Fast Europe Open: UK services PMI, Norway interest rates decision

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Chalk up a first-quarter win for HSBC – and a much needed one, too.

HSBC beat analyst expectations for its first quarter numbers on Thursday as strong trading, rising interest rates and a weaker dollar lifted earnings in a welcome development for the bank struggling to get out from under a heavy miss at the end of last year.

Pre-tax profits, adjusted for one-offs and currency moves, reached $5.9bn, outpacing consensus forecasts of $5.3bn.

HSBC has missed a string of financial targets and is in the process of a hefty restructuring after its return on equity fell to less than 1 per cent last year. It has offset disappointment among investors with its performance by buying back $3.5bn of shares and analysts are hoping it will announce plans for more this year.

In spite of the buybacks, the bank is one of the worst-performing among its European peers this year, down 1.8 per cent. In February, its full-year earnings miss sparked a 6.5 per cent share price fall, wiping almost £10bn off its market capitalisation and giving the bank its worst day in at least five years.

Asian stock markets were mostly weaker on Thursday as investors processed the outlook for US monetary policy with a drop in commodity prices and an effort to tame financial risks in China. Sydney’s S&P/ASX 200 index and Hong Kong’s Hang Seng were both off 0.5 per cent while the Shanghai Composite dipped 0.1 per cent. Tokyo’s stock market was off on holiday.

Corporate earnings reports out today include Société Générale, Shell, Statoil, Air France-KLM, Morrisons, Next, G4S, Convatec, Inmarsat and Punch Taverns.

The economic calendar for Thursday has something of a theme to it (all times London):

  • 08.00: Spain unemployment rate
  • 08.15: Spain Markit services and composite PMIs
  • 08.45: Italy Markit services and composite PMIs
  • 08.50: France Markit services and composite PMIs
  • 08.55: Germany Markit services and composite PMIs
  • 09.00: eurozone Markit services and composite PMIs
  • 09.00: Norway interest rates decision
  • 09.30: UK Markit services and composite PMIs
  • 09.30: Bank of England UK mortgage approvals, net consumer credit and money supply
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