Daily roundup | Calamatta Cuschieri

European markets finished the day on a positive note following the latest batch of corporate earnings. The FTSE 100 rose 0.59% at the closing bell in London. Hargreaves Landsdown led the gainers as it climbed 2.76%.The German DAX settled 0.07% higher, as Lufthansa outperformed with a gain of 3.12%. In Paris, the CAC 40 edged up 0.05% when the session ended. European sovereign bond prices appreciated too. The yield on 10-year German Bunds dropped to 0.404% whereas the yield on 10-year British gilts dipped to 1.172%.

On Wall Street, the US government bonds traded higher, with markets digesting the dismissal of the Federal Bureau of Investigation (FBI) Director James Comey by President Trump because he was "not doing a good job." Trump defended his decision saying Comey "lost the confidence" of both Republicans and Democrats. Meanwhile, Vice President Mike Pence called the dismissal "the right decision, at the right time" and denied it had anything to do with FBI's investigation into Trump's alleged links to Russia. The cautious mood on markets has put bond yields under pressure after they rose in recent days on the back of expectations of tighter monetary policy in the World’s largest economy.

Oil

Oil prices rose after Iraq and Algeria joined Saudi Arabia in supporting an extension of OPEC supply cuts. Adding to this the US crude inventories declined by 5.2 million barrels in the week ending 5 May. This was a substantial difference from the previous week with only a decline of 0.9 million barrels. The rise in oil prices failed to recover last week’s losses with concerns about rising outputs from the US, Libya and Nigeria.

Nigeria, along with Libya are exempt from OPEC cuts weigh on current oil prices. Questions remain about the effectiveness of the cuts as Libya said production now exceeded 800,000 barrels per day for the first time since 2014 and could keep on rising later on this year.

Corporate news

Toyota, Japan’s biggest automaker forecast a slide in its operating profit for the current year, due to increased spending to push sales in a slowing US market and the continuous stronger Japanese Yen. This comes in light when data shows the strong run of US demand for cars may be ending. This is a setback in sustaining big investments in fast-growing new technologies such as automated driving functions and artificial intelligence.

China National Chemical Corp. announced that 82.2% of shares in Syngenta AG have been validly tendered, compared to 80.7% from the initial report. The mandatory quota for the $43 billion transaction was set at 67%. The Chinese investor will take control over the Swiss seeds and agricultural chemicals giant, resulting in the biggest foreign acquisition to date. Chemical Corp will be using Syngenta’s portfolio of top tier chemicals and patent-protected seeds to improve domestic agricultural output. Syngenta shares increased nearly 20% in the past year.

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.