EUROPE

No agreement on Brexit between the UK and EU 

Theresa May visited Dublin and Brussels last week, but no new agreement was reached on the Brexit deal. The EU restated it would not renegotiate the withdrawal agreement. However, negotiations continue on both sides to reach a favorable agreement withing that framework to satisfy both parties. The Brexit deadline is only 50 days away (March 29th) and UK’s future is still uncertain.

Source: BBC

Italy see record demand for 30-year bonds 

Italy received orders of 41 billion for 8 billion of 30-year paper on offer. This is a continuation of the record orders witnessed for the Belgian and Austrian bonds last week. The bond was priced at a coupon of 3.85%, which is on the higher side among similar markets. 

Source: Financial Times

Deutsche Bank increasing funding cost and decreasing revenue affecting share price

Deutsche Bank has paid the highest financing rates on the euro debt market for a leading international bank this year.  The bank raised a total of €3.6 billion in debt, paying 180 basis points (bp) over the benchmark for a two-year bond. It also paid 230bp over the benchmark on a seven-year bond, a higher rate than domestic Spanish lender CaixaBank, which recently raised five-year bonds at 225bp.

Deutsche’s shares have fallen 45 per cent in the past year amid worries about drops in revenues. For the full year, the bank generated a net profit of €341m — its first since 2014 — but this was 20 per cent lower than average analyst forecasts.

Source: Financial Times

EMERGING MARKETS

Eskom starts to shed Stage 4 power load 

Eskom will implement stage 4 load-shedding from 13:00 until 22:00. Stage 4 load-shedding calls for 4,000 MW to be load-shed from the national grid. It is predicted that 4 load- shedding everyday would take away 10 percent of power of South Africa thus adversely affecting the economy. Due to this, the rand has fallen by approximately 1 percent against the dollar.  

Source: Bloomberg 

Thailand’s Political issues wears out Baht 

Thailand’s Election Commission on Monday formally blocked Princess Ubolratana Rajakanya’s prime ministerial bid, days after her brother Maha Vajiralongkorn, the King of Thailand issued a rare order to denounce his sister’s unprecedented foray into politics. The commission stated that the members of the royal family were above politics and politically neutral, barring them from holding political office.  This instability lead to the currency dipping to a low of 31.64 (almost 1%) against the dollar on 8 February 2019. 

Source: CNBC

The US becomes the UK’s top oil supplier for the first time since the Suez crisis.

Keep an eye on

  • Brexit
  • US-China trade talks
  • Outcome of Venezuela’s oil diplomacy to counter US sanctions

CHINA & JAPAN

Chinese Markets rally up 

Foreigners invest a record $9 billion in Chinese stocks. Fears of a trade war led to  a loss in value for the companies which has attracted foreign investors. Additionally, the optimism over US and China reaching a trade deal has increased, leading the markets to rally.

Source: Financial Times

Softbank announces buyback  

Softbank has recently announced a buyback plan amounting to 600 billion yen (5.5 billion USD). This will constitute 71 million shares or 6.5 million of the total, based on the share price on Feb 4.  The move also raised the share price by 17.7% 

Source: Bloomberg

Iron ore prices surge above $90 a ton.

US & CANADA

Goldman to shift focus from fixed income to other areas 

Goldman Sachs is the only major bank which will refocus from fixed income to other areas on account of poor performance in the 4th quarter. An unpredictable external environment was to blame for the performance. Other banks believe that the worst is over. The bank will continue to keep trust in its commodities division. 

Source: Financial Times

Written jointly by Kaushik PSK, Sahil Bansal, Sophia Boucher, Leo Bouvier, Deepak Chathoth Narayanan, Kaline Larousse, Nisham Hussain M, Anirudh Parthasarathy and Tejwinder Randhawa.

Disclaimer: This newsletter contains information about Financial markets and college events. This information is not advice and should not be taken as such.