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...Today is Friday, May 10th and this is your FT News Briefing....
...It warned, however, that interest rates may stay higher for longer than expected amid stubborn inflation — particularly price rises caused by geopolitical tensions....
...Most European markets were closed for the May 1 bank holiday. Traders worldwide will be focused on the US Federal Reserve’s rate-setting decision due later today....
...Strategists have warned that the European Central Bank and the Bank of England may be forced to cut interest rates more slowly in order to avoid divergence from the Fed if price pressures remain persistent...
...The impact may be felt unevenly across the market....
...Stephanie Stacey...
...“Things may be fine now but we would see this as a false dawn.”...
...Some analysts have warned markets may nevertheless be underestimating the potential for an escalation that causes a disruption of supplies through the Strait of Hormuz....
...“Interest rates are now at zero, but inflation at 2 per cent could become certain and concerns about an upside risk may arise.”...
...London’s FTSE 100, which has lagged behind its peers in Europe this year, rose to the highest level since May 2023....
...However, disappointments in industrial output and retail sales suggested the recovery may not yet be on solid ground....
...Pictet Asset Management has bought more commodities in recent months in expectation that improved demand may spark price rises, while offering a buffer to stubborn consumer price growth....
...Readers may notice some recurring themes....
...Board chair Larry Kellner will leave in May....
...Any further signals of sticky inflation may prompt traders to push back their bets on interest rate cuts, potentially undermining the recent Wall Street rally....
...The S&P purchasing manager’s index, a measure of activity in the private sector, rose to 53.3 in February, up from 52.9 in January and the highest since May 2023....
...On the other side of the Atlantic, a slowdown in the US services sector boosted hopes that inflation may be easing in the world’s largest economy....
...Stephanie Pope was still in her first week as Boeing’s first-ever chief operating officer when a frightening accident on a 737 Max thrust the company into a new crisis and put the manufacturing and supply...
...Bets on US chipmaker Intel may have proven less successful....
...The Institute for Supply Management’s non-manufacturing purchasing managers’ index fell more than expected to 50.6 in December, the lowest reading since May....
...However, there are tentative early signs that economic activity may be picking up, say some strategists....
...The data, which signals the labour market may be cooling, comes ahead of Friday’s non-farms payroll report, considered the benchmark index for the US employment market....
...A sell-off in global bond markets combined with a rally in stocks this year shows that investors’ all-consuming obsession with the path of inflation and interest rates may finally be ending, say analysts...
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