Global Markets News Round-up to start your day: 07/02/23

The earthquake that struck Turkey and Syria has left at least 3,400 people dead, and search-and-rescue efforts are still underway. The temblors have led to a halt in oil flows to a key export terminal, but no leaks have been detected. Help has been offered from 45 countries, including Elon Musk’s Starlink, which was declined. 

The Reserve Bank of Australia has raised its key interest rate by 25 basis points to 3.35% and hinted at further tightening “over the months ahead”. The move was aimed at curbing inflation and the Australian dollar rose 1% as a result. 

Meanwhile, in the US, the Federal Reserve Bank of Atlanta President, Raphael Bostic, stated that the strong jobs report in January suggests the Fed may need to lift borrowing costs to a higher peak than originally expected, particularly if economic strength persists. 

Elsewhere, the Bank of England (BOE) and the Treasury will publish a consultation paper today seeking opinions on whether they should build a digital pound. The working paper will try to ease concerns that a digital currency could risk financial stability. The BOE and Treasury are aiming to launch the digital currency by 2030.

Meanwhile, the Rothschild family will take its French bank private, valuing the deal at €3.7 billion. This comes after decades of public ownership, and is seen as a response to stubbornly subdued equity markets. 

M&A activity has also picked up, with $40 billion of announced and potential deals ranging from gold mining to self storage. The biggest deal of the year so far is Newmont’s $17 billion offer to acquire Newcrest Mining. 

Microsoft’s $69 billion takeover of Activision Blizzard faces a key decision in Britain, as the nation’s merger watchdog marks its arrival as a global regulator.

Markets yesterday:

Stocks in Asia, Europe and the US rose as investors awaited commentary from Federal Reserve Chair Jerome Powell. 

A gauge of Asia’s shares rose by 0.8% after two days of losses, as investors weighed the chances of the Fed keeping a firm grip on monetary policy. The strongest gains were in tech stocks in Hong Kong, which saw a sharp contrast from Monday’s decline in US equities. 

Treasuries recovered from a two-day rout sparked by traders betting on future Fed tightening. 

In Australia, the currency extended its gain and bonds fell after the central bank raised its key rate to the highest in 10 years and warned of further hikes to combat inflation. 

The yen gained after Japan reported unexpected wage growth in December, raising market bets on the central bank adjusting its stimulus program. 

Citigroup sees dollar strength as a key risk to the stock markets globally. 

In India, most of Adani Group’s stocks rose after prepaying $1.11 billion of borrowings. 

Caution in global markets is being reinforced by geopolitical concerns such as US tariffs on Russia and the recovery of a Chinese balloon shot down off the coast of South Carolina. 

Oil rose for a second day after Saudi Arabia raised its crude prices to Asia. 

Gold steadied.

Global indices at 6am UKT:

Dow Jones: 33,891.02 (-0.1%)

NASDAQ: 11,887.45 (-1%)

FTSE100: 7,836.71 (-0.82%)

CAC40: 7,137.1 (-1.34%)

Sensex: 60,455.89 (-0.08%)

Nifty50: 17,747.45 (-0.1%)

Nikkei225: 27,683.04 (-0.04%)

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