Good morning! Here’s what you need to know in markets on Thursday.
1. All eyes are on the Bank of England, with the latest inflation decision, asset purchase facility decision, and outlook on the UK economy all due at 12.00 p.m. BST (7.00 a.m. ET). No change is expected to the Bank’s policy but inflation data on Wednesday put pressure on the bank to raise rates sooner rather than later. Markets will therefore be watching the wording of any statements closely.
2. The tax authorities have accused Amazon of failing to co-operate fully in tackling a multibillion-pound fraud that is putting scores of small British companies out of business. The Times reports that figures from HM Revenue & Customs suggest that foreign companies selling goods through websites such as Amazon and eBay are evading tax on up to a third of all sales. Meanwhile, the online giants make millions of pounds in commission.
3. US stocks nudged higher to a new record overnight as investors weighed new inflation data in an attempt to forecast the Federal Reserve’s next move. The S&P 500 rose less than 0.1%, up slightly from a new record high reached on Tuesday. Meanwhile, the Dow rose 0.2%, while the more tech-heavy Nasdaq increased 0.1%.
4. Japanese stocks were steady in choppy trade on Thursday morning, as weak Chinese economic data offset early gains. China posted its slowest growth in investment in nearly 18 years along with weaker-than-expected industrial output and retail sales. Japan’s Nikkei stock index is down 0.29% at the time of writing (6.30 a.m. BST/1.30 a.m. ET), while elsewhere in Asia the Hong Kong Hang Seng is down 0.66%, and China’s Shanghai Composite is down 0.32%.
5. The UK government will aim for a “bespoke” deal with the EU to protect the City of London after Brexit, Chancellor Philip Hammond has said. Financial services are the UK’s most important export to the EU, he said at a dinner in the City last night. The BBC reports that Hammond said Brussels would not be allowed to use Brexit to introduce “protectionist” measures designed to target the City.
6. House prices in central London fell at their sharpest pace since 2008 in August, intensifying the slowdown in the capital’s housing market, but prices went up in other regions of Britain, a survey showed on Thursday. Reuters reports that the Royal Institution of Chartered Surveyors (RICS) said its monthly balance of overall British house prices picked up to +6 after dropping to a four-year low of +1 in July.
7. China’s newly wealthy families have increased their overseas investments in European properties and technology stocks in the US, according to research by UBS and Campden. Enrico Mattoli, head of global family office in Greater China at UBS Wealth Management, said that family offices in Hong Kong and mainland China were increasingly seeking opportunities beyond Asia.
8. US President Donald Trump blocked a Chinese-backed private equity firm from buying a US chipmaker on Wednesday, sending a clear signal to Beijing that Washington will oppose deals that involve technologies with potential military applications. Canyon Bridge Capital Partners’ planned $1.3 billion (£980 million) acquisition of Lattice Semiconductor was one of the largest attempted by a Chinese-backed firm in the US chip sector and was the first announced deal for the Palo Alto-based firm, which launched last year with a focus on technology investments.
9. Facebook is rolling out a slew of new policies and guidelines aimed at making advertisers more comfortable about where their ads will run and what kind of content they’ll be adjacent to. The announcements are summed up in a new blog post by Facebook’s vice president of global marketing solutions titled “Providing More Clarity and Control for Advertisers.”
10. JPMorgan’s global head of quantitative strategy has joined his boss, CEO Jamie Dimon, in the growing legion of anti-cryptocurrency crusaders. In a client note on Wednesday, Marko Kolanovic said cryptocurrencies as a whole had “some parallels to fraudulent pyramid schemes.”