Morning Note: An Update on Market News.

Market News

US equity markets were closed for a holiday yesterday and are only open for a half-day today. This morning in Asia, Hong Kong (Hang Seng, -1.9%) and mainland China equities (Shanghai Composite, -0.7%) retreated, while Japan (Nikkei 225, +0.5%) played catch-up after a national holiday. Japan’s key inflation measure accelerated for the first time in four months, with growth in CPI excluding fresh food inching up to 2.9% in October from 2.8% in September.

The FTSE 100 is currently little changed at 7,484. Barclays is looking to cut costs by up to £1bn, which may involve slashing as many as 2,000 mostly back-office jobs, Reuters reported. The possible layoffs represent about 2% of the bank’s workforce.

The yield on the UK’s 10-year Gilt surged back above 4.3%, rebounding from a recent six-month low of 4.03%, as markets adjusted their expectations on the timing of the Bank of England’s potential interest rate cuts after stronger-than-anticipated flash PMI data. The FT reports that Hugh Pill, the BOE’s Chief Economist, said the central bank can’t afford to ease off tight monetary policy in the battle against high inflation.

UK consumer confidence rebounded in November, with households more willing to splash out on big-ticket purchases ahead of Christmas, GfK said. Its measure of sentiment increased 6 points to minus 24, the sharpest rise since April. Sterling trades at $1.2532 and €1.1486.

Brent Crude held steady at $81.40 a barrel, while gold trades at $1,993 an ounce. The EU has put forward a plan for a €584bn overhaul of power grids.

Source: Bloomberg