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| Eurozone crisis live: Dutch parliament to debate budget | Eurozone crisis live: Dutch parliament to debate budget |
| (40 minutes later) | |
| 9.25am: While we're on topic, a quick look at the Budapest Stock Exchange, which is not something we do often. | |
| Basking in the glow of a potential bail-out, Hungary's BUX share index rallied 4.2% yesterday. But, it appears the exuberance was short-lived and the index is currently up by just 0.1%. | |
| 9.16am: After yesterday's news that relations had warmed between Hungary and the EU, politicians are now talking about the potential size of any loan from the EU and IMF. And the suggestion is it's going to be smaller than the €20bn bail-out Hungary received in 2008. Antal Rogan, head of the Hungarian parliament's economic committee said: | |
| In 2008 the government thought it would take out a €7bn-€10bn loan, whereas whereas the IMF experts decided on double that amount. In contrast to that this will be definitely smaller. | |
| 9.01am: Dutch politicians are sounding more positive this morning about passing a budget before an early general election in September. | |
| Finance minister Jan Kees de Jager said talks have been constructive so far and discussions would continue with at least three opposition parties. He said on Dutch TV: | |
| I have had good, constructive talks with a number of factions. | |
| Kees de Jager is part of the outgoing government, which is struggling to strike a deal to make spending cuts and bring the deficit down to the EU limit of 3% of GDP. The current challenge facing the politicians is to win support for cuts so they can submit plans to Brussels by April 30. The Dutch parliament will debate the plans later today. | |
| 8.42am: It's a bit of a rollercoaster on European stock markets today, although shares are largely flat. The Dax and the CAC are back in positive territory again. | 8.42am: It's a bit of a rollercoaster on European stock markets today, although shares are largely flat. The Dax and the CAC are back in positive territory again. |
| 8.33am: The Dax in Frankfurt and the CAC in Paris have turned negative, trading both down about 0.2%. The FTSE is still positive and has risen further, up nearly 38 points, or 0.7%, at 5756. | 8.33am: The Dax in Frankfurt and the CAC in Paris have turned negative, trading both down about 0.2%. The FTSE is still positive and has risen further, up nearly 38 points, or 0.7%, at 5756. |
| 8.17am: European shares are supported by a crop of strong corporate results, although gains are limited. The FTSE 100 index in London is up nearly 20 points at 5737, a 0.3% increase. Germany's Dax and France's CAC have also edged higher. | 8.17am: European shares are supported by a crop of strong corporate results, although gains are limited. The FTSE 100 index in London is up nearly 20 points at 5737, a 0.3% increase. Germany's Dax and France's CAC have also edged higher. |
| 8.09am: Right here is a quick round-up of today's company results across Europe. German chemical giant Bayer saw net profit jump 53% to €1.05bn in the first quarter, with sales surging to a record €10.05bn. | 8.09am: Right here is a quick round-up of today's company results across Europe. German chemical giant Bayer saw net profit jump 53% to €1.05bn in the first quarter, with sales surging to a record €10.05bn. |
| Deutsche Bank fared less well: lower investment banking revenues amid the European debt crisis and a onetime writedown reduced its net profit by a third to €1.4bn. Spanish bank Santander posted a 24% drop in first-quarter net profit after it set aside money to cover rising loan defaults. | Deutsche Bank fared less well: lower investment banking revenues amid the European debt crisis and a onetime writedown reduced its net profit by a third to €1.4bn. Spanish bank Santander posted a 24% drop in first-quarter net profit after it set aside money to cover rising loan defaults. |
| Here in the UK, AstraZeneca's chief executive David Brennan quit after six years in the post, a victory for shareholders unhappy with the drugmaker's threadbare drugs pipeline. He will be replaced by finance chief Simon Lowth as interim CEO from 1 June. And the new chairman-designate, former Volvo boss Leif Johansson, will take over from Louis Schweitzer on the same day - three months earlier than planned. The pharma group's underlying profits fell 19% in the first quarter. | Here in the UK, AstraZeneca's chief executive David Brennan quit after six years in the post, a victory for shareholders unhappy with the drugmaker's threadbare drugs pipeline. He will be replaced by finance chief Simon Lowth as interim CEO from 1 June. And the new chairman-designate, former Volvo boss Leif Johansson, will take over from Louis Schweitzer on the same day - three months earlier than planned. The pharma group's underlying profits fell 19% in the first quarter. |
| Barclays set aside more money to cover compensation for mis-sold payment protection insurance, which pushed it to a statutory loss before tax of £475m. Royal Dutch Shell unveiled an 11% increase in first quarter earnings to $7.3bn. And consumer goods giant Unilever said it had a good start to the year and was on track to hit its full year targets. | Barclays set aside more money to cover compensation for mis-sold payment protection insurance, which pushed it to a statutory loss before tax of £475m. Royal Dutch Shell unveiled an 11% increase in first quarter earnings to $7.3bn. And consumer goods giant Unilever said it had a good start to the year and was on track to hit its full year targets. |
| Swedish carmaker Volvo reported record sales for a first quarter, of SEK 78.8bn. In the US, Chrysler enjoyed its best first quarter in 103 years, making a net profit of $473m. | Swedish carmaker Volvo reported record sales for a first quarter, of SEK 78.8bn. In the US, Chrysler enjoyed its best first quarter in 103 years, making a net profit of $473m. |
| Markus Huber at ETX Capital says: | Markus Huber at ETX Capital says: |
| Yesterday, European equities managed to extend their rebound off Monday's low to a second day with solid US corporate earnings outweighing much weaker than expected US durable goods orders and pushing aside while most like only temporary concerns about the upcoming second round of French election in early May. | Yesterday, European equities managed to extend their rebound off Monday's low to a second day with solid US corporate earnings outweighing much weaker than expected US durable goods orders and pushing aside while most like only temporary concerns about the upcoming second round of French election in early May. |
| Early on today, equities in Europe are little changed to slightly higher with the FOMC meeting turning pretty much out to be a non-event. Today it is Europe's turn, with several top tier companies reporting earnings today. So far Barclays, AstraZeneca, Bayer and Shell all beat expectations while Deutsche Bank posted a miss for the first quarter. It will be very interesting to see if markets are able to build on yesterday's gains again. Of interest today will also be the Italian 6 month T-Bill auction which should not pose too much of a problem and the eurozone consumer and company confidence figures with traders waiting to see if resurfacing worries about Spain and weaker stock markets have managed to filter through to consumer and companies already. | Early on today, equities in Europe are little changed to slightly higher with the FOMC meeting turning pretty much out to be a non-event. Today it is Europe's turn, with several top tier companies reporting earnings today. So far Barclays, AstraZeneca, Bayer and Shell all beat expectations while Deutsche Bank posted a miss for the first quarter. It will be very interesting to see if markets are able to build on yesterday's gains again. Of interest today will also be the Italian 6 month T-Bill auction which should not pose too much of a problem and the eurozone consumer and company confidence figures with traders waiting to see if resurfacing worries about Spain and weaker stock markets have managed to filter through to consumer and companies already. |
| 7.51am: Cut and grow? Here are some morning musings from Gary Jenkins of Swordfish Rearch. | 7.51am: Cut and grow? Here are some morning musings from Gary Jenkins of Swordfish Rearch. |
| Mr Draghi said that "We've had the fiscal compact, what is most present in my mind now is to have a growth compact…" Fine words and in line with the thinking with the likes of François Hollande and some other European politicians who have had enough of austerity. | Mr Draghi said that "We've had the fiscal compact, what is most present in my mind now is to have a growth compact…" Fine words and in line with the thinking with the likes of François Hollande and some other European politicians who have had enough of austerity. |
| Whilst growth is most certainly required the only problem the politicians have is that if they want to spend in order to obtain it then someone has to fund them and I am not sure how the market would respond to a change of strategy at this time. Ms Merkel did say that she supported Mr Draghi's concept as he has proposed it, which is very much "cut and grow". That works well on rose bushes (so I am told) but not convinced it will work in Europe. Methinks the ECB might well continue to be very closely involved which might go against Mr Draghi's instincts but is in line with the gradual creep of the ECB into the hands of the politicians… | Whilst growth is most certainly required the only problem the politicians have is that if they want to spend in order to obtain it then someone has to fund them and I am not sure how the market would respond to a change of strategy at this time. Ms Merkel did say that she supported Mr Draghi's concept as he has proposed it, which is very much "cut and grow". That works well on rose bushes (so I am told) but not convinced it will work in Europe. Methinks the ECB might well continue to be very closely involved which might go against Mr Draghi's instincts but is in line with the gradual creep of the ECB into the hands of the politicians… |
| 7.48am: Here is today's agenda: | 7.48am: Here is today's agenda: |
| Dutch parliament meets to debate budget Italian 6 month T-Bill auction 11.00 CBI retail sales (UK) 10.00 Eurozone consumer confidence 13.30 US jobless claims | Dutch parliament meets to debate budget Italian 6 month T-Bill auction 11.00 CBI retail sales (UK) 10.00 Eurozone consumer confidence 13.30 US jobless claims |
| All times are BST | All times are BST |
| 7.30am: Good morning and welcome back to our rolling coverage of the world economy and eurozone debt crisis. For once positive company earnings have displaced concerns about Europe, at least for the moment. Results from Apple helped sentiment yesterday, while Credit Suisse, BBVA, Electrolux and Boeing also beat analysts' estimates. | 7.30am: Good morning and welcome back to our rolling coverage of the world economy and eurozone debt crisis. For once positive company earnings have displaced concerns about Europe, at least for the moment. Results from Apple helped sentiment yesterday, while Credit Suisse, BBVA, Electrolux and Boeing also beat analysts' estimates. |
| Last night's statement from the Fed also painted a slightly more positive picture of the American economy. The Fed upgraded its forecasts for economic growth and revised down its unemployment projections. Concerns about rising prices crept into the statement, making more quantitative easing less likely, which could give the dollar a boost. | Last night's statement from the Fed also painted a slightly more positive picture of the American economy. The Fed upgraded its forecasts for economic growth and revised down its unemployment projections. Concerns about rising prices crept into the statement, making more quantitative easing less likely, which could give the dollar a boost. |
| Company results take centre stage again today in the absence of major economic data. The Dutch parliament meets to try and pass a budget ahead of the EU deadline on 30 April. | Company results take centre stage again today in the absence of major economic data. The Dutch parliament meets to try and pass a budget ahead of the EU deadline on 30 April. |
| As far as data goes, the latest weekly US jobless claims numbers are expected to show a small decline from last week's surprise rise to 386,000, dropping back to 375,000, says Michael Hewson, senior market analyst at CMC Markets UK. | As far as data goes, the latest weekly US jobless claims numbers are expected to show a small decline from last week's surprise rise to 386,000, dropping back to 375,000, says Michael Hewson, senior market analyst at CMC Markets UK. |
| In the UK, CBI retail sales for April are expected to show a slight fall from March's flat reading to -4. | In the UK, CBI retail sales for April are expected to show a slight fall from March's flat reading to -4. |
| Hewson adds: | Hewson adds: |
| With political divisions opening up across Europe pressure is building on Germany and the ECB to do more and rein back on the current austerity based approach. While this does appear to have prompted a slight shift in tone from Germany's Angela Merkel, she pointedly ruled out any form of stimulus spending to boost economic growth, due to concerns about inflationary pressures. | With political divisions opening up across Europe pressure is building on Germany and the ECB to do more and rein back on the current austerity based approach. While this does appear to have prompted a slight shift in tone from Germany's Angela Merkel, she pointedly ruled out any form of stimulus spending to boost economic growth, due to concerns about inflationary pressures. |
| Yesterday's surprise news that the UK economy contracted by 0.2% in Q1 appears to have been shrugged off by investors as a statistical quirk which will get ironed out in the coming weeks, judging by how the news was received across the markets yesterday. The pound initially dropped back but soon recovered its poise. | Yesterday's surprise news that the UK economy contracted by 0.2% in Q1 appears to have been shrugged off by investors as a statistical quirk which will get ironed out in the coming weeks, judging by how the news was received across the markets yesterday. The pound initially dropped back but soon recovered its poise. |