- A three-year legal battle has concluded with the EU enforcing stricter copyright laws that could affect the business models of tech giants like Google and Facebook. The new reform plans to protect artists and publishers whose work has been widely spread on the internet, by making the tech firms responsible for detecting and removing content that infringes copyright law. Google will has been very critical about the new reform saying that it will restrict freedom of expression, as its video-sharing platform YouTube will be one of the most affected by these changes. Google shares were down 0.63% at the close of Tuesday after the new laws were announced.
- Trading in Australasia was mixed during the Wednesday session. The Nikkei 225 closed 0.23% lower mainly driven by a 4% percent drop in Nissan shares, the ASX 200 closed 0.01% higher and the South Korean Kospi closed 0.15% lower despite a recovery in Samsung Electronics pushing it higher throughout the day. There was a positive close in China as both the Shenzhen and the Shanghai composite closed 1% and 0.85% higher respectively.
- European stocks are expected to be mixed at the opening of the trading session on Wednesday as they struggle to find direction amid lingering fears of a US recession, whith the FTSE and the DAX expected to open slightly higher while the CAC points to a lower open.
- Oil prices were slightly lower on Wednesday as an industry report showed a rise in output in the US, but the losses are expected to be capped as issues with rolling blackouts in Venezuela continue to disrupt supply from the region, pushing prices higher. US crude futures fell 9 cents to $59.85 and Brent was down by 12 cents at $67.85.
- Metal prices are trading marginally higher this morning despite a slightly firmer dollar
Asian overnight: Another indecisive Asian session saw losses in Japan offset by gains in China, Hong Kong and Australia. The NZD dropped overnight after the RBNZ warned that they could cut rates soon in response to slowing economic growth. Given the fact that the FOMC dot plot now points towards zero rate hikes in 2019, we are clearly seeing a more dovish central bank outlook offset some of those growth fears.
UK, US and Europe: Today’s focus will be on the UK, with a host of indicative votes taking place in parliament. British MPs prepare to vote on their preferred Brexit options as the Prime Minister is still trying to get backbench Tory support for her deal. The options put forth by the Speaker are likely to range from cancelling Brexit altogether to leaving the EU without a deal. The ability to converge on any single form of Brexit is going to be key, although any such measure also has to be able to pass through the EU which makes the task even tougher.
Global equity markets have rebounded in the near term, although recessionary concerns remain, in part fueled by the inversion of US yield curves, which are said to be a precursor to contracting economic growth.
South Africa: The firmer dollar sees the rand back near its weakest levels of the last month.
Economic calendar - key events and forecast (times in GMT)
Source: Daily FX Economic Calendar
12.30pm – US trade balance (January): deficit to rise to $60 billon from $59.8 billion. Markets to watch: USD crosses
2.30pm – US EIA crude inventories (w/e 22 March): stockpiles fell by 9.6 million barrels a week earlier. Markets to watch: Brent, WTI
Corporate News, Upgrades and Downgrades
- Imperial Brands expects revenue at the upper end of guidance despite warning that first half reveneus will come under pressure.
- Sports Direct has proposed a takeover for Debenhams, worth 5p for each share, a 127% premium to Tuesday’s closing price. The offer requires the acceptance of Mike Ashley becoming CEO.
- Bellway reported a 12.4% rise in revenue for 2018, to £1.49 billion, while pre-tax profit rose 8.7% to £313.9 million
Barry Callebaut upgraded to buy at Goldman
Ferguson upgraded to overweight at JPMorgan
Greencoat Renewables raised to outperform at RBC
Pets at Home upgraded to buy at Citi
Axa downgraded to add at AlphaValue
EON downgraded to neutral at Oddo BHF
Gem Diamonds downgraded to hold at Berenberg
Inditex downgraded to hold at Jefferies
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