Mortgage fears as interest rates poised to hit 5.75%

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Wages grew at their fastest pace ever outside the pandemic period, according to the Office for National Statistics.

Regular salary excluding bonuses rose 7.2% in the three months through April.

5 things to start your day

1) US seeks to block Microsoft’s $69 billion deal to support Britain | The Federal Trade Commission is applying for an injunction to stop the takeover by Activision Blizzard

2) Excluding Credit Suisse’s top bankers as UBS completes bailout | Several senior Swiss bank heads will leave the combined company

3) JPMorgan pays $290 million to Jeffrey Epstein victims | A Wall Street settlement giant claims it knowingly profited from the sexual assault of a former client

4) Brexiteer Crispin Odey’s name revoked by hedge fund after sexual abuse allegations | A company planning a complete rebranding that would remove all traces of the disgraced financier

5) Britain ignites a coal plant as solar panels are damaged in hot weather | The rush to turn on air conditioning during a heat wave causes electricity demand to skyrocket

What happened overnight

The People’s Bank of China (PBOC) revived the highly anticipated US inflation data today by lowering its short-term lending rate for the first time in 10 months.

Many analysts were expecting a rate cut of the one-year medium-term lending facility on Thursday, as the People’s Bank of China (PBOC) is widely expected to roll over outstanding loans. Today’s 10 basis points cut to the seven-day reverse repo rate removed any lingering doubt about China’s stimulus policy in the face of persistently weak economic data.

The move had little effect on stock markets, but it spurred a rally in China’s benchmark 10-year government bonds and sent the beleaguered yuan to a six-and-a-half-month low – without doing much to boost local stocks, in a worrying state. A reflection of what is increasingly being called a loss of confidence in China’s growth prospects.

Elsewhere in Asia, stocks followed Wall Street’s higher close and the US dollar was on edge ahead of an expected pause in the Fed’s rate hike cycle on Wednesday.

Wall Street closed higher, carrying 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 Standard & Poor’s 500 Index rose 40.07 points, or 0.9%, to 4,338.93 points. The Dow Jones Industrial Average rose 189.55 points, or 0.6 percent, to 34,066.33 points. The Nasdaq Composite Index rose 202.78 points, or 1.5%, to 13,461.92 points.

Meanwhile, HSBC announced that it would close its wealth and personal banking business in New Zealand.

The London-listed bank said last year it was reviewing its retail banking business in New Zealand with a view to selling it.

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