LONDON - There was good news for the UK economy on Thursday, with activity holding up better than expected in May.

The Office for National Statistics said GDP expanded by 0.1%, beating forecasts for no growth and reversing April’s 0.1% contraction.

Services output rose by 0.3%, comfortably exceeding the 0.1% consensus estimate. However, production fell by 0.5%, a steeper decline than the 0.1% forecast and a reversal of April’s upwardly revised 0.2% increase. Within the sector, manufacturing output edged up by 0.1%, following a revised 0.5% rise in April.

(Continue Reading - LS)

While we expect the European Central Bank to stay on hold next week, a surprise hike should not entirely be ruled out.

Just weeks ago, the 23 July ECB meeting looked like a formality — the last stop before summer break, the one meeting no one would have missed had it been cancelled at the last minute. However, the new escalation in the Middle East and the renewed rise in energy prices have changed the picture once again. Instead of gradually transitioning into summer vacation mode and postponing any rate decision until after the summer, some ECB officials might actually be inclined to push more forcefully for another rate hike.

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U.S. investment banks have toasted a record quarter, as their European rivals continue to lag — but now a major pivot towards deregulation across the Atlantic could provide a much-needed shot in the arm for the continent’s beleaguered banks.

At stake is whether Europe can build banks with the scale and firepower to compete with U.S. giants that have spent more than a decade taking market share in trading, investment banking and capital markets. A major EU deregulation push could lower capital burdens, free up balance sheets and clear the way for more cross-border mergers — potentially reshaping a banking sector long seen as too fragmented to challenge Wall Street.

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Investors can’t stop piling more money into stock-market bets. Wall Street is making a killing on it.

JPMorgan Chase, Goldman Sachs and the other three biggest banks on Wall Street are on pace to have their best trading years ever, after a second-quarter boom in activity.

In the past, such gargantuan hauls for trading desks have been a sign of turmoil in the markets. For several banks, the previous record-trading year was 2009, when the market was going haywire.

(Continue Reading - WSJ)