Mario Draghi says the ECB is comfortable with taking fresh action next month - sending the euro sliding.
Draghi: we're comfortable with acting next time
ECB press conference underway - highlights here
Bank of England leaves rates unchanged - details start here
Barclays cutting 7,000 investment bankers
Jack Ewing of the New York Times sums it up:
Main takeaways from #draghi press conference: #ECB action likely next month, concern growing about economic fallout from #Ukraine.
The press conference ended with Draghi repeating that Europe must push forwards, not go back.
"Our crisis would not have been so severe if we had more integration, not less integration", Draghi insists. The future does not lie with "the renationalisation of our economies".
What did Jeroen Dijsselbloem, president of the Eurogroup (euro area finance ministers) tell the ECB at the meeting?
Draghi says that Dijsselbloem gave a presentation on the euro area that was rich and detailed, and "to some extent positive".
Juergen Baertz of Associated Press seeks more information about the ECB's fears over the Ukraine crisis - what effect is it having on the euro?
We have been observing for several months that M3 money supply* is being driven by money from outside...and that has the effect of keeping the euro strong
#ECB's Draghi acknowledges that #ukraine-#Russia tension is currently one of the factors driving up the #euro exchange rate.
Draghi reminds the press pack of the mistake that led to the eurozone debt crisis -- the original fiscal rules were broken by Germany, France, Italy, which weakened those rules.
Other countries then ran up debt levels that were unsustainable once market lost confidence in the euro area.
#Draghi: not clear where flows from Russia go, if they go to Cyprus, a sign of renewed confidence in the economy
Mario Draghi suggests that some Russian money could flow into the Cyprus banking sector due to the Ukraine crisis - if so, that would be a sign of renewed confidence in the island.
The next question is on the rise of euroscepticism in Europe, ahead of the European elections later this month:
Draghi replies that the debate taking place at this time is welcome - it's important that we he have a discussion about the benefits and costs about living in a monetary union.
Euro are integration was v good for efficiency but we somehow left behind the equity dimension of integration, Draghi says
Draghi: Crisis Partly Due to Insufficient Integration >> More Europe! #DRINK
Was the decision unanimous, or did some council members want action today?
There was no decision, replies Draghi, coyly- this was a preliminary discussion ahead of June's meeting, remember?
Next question - how worried is the ECB that the Ukraine crisis will send the euro higher.
Draghi says that if geopolitical tensions deepen, the eurozone will be more badly hit than the rest of the world, due to close ties with Russia.
Euro going down like a knackered lift
This chart shows how the euro fell sharply as Draghi said the ECB was comfortable with acting next month:
The press pack demand more details - what is the ECB governing council comfortable with doing in June, exactly?
Draghi replies that there is a consensus on the governing council with being dissatisfied with the projected path of inflation.
Is the ECB gearing up for action in June, asks Brian Blackstone of the WSJ.
Draghi gives a lengthy answer, saying that he'd describe today's discussion as "a preview" of the discussion we are going to have next time.
The governing council is comfortable with acting next time, but it wants to see the new economic forecasts drawn up by the ECB staff first [they arrive in early June].
Next question - is the ECB worried about exchange rates, and the strength of the euro?
Draghi says that the ECB doesn't have a target for the euro, but obviously it's a very important issue.
Draghi also reiterates that ECB's independence, while it is "thankful" for recent advice from politicians et al.
Claire Jones of the Financial Times goes first -- asking when a "prolonged period of inflation" becomes a "too prolonged period of inflation".
Draghi explains that the key issue is whether medium-terms inflation expectations have become "de-anchored" (rather than people having faith that inflation will rise back to target).
Draghi: "A too prolonged period of low inflation: you have one when u see risks of deanchoring medium term infl expectations are increasing"
The statement ended with Draghi's familiar warning that eurozone country's must not falter in their reform programmes.
#ECB's Draghi reiterates that exchange rate developments will be monitored closely. #Euro jumps to almost $1.40. pic.twitter.com/QYvVC4HCku
Frederik Ducrozet of Credit Agricole reckons that Draghi's comments about credit conditions means the ECB is not close to launching QE.
Draghi commenting at length on improving credit conditions - no QE any time soon.
Draghi: exchange rate developments will be monitored closely. (looking at it doesn't change it - this isn't quantum physics)
Credit conditions have stabilising in recent months, says Mario Draghi -- easing a little for households, but unchanged for firms.
Small businesses in some eurozone countries have reported that credit availability has improved recently, but banks are still reporting that conditions are tight in a historical basis.
#Draghi - ECB ready to consider unconventional instruments - such as?
The euro's climbing against the US dollar.... now at $1.3982.
On unemployment, Draghi there are signs that the eurozone jobless rate is stabilising but remains high.
(It was recorded at 11.8% last month, sharply higher than in the UK or the US).
So far, so familiar....
Hey, someone gave Draghi the text from the April meeting. #ecb
Draghi cites "Geopolitical risks" (Ukraine, for starters), and tensions in the developing markets as key causes of downside risk to the euro area.
Draghi says inflation remains low in the euro areas, with a high degree of spare capacity.
Draghi says the ECB would act swiftly with new monetary stimulus if needed.
And he strongly reiterates the ECB's 'forward guidance' -- that interest rates will remain at their present, or lower, levels for a considerable time.
#Draghi: will maintain a high degree of monetary accomodation...will act swiftly if further easing is needed
And we're off - Draghi says today's meeting was also attended by Jeroen Dijsselbloem, head of the eurogroup.
The latest data shows that the European economy is recovering moderately, in line with the ECB's forecasts.
The ECB press conference is starting in Brussels. Can Draghi talk the euro down, or might the single currency drive higher?....
It is being streamed live here, and also on Bloomberg TV.
With eurozone monetary policy unchanged, the financial markets are - once again - looking to Mario Draghi for guidance on the ECB's thinking when the press conference starts in five minutes....
But can Draghi simply jawbone the markets again, without actually doing anything?
Without a shadow of a doubt Europes fragile economic recovery is gaining ground. Numbers are improving week in week out and were seeing signs of improved competitiveness in the periphery. But lets not forget there are still deep rooted underlying problems. Inflation remains disturbingly low and there are mumblings that economic recovery could falter if euro strength is sustained. Whats more, the general state of the emerging markets has meant a slowdown in these economies has kept a lid on global trade and continued to put downward pressure on tradable goods prices. Ukraine remains a lurking concern. If these issues become worse, Draghi may find himself with little choice but to step in and to bring Europe back to health. Further rate reductions may be the first step but the most likely remedy would be buying of assets through quantitative easing-European style.
So far Draghi has done a sound job of talking the talk, and often talking is almost as good as doing it. But investors are starting to look for actual movement - Will he, wont he has kept many on their toes for several months already. In part because Europe is seen to be recovering in spite of these underlying issues. So far, Draghi hasnt needed to make a move. However, his positioning in Europe creates an air of uncertainty, adding to the clouds of unease already hovering over many part of the globe. Murky markets in the UK, US and Asia have meant many investors are fairly muted in their risk. By the end of the year we expect the clouds to have cleared for Europe, and quite possibly the UK too, but until then all eyes will be on Draghis next move, followed by the China, and then the BOJ. Waiting for policy makers is the new investment normal in a post financial crisis world.
#ECB doing nothing gives the euro a little push higher -- will Draghi talk it back down? pic.twitter.com/ZgP1G7nPa0
The Euro has hit a two-month high of $1.3690 against the US dollar, following the ECB's decision not to change interest rates.
Phew... RT @chrisadamsmkts #Euro hits two-month high of $1.3960 after #ECB holds rates
And here's the official statement from the European Central Bank, confirming it left interest rates unchanged across the eurozone today.
At todays meeting, which was held in Brussels, the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.25%, 0.75% and 0.00% respectively.
Rate decision @ecb press release, fwiw http://t.co/ShcwMNYqBj
Here we go! The ECB has voted to leave its benchmark interest rate unchanged at the record low of 0.25%.
European Central Bank Rate Decision #ECB leaves rates unchanged at 0.25%
One down, one to go..... The European Central Bank will release its own monetary policy decision very soon, at 12.45pm BST, ahead of the press conference 45 minutes later.
The ECB governing council is in Brussels this month, rather than Frankfurt.
80% of £115bn of assets chucked into Barclays' bad bank are from investment arm. Those bonus-driven traders really did a great job then
Rob Wood of Berenberg Bank has an alternative view -- he thinks Britain's record low borrowing costs are" increasingly unnecessary and difficult to justify".
One reason to keep rates on hold for longer would be if wage growth does not pick-up through this year. But wages are already improving, particularly outside the finance and business services sectors.
We look for at least one of the rate setters to break ranks and vote for a hike after the August Inflation Report.
David Kern, chief economist at the British Chambers of Commerce (BCC), wants the Bank of England to strengthen its forward guidance, to calm calls for a rate rise everytime some decent economic data is announced:
Businesses need clarity that encourages them to increase investment, and at the moment the MPC is delivering this.
However its efforts are hampered by repeated calls for interest rate rises whenever a piece of positive news is published. Such a move would be premature.
Howard Archer of IHS Global Insight says there are plenty of reasons for the Bank of England to be considering a rate hike.
He thinks rates will remain unchanged until the second quarter of next year, though.
With the UK economy seemingly starting off the second quarter strongly following GDP growth of 0.8% quarter-on-quarter in the first quarter, the unemployment rate falling markedly to 6.9% in three months to February and annual house price inflation moving above 10.0% on the Nationwides measure in April, there is growing pressure on the Bank of England to seriously consider hiking interest rates.
More reaction to the Bank of England's decision to leave interest rates unchanged, once again...
Bank of England leaves interest rates unchanged at 0.5pc. QE unchanged at £375bn. Most unsurprising news of the day
With Forward Guidance in play what does the Bank of England do in its monthly meetings? Plunder the tea trolley? #BoE #QE
Last time Bank of England moved rates I was a bright-eyed, bushy-tailed, enthusiastic young BBC researcher *looks in mirror*
There's also no statement from the Bank of England.
No surprise there either. As Jeremy Cook of World First points out, the BoE face the media next week when it publishes its quarterly inflation report.
No statement from BOE either. Next week's QIR will be interesting however
The Bank of England has just announced that it has left UK interest rates at their current record low of 0.5%.
There's also no change in its quantitative easing programme, which remains at £375bn
Barclays call is over. The Go-To investment bank has gone.
The Bank of England should announce the scrapping of Forward Guidance at 12pm today but I very much doubt it will! #BoE #QE
Sujatha Krishnan-Barman, financial services analyst at The Economist Intelligence Unit, warns that the coming months will be tricky for Barclays (especially for staff who are laid off).
The bank will still need to reserve capital for the loans in the bad bank, which will constrain lending capacity
The large job cuts will make for a painful 12-18 months at Barclays, as the bank seeks to shift its focus from investment banking to retail operations in Britain and in emerging markets."
Barclays isn't the only company pinning its hopes on a shiny turnaround plan. Supermarket chain Morrisons has been defending its own strategy after reporting a 7% tumble in like-for-like sales in the last 13 weeks.
CEO Dalton Philips insists that the company's new "I'm cheaper" strategy of price cuts will pay off, in a tough trading environment for most supermarkets.
Shareholders must be hoping that the firm has deliberately front-loaded all the bad news, but executing such a major turnaround in the full glare of analyst scrutiny is going to be a far harder task than many realise.
Reminder - the Bank of England will announce its latest monetary policy decision in 45 minutes time.
It's expected to leave interest rates unchanged, in line with its forward guidance that there is still too much slack in the UK economy:
Traders passing the time before this month's barn burner of a Bank of England rate decision pic.twitter.com/3OLjTzND3o
Back to the Barclays conference call with analysts - and Antony Jenkins says that the 7,000 investment bank job cuts will be split between front and back office.
Front-office staff will take the hit first, while infrastructure roles will be eliminated more slowly as Barclays develops simpler systems to handle its trading.
In the FT (£), Martin Arnold explains why Barclays is shunting its European banking operations into its new bad bank:
The unit is expected to include Barclays retail banking businesses in France, Italy, Spain and Portugal, which it has been attempting to sell for several years. Losses from its 572 branches in continental Europe widened from £277m to £964m last year.
This is the apogee of the home markets strategy, pressed on the UK banks by the government and regulators, and designed to deprive UK businesses of access to normal banking services outside the UK.
Antony Jenkins talking to investors at #Barclays strategy update pic.twitter.com/IV5Acf3sDg
BARC Jenkins on job cuts "unsettling for colleagues"
On bonuses, Jenkins says that variable pay will closely track performance across the group in future.
Fixed income is main focus at Barclays. Cuts in FICC are big enough to rebalance the whole bank away from investment bank, to retail banking
On investment banking - and Jenkins says Barclays is determined to cut it down to size.
Today, our investment bank consumes too much capital, does not generate enough of a return for shareholders, and is too large (as a proportion of the overall company), says Jenkins.
Antony Jenkins insists he can slash the size of the investment bank and still build on its "leading position" in the UK and America.
08-May-2014 10:24 - BARCLAYS CEO SAYS AIMS TO BE A GLOBALLY RELEVANT INVESTMENT BANK, BASED ON STRONG US AND UK BASES
Okay, I now officially don't understand Barclays' investment banking strategy. Might work, I just don't understand it.
BARC Jenkins wants to be "go to" IB and yet cutting..
And here's a graphic showing how the 14,000 Barclays job cuts planned this year breaks down - half are in 'front office roles', 40% in operations and IT, and 10% in 'central functions'.
Jenkins using the word "powerhouse" to describe Barclays' newly merged personal and corporate division where he will "streamline management"
Africa is an important, exciting part of the world to operate a bank in, Jenkins says.
Barclays is planning to be in the top three banks for revenue in South Africa, Kenya, Ghana, Botswana and Zambia by 2017, as it aims to serve a growing middle class.
Jenkins says that Barclays UK retail banking arm is in a strong position, with15 million retail customers and 800,000 small businesses.
It should benefit from the economic recovery in the UK and connected international markets.
Barclays CEO Antony Jenkins is now presenting his plan to City analysts.
He's explaining that his new strategy will have a 'profound' impact in the way the bank runs. His plan is to focus on areas where Barclays has a competitive advantage, sell or run down areas where it doesn't, and be more rigorous on costs.
European stock markets are all up this morning, partly driven by relief that Russia beat a "tactical retreat" over Ukraine yesterday, by calling for an independence referendum in the East of the country to be postponed.
Dovish comments by Fed chair Janet Yellen yesterday is also pushing shares up --- America's central bank chief said interest rates will remain at their record lows for some considerable time yet.
Traders were worried that the Fed may suddenly tighten policies and the lack of clarity in forward guidance didnt help. Yellens remarks yesterday however, will go some way in soothing worries about unexpected rate hikes.
Adding further support to market sentiment, Russias president Putin called on separatists in Ukraine to delay a planned referendum and said his troops had been withdrawn from Ukraines border.
Over in the insurance world, Prudential has reported a 35% drop in individual annuity sales to £36m in the first quarter, which it said reflected the downturn in the market through last year as policyholders increasingly chose to defer retirement.
My colleague Julia Kollewe explains:
The Pru said the implications of the big pension shake-up in the March budget which means those reaching retirement age no longer have to buy an annuity are still uncertain.
The insurer said:
Here's Jill Treanor's full news story on Barclay's job cuts and transformation plan:
Barclays is axing 19,000 jobs in a radical overhaul of its business, including a dramatic scaling back of its troublesome investment banking operations, where almost one in three jobs are to go. More than half of the 19,000 job cuts will fall in the UK.
Facing pressure to bolster the bank's profits, Barclays' chief executive, Antony Jenkins, said: "This is a bold simplification of Barclays. We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage."
Barclays shares are pushing higher...now up 5.3% today.
Four years ago,Tony Hayward was public enemy number one in America, as thousands of gallons of oil gushed into the Gulf of Mexico each day, as the Deepwater Horizon disaster played out.
Hayward's response to the crisis, in which 13 people died, cost him his job at BP (he was heavily criticised for saying that he wanted his life back). But today, his rehabilitation in the City is complete - he's been appointed chairman of mining giant Glencore Xstrata.
In other news this morning, Halifax has reported a surprise dip in house prices in April, which may dampen talk that the market is getting out of control.
Halifax said that prices fell by 0.2% month-on-month in April, but were still 8.5% higher than a year ago. Economists had expected to see prices rise by 0.9%.
Halifax says UK house prices dipped 0.2% month-on-month but up 8.5% year-on-year in April. / Start of deceleration?
"Housing demand continues to be supported by an economic recovery that is gathering pace, rising consumer confidence, low interest rates and wage growth finally beginning to outgrow consumer prices.
"However, with supply of properties being slow to respond to market conditions, stronger demand in the past year has resulted in upward pressure on house prices."
There's rarely too much sympathy for investment bankers, especially since the financial crisis broke out. But the unions point out that thousands of less well-paid staff have suffered in recent years.
Dominic Hook, Unite national officer, says:
"These have been extraordinarily turbulent times for ordinary Barclays workers who have worked hard to keep the bank on track against a backdrop of continued uncertainty and redundancies.
The bank needs to recognise their tireless work to put customers first while jobs have been lost and give reassurances over their futures."
One bit of Bob Diamond's legacy that does remain is the Africa business. Now one of Barclays "core operations"
One for football fans -- or followers of Arsenal, anyway -- from City analyst Ian Gordon of Investec.
Barclays may soon resemble the Emirates Stadium with 20 minutes left to play there will be over 20,000 empty seats.
What does excite us is the emboldened commitment to deliver underlying costs of £16.3bn by 2015 (vs £18.5bn in 2013) against reasonable revenue give-ups. Buy.
Antony Jenkins just popped up on Bloomberg TV to outline his plan.
BARCLAYS CEO SAYS DEPARTURES NOT LINKED TO I-BANK SHRINKAGE Said with a straight face .....
BARCLAYS CEO SAYS DEPARTURES ARE `GENERATIONAL SHIFT' "Rats leaving ..................."
Sounds like Barclays is determined to pull out of European retail banking.
Speaking on CNBC, Jenkins said he could decide to sell or float parts of its European retail banking operations, which are all being put into a "bad bank".
"A sale or an IPO would be a potential option for the assets we have in there,"
William Wright, former editor of Financial News, flags up that around half the risk-weighted assets (RWA) which Barclays is shovelling into its new bad bank were already earmarked for the axe:
Not quite what it seems: #Barclays was already exiting half of the £90bn RWAs from the inv bank that it is moving to its 'bad bank'...
Barclays Shares Open +7p or 3.2% at 251p After Strategy Update >> the market likes bond traders getting the heave-ho, it seems
The City likes the sound of Jenkins' plan -- shares in Barclays jumped 3.5% at the start of trading to 251.7p, a gain of 8.7p.
Fund manager Colin McLean, of SVM Asset Management, has warned that executing Jenkins' plan will not be easy.
Speaking on Radio 4's Today Programme, McLean explained that much depends on Barclays' ability to maintain profits and revenues while pulling away from 'non-core' divisions, and shrinking its investment banking operation.
Some instant reaction to the plan
Barclays sources tell me "This is the end of Bob Diamond's bank" Investment bank cut it half
Barclays: 14,000 jobs going this year, 5,000 more by 2016; investment bank shrunk; focus on US and UK; cutting back on Asia
More than half of the 19,000 job cuts will fall within the UK, our City editor Jill Treanor flags up.
In February, Jenkins signalled that 12,000 jobs were going, with 7,000 in the UK -- around 4,000 of those roles have already been cut (between the retail and investment banking arms).
Antony Jenkins, who became CEO in 2012, says today's changes will deliver "a bold simplification of Barclays."
We will be a focused international bank, operating only in areas where we have capability, scale and competitive advantage.
In the future, Barclays will be leaner, stronger, much better balanced and well positioned to deliver lower volatility, higher returns, and growth.
The Barclays turnaround plan is designed to simplify the bank, and leave it with four key divisions:
Sweeping changes at Barclays have just been announced, as CEO Antony Jenkins finally unveils his heavily anticipated vision for the Bank.
Under the plan, 19,000 jobs will be cut over the next three years - in a bid to cut costs and drive profitability. That's up from the 12,000 announced in February -- with an extra 7,000 investment bankers being let go by the end of 2016.
Barclays to cut 7,000 investment banking jobs by 2016 - and increase job cuts across the group in 2014 to 14,000 from 12,000
The size of the investment bank is shrinking to 30% of Barclays from 50% now - "Barclays will become significantly more balanced"
Barclays today also announces the creation of Barclays Non-Core. This unit groups together those assets which do not fit the strategic objectives or returns criteria underlying the Strategy Review.
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.
Busy day ahead, with the Bank of England and the European Central Bank both holding their monthly monetary policy meetings. We're not expecting any major changes, but Mario Draghi's press conference (from 1.30pm) will be as unmissable as ever.