Global Markets News Round-up to start your day: 08/02/23

The former Bank of England policy maker Danny Blanchflower warns that UK’s declining house prices will force the BOE to rapidly pivot towards rate cuts. The former policy maker said that “really bad data” will prompt a rethink, and that officials should have cut last week instead of hiking. London home prices showed the worst annual performance in over three years, according to Halifax. Property buyers received some relief as five-year fixed-rate mortgages became available below 4%. However, BP is moving back into petroleum, despite fine words about its commitment to green energy.

The UK retail problem is returning as borrowing costs increase, savings accounts shrink, and inflation hits discretionary purchases. With the default rate among junk-rated US retailers expected to reach 12% this year, some retail companies may not survive. Matalan was taken over by creditors, Paperchase was sold to Tesco, and several French fashion retailers have entered insolvency proceedings in recent weeks. Bankruptcy lawyer Craig Ganz says “a whole slew of these retail companies just can’t survive.”

Additionally experts believe that inflation is there to stay in the UK till late 2025 and 2023 will feel like recession to 7 million homes in the UK.

Vladimir Putin is pressuring the Bank of Russia to be more positive about the economy and loosen monetary policy. However, the governor of the Bank of Russia and her colleagues are unwilling to suggest any imminent easing because of inflation risks. 

The earthquake-struck areas in Turkey have declared a three-month state of emergency to give the government more leeway for rescue and reconstruction efforts. The death toll across Turkey and neighboring Syria now exceeds 5,000.

Credit Suisse canceled some bonus talks, adding to strained relations, but deal talks are still ongoing. Apollo is considering an unspecified stake in CS First Boston. 

Rishi Sunak created a new UK department for energy security and named Grant Shapps to head it. New rules to combat climate change may make many office buildings obsolete, but industry leaders believe there will be a severe shortage of high-quality space. 

Rigged bets and online gambling have made match fixing more pervasive. 

Germany’s Vay is launching “teledriving,” which allows humans to control vehicles from a remote location.

Markets yesterday:

Stocks in Asia increased on Wednesday, following the late rally of US shares in a volatile session, as Federal Reserve Chair Jerome Powell declined to dampen investor optimism. 

In the Asia-Pacific region, equities in Australia and South Korea advanced, pushing a regional benchmark higher. 

The tech-heavy Nasdaq 100 outperformed major benchmarks, increasing by over 2%. European stock futures rose while US contracts were unchanged. 

The price of oil also extended gains after a 4.1% increase on Tuesday. 

The US dollar index was steady after declining on Tuesday, which broke a three-day rally. The yen stabilized after rallying by more than 1% on Tuesday, while the Australian dollar increased after the Reserve Bank of Australia raised interest rates. In India, bond yields and the rupee rose after the central bank raised interest rates by 25 basis points.

Global indices at 6am UKT:

Dow Jones: 34,156.69 (+0.78%)

NASDAQ: 12,113.79 (+1.90%)

FTSE100: 7,864.71 (+0.36%)

CAC40: 7,132.35 (-0.07%)

Sensex: 60,634.04 (+0.58%)

Nifty50: 17,841.15 (+0.68%)

Nikkei225: 27,567.48 (-0.43%)

Disclaimer: The information provided in this summary is based on sources believed to be reliable and accurate. However, the accuracy and completeness of the information cannot be guaranteed. The opinions and views expressed in this summary are for informational purposes only and do not constitute investment advice. This summary should not be relied upon as the sole source of information when making investment decisions. Any decisions made based on information contained in this summary are the sole responsibility of the reader and may not be in the reader's best interest. The author and publisher assume no liability for any errors or omissions in this summary.
MSc Finance graduate from the London School of Economics and Political Science (LSE)
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Ria V Vaghela is an M&A Executive at RSM UK and an MSc Finance graduate from the London School of Economics and Political Science (LSE). She has worked at Jefferies, Dial Partners and 7i Capital prior to RSM UK gaining an experience of about 1.5 years. She has also worked as an Editor and Content Writer for The Representative Media. Apart from finance, she is interested in reading books on psychology and economics and also likes to paint and play lawn tennis

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