Mortgage fears as interest rates poised to hit 5.75pc
Outside of the pandemic, wages have risen at an unprecedented rate, according to the Office for National Statistics.
Regular salary excluding bonuses rose 7.2 percent in the three months to April.
5 things to start your day
1) The US wants to block a $69 billion deal with Microsoft to give the UK a boost | The Federal Trade Commission is seeking an injunction to stop its acquisition of Activision Blizzard
2) Top bankers exit Credit Suisse as UBS completes bailout | Numerous senior heads of Swiss banks will leave the combined company
3) JP Morgan will pay Jeffrey Epstein’s victims $290 million | The Wall Street giant has acknowledged claims it knowingly benefited from a former client’s sexual abuse
4) Brexit advocate Crispin Odey’s name is dismissed by a hedge fund after allegations of sexual assault | The company is planning a complete rebranding that will eliminate all traces of the disgraced financier
5) UK ignites coal-fired power station as solar panels suffer in hot weather | The rush to turn on the air conditioning during the heatwave is causing an increase in electricity demand
What happened overnight?
The People’s Bank of China (PBOC) has fueled the wait for today’s much-anticipated US inflation data by cutting interest rates on short-term loans for the first time in 10 months.
Several analysts had expected a rate cut on the one-year term loan on Thursday on Thursday amid widespread expectations that the PBOC will roll over maturing loans. Today’s 10 basis point cut in the 7-day reverse repo rate promptly dispelled any remaining doubts about China’s stimulus policy amid continued weak economic data.
The move had little major impact on stock markets, but sparked a rally in China’s benchmark 10-year government bond and sent the beleaguered yuan to its lowest level in six-and-a-half months — which was worrying, though, without hurting local stocks This reflects what is increasingly being described as a loss of confidence in China’s growth prospects.
Elsewhere in Asia, stocks trailed Wall Street’s higher close and the US dollar underperformed ahead of an expected pause in the Federal Reserve’s rate-hiking cycle on Wednesday.
Wall Street closed higher, taking the S&P 500 to its highest level in more than a year ahead of the US consumer price inflation (CPI) release this afternoon.
The S&P 500 rose 40.07 points, or 0.9 percent, to 4,338.93. The Dow Jones Industrial Average rose 189.55 points, or 0.6 percent, to 34,066.33. The Nasdaq Composite rose 202.78 points, or 1.5 percent, to 13,461.92.
Meanwhile, HSBC announced that it will close its wealth and retail banking businesses in New Zealand.
The London-listed bank announced last year that it was reviewing its retail banking business in New Zealand with a view to selling it.