LONDON European Union foreign ministers meeting in Malta today will discuss Turkish President Tayyip Erdogan's referendum victory and what they view as his latest steps to dismantle the country's democratic institutions.
The bottom line is that ministers must consider whether an increasingly autocratic Turkey remains eligible to be a candidate for EU membership - an albeit distant prospect which even many Turks are seeing as remote and increasingly irrelevant. Erdogan himself says dismissively that he is not holding his breath for EU membership.
All that said, any move that formally curtails Turkey's EU prospects would be hugely symbolic after decades of an often fraught courtship between the two sides. One option is for ministers to urge a review of Turkey's progress in meeting entry criteria and leave the final decision up to EU leaders at a summit due in June.
Aside from the subtlest of nods to the increasingly solid recovery in much of the euro zone, the ECB's Mario Draghi was careful to keep the accent on the need for more stimulus at his news conference yesterday. Not, perhaps, that surprising given the lingering uncertainty about the French presidential election and his continued assertion that inflation has yet to pick up sustainable.
ECB-watchers will get more insight on the latter this morning as Eurostat releases its latest flash CPI numbers for the zone, combined with the ECB's own quarterly inflation survey. Lending data and M3 money supply figures are also due.
Finally, Japanese Prime Minister Shinzo Abe will be meeting British PM Theresa May at her Chequers country residence today. One subject that might come up is cars: Japan's automakers are a key part of the British sector and May has promised to seek a Brexit deal that will allow Nissan and others to flourish in Britain.
MARKETS AT 0655 GMT
On the last trading day of April, the dollar is up a shade, European shares are about flat and benchmark German Bund yields are ever so slightly higher. In other words, it would appear it's the prospect of a long weekend for most European markets rather than the possibility of what U.S. President Donald Trump called a "major conflict" with North Korea that is dominating thinking.
That said, there should be plenty for markets to get their teeth into. A first look at Q1 GDP data from the United States, much of the euro zone and Britain is due. Euro bulls, sitting on 2 percent gains for the month, will be mindful of ECB chief Mario Draghi's somewhat upbeat words on the euro zone economy on Thursday, even though he said risks remained tilted to the downside and that the central bank's policy setters had not discussed removing its easing bias.
The euro was marginally higher at $1.0876 on Friday while the dollar index, which measures the greenback against a basket of currencies was up 0.1 percent. The yen was also slightly stronger versus the dollar.
German 10-year Bund yields, which fell sharply on Thursday after the ECB policy meeting, were 1 basis point higher at 0.31 percent.
The pan-European STOXX 600 index has gained 2.7 percent so far this week, set for its best week since December. Earnings should again dominate trade on Friday.
In another heavy day for company updates, especially banks, shares in UBS are up 2.8 percent in pre-market trade after Switzerland's biggest bank kicked off 2017 with its second-best start to a year since the financial crisis as a brighter outlook and a spike in trading levels boosted its investment bank and core wealth management business.
Barclays said first-quarter profit more than doubled, driven by lower losses in its non-core unit, even as it booked a one-off charge on its Africa business. Royal Bank of Scotland swung to a better than expected first quarter profit of 259 million pounds, its first quarterly profit since Q3 2015.
Other stock movers: Electrolux Q1 profit tops forecast; Genzyme, CHC lift Sanofi's first-quarter figures; Europe, Asia, engineering lift Linde's quarterly profit; O2 Czech Republic net profit rises in first quarter, beating estimates; Norsk Hydro units missed forecast in Q1; Spain's Caixabank posts 48 percent rise in Q1 profit; Continental Q1 operating profit rises more than expected; Danske Bank Q1 profit beats expectations on improved lending, strong Nordic performance; Atlantia presses ahead with Abertis tie-up plans after motorway stake sale; Zodiac aims to complete Safran deal, CEO offers resignation.
Asia-Pacific shares exJapan fell 0.1 percent while Tokyo shares gained 0.3 percent as investors sat on their second largest weekly gains since December.
Oil prices edged up after OPEC said it was keen to reach a deal on extending its output cuts. Brent was last up 0.9 percent at $51.91. Gold edged higher but was set for its worst week in seven.
Emerging stocks extended their falls for a third day, but stellar gains at the start of the week ensured the benchmark was on track for a 1.6 percent weekly rise and the index looked poised for a fourth straight month of gains. On the day, the index was weighed down by losses in heavyweight South Korea's Kospi index which snapped a six-day losing street and falls elsewhere in Asia, after U.S. President Donald Trump announced in an interview with Reuters that he planned to renegotiated or scrap Washington’s “horrible” trade deal with Seoul.
The dollar nudging higher for a third straight session ups the pressure on emerging currencies on the day, but many are on track for monthly gains. Turkey’s lira weakens 0.3 percent but looks to strengthen nearly two percent in a third straight month of rises. Comments from an aide to President Tayyip Erdogan saying the president wanted to see a more "relaxed and generous central bank" and Wednesday’s move to raise the late liquidity window once again fuelled concerns after investors had lauded policy makers’ move as a cautious affirmation of policy makers’ independence.
South Africa’s rand looks to add nearly 1 percent since the start of April, though latest data shows slowing credit growth while the government announced petrol and diesel prices would rise from May.
Russia’s rouble is trading flat ahead of a central bank decision which is expected to lower interest rates by 25 basis points, or even 50 bps, in what could be the first of further cuts amid easing inflation. On the month, the rouble looks to snap a four month winning streak and ease 1.3 percent.
Europe corp events: UBS, Danske, Electrolux, Sanofi, Barclays interim, RBS interims, Mail.ru, Caixabank, Amundi, Linde
German March retail sales
US/Canada/UK/France/Spain Q1 GDP
France March consumer spending
EZ, Italy flash April inflation
UK BBA March mortgage approvals
EZ March credit, M3
SNB chief Studer speaks in Bern
Turkey March trade/tourism
Russian central bank policy decision
US Q1 earnings: GM, Exxon Mobil, Chevron, Colgate Palmolive, Goodyear,
US April Chicago PMI, UMich sentiment
Philadelphia Fed chief Harker speaks in DC
S&P to review sovereign credit ratings of UK, Germany, Botswana; Fitch to review Ukraine, Netherlands, Latvia, Mozambique
(Editing by Richard Lough)