Rate hike fears hit the LSE

With investors focused on earnings season, risings yields did not have much impact on equities yesterday. The FTSE 100 remained flat, despite poor performance from miners, which released disappointing outlooks, including BHP and Anglo American.

However, this morning is different. The FTSE 100 is down 0.3%, hampered by miners and financial companies, due to investor concern over a more aggressive monetary policy from central banks. Overnight, Fed chair Jerome Powell said a half-point interest rate hike will be "on the table" when the Fed meets on May 3-4.

Bank of England Governor Andrew Bailey also spoke yesterday, and mentioned concerns about the risks of persistent inflationary pressure from a strong labour market. He added that the central bank was walking a tight rope between curbing inflation and avoiding recession.

British retail sales volumes fell 1.4%, according to the Office for National Statistics. This is a bigger drop than the 0.3 % forecast in a Reuters poll.

 

Things to read today:

Elon Musk Enters His Rupert Murdoch Phase Twitter is more powerful than any rocket or car he’ll build. No wonder he wants it so bad. (Intelligencer)

China sets its eyes on Earth's last frontier (Nikkei Asia)

Jay Powell signals Fed is prepared to raise rates by a half-point in May (Financial Times)