Here is what you need to know.
The US and Cuba held their highest level talks in over 50 years. US Secretary of State John Kerry met with Cuban Foreign Minister Bruno Rodriguez in Panama City, Panama. While what was discussed remains unclear, the event is noteworthy as it marks the highest level talks since April 1959, when then Vice-President Richard Nixon met with Cuba’s prime minister, Fidel Castro.
Chinese inflation held steady in March. China’s Consumer Price Index held at 1.4% year-over-year in March, slightly hotter than the 1.3% YoY that was expected. Meanwhile, Produce Price Index was also hotter than expected, declining 4.6% YoY versus the 4.8% YoY drop that analysts were anticipating. China’s yuan slipped 0.1% to 6.2087 per dollar.
The Hong Kong Monetary Authority intervened for a second straight day. The HKMA sold $US6.2 billion Hong Kong dollars as it was forced to defend the strong end of its 7.75 to 7.85 range. The action was taken as there has been a rush of inflows from mainland China during the recent surge in Hong Kong stocks. Hong Kong’s dollar was unchanged at 7.7500.
Hong Kong Exchange will raise quotas on investors from mainland China. The rush of money into Hong Kong stocks from mainland China has caused Hong Kong Exchange to announce a 30% increase in quotas. The quotas are designed to limit the amount of stocks mainland investors can purchase through the Hong Kong-Shanghai stock connect program. Hong Kong’s Hang Seng has rallied 15% since March 12.
Apple’s $US20,000 gold watch sold out in less than an hour in China. According to author Ben Thompson, every store in China has the watch listed as out of stock. While some customers were able to walk out of the store with the device, most are forced to wait until late-May or early-June.
Amazon has received FAA clearance to test drones. The company is hoping to use the drones to expedite its delivery process for packages travelling more than 10 miles. Reuters says, “Amazon must keep flights at an altitude of no more than 400 feet (120 meters) and no faster than 100 miles per hour (160 km per hour).”
Deutsche Bank is nearing a settlement in its Libor probe. Reports suggest the fine will be levied by authorities in the US and Britain, and is expected to top the record $US1.5 billion fine UBS paid in 2012. The bank’s unit at the heart of the investigation is expected to enter a guilty plea.
General Electric is selling a ton of real estate. GE is looking to unload most of its $US30 billion worth of real estate with Blackstone and Wells Fargo said to be the most interested buyers. According to Reuters, the company wants to focus on “improving profits from sales of industrial products such as jet engines, generators, electric grid gear and oil field equipment.
Global stock markets are mostly higher. Germany’s DAX (+1.2%) leads European stock markets higher. Overnight, China’s Shanghai Composite (+1.9%) paced the advance while Japan’s Nikkei (-0.2%) lagged. The Nikkei briefly crossed the 20,000 level for the first time in 15 years.
US economic data is light. Import and export prices are due out at 8:30 a.m. ET and the federal budget is scheduled for release at 2 p.m. ET.