European Central Bank and the OPEC oil cartel both gather in the Austrian capital, but markets underwhelmed by outcomes
Summary: ECB’s Brexit worries
Draghi wants UK to Remain in Europe
No deal at OPEC
MEETING ENDS WITH NO DEAL
Cinderella moment at as reporter loses shoe.
Mind the door!
6.01pm BST
There were no fireworks from Vienna, with the European Central Bank keeping rates on hold and revising its inflation and growth figures only slightly higher, while Opec failed to agree on an output ceiling on oil.
So investors remained cautious ahead of the US non-farm payroll numbers due on Friday. The final scores showed:
5.42pm BST
#Euro slightly softer after #ECB June decisions & #Draghi remarks. Eurozone #inflation forecast for 2016 revised up less than some expected
5.29pm BST
Here’s our report on the Opec meeting stalemate:
Lingering hopes that Saudi Arabia and Iran could put aside their regional power struggle and reach a deal on oil production levels to help stabilise the volatile crude markets have been dashed.
A ministerial meeting of the Opec oil-producing cartel broke up in Vienna without agreement on Thursday, with Tehran refusing to support a plan by Riyadh and others to freeze their crude output.
Related: Opec fails to reach agreement on oil production levels
5.26pm BST
Back with Greece and the European Central Bank, and the prospect of reintroducing a waiver allowing the Bank to buy the country’s bonds:
#ECB can decide on reinstatement of #Greece waiver any time after #ESM decision on disbursement, acc to sources familiar with the matter.
4.31pm BST
There was talk of country quotas following the Opec meeting but.....
4.19pm BST
Back with oil, and after a surprise build up of stocks reported on Wednesday by the American Petroleum Institute, there was a fall in inventories according to the latest weekly Energy Information Administration.
EIA figures showed US crude stocks fell by 1.37m barrels, and despite being lower than the forecast 2.5m barrel draw, the news has given some support to oil prices which were hit by the earlier lack of agreement by Opec.
4.03pm BST
Earlier of course there were also some US jobs figures, ahead of the non-farm payroll numbers on Friday. The ADP private sector payroll number came in exactly in line with forecasts, but ING Bank warns not to read too much into that as far as the non-farms are concerned. ING economist James Smith said:
Although ADP’s estimate of employment remained below 200,000 in May, we would caution against relying on it too heavily as a guide for tomorrow’s labour report.
In advance of this week’s hotly-anticipated labour report, ADP’s estimate of May’s private payrolls came in (rather magically) exactly on consensus at 173,000. This figure may not have been adjusted for the Verizon strike, which the Bureau of Labor Statistics has already said will remove approximately 35,000 workers from May’s overall employment and this in principal, supports the view that non-farm payrolls (NFP) will come in below 200,000 again tomorrow.
3.49pm BST
It’s been a busy couple of hours, what with the European Central Bank and the collapse of BHS. And of course Opec.
On the outcome of the oil producers’ meeting, chief market analyst at FXTM Jameel Ahmad said:
There was never a chance that Opec would cut production today, meaning there are no real surprises from the outcome of this meeting resulting in OPEC failing to reach an output deal.
While the oil markets are finding themselves under pressure and encountering selling momentum as a result of the announcement, it is important to point out that the oil markets have been meeting sellers around $50 now for the past fortnight and this is currently seen as a “top” for the commodity.
3.39pm BST
Ranko Berich, Head of Market Analysis at Monex Europe, agrees that today’s ECB press conference wasn’t a hummdinger:
“Very little was added to the mix during today’s press conference apart from a start date for corporate bond purchases*. The bottom line is that the outlook for inflation remains grim, but the ECB is not likely to act until it has no other choice, due to vague hopes of energy prices propping up inflation in the near future.
3.27pm BST
Elsewhere in Vienna, the news that oil producers have not agreed on a ceiling on output ( not exactly a big surprise) has sent crude prices lower.
But Opec members are putting a brave face on it, and Saudi Arabia has said it is open to a policy change at the end of the year.
*OPEC PRESIDENT SAYS `GOOD MEETING'; EXCELLENT UNDERSTANDING pic.twitter.com/JcDVQ2qQZC
While #OPEC did not agree to reinstate production ceiling, big news for market is Saudis are "open" to potential policy change at year-end.
3.26pm BST
The sad collapse of BHS this afternoon mean there will be even more pressure on its former owner, Sir Phillip Green, when he testifies to parliament later this month.
Many employees facing the loss of livelihood will no doubt be paying close attention to the scheduled appearances of Dominic Chapell and Sir Philip Green before the work and pensions committee over the next two weeks.
The question of how company executives were able to extract so much money from the retailer during its 16 year drift into liquidation will no doubt be high on the agenda, especially since the failure of a retail brand like BHS has been something that any visitor to its half empty stores in recent years might have made an educated guess at.
For those looking for a silver lining respite will be scant. BHS and Austin Reed had a combined high street presence of over 280 stores, with closures likely to make a tangible impression on some high streets.
As with all fire sales, the best assets will no doubt be picked up cheaply and resurrected by more successful retailers, which will make some dent in the job losses, but many will not as the British High Street continues to undergo a painful correction to accommodate changing shopper habits.
Related: BHS rescue bid fails with loss of 11,000 jobs
3.21pm BST
That wasn’t the most dramatic press conference in the European Central Bank’s history, so what did we learn?
Mario Draghi has joined the ranks of global policymakers warning against Brexit. The ECB president singled out this month’s referendum as a clear ‘downside risk’ to growth.
The ECB has a view that the UK should remain in the European Union, because the European Union would benefit from its presence.
And we believe the UK would benefit from being in the European Union too.
“Inflation rates are likely to remain very low or negative in the next few months before picking up in the second half of 2016 ...
Supported by our monetary policy measures and the expected economic recovery inflation rates should recover further in 2017 and 2018.”
ECB staff projections including revisions. Overly dovish. pic.twitter.com/bxU9l2ZoOT
Very limited revisions to ECB staff projections charted. pic.twitter.com/PcvSWADsZ0
2.35pm BST
Bad news in the UK retail sector. Attempts to find a buyer for BHS, the department store, have failed.
BHS set to go into liquidation, 11,000 jobs at risk
BHS head office staff likely to be made redundant today, shops will stay open until stock sold out
Funds from Portuguese-backed consortium never materialised, last minute Sports Direct "bid" nowhere near what administrators wanted
BHS brand likely to disappear from high street, unless someone buys brand name from liquidators...
2.30pm BST
And finally....
Q: What structural reforms does the ECB most want to see implemented by eurozone governments?
#Draghi on Italy without ever naming it: high unemployment SHOULD BE incentive to labour market reforms much more than high interest rates
2.23pm BST
Q: Given Europe’s persistently weak inflation rate, should the ECB alter its target (currently 2%) to something more achievable?
Dreadful idea, Draghi insists.
Draghi dodges the 1% inflation target issue by waffling as listeners lose both concentration and the will to live #ECB
Central banks have done QE and gone negative, but raising the inflation target would hurt central bank credibility says Draghi.
2.18pm BST
Tom Fairless of the Wall Street Journal then puts Draghi on the spot, asking:
Q: Would the ECB would really halt its QE programme next March, given it expects inflation to be just 1.6% in 2018?
We can adjust the program in a way that could meet the desired size. We are willing and ready to do so.
#Draghi doesn´t find it easy to answer whether the 2018 1.6% for inflation is OK for the ECB. If it wasn´t the ECB would have to do more.
2.14pm BST
Back at the ECB meeting, Draghi is asked about speculation that the decision to abolish the €500 note is part of a secret plot to get rid of cash.
It’s simply not true, the ECB president insists. We are printing more €200 notes, to make up for the end of the €500 one.
#ECB's Draghi: Decision on €500 note has nothing to do with abolition of cash. (Bank notes in circulation has risen) pic.twitter.com/lpsPEwCFJA
2.12pm BST
More drama in Vienna! The Opec meeting of oil ministers has broken up, without a deal on production caps.
That’s not a great surprise, given Iran’s opposition to the supply curbs which some countries, including Saudi, had apparently been pushing for.
WTI did not like that non-OPEC agreement news #OPEC #OIL pic.twitter.com/OWwo0PCWVn
2.07pm BST
Another question: Is Mario Draghi worried about the impact on savers from record low interest rates?
Draghi agrees that this is a concern in several countries, not just Germany (where savers are particularly irked).
For interest rates to be higher tomorrow, they must be low today.
Draghi: low int rates are a symptom of a weak economy. Low/0 rates are the right measure to restore/strengthen economy- Draghi
Draghi defends low/negative rates. "The low i rates are a symptom of a weak economy.. where there is an excess of savings over investments"
2.03pm BST
The markets aren’t happy that the ECB hasn’t welcomed Greek bonds back to the fold today:
Greek2y yields jump as ECB's Draghi says ECB has taken no decision on #Greece waiver. pic.twitter.com/midIF1YVOE
1.58pm BST
Mario Draghi then declares that the European Central Bank believes Britain should stay in the European Union.
Asked about the June 23 referendum (which he called a ‘downside risk’) Draghi tells the press conference in Vienna that:
“The ECB is ready for any outcome.”
Of course... the UK and Europe and the eurozone are mutually beneficial.
The ECB has a view that the UK should remain in the European Union, because the European Union would benefit from its presence.
The ECB is ready for all contingencies.
ECB's Draghi: "I have said it before and will say it again, the UK and EU and eurozone are mutually beneficial"
1.54pm BST
Q: Why has the ECB not reinstated the ‘waiver’ on Greek bonds, allowing them to be used for its programmes?
Draghi says the governing council discussed the issue, and acknowledges the ‘significant progress’ which Greece has made recently with its lenders.
1.49pm BST
Onto questions...
Q: Why are the ECB’s forecasts not more optimistic, given the stimulus measures it has taken?
1.47pm BST
The Juncker plan should be enhanced to be effective according to #Draghi. This is a half of a criticism.
1.47pm BST
Mario Draghi ends his statement with his traditional call for eurozone governments to implement structural reforms.
He singles out the EC’s “Juncker Plan”, saying this spending plan needs to be boosted.
zzz.....*DJ Draghi: Focus Should Be on Actions to Raise Productivity, Improve Business Environment
1.44pm BST
The ECB has only made small adjustments to its inflation forecasts, dashing hopes that price inflation could get close to the 2% target by the end of 2018.
#ECB raises 2016 inflation forecast from 0.1% to 0.2%, Keeps 2017, 2018 unchanged at 1.3% and 1.6%.
1.39pm BST
Mario Draghi then warns that the risks to the global economy are to the downside.
And he cites this month’s British referendum as one downside risk, along with other geopolitical risks.
That's all we needed to hear; inflation negative for next few months; risk to downside, brexit, geopol etc #dovish
Draghi: Inflation likely to remain very low or negative in the next few months before picking up in the second half of 2016
1.35pm BST
Draghi says the ECB has revised its growth forecast for 2016 to +1.6%, from +1.4% before.
However, it has left its forecasts for the next two years unchanged.
Outlook for GDP revised up for 2016, broadly unchanged 2017 & 2018-- @ecb's #Draghi
1.34pm BST
Mario Draghi starts his press conference by confirming that the governing council left borrowing costs at record lows.
They will stay at their current levels, or lower, for an ‘extended period’. And he confirms that the ECB will continue to run its QE bond-buying scheme until March 2017, or until inflation is returning back to target.
1.27pm BST
Draghi is early! You can watch the press conference here.
1.27pm BST
Mario Draghi, president of the European Central Bank, is about to hold a press conference in Vienna, after leaving interest rates at record lows.
Here’s what investors and commentators will be watching for:
1.19pm BST
A tiny gobbet of US economic news, while we wait for the ECB press conference.
US private sector companies created 173,000 new jobs in May, which (remarkably) is exactly what Wall Street had expected. Yes, economists got a forecast right.
ADP right in line at 173K
How often does this happen? 173 print 173 exp
12.49pm BST
Breaking: The European Central Bank has left eurozone interest rates unchanged at their current record lows.
No change from the ECB. Anything else would have been a shock.
12.44pm BST
Here comes the ECB’s monetary policy decision......
12.39pm BST
Reporting from OPEC’s meeting is more dangerous than I thought.
Footage has just emerged of a cameraman in Vienna clattering into a glass door, while trying to film Iran’s Bijan Namdar Zangeneh.
Intrepid cameraman runs into glass door chasing Iranian oil minister at Vienna hotel ahead of #OPEC meeting - https://t.co/T5FUwhUsq3
@IraSpitzer @graemewearden @YouTube Our cameraman Rae Hurring battling the barriers to good journalism at OPEC
12.22pm BST
Bond trading giant Pimco has now issued its new Global Outlook report.
It warns that the world economy is “Stable But Not Secure”, and sees growing dangers as monetary policy reaches its limits.
12.05pm BST
European stock markets have crept up this morning, as investors watch for developments in Vienna.
The FTSE 100 is up 27 points, or almost half a percent. That ends a two-day losing streak, and means the index is almost flat for 2016 again.
Related: FTSE recovers ahead of Opec and ECB as Johnson Matthey update pleases
11.40am BST
Back in the UK, investment management firm Pimco has predicted that there’s a decent chance Britain will vote to leave the EU later this month.
Reuters has the details:
PIMCO managing director Mike Amey put the likelihood of Britain voting to stay in the EU at about 60 percent. Bookmakers price the chance of a “Remain” vote higher, at about 80 percent, while opinion polls suggest the two sides are evenly split.
“There’s a pretty significant chance that we leave,” Amey told reporters. “It would be a significant event for the UK, but it wouldn’t be a globally systemic event. It wouldn’t derail the global economy.”
11.19am BST
Sebastien Marlier, senior commodities editor at the Economist Intelligence Unit, agrees that little is expected from today’s OPEC meeting:
It comes so soon after the failed Doha meeting, as OPEC countries seem increasingly divided and as supply disruptions have already done much to lift prices.
11.11am BST
Mystery of missing shoe solved!!
It belonged to Leslie Hayward, the managing editor of @EnergyFuse.
It anybody found a shoe in the #OPEC stairwell, it's mine pic.twitter.com/nmU0PJRGg0
11.02am BST
This chart shows how the Brent crude oil price has risen steadily since January, when it hit just $28 per barrel.
10.58am BST
Today’s meeting comes two months after Opec failed to get any deal on production cuts at an emergency meeting in Doha.
The oil price has actually risen by over 10% since then, as production cuts by non-Opec members have eliminated the supply glut.
Who says lack of #OPEC unity is a bad thing? Oil price up $10 since Doha debacle in April. #OOTT pic.twitter.com/CvgGrVP4ks
10.45am BST
Journalists in Vienna are being offered a hearty array of biscuits and crisps to keep them on the go:
Opec delicacies: @JavierBlas2 deeply missing delicious cakes of Park Hyatt hotel @StuartLWallace pic.twitter.com/3Y2ndLuBBq
10.39am BST
Two tables of ministers in #OPEC meeting room. Iran and Saudi Arabia are not the same side here or on most issues. pic.twitter.com/Dhr4fYe3pD
10.25am BST
The Financial Times reckons Saudi Arabia’s is changing its strategy, after telling reporters that Opec should “steward the market” [see earlier post].
Their correspondents Anjli Raval and David Sheppard write:
Khalid Al Falih, speaking at the Opec secretariat prior to the group’s twice-yearly meeting, said the group should “encourage the rebalancing to take place” and said the kingdom wanted to avoid any oil shocks, dampening fears Saudi Arabia is preparing to raise production significantly.
“Whatever action we take will be taking into consideration that the market is doing quite well by itself, so we will be very gentle in our approach,” said Mr Al Falih.
10.18am BST
The OPEC meeting began with a warning that the global economy remains weak.
Dr. Mohammed Bin Saleh Al-Sada, Qatar’s Minister of Energy and Industry, told delegates that:
With regard to global economic growth, the story remains somewhat patchy. While the estimated 2016 growth of 3.1 per cent is higher than that of 2015, it has been revised down slightly since our December meeting.
World oil demand this year remains healthy, with growth of over 1.2 million barrels per day. The majority of this will come from non-OECD countries, but OECD countries are also expected to see some growth in every quarter this year.
From the supply perspective, in the first half of this year, we have seen a further downward revision to the 2016 outlook for non-OPEC supply. We now anticipate a contraction of 740,000 barrels per day this year. This is more than 2 million barrels per day lower than the growth of 2015.
This trend stems mainly from reduced cashflows, investment cutbacks and the deferral or cancellation of projects.
The five-year average for OECD commercial stocks is currently at a surplus of around 360 million barrels. It is important that we take note of this figure on a downward trend.
A more stable and balanced market will be beneficial to all.
Opening address to the 169th Meeting of the OPEC Conference https://t.co/g0ZysLNIkg
10.03am BST
Alex Schindelar, news editor at Energy Intelligence Group, reckons few OPEC ministers will push for production curbs in Vienna.
Nothing too illuminating out of the #Opec "gang bang" except most ministers do not seem to have much problem with doing nothing.
9.59am BST
Energy analyst Joe McMonigle is tweeting from the Opec meeting. He doesn’t see any signs of a production cap today:
Much talk from ministers about "letting the market work" during the pre-OPEC meeting press avail. #OPEC #OOTT
Libya and Nigeria #OPEC ministers expressed optimism at being back at full capacity in just months. If so, very bearish for prices. #OOTT
9.51am BST
Inside the OPEC fun house pic.twitter.com/3NtVEo2za9
9.47am BST
OPEC have now cleared the room of journalists, after allowing them to poke dictaphones under ministerial noses in the hope of a juicy quote.
At least one reporter is hobbling around....
An Opec press officer appears in press room following pre-meeting stampede: "Attention! Somebody lost a shoe."
9.44am BST
The United Arab Emirates has put its finger on OPEC’s fundamental problem....
UAE: "We are willing to put out a ceiling providing everyone agrees"
So that's a no then. #OPEC
9.34am BST
Algeria’s representative has suggested that Opec might agree quotas for each country, rather than a flat cap.
OPEC meeting = Iran vs Saudi Arabia
9.32am BST
Angola’s oil minister told reporters that there is “a possibility” of setting an oil output ceiling today.
Jose Botelho de Vasconcelos added that the prospect of $60 per barrel oil is “not bad”, but $80/barrel “would be better”.
9.21am BST
The OPEC meeting is underway!
And there’s a flurry of action in Vienna as energy correspondents try to grab a word with energy ministers.
Saudi's Falih says its "time to steward the market and encourage" the rebalancing to take place #OPEC pic.twitter.com/yqIth9U8Wt
8.53am BST
The oil price has just broken through the $50 mark, as the OPEC meeting gets underway.
Brent crude is up 0.8% at $50.12 per barrel, a one-week high.
The price of a barrel of Brent Crude Oil nudges above US $50 as OPEC meets #Inflation
8.43am BST
Here’s some good news for the ECB to savour over their morning coffee -- Spain’s unemployment total has hit a six-year low.
The jobless total dropped by almost 120,000 in May, the biggest monthly fall in almost two years. That takes the number of people out of work to below four million.
Spain Unemployment Change below forecasts (-110K) in May: Actual (-119.8K) pic.twitter.com/ODT5DSMpFT
Spain's unemployment has fallen below 4 million for the first time since 2010 https://t.co/QPbunjmaqi pic.twitter.com/A0x8EEinXO
8.23am BST
There’s tight security in Austria today as OPEC oil ministers arrive:
Good morning from Opec hq in Vienna where security strongly in place and press corps is arriving ahead of meeting pic.twitter.com/eglLFYOtX5
All eyes on Vienna today as #ECB & #OPEC meet on same day, at same time and in same city. In same wait-and-see mood. Remarkable coincidence.
8.17am BST
Fortunately, the two meetings won’t clash too badly.
8.10am BST
Iran has slapped down the idea that OPEC could agree production limits at today’s meeting.
One of our main ideas is to have country quotas, but I don’t think we can reach an agreement on this subject at this meeting.
Related: Opec leaders meet in Vienna as Iran rejects oil output cap
8.07am BST
The OPEC oil ministers will have to take one decision in Vienna today - electing a new secretary general.
Our energy editor, Terry Macalister, explains:
Mohammed Barkindo, a former boss of Nigeria’s national oil company, is in pole position to be installed as front man for the oil cartel, whose lack of internal unity leaves it unable to take decisive action.
The laissez-faire consensus more likely to prevail was outlined by Suhail bin Mohammed al-Mazrouei, the energy minister for the United Arab Emirates, who said: “Supply and demand are working and this is the element of this (Opec) policy. From the beginning of the year until now, the market has been correcting itself upward. This is the year of correction.”
Related: Indecision reigns at Opec as it votes for new secretary general
7.39am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Go long Vienna hotel rooms today...both OPEC & ECB descend on city for crucial meetings. Euro & oil trade flat ahead of meetings
Our European opening calls:$FTSE 6180 down 12
$DAX 10173 down 31
$CAC 4450 down 25$IBEX 8896 down 21$MIB 17785 down 26
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