Here is what you need to know.
The Bank of England holds. The central bank held its key interest rate at a record low 0.50% and its asset purchase program at £375 billion. Bank of England members voted 8-to-1 for a fifth consecutive meeting to keep things as is. The British pound is down 0.2% at 1.5155.
The Swiss National Bank still thinks the franc is overvalued. The Swiss National Bank kept its Libor Rate at a record low -0.75% while maintaining its target range between -0.25% and -1.25%. The central bank once again noted its currency, the franc, remains “significantly overvalued,” and said it will remain active in the foreign exchange market to “to influence the exchange rate situation, as necessary.” The Swiss franc is lower by 0.3% at .9858 per dollar.
The Bank of Korea held its key rate at 1.50%. South Korea’s central bank held its Base Rate at 1.50%, as expected. The central bank noted the US economy continues to improve, but that growth in China and other emerging markets was remained slow. The bank said, “Looking at the Korean economy, although domestic demand activities have sustained their paces of recovery, driven by consumption, the trend of declining exports has persisted while the improvement in economic agents’ sentiments has been inadequate.” South Korea’s won weakened by 0.2% to 1181.53 per dollar.
The Australian jobs report was a stunner. The Australian economy added 71,400 jobs, crushing the drop of 10,000 jobs that was expected. The last time Australia had a number this big was right before the Sydney Olympics in 2000. Full-time employment surged by 41,600 and the unemployment rate dipped to 5.8%. The two-month addition of 127,500 jobs was the largest since January 1988. The Australian dollar is stronger by 0.9% at .7296 per dollar.
Anything South Africa is under pressure. On Wednesday, South African President Jacob Zuma unexpectedly announced he was removing his finance minister, Nhlanhla Nene, from office. South Africa’s currency, the rand, plunged to an all-time closing low of 14.9730 per dollar in response to the news. Sellers of the rand are back at it today with the currency currently down 1.4% at 15.1850 per dollar. In addition, South African bonds are being hit hard with the 10-year yield spiking more than 100 basis points to above 10%.
Glencore announced a new plan to ease its debt burden. The commodities giant announced it would pay down $18 billion of debt over the next year, several billion dollars more than the original plan. CEO Ivan Glasenberg noted, “Glencore is well placed to continue to be cash generative in the current environment and at even lower prices. We retain a high degree of flexibility and will continue to review the need to act further as required.” The stock is up almost 10% in London.
Sales are cratering at Jos. A. Bank. Shares of Men’s Warehouse were down 13% in after-hours trade after the company announced it was booking a $90.1 million charge for its failed investment in Jos. A. Bank, which saw sales slump 35.1% quarter-to-date. CEO Doug Ewert said Men’s Warehouse “underestimated the impact to the near- term performance as we began to execute the difficult, but necessary, corrective steps. We remain confident that these steps will restore a long-term, sustainable, profit model and reshape the business for a healthy and growing Jos. A. Bank.” Excluding the charge, Men’s Warehouse earned $0.50 per share on revenue of $27.15 million.
Atlassian is IPOing. The maker of business development and collaboration software priced its initial public offering at $21 per share, above the $19 to $20 range that was expected. The 22 million shares for sale will raise $462 million. Atlassian will trade under the ticker ‘TEAM.’
Global stock markets are mostly lower. Spain’s IBEX (-0.6%) leads the way lower in Europe after Japan’s Nikkei (-1.3%) paced the decline in Asia. S&P 500 futures are outperforming, up 6.00 points at 2040.25.
US economic data picks up a bit. Initial and continuing claims and import/export prices are set for release at 8:30 a.m. ET before natural gas inventories are announced at 10:30 a.m. ET and the Treasury budget is released at 2 p.m. ET. The Treasury will reopen $13 billion 30-year bonds at 1 p.m. ET. THe US 30-year yield is unchanged at 2.97%.
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