Source: Sharecast
The drop in Sterling came as US government bond yields continued to edge higher, amid a recession warning overnight from the World Bank, who said that central banks globally might need to raise rates much further still - "unless supply disruptions and labor-market pressures subside."
Heading into the bank holiday to mourn the passing of Queen Elizabeth II, as of 1201 BST, London's top-flight index was 0.14% to 7,291.64, even as the second-tier index dipped 0.32% to 18,826.01.
Helping to buoy the FTSE 100, Sterling was down by 0.36% at 1.1426 after the Office for National Statistics reported a 1.6% month-on-month drop in UK retail sales (consensus: -1.4%) during the month of August.
It earlier plumbed 1.1400, its lowest mark since the UK was forced out of ERM.
According to the World Bank, central banks around the world might need to do more in order to return global core inflation down to target - roughly 200 basis points more of tightening to be exact.
Otherwise, global core inflation excluding energy would only retreat to about 5.0% in 2023, twice the average seen over the five years preceding the pandemic, which could see the rate of increase in global gross domestic product slow to 0.5%.
On a related note, in a research note sent to clients, Bank of America Securities strategists, Michael Hartnett, Elyas Gabou and Myung-Jee Jung, said: "US CPI unlikely to drop below 4-5% anytime soon [...]
"Fed funds & US yields heading to 4-5% next 4-5 month [...] US unemployment rate heading to 4-5% next 4-5 quarters; world max bearish but we say new highs in yields=new lows in stocks."
They also recommended that clients circle 15 November on their calendars.
"G-20 meeting in Bali…hugely important meeting, in our view, given new markets, macro & geopolitics…markets may pressure policy makers for new US dollar “Plaza accord” via US dollar spike; plus potential negotiations re Russia/Ukraine."
In the background, August retail sales, industrial production and fixed asset investment data in China all surprised to the upside overnight, despite the drag from health restrictions, power shortages to the heat wave and declines in house prices.
Nonetheless, Julian Evans-Pritchard, senior China economist at Capital Economics, was expecting economic momentum to remain weak into 2023 due to the ongoing drag from Covid-19 restrictions in the Asian giant which it said were likely to remain in place at least until the People's Congress next March.
FedEx withdraws guidance, takes Royal Mail down with it
Royal Mail shares were hammered by the negative read-across in markets from US peer FedEx's decision to withdraw its full-year guidance after Thursday's close. It also guided analysts towards fiscal first quarter profits of $3.44 on sales of $23.3bn. That compared to consensus forecasts for $5.14 abd $23.6bn, respectively.
AstraZeneca and Sanofi said their Beyfortus drug for the prevention of lower respiratory tract disease in newborns and infants has been recommended for marketing authorisation in the European Union If approved, Beyfortus would be the first and only single-dose passive immunisation for the broad infant population, including those born healthy, at term or preterm, or with specific health conditions.
Business process outsourcing firm Capita has agreed to sell its Pay360 division to Access PaySuite in a deal that values the division at £150.0m. Capita said on Friday that the disposal of Pay360 was on a cash-free, debt-free basis, representing a 14.3x multiple on the business' 2021 underlying earnings of £10.5m.
Market Movers
FTSE 100 (UKX) 7,290.84 0.12%
FTSE 250 (MCX) 18,821.02 -0.35%
techMARK (TASX) 4,247.48 0.13%
FTSE 100 - Risers
AstraZeneca (AZN) 10,376.00p 2.43%
Hikma Pharmaceuticals (HIK) 1,257.50p 2.11%
Abrdn (ABDN) 146.70p 1.49%
British American Tobacco (BATS) 3,484.00p 1.43%
Hargreaves Lansdown (HL.) 862.00p 1.36%
SSE (SSE) 1,758.50p 1.33%
Barratt Developments (BDEV) 429.60p 1.27%
Imperial Brands (IMB) 1,931.50p 0.99%
St James's Place (STJ) 1,103.50p 0.91%
Informa (INF) 557.40p 0.91%
FTSE 100 - Fallers
InterContinental Hotels Group (IHG) 4,699.00p -4.08%
Airtel Africa (AAF) 133.60p -3.88%
Land Securities Group (LAND) 598.00p -3.30%
Glencore (GLEN) 488.50p -2.69%
Fresnillo (FRES) 711.60p -2.68%
JD Sports Fashion (JD.) 125.20p -2.34%
Halma (HLMA) 1,998.00p -1.96%
International Consolidated Airlines Group SA (CDI) (IAG) 106.46p -1.81%
B&M European Value Retail S.A. (DI) (BME) 339.00p -1.77%
Endeavour Mining (EDV) 1,627.00p -1.75%
FTSE 250 - Risers
National Express Group (NEX) 197.10p 5.63%
Jupiter Fund Management (JUP) 107.70p 5.07%
Provident Financial (PFG) 187.60p 3.65%
Hammerson (HMSO) 21.64p 3.24%
Polymetal International (POLY) 230.00p 3.14%
W.A.G Payment Solutions (WPS) 94.00p 2.96%
Telecom Plus (TEP) 1,780.00p 2.89%
Redrow (RDW) 518.00p 2.57%
Syncona Limited NPV (SYNC) 190.00p 2.48%
ICG Enterprise Trust (ICGT) 1,070.00p 2.29%
FTSE 250 - Fallers
Royal Mail (RMG) 222.30p -11.04%
Darktrace (DARK) 344.50p -9.91%
Aston Martin Lagonda Global Holdings (AML) 167.90p -6.67%
Wizz Air Holdings (WIZZ) 1,986.50p -4.40%
JTC (JTC) 745.00p -4.12%
WH Smith (SMWH) 1,415.00p -3.58%
Clarkson (CKN) 2,625.00p -3.14%
NCC Group (NCC) 223.00p -3.04%
easyJet (EZJ) 349.00p -2.79%
Ferrexpo (FXPO) 151.00p -2.77%
