Bloomberg Business
-Stocks rise, bonds fall: The MSCI Asia Pacific Index gained 0.9 percent overnight, with Japan’s Topix jumping 1.5 percent as the yen weakened. Equities in Europe were slightly higher, with the Stoxx 600 Index gaining 0.1 percent at 10:18 a.m. London time after falling as much as 0.7 percent earlier in the session. S&P 500 futures were 0.3 percent higher. Euro area bond yield curves are steepening ahead of a sale of French 50-year debt while Treasuries also dropped.
-Italy’s $5.7 billion bank fund: Italian officials and bank executives have agreed to create a €5 billion ($5.7 billion) fund to help troubled lenders in the country. With an estimated €360 billion of bad loans still outstanding in Italy’s banking system, the size of the fund is already being questioned. The fund will get its first test in the coming weeks as UniCredit SpA pushes ahead with the initial public offering of Banca Popolare di Vicenza SCpA it is running. The fund launch comes as Italian Prime Minister Matteo Renzi’s efforts to reboot the Italian economy continue.
-Deglobalisation at Nomura: Japan’s largest brokerage, Nomura Holdings Inc., plans to shut down its European equity operations, according to a person familiar with the matter, with the company confirming that it will close certain businesses in Europe and “rationalize” parts of its operations in the Americas. Shares in the brokerage closed 7.4 percent higher after Bloomberg News reported the move.
-U.K. inflation highest in 15 months: Consumer prices in the U.K. rose 0.5 percent from a year earlier for March, exceeding expectations and the highest level since December 2014. Core inflation rose to 1.5 percent. The earlier Easter holidays played a part in the higher numbers as air fares rose 23 percent in the month, compared with 2.7 percent in March of last year. Markets seem to be looking through the seasonality factor, as the pound has extended gains since the data was released. Elsewhere in currencies, hedge funds have cut their net bullish positions on the U.S. dollar to the lowest in almost two years.
-Wells Fargo’s wrong way oil bet: Wells Fargo & Co. chose the wrong time to expand its oil-lending. The bank targeted some of the least creditworthy borrowers in the shale industry, demanding oil and gas reserves as collateral, a type of financing thought to be low risk. With oil now hovering close to $40 a barrel, the value of those reserves held as collateral has plummeted. This pressure was clearly illustrated yesterday when Chesapeake Energy Corp. pledged almost all of its oil and gas reserves, real estate and derivatives contracts to keep its $4 billion credit line. U.S. shale production, meanwhile, is seen reaching a two-year low.
CNN Money
-Betting on Italy’s banks: Italian banks staged a relief rally in the morning after the government announced (statement in Italian) that the country’s strongest financial firms had agreed to set up a massive bank bailout fund. Italian banks have taken a big hit this year on concerns about their huge non-performing loans.
-Global markets overview: Looking across the rest of the world, stock markets are soft. U.S. stock futures are trying to hold onto Monday’s closing levels. European markets are all slipping in early trading. Asian markets ended with mixed results. The Nikkei index in Tokyo was a standout performer with a 1.1% rally. In the bond market, prices for 10-year government bonds across Europe and the U.S. are slipping as yields move up. Crude oil futures are rising by 1% to trade around $40.75 per barrel. Gold and precious metal prices are also looking firm.
– Stock market movers — LVMH: The luxury retail group LVMH (LVMUY) has lost its luster after reporting quarterly results that disappointed investors. Shares are dipping by about 4% after the company said global sales increased 4% in the first three months of the year compared to the same period in 2015. Sales were particularly weak in France, as tourist numbers slumped in the wake of the Paris attacks last November. LVMH owns a variety of brands, including TAG Heuer, Donna Karan and Marc Jacobs.
– Monday market recap: U.S. stock markets put in a weak performance on Monday. The Dow Jones industrial average dipped by 0.1%, the S&P 500 pulled back by 0.3% and the Nasdaq declined by 0.4%.