Good morning! Here’s what you need to know.
Wal-Mart suing Visa. The retail giant is accusing the credit-card behemoth of violating antitrust statutes by setting uncompetitive swipe fees. Wal-Mart is seeking $US5 billion in claims. Visa shares were down 1% this pre-market.
Hilsenrath. WSJ’s Jon Hilsenrath says the Fed has begun pondering what a rate increase would look like when the time comes to raise them. “When the Fed first raises the rate, it will have several choices,” he writes. “It could first firm the rate at the upper end of that range, 0.25%, and proceed later to lifting it higher. Alternatively, it could go straight to a higher level of 0.5%. Or it could lift the fed funds rate from a range of zero to 0.25% to a range of 0.25% to 0.5%.”
Amazon denies TV report. Amazon is denying a report from Greg Bensinger at The Wall Street Journal reports that it is planning to release a free video-streaming service. In an email to Variety, Amazon spokesperson Sally Fouts said, “We’re often experimenting with new things, but we have no plans to offer a free streaming-media service.”
Spanish deflation and the Euro. Spain has officially entered deflationary territory as consumer prices contracted 0.2% YOY in March. As a result, the Euro is getting crushed on expectations the ECB will move aggressively to counteract the development.
Record UK trade deficit. The UK’s current account deficit now totals $US71 billion, or 5.4% of GDP, said to be a record. “However, relatively little of this is due to deteriorating net trade,” the FT says. “Most of the decline stems from falling income from UK assets overseas, compared with income from foreign-owned assets in the UK.” Services and consumer spending are continuing to drive the UK economic recovery. Services activity kicked up 3.2% YOY.
Markets. Stocks were mostly higher across the world, led by Hong Kong’s Hang Seng and Germany’s Deutsche Boerse, both at 1%. U.S. futures are higher. Gold is up slightly. Lumber contracts were up 3%.
Blackberry earnings. Blackberry turned a Q4 adjusted loss of $US0.08, beating expectations for a loss of $US0.57. Revenues of $US976 million just missed expectations. Shares were up 4% pre-market.
Personal income. At 8:30 a.m. we get personal income and outlays for February. Income and spending are both expected to have increased 0.3%. Core PCE is expected to be up 0.1%.
Consumer confidence. The University of Michigan will release its consumer confidence survey for March just before 10 a.m.. Consensus is for an increase of 0.6 to 80.5.
FT: Banks hit back at Fed stress tests. Wall Street is complaining that the process lacks transparency. “It’s not a game,” said one executive at a bank which passed the test. “If they want to strengthen the system they should say beforehand where they don’t agree with the way you measure or forecast.” And an official at Citi, whose capital plan the Fed flunked, said “every year the Fed has to pick on someone and this year it was us — it seems because of our global complexity”.
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