Here is what you need to know.
The IEA says the oil glut should ease. The International Energy Agency’s latest report says the oversupply of oil will shrink to 200,000 per day from 1.5 million, according to Bloomberg. “There are signs that the much-anticipated slide in production of light, tight oil in the U.S. is gathering pace,” the IEA’s report said. West Texas intermediate crude oil is unchanged at $41.77 per barrel.
The Bank of England kept policy on hold. In an unanimous vote, the central bank opted to keep its benchmark interest rate at 0.50% for the 85th consecutive month. The 9-0 vote marked the third straight month the decision was unanimous as the bank’s lone hawk, Ian McCafferty, moved in line with his peers back in February. The BOE also voted to keep its asset purchase program at £375 billion. The British pound is weaker by 0.3% at 1.4161.
Europe has escaped deflation. The latest release from Eurostat showed eurozone Final CPI for March ticked up to 0.0% from the previous look of -0.1%. While it’s good news that prices in the region are no longer falling, the European Central Bank’s 2% target remains a long way away. Notable was the 1.2% print in Sweden, which is starting to see the impact of negative interest rates. By comparison, prices were up just 0.5% in the UK, 0.1% in Germany, down 0.1% in France, and down 0.7% in Greece. The euro is little changed at 1.1267.
Australia’s jobs report crushed estimates. The Australian economy added 26,100 jobs in March, well above the 17,000 gain that economists were anticipating. However, part-time jobs rose by 34,900 and full-time jobs fell by 8,800. The unemployment rate slipped to 5.7% when economists were expecting an uptick to 5.9%. The Australian dollar is stronger by 0.7% at .7704.
Bank of America misses on revenue. The bank earned $0.21 per share on revenue of $19.7 billion. While EPS was in line with estimates, revenue was a bit shy of the $20.09 billion that was expected by the Bloomberg consensus. Total trading revenue came in at $3.95 billion, which was ahead of the $3.29 billion that was expected. However, fixed income revenue was down 19% versus last year and equities revenue was down 11%. “Despite volatile markets, our Global Markets business produced solid earnings,” CEO Brian Moynihan said in the earnings release.
Burberry warned. The luxury retailer said that in the six months leading up to March 31 it experienced a 1% drop in revenue, compared to a 9% gain a year ago. Additionally, it expects full year profits to be at the lower end of analysts’ expectations for the current fiscal year. Burberry ties the slowdown to an “external environment that remains challenging for luxury.” Luxury retailers around the globe are struggling in the wake of China announcing an anti-corruption and anti-extravagance campaign spearheaded by president Xi Jinping.
Jamie Dimon says the US consumer is looking good. In an interview with Yahoo Finance’s Andy Serwer, JPMorgan CEO Jamie Dimon said the US consumer is looking healthy. As evidence, Dimon pointed to a strong labour market, robust auto sales, and the fact that wages are finally starting to rise. “The balance sheet of the American consumer is pretty good, meaning how much of their income goes to serve as debt is lower than it has been in 30 years,” Dimon told Serwer.
Stock markets around the world are mixed. Japan’s Nikkei (+3.2%) set the tone in Asia and Germany’s DAX (+0.1%) leads a flat session in Europe. S&P 500 futures are down 1.25 points at 2075.00.
Earnings reporting picks up a bit. BlackRock, Delta Airlines, PNC, Progressive, Taiwan Semiconductor and Wells Fargo are among the names releasing their quarterly results ahead of the opening bell.
US economic data flows. Initial and continuing claims, and CPI will cross the wires at 8:30 a.m. ET. Then, natural gas inventories will be announced at 10:30 a.m. ET. The US Treasury will hold a $12 billion 30-year bond reopening at 1 p.m. ET. The US 30-year yield is up 1 basis point at 2.60%.
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