Last Week In Review: A Financial?Roundup
Monday?
Gold Trades Near New Record Before Pivotal US Inflation Print
Gold prices approached a new high of $2,353.95 as investors awaited a crucial US inflation report, with the metal rebounding from earlier dips caused by rising Treasury yields.?
Despite uncertainties, gold remains above $2,300, driven by factors like central bank demand and geopolitical tensions in the Middle East. The sudden rally since mid-February, with gold up over 17%, seems to have puzzled some observers due to the lack of a clear trigger.?
UBS Group AG raised its year-end gold outlook to $2,500, anticipating increased demand from bullion-backed exchange-traded funds after potential Fed rate cuts. However, if geopolitical tensions ease, TD Securities suggests a possible price reversal.?
Click the link below to read the full story https://www.bloomberg.com/news/articles/2024-04-08/gold-retreats-as-robust-us-data-dampen-rate-cut-expectations
Tuesday
EU leaders to call for harmonised EU bankruptcy, corporate tax laws
European Union leaders plan to advocate for harmonising bankruptcy and corporate tax laws across the 27-member bloc in an attempt to attract more private capital for the EU's transition to renewable energy and a digital economy.
They've further proposed the development of a European securitization market and enhanced supervision of cross-border financial actors. The European Commission estimates that around €650 billion annually is required until 2030 for the transition to renewable energy and digitalization.
The proposed measures align with the goal of creating a capital markets union in Europe, though progress has been slow due to various legal traditions and vested interests among EU countries.
Click the link below to read the full story https://www.reuters.com/markets/europe/ecb-holds-rates-record-highs-signals-upcoming-cut-2024-04-11/
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Wednesday?
Lloyds to cut jobs in risk management after finding it was a 'blocker' to transformation progress
Lloyds Banking Group is restructuring its risk management division, aiming to remove barriers hindering its transformation strategy. Chief Risk Officer Stephen Shelley announced a reset in the risk approach after internal review findings.?
Two-thirds of executives felt risk management impeded progress, with less than half of the workforce perceiving encouragement for "intelligent risk-taking." The restructuring may lead to around 175 redundancies, with an initial focus on non-financial risks.?
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The move coincides with potential compensation costs from the Financial Conduct Authority's (FCA) probe into motor finance commission arrangements. Analysts estimate the probe's impact on Lloyds could reach ￡3.5 billion.
Click the link below to read the full story
Thursday?
Bank investor sentiment fragile as rates shift ahead of Q1 2024 earnings report
Interest rate fluctuations are prompting investors to scrutinise bank earnings reports for insights into net interest income (NII) trends and potential credit impacts from higher borrowing costs.
Despite challenges, large banks have performed relatively well this year, with some indices showing gains. Projections anticipate declines in NII and revenue for most big banks, except for JPMorgan Chase, Bank of America, Citigroup, and Huntington Bancshares, which are anticipated to benefit from increased activity in investment banking, especially in debt markets.?
Notably, loan loss provisions are predicted to decline at most major banks. Overall, analysts suggest credit costs should remain manageable despite ongoing uncertainties.
Click the link below to read the full report https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/bank-investor-sentiment-fragile-as-rates-shift-ahead-of-q1-2024-earnings-reports-81184163
Friday?
ECB holds rates at record highs, signals upcoming cut
The European Central Bank (ECB) maintained record-high interest rates but hinted at potential cuts due to falling eurozone inflation. Despite keeping the deposit rate at 4.0% since September to control prices, the ECB has suggested a reduction at its next meeting.?
With inflation nearing the ECB's 2% target, stagnant bank lending, and sluggish economic growth, the ECB hinted at a possible rate cut to stimulate the economy. ECB policymakers are leaning towards a rate reduction in June, pending moderating wage growth and inflation.?
ECB President Christine Lagarde addressed future rate cuts during her news conference today at 1245 GMT. The ECB has left other interest rates unchanged, reflecting minimal bank demand due to excess cash reserves from past monetary policies.
Click the link below to read the full story