Morning Note: An Update on Market News.
Market News
Donald Trump says he will impose 25% tariffs on all steel and aluminium imports into the US. The President also said he will announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each nation. The dollar climbed amid speculation rising tariffs may boost inflation and limit the Federal Reserve’s ability to cut interest rates. Gold is trading at another all-time high, currently $2,895 an ounce.
Data released on Friday showed US job growth moderated in January: nonfarm payrolls came in at 143k, below the 175k expected, although the unemployment rate was 4.0%, just below the 4.1% expected, and robust gains in earnings underscored the strength of America’s labour market. The data bolstered the Federal Reserve’s case to proceed slowly with interest rate cuts. US stocks – S&P 500 (-1.0%); Nasdaq (-1.4%) – and government bonds both came under pressure following Friday’s report, although futures indicated the market will rally somewhat at the open this afternoon. The 10-year Treasury yields 4.48%.
In Asia this morning, equities were generally firm: Nikkei 225 (+0.1%); Hang Seng (+1.7%); Shanghai Composite (+0.6%). China’s consumer inflation accelerated for the first time since August, rising 0.5% in January from a year earlier, driven by holiday spending. Factory deflation persisted with a 2.3% decline.
The FTSE 100 is currently 0.3% higher at 8,725. BP is up 7% this morning on news that activist investor Elliot has built a significant stake in the oil major. Elliot is seeking to boost shareholder value through transformative measures, people familiar said. BP is due to release its 2024 results tomorrow morning.
UK workers are increasingly worried about unemployment, according to a survey. Despite rises in wages, almost half of adults were concerned about their job in January, a 54% increase from a year earlier. 10-year Gilts currently yield 4.48%, while Sterling trades at $1.2410 and €1.2020.
Source: Bloomberg