Here are the top five things you need to know in financial markets on Monday, June 17:



1. Draghi kicks off busy week for central banks

European Central Bank President Mario Draghi will give opening remarks to the euro zone monetary authority’s annual three-day meeting in Sintra, kicking off a busy week that will include policy decisions from the Federal Reserve, the Bank of Japan and the Bank of England.

Ahead of the meeting, Benoit Coeure, one of the possible candidates to succeed Draghi, gave a gloomy interview to the Financial Times, warning that market-based indicators of inflation expectations are signalling a much bleaker outlook for the economy than current data. That's keeping the euro close to a two-week low against the dollar.

Although no interest rate changes are expected this week from the FedBoJ or BoE, Fed chair Jerome Powell will be in the spotlight as investors expect a clearer hint as to what the Fed would see as an actual trigger to cut interest rates.


2. Huawei launches profit-warning as trade tensions drag on

Huawei Technologies Chief Executive Officer Ren Zhengfei said Monday he expects the company’s sales to drop to around $100 billion this year and next after the U.S. banned American companies from doing business with the Chinese firm.

Although the U.S. blacklisting of the Huawei was done for “national security” reasons, U.S. President Donald Trump did suggest in an interview with CNBC last week that something could be done with the company as part of the trade negotiations with China.

U.S. Commerce Secretary Wilbur Ross played down the importance of Trump and Chinese counterpart Xi Jinping at the G20 meeting on June 28 and 29, while reiterating the American president was “perfectly happy” with continuing with his tariff strategy.

Congressional hearings on the next planned round of U.S. import tariffs get underway on Monday.

Read more: Broadcom Earnings Show Chip Stock Slump Could Get Worse - Haris Anwar


3. Global stocks inch higher ahead of monetary policy decisions

Global stocks registered slight gains on Monday as the week's central bank meetings cast their shadow over early trading.

U.S. stocks looked set to shift sentiment at the open after Friday’s negative close. Dow futures edged forward 35 points, or 0.1% by 5:43 AM ET (9:43 GMT), S&P 500 futures rose 4 points, or 0.1%, while Nasdaq 100 futures traded up 20 points, or 0.3%.

The European bank sector supported the region’s equities as Germany’s Deutsche Bank (DE:DBKGn) was reported to be planning more radical cost cutting.

Asian shares staged a timid recovery near one-week lows. Hong Kong’s Hang Senghad one of the strongest showings, rising some 0.4% after territory's leader Carrie Lam backed down on a bill that would have allowed extradition to China.


4. 737 MAX trials to start as Boeing seeks to restore confidence

The Federal Aviation Administration could start flight trials of Boeing's (NYSE:BA) 737 MAX safety enhancement as early as this week, according to sources cited by The Wall Street Journal.

At the Paris Air Show on Sunday, Chief Executive Dennis Muilenburg admitted the company had made mistakes regarding the model's warnings systems, and promised that Boeing’s first priority was to rebuild trust.

With the MAX 737 grounded for safety reasons, Airbus (PA:AIR) will reportedly launch its A321XLR airplane at the Paris Air Show. It's hoping to seal over 200 orders, according to reports.

The air show comes at a time when the slowing economy is taking a toll on airlines. Germany's Deutsche Lufthansa (DE:LHAGbecame the latest to issue a profit-warning Monday, citing overcapacity in the short-haul sector and higher fuel costs.


5. Iran plans to break uranium limit in 10 days

Iran announced Monday that it will break internationally-agreed limits on its stocks of enriched uranium in 10 days unless Europe takes steps to help it counteract the crippling effect of U.S. economic sanctions.

Tehran had previously threatened to renege on the nuclear deal after the Trump administration withdrew from the pact last year and imposed economic sanctions.

U.S. Secretary of State Mike Pompeo said Sunday that the U.S. is “considering a full range of options”, against a backdrop of rising tensions embodied by the attacks on two oil tankers near the Persian Gulf last week. Iran has denied accusations of planning the attacks.

Pompeo, who has said that there is "no doubt" that Iran was behind the attacks, said a military response was among the options under consideration.


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