Two big news items today: the Bank of England will likely hike interest rates and Donald Trump is expected to nominate Jerome Powell as his next central bank chairman. If the Bank of England bites the bullet – finally – it means the first rate boost since July 2007.
Watch for tone and nuance about future rate moves. While a rate climb today is already priced in the UK's Brexit visibility, or lack of it, plus stagnant wage growth, could still provide Bank of England governor Mark Carney with an emergency brake lane exit from what markets expect.
A rate lift would likely hit 3.7m Brit households on tracker or variable standard rate mortgages. Deutsche Bank is not optimistic on the UK economy; it predicts GDP growth will be clipped from +1.6% to +1% next year.
If Donald Trump meanwhile offers Jerome Powell the Fed chair job it will likely be seen as a job continuity project. In other words, keeping to the slow-but-steady rate rise program current incumbent Janet Yellen commenced. Powell has been largely pro-regulation since the 2008 financial crisis though Yellen is viewed as more aggressive on this front.
Overnight stocks in Asia saw the Japanese Nikkei climb half a per-cent to 22,539 while Chinese stocks were all down with the Shanghai composite falling almost -0.40%. Currency-wise the pound dipped -0.04% overnight against the euro to 1.1393 but climbed +0.21 against the dollar to 1.3282.
- UK FTSE 100 7,487.96 -0.07%
- Dow 23,435.01 +0.25%
- S&P 500 2,579.36 +0.16%
- Nasdaq 6,716.53 -0.17%
- Nikkei 225 22,539.12 +0.53%
- DAX 13,465.51 +1.78%
- CAC 40 5,514.29 +0.20%
- Gold 1,279.20 +0.15%
- Oil WTI 54.30 0.00%
Morrisons like-for-like sales up
Morrisons claims a +2.5% like-for-like sales rise for the 13 weeks to 29 October. Including fuel, group like-for-like sales growth was up +3.4%. Morrisons says it has worked hard to soften the impact of a lower sterling on imported food prices.