Robust U.S. economic data that has stoked the fires of inflation anxiety. The yield on the UK's 30-year government bonds has climbed to a dizzying 5.24%, a peak not seen since 1998. This surge in borrowing costs is ringing alarm bells about the UK's fiscal health. The Federal Reserve's interest rate strategy for 2025 is getting tangled in a web of strong economic indicators. Yesterday, the US Institute for Supply Management's Services PMI jumped to 54.1 in December, outpacing forecasts. The prices index also surged, adding fuel to the inflation fire.
Nevertheless, the FTSE was inching up 0.1% this morning, boosted by Barclays, the London Stock Exchange Group and Games Workshop.
Over in Europe, the eurozone's headline inflation ticked up to 2.4% in December, with core inflation holding steady at 2.7%, right in line with market predictions.
For those keeping an eye on the economic calendar, Wednesday promises a smorgasbord of data: eurozone consumer confidence, producer price index, and U.S. ADP unemployment figures.
Turning to the corporate stage, Shell is bracing for a dip in Integrated Gas production for the fourth quarter, forecasting output between 880,000 to 920,000 barrels of oil equivalent per day, down from 941,000 in the previous quarter. The energy giant also anticipates weaker trading results due to expired hedging contracts and is preparing for well write-offs to the tune of USD 300 million.
In the world of gaming, Flutter Entertainment has issued a warning of its own. The company expects U.S. revenue for 2024 to fall short by USD 370 million, thanks to unfavorable sports outcomes.
Things to read today:
- Luxury, the end of youthism (Bloomberg).
- The new Rasputin (The Atlantic).
- Why Canada should join the EU (The Economist).
- Carmakers have a maddening software problem (Financial Times).