Daily Agenda: Corporate Earnings Show Forex Tension

Bank of England vote indicates no change in thinking; Nikkei closes above 2,000 for the first time in 15 years; Bank of America fined in U.K.


The exterior of the Bank of England seen in London’s financial district Tuesday May 6 2003. Bank of England policy makers voted 5-4 to keep interest rates unchanged this month, according to the minutes of the meeting, revealing a level of division that raises the prospect of a rate increase before the end of the year. Photographer: Graham Barclay/Bloomberg News


Corporate earnings season is in full swing in the U.S., and for companies with international franchises, a dominant theme has been the give-and-take impact of currency volatility. As the Federal Reserve edges toward tightening as central bankers elsewhere keep the printing presses in full gear, the challenges facing executives at firms that operate across multiple borders appear likely to persist.

Bank of England vote remains unchanged. The Bank of England’s released the vote count of its most recent monthly Monetary Policy Committee today, revealing another unanimous decision to keep rates at historic lows. The committee was also in complete agreement that the next move from the bank will be tightening.

Abe and Xi confer. Japanese Prime Minister Shinzo Abe met with Chinese President Xi Jinping at the Asian African Summit in Jakarta, Indonesia today. While relations between the two nations remains strained over disputed islands in the Sea of China, the tone of the discussion was conciliatory. Separately, the Nikkei Stock Average closed above 2,000 for the first time in 15 years today.

Gazprom charged with antitrust violations. After two years of investigations, European Union antitrust regulators announced charges today against Russian state-controlled energy firm Gazprom, alleging anticompetitive practices in six countries. According to a statement released by EU Competition Commissioner Margrethe Vestager, the company created artificial barriers for natural gas supplies to drive up demand and prices.

Bank of America fined in the U.K. The Financial Conduct Authority, a U.K. regulatory body, announced today a fine of roughly $20 million would be levied against Bank of America Merrill Lynch for incorrectly reporting 35 million transactions from its London office, despite earlier warnings. The FCA has fined a number of other banks for faulty reporting in recent years.

Athens leans on public coffers. Reports indicate that Greek Prime Minister Alexis Tsipras, increasingly desperate to secure money to meet domestic obligations, is pressuring municipal governments to comply with Monday’s demand that all public funds available be lent to the central government. Multiple mayors have threatened to challenge the reallocation in court.

Earnings reporting season continues. Bank of New York Mellon reported first-quarter earnings that beat expectations, with a profit of $779 million, compared to $674 million during the first three months of 2014. Fast-food giant Mc Donald’s Corp. reported disappointing results: earnings-per-share for the first three months of 2015 came in at $1.01, compared to consensus analyst estimates of $1.06 as the company witnessed “negative guest traffic is all major segments” from January through March. Telecoms product manufacturer Qualcomm’s earnings announcement, scheduled after the New York market close, will be carefully watched in light of the recent push by activist hedge fund firm Jana Partners for a breakup of the firm’s business units.