5 Things to start your day – Bloomberg Europe Edition
Good morning. Further stress signal in the US banking sector, the UK government may break its Brexit vow, a fresh attack in Ukraine, and the Bank of Japan’s decision. Here’s what people are talking about.
Banks increased emergency borrowings from the Federal Reserve for the second week in a row, underscoring ongoing stress in the financial system following a string of bank collapses last month. The US central bank had $155.2 billion of loans outstanding to financial institutions through two backstop lending facilities in the week through April 26, compared with $143.9 billion the previous week, according to data published Thursday. Bank stocks have come under renewed pressure this week after deposit outflows from First Republic Bank saw its shares plunge to a record low.
The UK government has signaled it will break its pledge to carry out a “bonfire” of legislation dating from Britain’s membership of the European Union. Business and Trade Secretary Kemi Badenoch told a private meeting of Euroskeptic Conservative MPs on Monday that it would not be possible to remove around 4,000 laws by that deadline, according to a person present at the meeting. Prime Minister Rishi Sunak has repeatedly promised that he would review or remove all EU laws from the British statute book by year-end. Instead, Badenoch suggested the government would focus on removing a smaller number, estimated at around 800, the person said.
Russia launched a new missile attack on Ukraine early Friday morning, with several explosions heard in the capital Kyiv. It’s the first strike in the capital in more than a month. Explosions were also heard in a number of regions across Ukraine, including in Kremenchuk, Dnipro, Mykolayiv, Poltava and Cherkasy, according to Ukrainian TV channel TSN. By preliminary estimates, Ukrainian air defence shot down 11 cruise missiles and two UAVs over Kyiv, city’s military administration chief Serhiy Popko said in Telegram. While no casualties and no destruction have been reported in the capital, missile debris hit a power line in one of the districts, according to Popko.
The Bank of Japan scrapped its guidance on future interest levels and called for a long-term review of its policies while keeping its main stimulus measures unchanged at the first meeting under Governor Kazuo Ueda’s leadership. The central bank maintained its rock-bottom interest rate and asset purchase settings at the end of a two-day gathering Friday, as expected by almost 90% of economists surveyed by Bloomberg. The bank adjusted the wording of its forward guidance, ditching its reference to Covid-19 and its expectation that interest rates will stay at current or lower levels. The phrase indicating a clear easing bias has been a fixture in policy statements since October 2019.
European stocks are on track to advance, with the spotlight on corporate results. EU finance ministers and central bank governors hold a meeting in Stockholm, chaired by Swedish Minister for Finance Elisabeth Svantesson. Expected data include GDP figures from Germany, Italy and Spain, as well as CPI for countries including France and Germany. Mercedes, Eni and Neste are on tap for earnings.
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