Moving markets: What’s shaping the FTSE 100 today
Moving Markets Today: Asian Shares Mixed, Oil Surges on US-UK Yemen Strikes, Gold Shines on Growing Safe-Haven Appeal, Attention Turns to UK Factory and GDP Data
U.S. stocks closed with minimal change as higher-than-expected inflation and positive labour market signs tempered hopes for early Fed rate cuts. Asian shares approached Friday cautiously. U.S. and UK strike against Houthi rebels in Yemen led to a spike in oil prices. China experienced a December decline in consumer prices amidst weak demand, while exports rose. U.S. bitcoin ETFs recorded $4.6 billion in volume on their debut, and Microsoft briefly surpassed Apple as the world’s most valuable company. Britain is set to release key data today, including November Industrial and Manufacturing Production, November Trade Balance, and November GDP figures. Here are five key takeaways for your day.
US and UK Military Strikes on Houthi Rebels in Yemen Trigger Surge in Oil Prices
The U.S. and the UK launched military strikes against Iran-backed Houthi rebels, causing concerns about an escalation in the regional conflict. President Joe Biden ordered the strikes in response to what he termed as “unprecedented Houthi attacks” on international vessels in the Red Sea. Australia, Bahrain, Canada, and the Netherlands supported the operation. As a result, oil prices increased on Friday due to the military strikes, raising fears of heightened instability in a region crucial for global energy trade. West Texas Intermediate rose by 2.2% to $73.58 per barrel, and Brent crude climbed 2% to reach $78.96.
China’s Consumer Prices Decline in December; Exports Rise
China’s consumer prices remained in deflation for the third straight month in December, with a 0.3% year-on-year drop. This adds pressure on policymakers working to restore economic confidence. Producer prices, reflecting business costs for goods, also declined by 2.7%, slightly less than expected, according to official statistics released on Friday.
China’s December exports rose by 2.3%, beating both the November figure of 0.5% and the expected 1.7% increase. Imports increased by 0.2% year-on-year, slightly below the forecasted 0.3%, but still an improvement from the 0.6% decline in the previous month, as per customs data released on Friday.
The International Monetary Fund (IMF) expects global economic growth to remain robust in the current year, building on a stronger-than-expected 2023. Nevertheless, there is a need for concerted efforts to push global growth rates beyond the modest 3% range in the medium term.
Bitcoin ETFs Garner $4.6B in Debut; Microsoft Temporarily Surpasses Apple as Global Market Leader
U.S.-listed bitcoin ETFs, recently approved by the U.S. securities regulator, saw a substantial $4.6 billion in shares traded. Eleven spot bitcoin ETFs, including those from BlackRock, Grayscale, and ARK, entered the market, triggering a competitive scramble for dominance. Grayscale, BlackRock, and Fidelity emerged as the leaders in trading volumes, according to LSEG data, Reuters reported.
Microsoft briefly overtook Apple as the world’s most valuable company due to a boost in artificial intelligence on Thursday. Microsoft’s shares rose 1% to $2.87 trillion, edging past Apple, which experienced a 1% decline. However, by midday, Apple regained its top position, closing the day at $2.89 trillion compared to Microsoft’s $2.86 trillion.
What’s Coming Up
Later today, the UK will release crucial data, including statistics on Industrial and Manufacturing Production for November, along with the Trade Balance for the same month. It is scheduled to disclose November’s GDP data, and economists are anticipating a modest rebound following the previous month’s decline. October’s downturn was largely influenced by an unusually significant decrease in manufacturing activity.
Asian Stocks Tread Water; Gold Shines on Weaker Dollar and Growing Safe-Haven Appeal
The U.S. stock market had minimal changes, with the S&P 500 dropping less than 0.1%, and the Nasdaq Composite remaining stable. Asian stocks showed mixed results, with Japan’s Nikkei 225 gaining 1.2%, while China’s CSI300 and Hong Kong’s Hang Seng index both declined by 0.3%. The Treasury market remained stable, and the dollar struggled to gain despite slightly higher-than-expected U.S. inflation data. The two-year yield in Asia dropped to 4.2639%, down by 11 basis points overnight, while the 10-year yield remained relatively unchanged at 3.9828%, showing a 5 basis point overnight decline. Spot gold prices rose by 0.3%, reaching $2,033.63 per ounce, and Bitcoin traded nearly flat at $46,122.85.