News updates from May 22: Nvidia beats forecasts and boosts dividend; Sunak calls July 4 UK election

Nikki Haley, the former South Carolina governor, has backed Donald Trump in the race for the White House after bashing him repeatedly as unfit for the office during their bitter Republican nomination fight earlier in the year.

Haley’s endorsement is the latest sign that traditional conservative Republicans are falling in line with Trump’s candidacy even after failing to stop his ascent to the party’s nomination against Joe Biden.

In Haley’s case, the support comes despite Trump’s vitriolic and humiliating attacks on her throughout the campaign, including his use of “Birdbrain” as a derogatory nickname against her.

“Trump has not been perfect on . . . policies,” Haley said. “But Biden has been a catastrophe. So I will be voting for Trump”.

Styrofoam and Kevlar maker DuPont has announced plans to split itself into three publicly traded companies, joining several other US multinationals that have separated their businesses in recent years.

Delaware-based DuPont, itself the product of a three-way split several years ago, will spin off its electronics and water units.

The remaining entity, referred to as “New DuPont”, would continue as a diversified industrial company, and house its iconic brands like and flame-resistant Nomex.

The chemical company also announced a leadership transition after market close on Wednesday, with chief financial officer Lori Koch set to succeed Ed Breen as chief executive officer effective June 1.

DuPont shares rose 4 per cent in after-hours trading.

Industrial icon General Electric in April completed its multiyear, three-way break-up. 3M and Johnson & Johnson have also recently spun-off units.

An earlier version of this post has been amended to reflect that DuPont is not the maker of Teflon

News Corp has struck a deal with OpenAI to allow its news content to be used by the AI developer to train its models and improve its consumer services.

OpenAI will receive access to current and archived content from publications including The Wall Street Journal, Barron’s and New York Post in the US and The Times and The Sun in the UK. A number of Australian titles will also be included. 

No financial terms were given when the deal was announced on Wednesday, although the Wall Street Journal, one of the titles included in the deal, reported that it could be worth more than £250mn to News Corp over five years.

Robert Thomson, chief executive of News Corp, said that OpenAI’s Sam Altman understood “the commercial and social significance of journalists and journalism”.

In April, the Financial Times signed a content licensing deal with OpenAI. 

US stocks fell from record highs as traders assessed minutes from the Federal Reserve’s most recent meeting and prepared for Nvidia’s earnings results.

The S&P 500 on Wednesday closed 0.3 per cent below the previous session’s record high, with about two-thirds of the benchmark index’s members declining. The tech-heavy Nasdaq Composite fell 0.2 per cent.

Early declines for Nvidia moderated in the afternoon, leaving the semiconductor group down 0.5 per cent at Wall Street’s closing bell and ahead of its first-quarter earnings report.

The small-cap focused Russell 2000 fell 0.9 per cent.

Treasury prices fell, pushing the yield on the two-year note up 0.04 percentage points to 4.87 per cent.

A star witness in Bill Hwang’s criminal trial testified that employees would do whatever it took to support their boss’s aggressive trading strategy, including lying to lenders in the run-up to the collapse in 2021 of his family office, Archegos Capital.

Over more than two days of testimony for the prosecution in Manhattan federal court, Archegos’s former chief risk officer Scott Becker said he repeatedly lied to banks in the hope they would facilitate more trades for the fund.

“At Archegos you did whatever you could” to support Hwang’s trading strategy, Becker said.

The downfall of Archegos three years ago captivated Wall Street, with questions over how an obscure family office managing Hwang’s personal fortune could trigger losses of more than $10bn at some of the biggest investment banks.

Read more here

UK investment broker Hargreaves Lansdown has rejected a takeover approach from a group of private equity firms including CVC Capital Partners.

The board of Hargreaves Lansdown on Wednesday evening said it had “unanimously rejected” the proposal of 985p a share, noting it “substantially undervalues” the business and its future prospects.

The consortium comprises private equity groups Nordic Capital and Platinum Ivy, a wholly-owned subsidiary of Abu Dhabi Investment Authority, as well as CVC.

Read more here

US stocks and Treasuries sold off as traders dissected minutes from the US Federal Reserve’s most recent meeting, which showed ‘various’ members of the rate-setting committee expressed a willingness to tighten policy further to tame inflation.

The S&P 500 extended previous declines to be 0.3 per cent lower shortly after the minutes were released. All sectors except healthcare were in the red.

The tech-heavy Nasdaq Composite fell 0.4 per cent. Nvidia was one of five Magnificent Seven groups trading lower, down 1.4 per cent a few hours ahead of its first-quarter earnings report.

Treasury prices fell, pushing the yield on the two-year note up 0.05 percentage points to 4.88 per cent.

Some US Federal Reserve officials signalled they would be prepared to raise interest rates further if inflation became more aggressive, according to a record of their last meeting at the start of May.

“Various participants mentioned a willingness to tighten policy further
should risks to inflation materialise in a way that such an action became appropriate,” said the minutes of the May 1 Federal Open Market Committee meeting, published on Wednesday. 

The prospects of a rate rise have fallen since the vote, after fresh inflation data for the past month came in cooler than expected. The minutes capture the extent of concerns among central bank officials at the persistence of inflation in the world’s biggest economy.

Read more here

Share moves to note on the New York Stock Exchange on Wednesday afternoon include TJX Companies, Target, and Lululemon Athletica.

• Shares of discount retailing group TJX Companies were up 5.4 per cent after the company raised its full-year profit outlook and beat earnings as it benefits from persistent inflation that has consumers visiting their stores in search of bargains.

• Target dropped 7.2 per cent, recovering some of the losses it made in early trading, after it missed earnings expectations as consumers continue to pull back spending on discretionary items.

• Lululemon Athletica shares fell 7.2 per cent after it announced following Tuesday’s closing bell that its chief product officer Sun Choe was leaving to take on another opportunity.

Shares in vaccine makers that played a role in the Covid-19 jab rollout surged after Australia reported its first human case of H5N1 bird flu. 

Australia’s health authorities on Wednesday reported the country’s first case of bird flu in a child who acquired the infection in India. The child has since made a full recovery, officials said. The US has also been battling a widespread bird flu outbreak in cattle herds.

US-listed shares in Germany-based CureVac, which last month announced an early-stage H5N1 vaccine trial in collaboration with GSK, jumped 20 per cent to just under $4 by early afternoon on Wednesday. Moderna, which is also developing an H5N1 vaccine, was up 11.5 per cent.

US biotech Novavax gained 7 per cent, while the American depositary receipts in German group BioNTech rose 8 per cent.

A US district judge in Texas has ruled ExxonMobil’s lawsuit over a climate-focused shareholder resolution will be allowed to proceed against Arjuna Capital, a registered investment adviser, while dismissing a separate claim against European group Follow This.

Exxon filed a lawsuit against the two climate-focused investor groups earlier this year to block a resolution they filed demanding it do more to cut its greenhouse gas emissions. The pair withdrew their resolution in response, asking the judge to dismiss the lawsuit.

But in an opinion issued Wednesday, district Judge Mark Pittman said the case against Arjuna could continue, arguing it was “not absolutely clear” the pair would not file future resolutions, which he argued were “vexing for corporations”. He said Exxon could not pursue the case against Netherlands-based Follow This because of jurisdiction issues.

UK blue-chip stocks notched up their biggest monthly drop in more than a month as stronger than expected inflation data dented hopes for interest rate cuts from the Bank of England.

London’s FTSE 100 closed 0.5 per cent lower, its largest one-day decline since mid-April.

Economic data showed consumer prices rose at an annual rate of 2.3 per cent in April, slightly above a forecast of 2.1 per cent.

In Europe, the region-wide Stoxx 600 closed 0.3 per cent lower, as did Germany’s Dax. France’s Cac 40 dropped 0.6 per cent.

Rishi Sunak is set to announce a July 4 general election, according to senior Conservative sources, despite opinion polls suggesting his ruling party is heading for a heavy defeat.

The UK prime minister and chancellor Jeremy Hunt concluded there was no point holding out until autumn in the hope of better economic news, according to party officials.

Sunak told the cabinet of his decision at a meeting that started at 4.15pm local time on Wednesday, defying opinion polls that give Sir Keir Starmer’s Labour party a lead of about 20 per cent.

Read more here and follow the FT’s election live blog for updates

Sales of previously built homes in the US declined in April, as high mortgage rates and home prices continued to deter buyers.

Existing home sales decreased 1.9 per cent in April from March to a seasonally adjusted annual rate of about 4.14mn, according to data from the National Association of Realtors released on Wednesday. Analysts had forecast an annual rate of about 4.21mn.

Although total housing inventory has improved, the median existing home price has continued to increase, rising 5.7 per cent from March to $407,600. 

NAR chief economist Lawrence Yun said the upper end of the market had seen more supply coming into the market, which may slow the pace of price rises. 

The New York Stock Exchange and nine affiliates have agreed to pay $10mn for taking four days to report to regulators an intrusion into its networks.

The Securities and Exchange Commission said NYSE’s parent Intercontinental Exchange found malicious code in a virtual private network in 2021 after a tip-off, but failed to immediately inform the regulator as required given its key role in US financial markets. 

“Every second counts and four days can be an eternity,” said Gurbir Grewal, director of the SEC’s enforcement division, who added that the fine reflected previous issues.

In 2018, NYSE was fined $14mn following a probe into a 2015 outage and another chaotic trading day months later.

In accepting the fine, ICE and its affiliates neither admitted nor denied the SEC’s findings. 

US markets were steady on Wednesday as investors await the quarterly earnings of chipmaking giant Nvidia and the Federal Reserve’s minutes from its most recent policy meeting. 

The benchmark S&P 500 and tech-heavy Nasdaq Composite were both down 0.1 per cent after the opening bell in New York. Results from Nvidia will be published after US markets close. 

Minutes from the Fed’s May meeting will be published at 2:00pm New York time. 

Yields on interest-rate sensitive two-year Treasuries were up 0.04 percentage points to 4.9 per cent. Yields move inversely to prices. 

BHP and Anglo American have agreed to extend talks over a possible merger after Anglo rejected a third approach by its Australian rival, in the latest twist of a £38.6bn takeover saga that would combine two of the world’s largest mining companies.

BHP said it had made a third, improved offer that increased the merger ratio by 9 per cent, adding that the two companies had subsequently agreed to extend the deadline for it to submit a formal proposal or walk away until May 29. BHP called the increased all-share proposal its “final” ratio.

Anglo’s board unanimously rejected the third proposal. But chair Stuart Chambers said “the Board is willing to continue to engage with BHP and its advisers”.

Vivek Ramaswamy, the biotech entrepreneur and anti-ESG campaigner, has acquired a 7.7 per cent stake in BuzzFeed, sending shares of the online media group surging. 

Following purchases in March, April and May, Ramaswamy holds 2.7mn shares in BuzzFeed, which would be worth almost $7mn based on Tuesday’s closing share price.

Ramaswamy, who tried to run for US president but ended his campaign in January, said in a regulatory filing that he wanted to speak to BuzzFeed’s board or management about “numerous operational and strategic opportunities to maximise shareholder value, including a shift in the company’s strategy.”

BuzzFeed, once a new media darling, last year shut down its news division. The group’s stock has struggled since listing via a Spac in 2021. BuzzFeed’s shares jumped 50 per cent in pre-market trading on Wednesday.

The European gas price has risen to its highest in four months on concerns that Russia could stop supplying Austria.

The price of Title Transfer Facility, the European benchmark, briefly rose to €34.46 a megawatt hour on Wednesday, its highest since early January. The rise came on the back of an announcement by OMV, which said late on Tuesday that Gazprom might halt supplying gas in relation to a foreign court ruling involving the Austrian energy company.

The rise comes despite the EU having near record levels of gas in its storage facilities for this time of year, at 67 per cent of capacity as of Monday.

Rishi Sunak’s team has failed to quash speculation of a summer UK general election.

The prime minister’s press secretary said there was “a lot of interest” in the possibility that Sunak might call a July poll after a meeting of his cabinet this afternoon. “I’m not going to rule anything in or out,” the official said. 

She also refused to answer questions about whether Sunak was considering a pre-election reshuffle, including possibly replacing chancellor Jeremy Hunt.

Sunak had previously said Hunt would be his chancellor until the general election, but the press secretary said only that the prime minister thought Hunt was doing “an excellent job”.

South Africa’s state-owned Public Investment Corporation, the second-largest shareholder of Anglo American, has said that BHP would need to make a “meaningful revision” to its bid for its smaller rival, hours before the takeover deadline for the £34bn mining mega-deal expires.

The PIC said in a statement on Wednesday that BHP’s offer ought to reflect the value of Anglo’s mines and the future options and benefits that the Australian company could obtain through a takeover.

The intervention by PIC, which holds 7.4 per cent of Anglo and a smaller amount of BHP, according to Bloomberg data, comes as the clock ticks down on a 5pm deadline for BHP to declare a formal offer or drop its takeover approach.

PDD Holdings reported that revenues jumped 131 per cent in the first quarter from a year earlier to Rmb87bn ($12bn), as global sales on the company’s Temu shopping app continue to boom.

The group said net income rose 246 per cent from a year earlier to Rmb28bn and reported Rmb242bn of cash and cash equivalents on its balance sheet at the end of the quarter. 

The bumper results sent PDD’s shares up more than 7 per cent in pre-market trading in New York.

PDD makes most of its money from the Pinduoduo ecommerce app in mainland China, but has been rapidly growing its international Temu business on the back of massive advertising spend.

WisdomTree has been given the green light by the Financial Conduct Authority, the UK’s financial market regulator, to list ETPs investing in “physical” spot bitcoin and ether, the two most popular digital tokens, on the London stock exchange on May 28.

It means the UK’s first cryptocurrency exchange traded products will begin trading almost a decade after the first such vehicles appeared in Sweden.

However, the ETPs — which form part of a barrage of similar vehicles expected to list on the LSE — will only be available to professional investors because the FCA has ruled that “crypto derivatives are ill-suited for retail consumers due to the harm they pose”.

The US retail chain Target predicted the end of a slide in same-store sales in the second quarter, after reporting they declined by 3.7 per cent in the first quarter. 

The Minnesota-based company, which has almost 2,000 stores selling merchandise from groceries to apparel, reported revenue of $24.5bn in the first quarter that ended on May 4. That was 3.1 per cent lower than a year before and roughly in line with expectations. 

Target’s diluted earnings per share of $2.03 were slightly below consensus expectations of $2.06, according to analyst estimates compiled by S&P Capital IQ, but within the range of Target’s own guidance. 

For the second quarter, Target forecast that the annual change in same-store sales will range between no increase and a 2 per cent rise.

US markets looked set for a steady open on Wednesday following hawkish comments by rate-setters on Tuesday and as investors await quarterly earnings from chipmaker Nvidia.

Futures tracking the benchmark S&P 500 and the tech-heavy Nasdaq Composite were down 0.1 per cent ahead of the opening bell in New York. Nvidia — a cornerstone of the artificial intelligence boom — will report after the US market closes today. 

Central bank policymakers this week tempered expectations around the pathway for rate cuts this year, with investors of the view that rates will remain high for much of 2024.

The yield on interest-rate sensitive two-year Treasuries rose 0.03 percentage points to 4.9 per cent. Yields move inversely to prices.

UK defence secretary Grant Shapps on Wednesday accused China of providing or preparing to give Russia lethal aid for use by Moscow in its war against Ukraine.

Shapps said that new US and British intelligence “can reveal that lethal aid is now or will be flowing from China to Russia and into Ukraine”. He gave no details.

The revelation follows a visit by Russian President Vladimir Putin to China last week for two days of talks with Chinese President Xi Jinping.

At a defence conference in London, Shapps said that China and Russia had developed a “deeper relationship” and the flow of weapons to Russia was “new intelligence which leads me to be able to declassify and reveal this today”.

Oaktree Capital Management has moved to seize control of Inter Milan after the football club’s Chinese owner Suning Holdings failed to refinance a €400mn loan in time.

Los Angeles-based Oaktree said it had assumed ownership of Inter Milan, following the non-repayment of Oaktree’s three-year loan to Inter Milan’s holding companies that matured on May 21.

Alejandro Cano, managing director and co-head of Europe for Oaktree’s Global Opportunities strategy, said the group’s initial focus was ensuring “operational and financial stability” for the club, which last month beat local rivals AC Milan to become champions of Serie A, Italy’s top football league.

Former Post Office chief executive Paula Vennells has apologised to victims of the Horizon scandal, during which hundreds of sub-postmasters were wrongly convicted based on data from flawed accounting software.

Vennells led the Post Office from 2012 until 2019, as the scale of the problems with the Horizon software became clear.

On Wednesday, Vennells told the public inquiry into the affair: “I would just like to say how sorry I am for all the sub-postmasters and their families and others who have suffered as a result of all of the matters that the inquiry has been looking into.”

She said she had “listened to all of the human impact statements” and “was very affected by them”.

UK rental cost growth slowed from its record high pace in April, while house prices returned to growth, according to official data that suggests the hit to tenants might have peaked. 

Average UK private rents increased by 8.9 per cent in the 12 months to April 2024, down from the record high of 9.2 per cent in the year to March 2024, the Office for National Statistics said on Wednesday.  

The ONS also reported that the average UK house price rose 1.8 per cent to £283,000, in the 12 months to March. This was up from an annual decrease of 0.2 per cent in February and was the first annual rise in prices since June 2023.

Trading in China’s much-anticipated Rmb40bn ($5.5bn) issue of 30-year sovereign bonds was suspended twice after their launch on Wednesday, as the Shanghai Stock Exchange warned of “abnormal fluctuations” and urged investors to be rational and pay attention to risks.

The sale has attracted huge interest from Chinese retail and institutional investors in search of haven assets. Beijing plans to sell Rmb1tn of 20 to 50-year bonds this year to spur investment and growth.

Prices for the 30-year bonds surged 13 per cent at the open before trading was suspended, then surged to a 25 per cent gain before the second suspension. In the final minutes of trading prices slumped back to close up just 1.3 per cent.

Big share price moves in Europe today include British grocery and clothing retailer Marks and Spencer, UK property group British Land and London-listed distributor of industrial and electrical products RS Group:

• Marks and Spencer: Shares in the food and clothing retailer surged 9.4 per cent after it reported its biggest annual profit in a decade, of £716mn.
  

  

• British Land: Shares in the FTSE 250-listed commercial property landlord rose 1.2 per cent after the decline in the value of its £8.7bn portfolio slowed, dropping by £214mn in the year to March, a much smaller hit than the 12 per cent fall reported the year before. 

• RS Group: Shares in the London-listed distributor of industrial and electrical products shed 8 per cent after it reported profit before tax for the year fell by a third to £249mn amid a “more difficult trading environment”.

Jeremy Hunt, the UK chancellor, has admitted that people have been left “bruised and battered” by recent economic turmoil, but insisted that Wednesday’s inflation figures showed the country was moving in the right direction.

Hunt told the BBC that the economy was experiencing “a soft landing” but added: “Prices are a lot higher than they were a year ago so it will take some time for that pressure to ease on family budgets.”

The chancellor said that a future Labour government would not take the “tough decisions” to keep the economy on track, but confirmed that for many voters at the moment “life is tough”.

Israel has recalled its ambassadors to Norway and Ireland in protest at their governments’ recognition of a Palestinian state, foreign minister Israel Katz said.

Norway’s prime minister earlier said official recognition would take place next week, while Ireland and Spain were expected to make similar announcements later in the day.

“Israel will not remain silent in the face of those undermining its sovereignty and endangering its security,” Katz wrote on social media platform X, warning that a similar move — and “severe consequences” — would be taken against Spain if it decided to follow.

European markets opened down slightly on Wednesday amid signs that inflation was proving stickier than expected. 

The region-wide Stoxx Europe 600 index was down 0.3 per cent. Germany’s Dax and France’s Cac were 0.4 per cent lower. 

The FTSE 100 was set for its biggest daily drop in a month, falling 0.6 per cent after April inflation came in at 2.3 per cent, slightly above a forecast of 2.1 per cent. 

Yields on interest rate-sensitive two-year gilts rose by 0.14 percentage points to 4.5 per cent, their highest level since May 2. 

Raspberry Pi, the British maker of tiny computers and computer modules, has confirmed its intention to float on the London Stock Exchange, selling equity held by existing shareholders alongside $40mn of new stock.

It said the proceeds would be used “for engineering capital expenditure, to enhance its supply chain resilience” and other purposes.

The company and the Raspberry Pi Foundation — its principal shareholder, which promotes teaching about computing — have agreed to sell $35mn of shares to semiconductor and software designer Arm and up to $20mn of shares to investment manager Lansdowne Partners, both existing shareholders, in the IPO.

French industrial automations company Schneider Electric has dropped a potential deal for US software group Bentley Systems, in what would have been its biggest-ever acquisition.

Schneider said in a statement on Wednesday that discussions around a “strategic transaction”, which it had confirmed in April, “are now mutually terminated”. Bentley Systems was worth $15.6bn on the stock market at the time, though its market capitalisation has since risen to $17bn. 

The French group, which has grown rapidly over the years through acquisitions and its focus on energy efficiency systems, said it remained “agile and opportunistic” regarding deals.

Traders in swaps markets have pared their bets on Bank of England rate cuts this year after UK inflation data came in stronger than expected.

Markets have lowered the probability of a June quarter-point rate cut from 50 per cent to 15 per cent, with a rate reduction by September now only priced at a chance of about 80 per cent.

Investors are now evenly split on whether one or two quarter-point BoE rate cuts will be delivered by the end of the year, having fully priced two cuts earlier this morning.

Norway has recognised Palestine as a state, the first in a series of European countries expected to do so on Wednesday.

Norway’s centre-left government said a two-state solution was the only viable possibility for peace between Israel and the Palestinians.

“In the midst of a war, with tens of thousands killed and injured, we must keep alive the only alternative that offers a political solution for Israelis and Palestinians alike: two states, living side by side, in peace and security,” said Prime Minister Jonas Gahr Støre.

Ireland and Spain are expected to follow suit later on Wednesday.

Abu Dhabi National Oil Company has signed its second overseas deal for liquefied natural gas, days after signing its first such deal in the US.

Adnoc has taken a 10 per cent stake in a concession in the Rovuma basin in Mozambique, an area with a combined production capacity of 25mn tonnes a year. The stake was acquired from Portugal’s Galp for an undisclosed sum.

The concession includes Rovuma LNG, an 18mn tonnes-per-annum mega-project expected to be operational in 2025. The project has faced difficulties, however, with Isis-linked insurgency affecting security.

The deal shows how the company is bolstering its bet on LNG, as global energy companies expand investment in a fuel that is in rising demand around the world.

British Land has reported the value of its commercial property portfolio declined just 2.6 per cent in the past year as stabilising interest rates improved the picture for big landlords. 

The FTSE 250 company reported on Wednesday that the value of its £8.7bn portfolio dropped by £214mn in the year to March, a much smaller hit than the 12 per cent decline reported the year before. 

Chief executive Simon Carter said that price declines had “slowed significantly in the second half and strong rental growth meant values were broadly flat”.

Marks and Spencer has posted its highest profit in a decade thanks to continued momentum in its turnaround strategy. 

The 140-year-old retailer posted a pre-tax profit and adjusting items of £716mn for the year to March 30, beating analysts’ expectations. It has been buoyed by a revival in its food and clothing and home divisions, with sales up 13 per cent and 5.3 per cent respectively. 

Chief executive Stuart Machin said: “Two years into our plan to reshape [the business] for growth we can see the beginnings of a new M&S.”

UK regulators have fined Citigroup a total of £61.7mn for failures in its trading systems between 2018 and 2022.

In announcements on Wednesday morning, the Prudential Regulation Authority fined the bank £33.9mn, while the Financial Conduct Authority imposed a fine of £27.8mn.

The fines arise from incidents including an incorrect order for $1.4bn being executed in European exchanges.

In a statement, Citi said: “We are pleased to resolve this matter from more than two years ago, which arose from an individual error that was identified and corrected within minutes. We immediately took steps to strengthen our systems and controls, and remain committed to ensuring full regulatory compliance.”

UK public finances were in worse shape than expected in April, while borrowing in the year to March was larger than initial estimates, according to official statistics that will be a disappointment for the chancellor as he weighs tax cuts ahead of the general election.

Net public sector borrowing was £20.5bn last month, the Office for National Statistics said. This was £1.5bn more than in April 2023 and £1.2bn more than the £19.3bn forecast by the Office for Budget Responsibility, the fiscal watchdog.

In the full fiscal year to the end of March, borrowing was £121.4bn. This was £7.3bn more than the £114.1bn forecast by the OBR in March and larger than the £120.7bn of earlier estimates.

The pound edged higher against the dollar on Wednesday after UK inflation figures came in higher than forecast. 

Sterling rose 0.3 per cent to $1.2741 after official figures showed consumer prices rose 2.3 per cent in the year to April. The Bank of England and economists polled by Reuters had expected the headline rate to drop to 2.1 per cent. 

Before derivatives markets opened on Wednesday, traders were evenly split on whether the BoE would deliver its first interest rate cut next month, with two quarter-point cuts priced in by the end of the year. 

Yields on 10-year Japanese government bonds hit 1 per cent for the first time in 11 years as investors increased bets on additional rate rises by the country’s central bank.

The rise in long-term bond yields comes as the Bank of Japan comes under pressure to tighten policy to address the weaker yen. In March, the central bank ended its negative interest rate policy by raising borrowing costs for the first time since 2007. 

More recently, the BoJ also surprised markets by announcing that it would buy a smaller than expected amount of debt during its regular operations, spurring speculation that Japan would begin reducing its sovereign bond purchases. 

UK inflation dropped less sharply than expected to 2.3 per cent in April, despite falling energy prices, denting expectations that the Bank of England will lower interest rates this summer.

The rise in the consumer price index was higher than the 2.1 per cent predicted by the BoE and economists polled by Reuters.

But the figure, which compared with March’s rate of 3.2 per cent, is close to the bank’s 2 per cent target and is likely to be hailed by Rishi Sunak’s government as a sign the UK is winning its battle with inflation ahead of the election expected this year.

A Chinese citizen journalist who accused Wuhan authorities of covering up the early coronavirus pandemic has been released after a four-year jail sentence.

In a short video, Zhang Zhan, one of several citizen reporters who challenged the official narrative that Beijing had successfully managed the outbreak, said she was released on May 13.

The fallout for citizens who resisted Beijing’s attempts to suppress information about the outbreak continue. Zhang Yongzhen, a virologist who first publicly shared the virus’s genome sequence, was evicted from his lab in Shanghai last month. 

Zhang shared the sequence data without government approval and has reportedly since faced “obstacles” to his research work. 

The New Zealand dollar strengthened on Wednesday after the country’s central bank held interest rates steady and issued a statement that was more hawkish than expected.

“Monetary policy needs to remain restrictive to ensure inflation returns to target within a reasonable timeframe,” the Reserve Bank of New Zealand said.

The currency rose as much as 1 per cent against the US dollar following the announcement but settled about 0.6 per cent stronger at NZ$1.63.

Japanese 10-year bond yields rose to 1 per cent as expectations build of rate increases from the Bank of Japan. The Topix index edged down while other Asian stock markets were muted.

Events: UK foreign secretary David Cameron visits Tirana to announce a new partnership for British judges to train their Albanian counterparts. Baltic defence ministers meet in Vilnius. The Nordic Nuclear Forum is held in Helsinki. Venezuelan foreign minister Yvan Gil visits Turkey.

Economic indicators: UK consumer price data for April is due, with the reading feeding into the Bank of England’s June interest rate decision, which analysts predict could herald the first cut this year. Also, monthly UK public sector finances figures and the house price index are released.

Corporate updates: Virgin Money shareholders vote on the proposed acquisition of the company by Nationwide Building Society. British Land, UK retailer Marks and Spencer, and utilities Severn Trent and SSE publish full-year results. UK wealth manager Close Brothers and insurer Swiss Life release quarterly earnings and trading updates.

Vietnam’s public security minister has been appointed as the country’s president, elevating the official in charge of a sweeping corruption crackdown to the second-most powerful position in the national leadership.

The National Assembly on Wednesday elected General To Lam, who was nominated by the ruling Communist party at the weekend, as president, state media reported.

It puts Lam in the running to replace Nguyen Phu Trong as Communist party secretary-general.

The appointment is the latest shuffle in Vietnam’s top ranks, which was long known for political stability under the Communist party’s tight control. But a years-long corruption crackdown has brought unprecedented political upheaval just as the south-east Asian country has emerged as an international manufacturing alternative to China.

Read more here.

Hong Kong’s stock market edged up on Wednesday morning as tech companies listed in the city helped the broader benchmark eke out a gain.

The city’s benchmark index edged up 0.5 per cent, making it the top early performer in Asia on a muted day.

Gains were concentrated in the city’s Hang Seng Tech index, which added 1 per cent. Chinese electric vehicle maker Xpeng and computer manufacturer Lenovo rose 13.4 per cent and 11.4 per cent, respectively.

Small cap Chinese equities also posted returns in early trading, with the CSI 2000 rising 0.5 per cent after a weak start to the year.

Events: BHP faces a deadline to either raise its takeover bid for London-listed Anglo American or scrap the deal. Malaysia’s deputy prime minister Ahmad Zahid makes an official visit to China and Guatemalan foreign minister Carlos Ramiro Martínez visits Japan.

Central banks: New Zealand and Indonesia announce decisions on interest rates, which they are both expected to hold.

Economic data: South Korea publishes its producer purchasing index and Japan releases April trade data figures.

Corporate updates: PDD Holdings and Kuaishou announce earnings.

A relief flight carrying passengers and crew from the Singapore Airlines aircraft that hit turbulence, killing one person, has arrived at Changi Airport from Bangkok, the carrier said on Wednesday. 

They were met by Goh Choon Phong, the airline’s chief executive. Singapore Airlines said it had arranged for transport to their homes or hotel accommodation. Those with onward connections have had new flights booked.

Another 79 passengers and six crew members from flight SQ321 remain in Bangkok, including those receiving medical care. 

The flight from London diverted to Bangkok after experiencing “sudden extreme turbulence” over Myanmar’s Irrawaddy Basin. A 73-year-old British man died during the incident.

Luxury home builder Toll Brothers lifted its guidance for the full year, as a resilient economy, favourable demographics and a general lack of housing supply also helped it to report forecast-beating quarterly results.

Toll said it expected earnings of $14 per diluted share for fiscal 2024, above its previous forecast for between $13.25 to $13.75 per share, and better than consensus estimates of $13.72.

The group also boosted its forecast for homes built, moving the top end of its projection to 10,800 units, from 10,500 in February.

New home sales rose to a six-month high in March, a sign that builders are responding to pent-up demand for homes.

US stocks closed at record highs as a measure of stock market volatility fell to its lowest level this year.

The S&P 500 gained 0.3 per cent on Tuesday, notching up its first three-session winning streak in a fortnight. The tech-heavy Nasdaq Composite rose 0.2 per cent to also close at a new peak.

The latest advance for stocks came as the Chicago Board Options Exchange’s volatility index fell more than 2 per cent in afternoon trading to a low of 11.84.

That marked the lowest intraday level for the Vix but its “closing level” of 11.86 was the lowest since November 2019.

Prices for US government debt rose slightly, sending yields lower.

The US plans to release 1mn barrels of petrol on to the market in the country’s north-east over the next month in a bid to keep a lid on prices as the summer driving season kicks off.

The sale comes as the White House frets over high petrol prices — a critical inflation metric — ahead of the November election.

Prices at the pump have been broadly stable over the past month at about $3.60 a gallon — and are well below record levels over $5/gallon reached in 2022 — but they remain about 60 per cent higher than when President Joe Biden took office.

The Bank of England is expecting “quite a drop” in inflation in April — to levels close to its 2 per cent target — its governor said, as he stressed he expects the next policy move to be a cut in official rates.

Andrew Bailey said falling energy prices should help bring down the rate of consumer prices inflation when the Office for National Statistics releases its April reading on Wednesday morning in the UK.

Both the BoE and economists polled by Reuters expect the headline rate of CPI inflation to slide to 2.1 per cent in April, compared with 3.2 per cent in March.

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