Here’s what’s moving the FTSE 100 and global markets this morning
Treasury yields climbed as Fed Chair Jerome Powell hinted at the possibility of prolonged higher rates, contributing to a decline in global stocks. The Reserve Bank of Australia cautioned about inflation risks, and a ransomware attack on China’s ICBC disrupted Treasury market trades. The spotlight shifts to UK GDP data and comments from ECB President Lagarde. Here’s what’s shaping the start of your day.
Powell and fellow Fed members hesitant to declare policy summit
Federal Reserve officials, including Chair Jerome Powell, expressed uncertainty about whether interest rates have reached a level sufficient to effectively combat inflation. The central bank “is committed to…monetary policy that is sufficiently restrictive to bring inflation down to 2% over time,” Powell said. “We are not confident that we have achieved such a stance. If it becomes appropriate to tighten policy further, we will not hesitate to do so,” he added.
Australia central bank sees risk of upside surprises to inflation
In its quarterly Statement on Monetary Policy, the RBA said, “there is potential for further upside surprises to inflation.” The central bank also mentioned that the Board’s priority was to return inflation to the target of 2-3%. Additionally, it added that whether further tightening of monetary policy is necessary to ensure that inflation reaches the target within a reasonable timeframe will depend on the data and the evolving assessment of risks.
Cyberattack on ICBC disrupts Treasury market trades
A ransomware attack on the Industrial and Commercial Bank of China’s (ICBC) U.S. unit caused disruptions in the Treasury market on Thursday, but the impact seems limited, according to market sources, Reuters reported. ICBC Financial Services confirmed the attack, stating it resulted in disruptions to certain systems. The bank is investigating and actively working on recovery efforts.
S&P 500 and Nasdaq halt winning streaks; Asian stocks dip
U.S. stocks ended lower, breaking the Nasdaq and S&P 500’s two-year winning streaks. The Dow fell by 0.63%, the S&P 500 by 0.73%, and the Nasdaq by 0.85%. Asian stocks also dropped to a one-week low, with Japan’s Nikkei down 0.50%, China’s stocks easing by 0.6%, and Hong Kong’s Hang Seng Index lower by 1.6%. The 10-year Treasury note yield fell by 1 basis point to 4.620%, reversing an overnight increase of 10.7 basis points. The dollar index held steady at 105.87, retaining overnight gains. U.S. crude slightly increased to $76.24 per barrel, and Brent increased to $80.58. Spot gold remained stable at $1,959.74 per ounce, on track for its weakest week in over a month. Bitcoin stayed near an 18-month high, currently at $36,519, peaking at $37,978 in the previous session, its highest level since May 2022.