much wider than the issues the Bank of England is concerned with,” Carney said on the BBC’s Marr Show just days after he warned that Brexit risked plunging the country into recession.
Another credit ratings agency has downgraded Saudi Arabia. Saudi Arabia’s credit rating has been downgraded by Moody’s because of the long and deep slump in oil prices, it was reported on Sunday. Moody’s cut the country’s long-term issuer rating one notch to A1 from Aa3 after a review that began in March.
It is all quiet on the data front on Monday. With Germany, Switzerland, and France all celebrating Whit Monday, economic data is very light. The biggest European data release on the day is a preliminary reading of Portugal’s Q1 GDP.