China and BoE lift the UK market

Yesterday, the Bank of England followed in the footsteps of the Fed and raised its rates by 75bps. This was widely expected, so there was little market reaction. The main difference with the Fed is that the institution signaled that peak interest rates would be less than what had been priced in by markets. The FTSE 100 ended the session up 0.6%.

Investors are still digesting Fed head Jerome Powell's speech, in which he said that interest rates will go higher than previously thought. Despite this, they are still eagerly awaiting the US job report due later today, in the hope that bad numbers would force the Fed to ease its monetary policy sooner rather than later.

Meanwhile, the FTSE 100 was up 0.9% at 9.30am, as mining stocks rose on expectations of strong demand after news that Beijing would ease its Covid-19 restrictions in March.

Among stocks, National World soared 7.1% after it said it was considering a cash offer for Daily Mirror owner Reach.

 

Things to read today:

Elon Musk begins mass lay-offs at Twitter (Financial Times)

Xi Jinping urges Olaf Scholz to co-operate despite tensions with the west (Financial Times)

UK Recession Guaranteed With BOE Outlook for 500,000 Job Losses (Bloomberg)