Oil prices jump Oil prices have risen from Thursday’s lows, supported by a strong yuan and a weaker dollar. U.S. crude futures CLc1 were trading at $38.66 a barrel this morning (0409GMT), over 2 percent up from their last close. The positive fluctuation was due to the Chinese yuan hitting its highest level in 2016 on Friday at 6.4877 per dollar, encouraged by a global weakening of the dollar – which could potentially provide a much-needed rise in demand. Thursday saw oil prices plummet back down after a major meeting between oil producers was stalled, as Iran refused to commit. DoJ accuse Apple of helping China, but not US The US Department of Justice have come to blows again with technology company Apple, this time claiming that Apple colluded with the Chinese government to circumvent security on its citizens iPhones.

Apple have hit back, accusing the DoJ of trying to “smear” the company with “desperate” and “unsubstantiated” claims.

This is the latest spat in the lawsuit between the DoJ and Apple, after Apple refused the FBI’s request to create software to circumvent security on the iPhone of San Bernardino killer Rizwan Farook. Apple’s general counsel Bruce Sewell responded to claims that Apple had aided the Chinese government with security requests in a conference call: “The tone of the brief reads like an indictment”. He said: “Everybody should beware because it seems like disagreeing with the Department of Justice means you must be evil and anti-American, nothing could be further from the truth.” Old Mutual to split after strategic review

Financial services firm Old Mutual (LON:OML) has announced its decision to split into four separate companies, after a lengthy strategic review into operations.

The company is listed in London and Johannesburg and has insurance, asset management and banking operations, and have seen its share price drop over the last year. Following the review, the company said its current structure was “too costly” and inefficient.

Bruce Hemphill, CEO, commented: “It’s a costly structure with insufficient synergies to justify those costs”

The announcement came as the firm reported a 4 percent rise in annual pre-tax adjusted operating profit to £1.7 billion. Its share price has dropped slightly this morning, trading down 0.81 percent at 183.80 (0905GMT).

11/03/2016

 

13:00 The ECB has released its latest monetary policy decisions from its meeting of the Governing Council today. The European Central Bank has cut its benchmark interest rate to 0 percent, causing the euro to plummet 1.5 percent and German 2 year bonds to shoot upwards. Andrew Sentance, a former Bank of England policymaker, tweeted: “Monetary policy being pushed to the limits… and beyond!” 13:10 The bank also announced the decision to expand the scope of assets that it will buy through its quantative easing programme, which will now include investment-grade corporate bonds. The decision to buy government debt suggests that the ECB have upped their game after a disappointing meeting in December. 13:13 The ECB intend to raise inflation to 2 percent, which currently could take up to 15 years. Draghi has announced the decision to cut deposit facility to -0.400 percent. 13:20 FTSE up 0.54%, CAC40 up 2.63%, IBEX up 3.29% 13:30 ECB press conference with Mario Draghi, President of the ECB, and Vítor Constâncio, Vice President – live from Frankfurt am Main, Germany ECB conducted a “thorough review” extending into the year 2018 and aim to stimulate return of inflation to levels of or at 2 percent. Draghi: “To ensure the continued smooth implementation of asset purchases, increased issue share limits for purchase of securities issued by organisations from 33 percent to 50 percent.” 13:40 Governing council expects key interest rates to remain at present or lower levels for an extended period of time. Draghi: ECB will launch four new refinancing operations – offering cheap four-year loans to banks. Loans could be as cheap as the ECB’s deposit rate, which has been cut to minus 0.4% today. “Growth dampened by volatile financial markets and the sluggish pace of implementation of structural reforms.” 13:45 “Outlook for real GDP has been revised slightly down reflecting weaker growth prospects for the global economy.” Heightened uncertainties in the global economy and broader geo-political risks” will impact on inflation and the EU economy, continues Draghi. Projections for European Area see inflation 1.3 percent in 2017 and 1.6 percent in 2018 – below its target of 2 percent. Outlook for inflation has been revised down, reflecting the fall in oil prices over recent months. Looking forward, Draghi said: “Long dynamics see path of gradual recovery observed since 2014.” Annual growth rate of loans to households remains stable at 1.4 percent in January 2016. 13:50 Public infrastructure is vital to increase investment and job creation. Draghi recommends swift implementation of structural reforms, and says schemes should be stepped up. “All countries should strive for a more growth-friendly composition of fiscal policies.” – End of Mario Draghi’s statement on today’s monetary policy decisions –

151-year old department store chain John Lewis reported a full-year profit fall of nearly 11 percent, and reduced their staff bonus to 10 percent of their salary. John Lewis Partnership pay their employees – known as partners – an annual bonus as a percentage of their salary. This year it has fallen to 10 percent, down from 17 percent three years ago. However, the group also announced a 24 percent rise in annual profits before tax to £435 million, ending 30 January. Sir Charlie Mayfield, chairman of John Lewis Partnership, said: “The partnership has delivered a healthy trading performance and increased market shares in challenging conditions.” Its supermarket division Waitrose saw a 2 percent fall in operating profit to £232.6 million, with a 0.4 percent rise in sales on a like-for-like basis. Like-for-like sales at John Lewis department stores rose by 3.6 percent.

10/03/2016

 

Volkswagen CEO to step down The US CEO and President of Volkswagen is stepping down, just months after the company was hit by an emissions scandal that rocked the car industry. Michael Horn’s departure was announced in a statement by Volkswagen this morning, and is effective immediately. It is said to be “through mutual agreement”, and he will be replaced on an interim basis by Hinrich J. Woebcken, the recently announced new Head of the North American Region and Chairman of Volkswagen Group of America. Herbert Diess, CEO of Volkswagen brand, commented: “I want personally to say ‘thank you’ to Michael Horn for the great work he has done for the brand and with the dealers in the United States,” said Herbert Diess, CEO of Volkswagen brand. “During his time in the U.S., Michael Horn built up a strong relationship with our national dealer body and showed exemplary leadership during difficult times for the brand,” he added. The long-standing German carmakers was hit late last year by the revelation that its ‘environmentally friendly’ Volkswagen, Audi and Porsche diesels were equipped with devices that lowered emissions results during tests. Almost 600,000 VW cars in the US were affected. Morrisons hit by further decline Troubled supermarket chain Morrisons have been hit by yet another disappointing set of financial results, marking their fourth straight year of decline. The company reported a 27 percent fall in annual profit on Thursday, despite signing a strategic deal with Amazon – a nine year low. It made an underlying pretax profit before one off items of 302 million pounds in the year to January 31st. Shares (LON:MRW) are trading down 1.04 percent at 199.90 (1007GMT). Oil prices dip again Oil prices fell on Thursday after hitting highs earlier this week, disappointing investors and causing further uncertainty. Expectations of more stimulus from the European Central Bank’s meeting this week, which would strengthen the dollar against the euro, also affected markets. After a 5 percent rise on Wednesday, Brent crude futures LCOc1 were at $40.57 per barrel (0805GMT), with US crude CLc1 down 32 cents at $37.97 per barrel. Analysts warned that the gains earlier this week were unusual, and that with supply still outstripping demand, the glut is expected to continue well into 2017.  

 10/03/2016

 

Premium chocolatier Hotel Chocolat has announced plans to go public, listing on the AIM market later this year. The company made £81.1 million worth of sales in the year to the 28 June, and is hoping to secure a valuation of £150 million through its IPO. The funds will be used to accelerate growth, with co-owner Angus Thirlwell calling it the “next logical step.” “This will enable us to accelerate the many initiatives that we have in place, in particular additional investment in our British chocolate manufacturing, in new stores and in our digital offering,” he continued.

09/03/2016

E.On post second straight loss UK ‘big six’ energy provider E.On posted a loss for the second year in a row on Wednesday, as wholesale electricity prices hit a record low. E.On saw annual net losses more than double in 2015 to 7 billion euros, above analysts expectations of a loss of 6.48 billion euros. The company also wrote down the value of its loss making power plants by 8.8 billion. The company cited record low wholesale prices, as well as the German government’s move towards renewable energy taking a hit to profits. It is the second year that E.On has reported a loss. Losses for Asian markets Asian markets saw sharp losses on Wednesday, falling further from its two-month highs due to weak-trade figures from China and further oil price fluctuation. The Shanghai Composite index and the CSI 300 fell around 2.4 percent before closing down 1.34 percent and 1.15 percent respectively. Hong Kong’s Hang Seng slipped 0.4 percent, with the Nikkei closing down 0.84 percent. Warnings issued for UK economy and beyond Bank of England Governor Mark Carney has spoken out against the Brexit campaign in his strongest statement yet, saying that leaving the EU could damage the UK’s financial centre. Carney reiterated that he was not making any recommendation on how to vote, but made it clear that he believes the UK’s $2.9 trillion economy could be battered by a vote to leave, with global banks choosing to move away from London. His statement came on the same day as the International Monetary Fund (IMF) warned that the global economy faces a growing “risk of economic derailment” and must intervene to promote demand. David Lipton, second in command at the IMF, said in a speech at the National Association for Business Economics in Washington on Tuesday: “The IMF’s latest reading of the global economy shows once again a weakening baseline,” he said. “We are clearly at a delicate juncture.”

09/03/2016

 

Following pressure from the government to “set out the facts, set out the figures so people can make a judgement” Mark Carney, the governor of the Bank of England, warned on Tuesday of the possible consequences if the UK is to leave the European Union following the referendum due on the 23rd of June this year. Although Carney maintained that he was not making any recommendation on how to vote, his comments are not likely to be supported by the euro-sceptics. Carey did not comment on the long-term impacts of the results of the referendum for the economy but he did state that the short-term impacts would result in a hit to the country’s growth and would lead to a vast reduction in foreign investment. Carney told lawmakers in British parliament: “One would expect some activity to move. I’d say a number of institutions are contingency planning for that possibility.” Such comments were not taken lightly from those in support of the Brexit campaign, with Conservative Party member Jacob Rees-Mogg saying it was “beneath the dignity” of the Bank of England to make “speculative” comments about Britain’s membership to the EU, and believed Carney was damaging the banks reputation. He has since felt support after attack from euro-sceptics following his seemingly pro-EU comments. “Mark Carney waded into the Brexit debate and emerged unscathed, defending the integrity of the Bank of England from accusations of bias from lawmakers, while highlighting the risks of the Brexit.” said Ranko Berich, head of market analysis at Monex Europe.  

08/03/2016