The DAX index has started the week with slight losses. In Monday’s European session, the DAX is trading at 12,611.50, down 0.18%. On the release front, Eurozone Final CPI edged down to 1.3%, matching the forecast. On Tuesday, Germany and the eurozone release ZEW Economic Sentiment.
One of the key stocks on the DAX, Deutsche Bank, is under pressure, and dropped 0.91% on Friday. Germany’s largest bank started off the Monday session with losses as well, after the ECB said it was considering implementing ownership-control procedures against the bank’s two largest shareholders, Qatar’s royal family and HNA, a Chinese conglomerate. The aim of the review is to ensure that an investor is financially stable and untainted by money-laundering or other crimes. If either shareholder fails the test, Deutsche Bank shares would likely fall.
Eurozone inflation levels have been softening in the second quarter. Eurozone Final CPI edged down from 1.4% to 1.3% in June, marking its weakest gain in 2017. Germany may be the catalyst of the eurozone’s economic recovery, but the bloc’s largest economy has not been immune to low inflation. Final CPI improved to 0.2% in June, compared to -0.2% in May. The ECB has set an inflation target of 2%, but German and eurozone inflation numbers remain well below that threshold. The ECB has acknowledged that economic conditions have improved, but insists that it has no plans to taper its ultra-loose monetary policy unless inflation levels move higher. The current asset-purchase plan is scheduled to wind up in December, and we’re unlikely to see any changes in monetary policy unless inflation moves considerably higher in the second half of the year.
With the US labor market close to capacity and the unemployment rate at just 4.4%, economists are puzzled why this hasn’t pushed inflation to higher levels. The Federal Reserve is also at a loss to explain the lack of inflation, but Fed Chair Janet Yellen insists that it’s only a matter of time before inflation moves higher. In testimony before a Senate committee last week, Yellen insisted that it was “premature to conclude that the underlying inflation trend is falling well short of 2 percent”, and that with a strong labor market “the conditions are in place for inflation to move up”. However, the markets remain skeptical that the Fed will make a move before the end of the year, with the odds of a December hike at just 43%, according to the CME Group.
Fed policymakers weren’t smiling after Friday’s consumer inflation and spending numbers. CPI edged up to 0.0%, short of the forecast of 0.1%. There was no relief from Retail Sales, which declined 0.2%, missing the estimate of 0.1%. This marked the third decline in the past four months. Consumer spending accounts for 2/3 of US economic activity, so it’s no surprise that weak spending has also meant weak inflation, despite Yellen’s claim that low inflation is a temporary phenomenon. The economy had a weak first quarter, with growth of just 1.4%. If the second quarter follows suit, investors could sour on the US dollar in favor of other assets, and the euro could take advantage.
H&M Group Q4 Sales Excl. VAT Down 4% YoY – Quick Facts
(RTTNews) – The H&M group (HNNMY.PK, HMRZF.PK, HEN.L) reported that, in the fourth quarter of 2017, sales including VAT amounted to 58.45 billion Swedish kronor compared to 61.10 billion kronor, prior year. Sales excluding VAT amounted to 50.4 billion kronor compared to 52.7 billion kronor, a decrease of 4 percent compared to the corresponding quarter last year. In local currencies, sales decreased by 2 percent.
For the full-year 2017, H&M group’s sales including VAT increased by 4 percent to 231.7 billion kronor from 222.9 billion kronor, prior year. Sales excluding VAT amounted to 199.99 billion kronor compared to 192.27 billion kronor. In local currencies, sales increased by 3 percent.
The H&M group said its growth during the year was dampened by the fact that the sales development in the fourth quarter was significantly below the company’s own expectations. The H&M brand’s online sales and sales of the group’s other brands continued to develop well. Meanwhile, the quarter was weak for the H&M brand’s physical stores.
Global Brokerage’s bankruptcy case triggers stay of legal actions brought by investors, ex-clients
As of the commencement of Global Brokerage’s Chapter 11 case, the actions have been automatically stayed as against the Debtor.
A number of legal actions against Global Brokerage Inc (NASDAQ:GLBR), formerly known as FXCM Inc, are stayed as a result of the filing of a bankruptcy petition by the broker on December 11, 2017. On Thursday, Counsel for Global Brokerage filed documents about the bankruptcy with the New York Southern District Court, thus informing all parties in the cases of the start of the Chapter 11 procedure.
The plaintiffs in several cases, including the actions brought by former clients of the broker, as well as actions brought by former investors in the so-called “mega lawsuit”, and the action concerning the allegedly “Black Swan” events from January 15, 2015, are all affected by the bankruptcy.
The documents filed with the Court explain that as of the commencement of Global Brokerage’s Chapter 11 case, the actions have been automatically stayed as against the Debtor.
Pursuant to Section 362 of the Bankruptcy Code, the filing of a bankruptcy petition automatically stays inter alia:
”the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title . . . Tradebuddy.onlineand] any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title.”
The “First Day Hearing” in the bankruptcy case was held on Wednesday, with the Court granting a number of Motions launched by the Debtor, including authorizing Global Brokerage to continue using its existing bank account and business forms, as well as a Motion for the entry of an order establishing notification procedures and approving restrictions on certain transfers of interests in the debtor. The Bankruptcy Judge has also granted the Motion for payment of the so-called Trade Claims.
The Judge also scheduled a Combined Hearing for January 17, 2018, in line with the timetable proposed by Global Brokerage’s Counsel. At this hearing, the Bankruptcy Court will consider, among other things, the adequacy of the Disclosure Statement and confirmation of the Prepackaged Plan for Chapter 11 bankruptcy.
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