That’s all folks. Tomorrow: UK inflation
That concludes our markets blog coverage today, on the day US inflation came in lower than expected and FTX founder Sam Bankman-Fried was arrested after being accused of fraud.
The Evening Standard City desk will be back at 7am tomorrow where we’ll find out if UK inflation is taking a similar trajectory to the US, and results from package holiday firm Tui will shed light on the health of the travel sector ahead of the Christmas holiday season.
FTSE 100 closes up 57 points: Evening wrap
The FTSE 100 closed up 57 points to 7,503 today, thanks to a late afternoon rally, joining New York stocks which made broad and strong gains after US inflation data fell, adding to hopes that the Federal Reserve would be able to adopt a smaller, 0.50% rate hike at the end of its December policy meeting on Wednesday.
The volatile run in online grocer and e-commerce technology specialist Ocado took another twist today, with its shares making some of the strongest gains of the FTSE 10, up 4.57%.
Some investors see the company as big potential growth case, with plenty of viable partners for its tech, highlighted by its recent deal with Lotte Shopping of South Korea. Others can’t see past a string of profit warnings from the company and it frequently moves from top slot to bottom place in a matter of days. Over the year, its shares are down almost 60%.
Rolls-Royce was the biggest single faller after bearish comment on the stock from JP Morgan analysts.
Binance net outflows top $3 billion in 24 hours
Net outflows at leading crypto exchange Binance have topped $3 billion in the past 24 hours, according to data platform Nansen, as the demise of FXT continues to send jitters around the crypto market.
Earlier, Binance had sought to reassure customers it had enough reserves to support customer funds by commissioning a “proof of reserves” report by French accountancy firm Mazars.
But Douglas Carmichael, a former head of US audit watchdog, the Public Company Accounting Oversight Board, told the Wall Street Journal it would be a “gross misrepresentation to call this an audit.”
Changpeng Zhao, the billionaire founder of crypto exchange Binance, tweeted: “Ignore FUD. Keep Building!” in reference to an abbreviation for ‘fear, uncertainty and doubt’ widely used by crypto traders on social media.
“There has hardly been a week going by without some FUD. We learned the ability to ignore them or keep building”, he said.
Blockbuster week for the economy moves on to inflation as Bank of England interest rate hike looms
Londoners are making headway through a blockbuster week for the economy, one which will set the tone for homeowners, consumers and investors alike into 2023.
Next up is one of the biggest numbers on the billing — inflation data for November — and it will reveal if there is any hope that the runaway pace of price rises may have peaked the month before Christmas during a cost-of-living crisis.
HSBC expects the Consumer Price Index to ease back slightly to 10.9% from 11.1% in October, in what would be the first sign of a fall. But that will leave it significantly above the Bank of England’s official target of 2%, leaving the way wide open for rate hikes.
Wall Street stocks rally on hopes inflation data means Fed’s inflation medicine is working into December rate call
New York stocks made broad and strong gains after US inflation data fell, adding to hopes that the Federal Reserve would be able to adopt a smaller, 0.50% rate hike at the end of its December policy meeting on Wednesday.
The S&P 500 rose over 2% to 4087.61, a rise of around 2%. The Nasdaq Composite was up over 3% and the 30-stock Dow Jones Industrial Average was up 2%.
The US ConsumerPrice Index for November fell to 7.1% year-on-year, down from 7.7% and lower than the 7.3% forecast, its lowest for over a year. While it remains significantly higher than the 2% target held by the Federal Reserve, it was also the fifth consecutive monthly fall and its lowest reading in over a year.
Pound at six month high amid tale of two rate hikes
The pound hit a six-month high against the dollar after the fifth consecutive monthly drop in the annual rate of US inflation took a toll on America’s currency above $1.24, but it wasn’t just the prospect of a softer rate hike from the Federal Reserve on Wednesday that was setting the pace.
While the US data made a Fed move of 0.50% more likely when it makes its December announcement on Wednesday, there was more talk in the market that the the Bank of England could stick with a 0.75%-sized hike on Thursday. It came after a run of supportive-looking UK data in a blockbuster week for the country’s economy.
That differential gave the pound some extra momentum, extending its rebound from the historic lows touched during Liz Truss’s time in 10 Downing Street.
US inflation falls by more than forecast, boosting Wall Street stocks and hitting the dollar
Signs that the fight against inflation in the US is kicking in properly to economic data boosted Wall Street stock futures and hit the dollar in the run up to the start of US trade.
The ConsumerPrice Index for November fell to 7.1% year-on-year, down from 7.7% and lower than the 7.3% forecast, its lowest for over a year. It is the fifth consecutive monthly fall, but it remains significantly higher than the 2% target held by the Federal Reserve.
The US central bank will make its December announcement on interest rates on Wednesday and the CPI data looks to open the way for a softer 0.50% hike.
After the CPI data came out, futures trade pointed to an opening rally of about 3% for the three main US stock trackers, the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite.
The dollar index fell by over 1%. The pound rallied by over 1% to $1.2412, its highest in six months.
City comment: Don’t shoot the MPC pilots
Who would be a rate setter on the MPC this week? It must be like flying through thick cloud with different control panel dials showing that the plane is descending – yet also climbing. Which indicators do you trust to avoid that worst case scenario (for pilots at least) a hard landing on terrain that is unpleasantly lumpy rather than flat?
This week’s data so far points to an economy running warmer than most commentators expected in the chaotic aftermath of the mini-Budget less than three months ago. Yet there is little doubt Britain is already in recession with apparently little hope of UK Plc’s nose pulling up much before the summer. But labour shortages are still holding back growth. Go figure.
My hunch is that the MPC will prioritise jobs and output over inflation by trimming their next rate hike to 0.5%. But there is still a lot riding on the CPI number tomorrow. Forecasts in the Reuters poll range from 10.6% to 11.5%. Anything at the upper end of that – particularly if it is above October’s high water mark of 11.1% and all bets are off.
If inflation is still seen to be accelerating despite the eight consecutive rate hikes that have been thrown at it, the pilots at the MPC may well reluctantly agree that the plane is gaining too much height and throw in another 0.75% rise. It is a tough call and will require strong nerves. There is no autopilot for the economy. So over to you Andrew Bailey and Co. Good luck.
SEC charges FTX founder Sam Bankman-Fried over allegedly defrauding investors
The US securities regulator has charged FTX founder Sam Bankman-Fried with orchestrating a scheme to defraud equity investors in the collapsed crypto exchange.
Bankman-Fried is accused of having orchestrated a years-long fraud to conceal from FTX’s investors the undisclosed diversion of FTX customers’ funds to Alameda Research LLC, his privately-held crypto hedge fund.
SEC Chair Gary Gensler said: “We allege that Sam Bankman-Fried built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto.
“The alleged fraud committed by Mr. Bankman-Fried is a clarion call to crypto platforms that they need to come into compliance with our laws. Compliance protects both those who invest on and those who invest in crypto platforms with time-tested safeguards, such as properly protecting customer funds and separating conflicting lines of business.”
FTSE 100’s biggest movers: Ocado bounces higher
The volatile run in online grocer and e-commerce technology specialist Ocado took another twist today, with its shares back at the top of the FTSE 100.
Some investors see the company as big potential growth case, with plenty of viable partners for its tech, highlighted by its recent deal with Lotte Shopping of South Korea. Others can’t see past a string of profit warnings from the company and it frequently moves from top slot to bottom place in a matter of days. Over the year, its shares are down almost 60%.
Rolls-Royce was the biggest single faller after bearish comment on the stock from JP Morgan analysts.
Read More: FTSE 100 Live 13 December: Pound rallies past $1.24 to 6-month high; US CPI inflation