Stocks struggled for direction on Thursday before the Bank of England's policy decision, with the central bank likely to keep interest rates unchanged. But as with the Federal Reserve, investors will be looking for clues as to when the first cut will come.

"The BOE is not expected to cut its policy rate today, but the MPC is expected to agree less on when to cut rates," Swissquote Bank said.

"Four MPC members out of nine are sitting in the hawkish camp; Governor Bailey has shifted his stance from 'it's too early to talk about cuts' to 'the inflation dynamics between the U.S. and U.K. are diverging.'"

The U.K.'s NIESR , a leading economic research institute, said the BOE will likely lower its key interest rate twice this year, with a first move in August, despite a weak outlook for economic growth.

Stocks to Watch

European energy majors have scope to raise buybacks alongside the next quarterly reports following a relatively muted quarter on the shareholder returns front, RBC Capital Markets said.

"We expect the next round of updates on this front alongside 2Q results, where we could reasonably expect Shell and TotalEnergies to nudge up their quarterly buyback run rates."

BP also looks likely to increase its dividend by 10% and solidify its guidance on buybacks, RBC said.

U.S. Markets:

Stock futures fell while Treasury yields extended Wednesday's small gains.

Arm, Airbnb and Robinhood shares are in focus premarket after the companies reported earnings late Wednesday. Warner Bros. Discovery and Constellation Energy are set to post results this morning.


The dollar edged higher as investors become wary that U.S. data next week could show inflation remains elevated, keeping prospects of interest rates having to stay high even after the weaker-than-expected jobs report, ING said.

Investors remain wary that another strong U.S. core CPI reading of 0.3% month-on-month "merely cements the view of the Fed keeping rates higher for longer."

The dollar could gain momentum too if the Bank of England suggests rates will be cut soon when it announces a decision at 1100 GMT, ING said.


Oil prices were trading higher, supported by a weekly fall in U.S. crude inventories, but gains were capped by a stronger dollar, lingering concerns around the timing of U.S. interest-rate cuts and a ceasefire deal in Gaza.

Analysts said a broader weakness in the market is increasing the likelihood that OPEC+ will roll over cuts in the second half of the year.

"OPEC+ members will become uncomfortable if Brent starts flirting with $80/bbl, a level which is not too far away," ING said.

Meanwhile, China's trade data showed signs of a recovery in domestic demand.

"We think the composition of economic growth is favoring commodity demand, particularly the acceleration in manufacturing and the energy transition," ANZ Research said.


Gold futures edged down, as central bank buying in China eased.

April saw the lowest amount of gold purchases by China's central bank since November 2022, and is the second month in a row the bank considerably slowed its gold buying-perhaps in response to historically high prices,

The importance of central bank gold purchases has risen since the coronavirus pandemic, and those purchases are key to gauging the future trajectory for the precious metal's prices, JPMorgan said.

A "fear of missing out" sentiment could be driving "exaggerated" near-term price movements in base metals, Macquarie said.

The U.S. and U.K. banning fresh trading in metals originating from Russia and BHP's bid for Anglo American are likely driving bullish sentiment in the short term. That creates risks for a price pullback across the board should negative surprises emerge, Macquarie said.

The easing in disinflation driving "higher for longer" rates also creates risks for prices. However, improving physical demand will likely offset any possible retreat in prices, while service PMIs globally suggest a pickup in economic growth, resulting in a healthy environment for risk assets like base metals, Macquarie said.

Iron Ore

Citi said there are divergent views over exactly where the price of iron ore is headed next, citing discussions at the Singapore Iron Ore Forum.

While bulls predict policy support from Beijing will spur a rebound this year in China's property industry--a big buyer of steel, made with iron ore--bears point to a structural oversupply in the Chinese property market and low consumer confidence.

Citi reckons iron-ore prices could head back to roughly $120/metric ton within the next three months, but said it doesn't see how prices could move sustainably higher without more significant policy measures in China.

"We continue to anchor 2Q-3Q trading around $110/ton."


Spain's BBVA Goes Hostile in Pursuit of Smaller Banking Rival Sabadell

BBVA, Spain's second-largest lender by assets, launched a hostile, $12 billion-plus takeover bid for smaller rival Banco de Sabadell, signaling a potential resurgence of dealmaking in Europe's long-moribund banking sector.

The move comes days after Sabadell's board rejected an all-stock offer from BBVA, or Banco Bilbao Vizcaya Argentaria. It underscores BBVA's continued hunger for the smaller bank, which it first tried to acquire four years ago.

BAE Systems Backs Guidance as Defense Spending Remains High

BAE Systems confirmed its forecasts that sales and earnings would continue to grow this year as governments rush to secure military hardware in the face of escalating geopolitical tensions.

The U.K. arms maker said on Thursday that its performance so far this year was in line with expectations, with defense spending remaining high in its key markets.

Telefonica Sees Guidance on Track After Profit Rises

Telefonica said it is on track to meet its 2024 guidance after first-quarter profit rose sharply, with revenue and underlying earnings increasing slightly.

Net profit for the first three months of the year amounted to 532 million euros ($571.9 million), up 79% compared with the same period last year, the Spanish telecommunications group said Thursday. The company's net result benefited from a profit from investments after its year-earlier result was hit by a decline in the valuation of investments and higher taxes.

Nexi Shares Climb After Buyback Launch

Nexi shares rose after the company launched a buyback program following higher first-quarter results that beat consensus.

At 0735 GMT, shares of Nexi were trading 7% higher at EUR6.10. Shares are down 18% year to date.

Concord Chorus Declares $1.51 Billion Hipgnosis Songs Offer Final

Apollo-backed music company Concord Chorus said that its $1.51 billion offer for Hipgnosis Songs Fund is final and won't be increased, potentially ending a bid battle for the home to the catalog of artists such as Neil Young, Shakira and Red Hot Chili Peppers.

Hipgnosis had agreed to the $1.25 a share offer from Concord on April 25, but withdrew its recommendation four days later after agreeing to a higher deal from Blackstone.


China Exports Return to Growth, But Risks Remain

China's exports swung back to growth in April after a short-lived drop in March, continuing to prove a driver for the world's second-largest economy as it struggles to revive domestic demand.

Outbound shipments rose 1.5% in April from a year ago, reversing from a 7.5% drop in March, the General Administration of Customs said Thursday. The result topped the 1.0% growth expected by economists polled by The Wall Street Journal.

BOJ's Policy Board Becoming More Concerned About Effects of Weaker Yen

TOKYO-The Bank of Japan's board is becoming more concerned about the inflation outlook as a sharply weaker yen threatens to drive up import prices, a summary of its latest meeting showed.

"While the yen's depreciation is likely to push down the economy in the short run through price rises driven by cost-push factors, it could push up underlying inflation in the medium to long run" through increases in inbound spending and domestic production, one of the BOJ's nine policy board members said at the meeting held on April 25 and 26.

Fed's Collins says she's not surprised by unwelcome inflation data

Boston Federal Reserve Bank President Susan Collins said Wednesday that she wasn't surprised by the unwelcome news on inflation given the rapid progress seen last year, but she added that the U.S. economy still needs to slow more in order to cool price pressures in the coming months.

Inflation surprised to the upside in the first quarter, with the core personal consumption expenditures price index going up at a 3.7% annual rate after two straight quarters at a 2% rate of increase.

Platinum Market Faces Largest Shortfall in Supply For a Decade

The platinum group metals market faces another year of deficits, with platinum forecast for its largest supply shortfall in 10 years.

Primary supply of platinum, or the supply directly from producers, is expected to decline by 2% on-year to around 5.68 million troy ounces, while demand is expected to remain firm across all sectors, according to a new report by Johnson Matthey.

China's Xi Enjoys Embrace of Europe's Renegades, Serbia and Hungary

Chinese leader Xi Jinping extended his tour of Europe with stops in Serbia and Hungary, the two countries on the continent that have embraced Moscow and Beijing most warmly and challenged a U.S.-led world order.

In Serbia on Wednesday, Xi was greeted on the tarmac by President Aleksandar Vucic and entered Belgrade's city center decorated with a panoply of Chinese flags flanking the main roads. Following talks with Xi, Vucic praised what he called the Chinese leader's teachings and took pride in saying he had invited him to visit more times than any other world leader.

Write to

Write to us at

(MORE TO FOLLOW) Dow Jones Newswires

05-09-24 0523ET