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Summary

  1. Fed minutes suggest June rate hike possible
  2. Sterling strengthens to $1.4538
  3. Burberry reports sliding sales and profits
  4. UK unemployment rate remains at 5.1%
  5. Mitsubishi president quits over emissions issues
  6. Japanese economy returns to growth in first quarter

Live Reporting

By Katie Hope

All times stated are UK

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US markets close

The Federal Reserve minutes gave US investors a choppy time of it. The Dow was up about 0.5% before the announcement, turned negative but finally ended almost unchanged at 17,524.84. Banks JP Morgan and Goldman Sachs did best, rising by more than 3%.

Investors see 34% chance of June hike

Investors now believe there is a 34% chance of a rate increase next month. That's up from 19% before the Fed minutes were published, according to derivatives firm CME Group. 

Its percentages are based on prices for futures contracts on the Fed's benchmark overnight lending rate.

Allo Allo: Google to launch new chat app

One of the other interesting aspects from Google's developer's conference is that it plans to launch a new chat app called Allo. 

It'll include Snapchat-like features such as drawing and emojis.

But its unusual feature is that it can provide replies on its user's behalf.

This includes commenting on pictures sent by friends, thanks to its use of image recognition algorithms.

The company acknowledged that the process would not be perfect but said the suggestions should improve the more people used the app.

Read more here:

More from Alistair Darling

BBC Scotland editor tweets...

Michael Howard speaks up for Brexit

Conservative Michael Howard, an advocate of Vote Leave, also speaking at the CBI dinner has said leaving the European Union would be a boost for businesses, particularly smaller ones.

At the moment, every UK business must comply with “ single market” legislation, even though just 5% of British firms export to the EU. This is a system which has an inherent tendency to produce disproportionate burdens on small companies, impeding their competitiveness.

Michael Howard

Alistair Darling: Brexit not worth the risk

Back on this side of the Atlantic, Former Labour chancellor Alistair Darling is currently speaking at the CBI dinner, on the risks of a "Brexit vote". 

"We shouldn't take on more risk when we don't need to.

Countries want to trade with us ..... But they also want access to the market of people living in the European Union. We need that bargaining power," he says. 

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What do economists make of the minutes?

"We had several regional Fed officials making remarks in the last few days about the possibility of an early rate hike. The minutes now suggest that Fed concern that markets have been underestimating the possibility of such a hike is wider than that within the central bank.

Mohamed El-ErianAllianz chief economic adviser

It looks like the Fed minutes indicate that they are ready to pull the trigger on a rate increase in June. I guess everyone's calculation that events outside of the country would keep the Fed from doing this were wrong. We will see next month what happens. It's a long way between now and then and anything can happen. With the likelihood of a rate increase increasing, stocks are selling off.

Kim ForrestFort Pitt Capital Group senior equity research analyst

They promised us four (rate hikes), they cut it back to two. I think June, maybe July would be the latest possible time they could hike without being accused of injecting politics into policy. That is sort of the unwritten rule of the Federal Open Market Committee - don't interfere with the election. If they don't pull the trigger in June they probably have to wait until December."

Jack AblinBMO private bank chief investment officer

"We thought they were surprisingly hawkish. In the post meeting statement we got no whiff of hawkishness from the Fed, in fact they were relatively dovish in the immediate aftermath of the meeting, so this really came as a surprise that we had this kind of tone shift already in April."

Jacob OubinaRBC Capital Markets senior US economist

Fed minutes send dollar higher

The US dollar has risen since the minutes were published, rising to $1.1226 against the euro compared with $1.1284 shortly before the minutes were published.

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Dow and S&P turn negative

Stock markets have unsurprisingly reacted negatively to the Fed minutes, with both turning negative immediately after they were released. 

The Dow is currently flat having been up 0.5% and the S&P 500 is also flat. 

Recent economic data increases Fed's confidence

More from the April minutes...

Recent economic data made the Fed more confident that inflation was rising toward their 2% target and that they were less concerned about a global economic slowdown.

"Most participants judged that if incoming data were consistent with economic growth picking up in the second quarter, labor markets continued to strengthen, and inflation making progress toward the committee's 2 percent objective, then it likely would be appropriate for the committee to increase the target range for the federal funds rate in June," according to the minutes. 

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BreakingFed signals June rate hike

The Federal Reserve will likely raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment, according to minutes from the US central bank's April policy meeting, just released.

NYSE said 'technical glitch' solved

The New York Stock Exchange says its technical issue has been resolved. 

The exchange said earlier it was experiencing a critical technical issue that meant the trading of 199 symbols was sent to other exchange venues. 

Google announces 'The google assistant'

Google boss Sundar Pichai says the firm plans to go beyond voice activated search and will launch Google Assistant which will understand the context of the questions a user is asking.

He gives the example of being able to say "what's showing?" and get the details of local films showing, which can then be adjusted for whether you want to bring children and he says it will then be able to book tickets for the film.

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What does Google have up its virtual sleeve?

The tech giant's I/O developers conference has just kicked off. The firm's biggest event of the year is expected to include its plans for virtual reality, artificial intelligence and messaging.

Google CEO Sundar Pichai is currently talking. 

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Don't try this at home

If you've ever been tempted. Listen to BBC's Business Daily to find out why throwing a lump of potassium in the Thames is a BAD IDEA…

Everyone's favourite school chemistry experiment goes slightly wrong

Oil price holds up

oil graph
bbc

The oil price is holding up well despite an unexpected rise in US crude stocks last week. 

Crude inventories rose by 1.3 million barrels in the week to 13 May, compared with analysts’ expectations for an decrease of 2.8 million barrels, according to the data released earlier from the Energy Information Administration.

Nonetheless oil is still up 0.9% at $49.70 a barrel. 

The other aspects of the oil report were not too bad at all. For a start, oil production fell once again. What’s more, there were larger-than-expected draws in distillates and – more importantly for this time of the year – gasoline stocks as refineries processed more crude now that the driving season is underway. Hence, [US benchmark] oil has not exactly fallen off a cliff (yet).

Fawad Razaqzada,City Index market analyst

Wall Street turns higher

Wall Street has done an about-turn and is now trading slightly higher driven by banking stocks which would benefit in the event of a rise in interest rates. 

The Dow Jones is currently up 0.2%, with JP Morgan and Goldman Sachs leading the charge, up 3.2% and 2.5% respectively. 

All could of course change direction very rapidly once the minutes from the Federal Reserve's April meeting, scheduled for 18:00 GMT are released. 

Time to stock up on holiday money?

BBC Personal Finance Correspondent tweets...

Lowe's bucks downward trend

Home improvement chain Lowe's is one of the few US retail stocks in the green. The firm's first quarter was better-than-expected with like-for-like sales up 7.3%, trumping forecasts for a 4.3% rise. Net income was up 31.4% to $884m in the quarter to 29 April.

Its shares are currently up 2.6%, easily outpacing the Dow which is currently flat. 

December rate hike expectations surge

This chart shows just how fast expectations of a fresh rate hike in the US are moving. 

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Fiat shares fall back

Fiat Chrysler shares have come back down to earth with a bump after Chinese car firm Guangzhou Automobile Group denied reports it was interested in taking a stake.

A spokeswoman for the Chinese firm said there were "currently no plans for this". 

Fiat's Milan-listed shares were earlier up over 3%, but are now 0.5% lower.

Wall Street opens lower

Tuesday's slide due to fears over an earlier-than-expected interest rate rise has continued into Wednesday with all the main US indexes flat or lower.

The Dow Jones is currently 0.24% lower at 17, 487.18, the S&P 500 is down 0.1% at 2,044.95 while the Nasdaq is flat at 4,720.08.

The Federal Reserve's minutes from its May meeting, due to be published later, will be closely scrutinised for any hint of when the next interest rate hike could be.

Field asks 'Project Thor' questions

BHS store
Getty Images

Frank Field, chairman of the Commons work and pensions committee, has written to Lesley Titcomb, chief executive of the Pensions Regulator, following Adam Parsons' Newsnight report last Friday on BHS. 

It referred to a proposed BHS restructuring known as "Project Thor", which allegedly involved putting money into the retailer's pension fund, including about £80m from former owner Sir Philip Green. However, the Pensions Regulator did not approve the proposal. 

Mr Field asks Ms Titcomb: "I would be grateful if you could please comment on the accuracy of this report and clarify: a) the nature and value of the proposed pension contributions; b) whether any conditions were attached to those proposed contributions; c) the nature of any such conditions; d) whether and why approval from the Regulator was sought; and e) why this approval was denied." 

Pound continues to strengthen

BBC economics producer tweets...

This Bloomberg chart shows the pound's surge against the dollar very clearly

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Ryanair cashes in on EU vote

Ryanair pic
Getty Images

Never one to miss a marketing trick, Ryanair boss Michael O'Leary, who has already made it clear he'd like the UK to vote to stay in the EU on 23 June, has launched a "Fly Home to Vote Remain" campaign. 

The budget airline says it's selling flights from €19.99 on 22 and 23 June to make it easier for the 1.2 million Brits living abroad to fly home to vote. 

Of course, the more straight forward option for Brits abroad may be to simply register for a postal vote.

Target shares fall

Target store
Getty Images

Investors in Target are not happy with the discount department store missing analysts' sales projections. With a little under an hour to go until official trading starts, shares are down more than 7% at $67.95.  

Check-mate?

Retail reporters really aren't happy about the lack of access to Burberry chief executive Christopher Bailey, as the Telegraph's Ashley Armstrong tweets:

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View more on twitter

Pound gains momentum

Sterling
Getty Images

The pound continues to charge higher. A short while ago it was trading at $1.455 - that's up almost a cent for the session so far.

"Sterling is catching a solid bid on the latest surprise poll indicating a strong move in favour of the 'In' camp," says Neil Jones of Mizuho.

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BreakingTarget sales miss the mark

Target store
Getty Images

Target reported a higher-than-expected quarterly profit, but an increase in like-for-like sales came in at 1.2% - worse than the 1.6% expected by analysts. 

Net earnings for the three months to 30 April were $632m down slightly on the same period of 2015.

Those BHS hearings in full...

BHS store
Getty Images

The Business and Work and Pensions select committees have announced details of future joint sessions for their separate inquiries into BHS.

On Monday 23 May the focus will be on the role of advisers and their advice on BHS pension arrangements and the sale. 

On Wednesday 25 May, the MPs will question the advisers to Retail Acquisitions on its purchase of the now failed retailer, as well as the BHS pension fund trustees.

We have to wait until next month the really juicy sessions, however. It's BHS management, Retail Acquisitions and its chief, Dominic Chappell, on Wednesday 8 June.

But the main event comes a week later, on Wednesday 15 June, when former owner and retail tycoon Sir Philip Green appears.

Burberry under pressure

The fall in Burberry shares has accelerated and they are now down almost 6%. It seems investors and analysts don't like the company's results, or what they've been hearing from chief executive Christopher Bailey.

Guardian retail reporter Sarah Butler tweets:

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George MacDonald, executive editor of Retail Week, tweets:

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Pilots welcome regulation of drones

Drones
Getty Images

The British Airline Pilots’ Association has welcomed new regulation of drones that will be in the upcoming Modern Transport Bill. 

Jim McAuslan, BALPA General Secretary, said:

We are pleased that the Government is planning to bring forward drone legislation in a new bill. The number of recent near misses with passenger aircraft, and the huge growth in the number of drones in the UK certainly means this is a sensible thing to do.

It is vital that the hobbyist drone user is educated about the rules, and understands his or her responsibilities, particularly the importance of keeping away from commercial air traffic.

Jim McAuslanBALPA General Secretary

'Unsettling' job figures for Scotland

BBC Scotland business editor tweets:

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Pound spikes on latest refendum poll

Pound vs dollar
Bloomberg

As the chart above shows a short while ago the pound surged higher.

At one point it hit $1.4490, up almost a cent from the lows of the day.

The rise was prompted by a new poll showing rising support for the Remain campaign, ahead of the UK's referendum on European Union membership.

The latest Ipsos-Mori poll, commissioned by London's Evening Standard newspaper found 55% favoured staying in the EU, while 37% wanted to leave.

The referendum is on 23 June.

Atari legend is back in games

BBC technology correspondent Rory Cellan-Jones tweets:

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'Frothy' offer for German robot maker

Kuka robot
EPA

China's biggest home appliances manufacturer, Midea, has made an unsolicited takeover bid for German industrial robot maker Kuka.  

Breakingviews from Reuters is not convinced the deal makes sense for the Chinese firm:

The 37% premium Midea may offer for German robot maker Kuka is frothy. There are no cost synergies, the suitor doesn’t seek control, and governance could be messy. Yet unless Kuka can find a white knight, minority shareholders have every reason to take the Chinese cash."

No comment from Bailey

Times retail correspondent Deirdre Hipwell has been listening to this morning's analysts' meeting with Burberry boss Christopher Bailey:

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'Vigour sapped' of UK labour market

Paul Hollingsworth Is UK economist at Capital Economics

Although there were some bright spots in today’s labour market figures, on the whole they offered a further indication that the economic slowdown has sapped the jobs recovery of its recent vigour. Assuming that the UK votes to “remain” next month, we should see a bit of a bounce-back in economic activity later this year, and as such the recovery in jobs and earnings is likely to pick up some pace again.

Paul HollingsworthCapital Economics

Eurozone deflation confirmed

Euro sign
Getty Images

Eurostat has confirmed its flash estimate of headline inflation for the eurozone at minus 0.2% in April. The core rate of inflation, which excludes volatile energy and unprocessed food costs, rose by.0.7%.

Meanwhile, Bundesbank chief Jens Weidmann says many eurozone countries do not have the leeway - or need - to boost fiscal spending, so should instead focus on reform to boost their growth potential.