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German Banking Giants Announce Formal Merger Talks - EMEA Brief 18 Mar

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MichaelaIG

  • Deutsche Bank and Commerzbank have announced formal merger talks which could result in the combined bank holding one fifth of Germany's High Street banking business. 
  • Asian shares rose despite reported potential push back of agreement to end trade war. The Hang Seng gained 1%, the Shanghai Composite surged 2.3% and Japan's Nikkei climbed 0.6%. 
  • Trump's weekend tweets ramped up the pressure on General Motors to reopen Ohio manufacturing plant which recent's closure cut 1,700 jobs. 
  • OneWeb a UK based space internet start-up has secured £940 million in funding to speed up plan to launch global high-speed broadband network. 
  • US Department of Transportation have launched a probe into the FAA's Boeing 737 Max aircraft approval. 
  • U.S. stock index futures rise in expectation of Federal Reserve meeting. The Dow future rising 21 points. 

Asian overnight: Another Brexit vote and central bank decisions dominate the coming week, while the backdrop of US-China trade talks continues. Equities and the US dollar both enjoyed strong runs last week, but the gains have been built on optimism that the two largest economies will be able to strike a deal. Should this view change, then we may see risk appetite suffer. 

UK, US and Europe: The week begins on a quiet note, with little in the way of heavyweight data today, but investors will be gearing up for the Brexit vote tomorrow and the FOMC decision on Wednesday.

South Africa: Global equity markets are continuing last week's positive momentum with all major indices trading in positive territory this morning. The Shanghai Composite in leading gains having added over 1% in early trade. Commodity prices trade mixed with base metals slightly higher, precious metal prices slightly lower and oil relatively flat on the day. The rand remains weak against the majors although is slightly firmer on the day. Tencent Holdings is up 2% in Asia, suggestive of a positive start for major holding company Naspers. The BHP Group is up 1.3% in Australia, suggestive of a positive start for local resource counters. While today's economic calendar is light, this week will see another Brexit vote in UK parliament, before Theresa May asks the EU for an extension to the Brexit deadline, as well as the US Federal Reserve guiding on monetary policy as major events to watch.

Economic calendar - key events and forecast (times in GMT)

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Source: Daily FX Economic Calendar

 

Corporate News, Upgrades and Downgrades

  • Serco has won a contract from the government of South Australia to manage a remand centre, in a deal worth £62 million. 
  • JD Sports has announced that it will buy Footasylum for £90.1 million. 

Alstom upgraded to buy at Kepler Cheuvreux
Rolls-Royce raised to overweight at Morgan Stanley
Deutsche Post upgraded to buy at Jefferies
IWG upgraded to sector perform at RBC

Adidas downgraded to no position at Evercore ISI
EDF downgraded to hold at HSBC
IMCD downgraded to hold at HSBC
VAT downgraded to hold at Kepler Cheuvreux

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