Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

European M&A, French Bonds, Iranian Election, Bitcoin - What's Moving Markets

EconomyJun 21, 2021 05:29AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Peter Nurse -- European M&A is in full swing, French bonds react positively to the latest election results, crude benefits from doubts about Iranian supply, and stocks attempt to recover from a difficult week. On the flip side, Bitcoin slumps below $33,000. Here's what's moving markets on Monday, June 21st.

1. European M&A in full swing

Global M&A is on the rise, helped by low interest rates, equities near record levels and interest in sectors that have received a boost from the Covid-19 pandemic. The U.S. has seen the bulk of the deals, but Europe looks like being next in the spotlight.

Earlier this month, numbers from data provider Refinitiv showed that global mergers and acquisition activity hit a record high for the third straight month in May, while the total value of pending and completed deals announced from the January-May period reached $2.4 trillion, an all-time record.

These deals look set to continue as the year progresses, with WM Morrison Supermarkets (LON:MRW), Britain's fourth-largest supermarket chain by sales, rejecting over the weekend a proposed 5.5 billion pound ($7.6 billion) cash offer from U.S. private equity firm Clayton, Dubilier & Rice.

The board said the offer “significantly undervalued Morrisons and its future prospects”, but this is unlikely to be the end of the matter with CDR obviously seeing value in the chain, potentially prompting competing bids from rival private equity firms.

Also over the weekend, billionaire investor William Ackman's Pershing Square Tontine Holdings, a large special purpose acquisition company, signed a deal to buy 10% of Universal Music Group for about $4 billion.

UMG is being spun-off by France's Vivendi (OTC:VIVHY), and is expected to complete its planned Euronext Amsterdam listing in late September.

Additionally, Amsterdam-based CNH Industrial (NYSE:CNHI) said Monday that it has entered into an agreement with Raven (NASDAQ:RAVN) Industries Inc. to buy the U.S. manufacturer of agriculture technology for an enterprise value of $2.1 billion.

Last month infrastructure investor John Laing agreed to be bought by private equity group KKR, in a deal worth two billion pounds ($2.8 billion).

2. Stocks seen rebounding after difficult week

U.S. stocks are seen opening higher Monday, rebounding after last week’s selling in the wake of the Federal Reserve’s hawkish turn.

By 6:30 AM ET, Dow Jones futures were up 200 points, or 0.6%, S&P 500 futures were 0.5% higher and Nasdaq 100 futures climbed 0.6%.

Wall Street headed lower last week after FOMC members reacted to the recent surge in U.S. inflation by pointing to interest rate hikes earlier than previously expected, with St. Louis Fed President Jim Bullard stating that he actually saw higher rates in late 2022.

The blue-chip Dow Jones Industrial Average dropped 3.5% last week, its worst week since late October, the broad-based S&P 500 fell 1.9%, its worst weekly performance since late February, while the tech-heavy Nasdaq Composite slipped 0.2%.

The economic data slate is largely empty Monday and there are no noteworthy earnings due. With this in mind, investors will turn their attention to a number of Fed speakers as they attempt to ease any worries that emerged from last week’s central bank meeting. 

Bullard, Dallas Fed President Robert Kaplan and New York Fed President John Williams are all expected to deliver remarks later Monday. Most eyes, however, will be on Fed Chairman Jay Powell, who is due to testify Tuesday before the House Select Subcommittee on the Coronavirus Crisis.

3. French bonds boosted by poor Le Pen showing

The decision last week of the Federal Reserve to take a more hawkish stance after the surge in U.S. inflation has resulted in long-term bond yields falling largely around the globe, but French debt has received an additional boost from the results of the weekend’s regional elections.

By 6:30 AM ET, the benchmark 10 year French OAT yielded 0.145%, after earlier falling as low as 0.13%, down from just below 0.20% last week. Bond yields move inversely with prices.

Helping this move was the weak performance of France's far right in Sunday's regional elections, with Marine Le Pen's Rassemblement National party dropping more than 7 percentage points nationwide compared with the last election in 2015.

An IPSOS exit poll showed the centre-right Les Republicains winning 27.2% of the national vote, ahead of Rassemblement National on 19.3%, followed by the Green party, the Socialist Party and President Emmanuel Macron's La Republique en Marche on 11.2%.

Le Pen ran in the 2017 presidential election on a campaign that advocated taking France out of the euro and the European Union, losing to Macron. She responded to that defeat by reining in the euroscepticism, but investors appear to remain wary of her intentions, particularly as the European Union has just agreed to a jointly backed recovery fund to combat the coronavirus pandemic.

There will be a second round of regional elections next weekend, and investors will be looking at these results ahead of next year’s presidential election, especially with Macron appearing to have lost favor.

4. Bitcoin lacks Chinese love

Bitcoin, the largest cryptocurrency by market capitalization, is under pressure once more, weighed by further reports of China clamping down on mining of the digital currency.

At 6:30 AM ET, Bitcoin traded over 6% lower at $33,161, after earlier falling below $33,000 for the first time June 8, and a far cry from its record high of just below $65,000 seen in April.

This follows a report in the Global Times, a newspaper backed by China’s ruling party, that stated authorities in the southwest province of Sichuan have ordered cryptocurrency mining projects to close. China accounts for more than half of global bitcoin production, while Sichuan is an important province in China's bitcoin mining industry.

Additionally, the Agricultural Bank of China (OTC:ACGBF), the third largest bank in the country, announced Monday that it was following guidance from the central bank and prohibiting the use of its services for cryptocurrency transactions.

Bitcoin’s chart is now showing a bearish trend, according to Alyssa Wisein, an analyst at CoinQuora, and the cryptocurrency is set to fall below $30,000.

That said, it’s not all bad news for the market as Hong Kong-based crypto startup Amber Group is now a crypto unicorn after breaching the $1 billion valuation mark. The firm achieved this after raising an additional $100 million in a recent funding round.

5. Crude gains after Raisi named new Iranian president

Crude oil prices pushed higher Monday, helped by a pause in Iranian nuclear talks, delaying the resumption of crude exports from the Persian Gulf country into the global market.

By 6:30 AM ET, U.S. crude was up 0.6% at $71.72 a barrel, while Brent was up 0.6% at $73.94.

Both benchmarks have posted strong gains this year, over 40% year-to-date, as successful vaccination programs have resulted in a lot of the high energy-consuming countries reopening their economies, ahead of the summer holiday season. 

Last week, Brent recorded its highest price since April 2019 and WTI its highest since October 2018.

This positive tone has been helped Monday by the adjournment of talks between Tehran and the western powers, and the U.S. in particular, over reviving the 2015 nuclear deal after the election of hardline judge Ebrahim Raisi as Iran’s new president.

This result could well delay any agreement as Raisi is on the U.S. sanctions list for human rights abuses and Tehran insists penalties must be removed if the nuclear pact is to be revived.

This pause comes as Reuters reported that Iran has begun moving some of its stored oil into tankers so it can quickly resume exporting its crude should a deal be signed, resulting in the U.S. lifting sanctions on the Iranian energy sector.

Further gains also look likely, judging by the latest positioning data. Speculators increased their net long positions in both ICE Brent and Nymex WTI by over 20,000 lots in the last reporting week.

“The bulk of this increase was driven by fresh longs entering the market,” said analysts at ING, in a note. However, “it is important to point out that this data predates the FOMC meeting, and so positioning is likely to be somewhat different currently.”


European M&A, French Bonds, Iranian Election, Bitcoin - What's Moving Markets

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Kaveh Sun
Kaveh Sun Jun 21, 2021 9:25AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The reason is manipulation. China shutdown miners increase the value of bitcoin not decrease. Whales use the media to push down the price, buy then use the media to push it up and sell. Rinse and repeat.
Jim Herndon
Jim Herndon Jun 21, 2021 7:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The slowing of Bitcoin mining should only increase the value of existing coins. When the mining reaches the limit there will be no additional coins,No dilution of value. How can the dollar rise in value with 120 Billion more added in circulation every month. Haha, Central banks are in total control of their minions, the finiancial media.
Yelen Shim
Yelen Shim Jun 21, 2021 7:09AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It's Bill Ackman not William Ackman.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email