Oil prices won't top $100 in the next decade, OPEC predicts

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Crude will stay below the $100-a-barrel (bbl) level for at least the next 10 years, according to the Organization of Petroleum Exporting Countries (OPEC). Read More

Market buzz: BoE's job "done", BoA-Merrill says
Thursday 19 Apr 2018

(ShareCast News) - 1457: US-based Allergan has reportedly joined the fray for Shire, tabling a counter-offer just after the UK-listed outfitted announced it was not interested in Takeda's bid - not at that level at least. 1456: "Our economists' long-held view that the FX impact on UK inflation would fade quickly (just as it has surprised with its speed of arrival) gained support from yesterday's news. A May rate hike still looks pretty certain; the follow-up may be delayed, but the prospect of a very gradual long-term tightening of real policy rates has not gone away. However, the market sees inflation in the UK firming out to 10 years almost as fast as rates are raised, so in real terms, it thinks the Bank is pretty much done. The persistence of super-easy monetary policy in the long term sits uneasily with above-target 5y5y inflation," say analysts at BoA-Merrill. "The opposite contradiction applies in the Eurozone, as we have said before: real rate tightening being priced that does not seem justified by sub-target inflation pricing (especially with QE maxed-out and other forms of tightening on the horizon)." 1450: Spokesman for Russian central bank reportedly says that the likelihood of a rate cut at the April policy meeting is now lower, adding "not ruling out various decisions", although impact on inflation from weaker rouble to be "limited". 1415: German lobby group WirtschaftsVereinigung Metalle has warned that the sanctions against Russian aluminium maker United Co. Rusal could force some European plants to shut and leave carmakers facing supply shortages. 1330: The headline gauge for the Federal Reserve bank of Philadelphia's regional manufacturing index edged higher from a reading of 22.3 for March to a reading of 23.2 in April. However, the key new orders sub-index nearly halved, retreating from 35.7 to 18.4. 1125: Shire shares are up almost 7% so far this morning amid speculation that Japan's Takeda has made an offer. The FT's Alphaville is noting a "strong rumour" of a ballpark offer of £46.50 per share in cash and equity, made in the past 48 hours or so. 1102: Reading across from US investment bank results, Citi expects European banks to report similar strong results in aggregate, although US dollar weakness looks set to weigh on year-on-year results on a local currency basis. Credit Suisse and Deutsche Bank have already given markets guidance, and Citi's PBT forecasts for both banks are broadly in-line with consensus. Barclays guidance "is outdated and we see a risk of a PBT miss", Citi said. For UBS, which has not provided guidance, the analysts see potential for a "small PBT beat". Buy Credit Suisse is a 'buy' and Top Pick, and UBS is a 'buy' too. BARC and DB are both 'sell'. "We expect to see consensus EPS upgrades at CS, combined with further re-rating potential. We also expect UBS to upsize buybacks in due course. In contrast we still see risk of consensus EPS downgrades at BARC and DB." 1025: In terms of read across from Debenhams highlighting challenging trading conditions and higher exceptional costs, analyst at RBC Capital Markets see the statement as a small negative for the apparel retailers today, in particular a negative read for Marks & Spencer, but sees brighter times ahead. "However, given current trading should now improve we think this may create a buying opportunity for UK apparel stocks." Yesterday, Jamie Constable at broker N+1 Singer said that while fundamentals remain tough, the improved UK wage and inflation data, together with the recent strength of sterling, make the case for a re-examination of retailers and other beneficiaries of a potential turnaround in consumer confidence spending. Analysts advised looking at names including Boohoo, Dunelm, Greene King and Restaurant Group, as sentiment improves. 0953: UK retail sales fell more than expected in March as consumers stayed away from shops amid snow and sub-zero temperatures swept in by the so-called Beast from the East, according to new data from the ONS. Sales fell 1.2% from a month earlier, led by a 7.4% drop in fuel transactions, the Office for National Statistics said. Analysts had on average expected a far smaller 0.5% drop. 0951: Unilever shares are down 2% after the consumer goods behemoth revealed sales growth slowed slightly in the first quarter. Volume growth was solid enough to give directors confidence of hitting its full-year sales and margin targets, but prices remain stodgy. 0854: Thursday's London open market report sees stocks edging higher in early trade as investors eyed the latest retail sales data. At 0850 BST, the FTSE 100 was up 0.2% to 7,332.41, while the pound was down 0.2% against the euro at 1.1459 and 0.1% lower versus the dollar at 1.4156. 0844: Pest controller Rentokil is the highest riser even though it reported underlying revenue growth slowed in the first quarter because of the impact of the hurricane in Puerto Rico and cold weather in the US that delayed the emergence of spring pests. 0841: Ultra Electronics is the biggest faller so far after the Serious Fraud Office opened a criminal investigation into suspected corruption in the conduct of the defence contractor's business in Algeria.

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