Technicians inspect bitcoin mining machines at a mining facility operated by Bitmain Technologies Ltd. in Ordos, Inner Mongolia – Qilai Shen /Bloomberg
BoE’s Bailey says inflation pressures will be ‘transitory’
Price pressures will be ‘transitory’, Bank of England governor Andrew Bailey said today in an annual report to parliament’s Treasury Committee.
“The Monetary Policy Committee judges that these transitory developments should have few direct implications for inflation over the medium term,” Bailey said, echoing comments made by the Fed’s Lael Brainard earlier.
Ben Marlow on the Ryanair ‘hijack’ by Belarus
Raman Pratasevich attends an opposition rally in Minsk, Belarus, Sunday, March 25, 2012 – AP
The Telegraph’s chief City commentator Ben Marlow has been writing about Ryanair’s reaction to the hijacking of one its planes over Belarus:
In a statement, the airline apologised for the “regrettable delay”, as if that was the most pressing issue, not the hijack or the kidnap of a passenger. Worse, it said that the plane left Minsk “with passengers and crew”. Well, yes, just not all of them.
So did Ryanair simply decide to ignore that one of its planes was hijacked, fail to notice, or worse, conclude that it was easier to just pretend Protasevich wasn’t even on the flight, never mind abducted by Belarus’s security forces?
This extract comes from our City Intelligence newsletter. You can sign up for the newsletter here to receive incisive analysis of the day’s biggest corporate story.
Brainard says Fed is stepping up CBDC research
The Federal Reserve is stepping up its research on digital currencies, as the pandemic accelerates touchless forms of payment, Governor Lael Brainard said today.
Speaking at Coinbase’s Consensus event, she added the growing role of digital private money, plans for using digital currency for cross-border payments by foreign central banks, and possible benefits for financial inclusion have all sharpened the Fed’s focus on a central bank digital currency (CBDC).
“The design of any CBDC should complement and not replace currency and bank accounts,” she said.
While the U.S. until now has sounded hesitant on the idea of a Fed CBDC, The People’s Bank of China and Sweden’s Riksbank are among two central banks that are experimenting with digital currency.
Although Brainard didn’t mention China specifically, US officials appear to understand that first movers get to have some say over standards.
“Given the potential for CBDCs to gain prominence in cross-border payments and the reserve currency role of the dollar, it is vital for the United States to be at the table in the development of cross-border standards,” Brainard said.
She was also critical of stable coins – digital currencies which peg their value to an asset like the US dollar or gold – and other assets not backed by regulatory oversight.
“New forms of private money may introduce counterparty risk into the payments system in new ways that could lead to consumer-protection threats or, at large scale, broader financial-stability risks,” she said.
Fed’s Brainard expects pricing pressures to subside
US Federal Reserve Governor Lael Brainard attends a “Fed Listens” event at the Federal Reserve headquarters in Washington, DC, on October 4, 2019 – ERIC BARADAT /AFP
The recent inflation spike in some sections of the economy should settle down after prices recover from pandemic lows and temporary imbalances between supply and demand are addressed, Federal Reserve Board Governor Lael Brainard said today.
“We’re in the middle of a pretty unprecedented rebound in the U.S. economy,” Brainard said during an online event organised by CoinDesk.
While some prices may increase further over the next several months, Brainard said, she expects these pressures associated with supply bottlenecks and the reopening to “subside over time.”
Wall Street rises on opening
Wall Street’s main indexes opened higher this morning in New York with higher oil prices pushing up energy stocks and investors gearing up for key inflation readings later this week.
The Dow Jones Industrial Average rose 0.13pc at the open. The S&P 500 lifted 0.34pc at the open while the Nasdaq Composite went up 0.64pc.
Russia threatens Google with slowdown
Russia’s communications watchdog has given Google 24 hours to delete what it called prohibited content and said that Moscow could impose a punitive slowdown measure on the tech giant’s services, the TASS new agency reported today.
Ted Baker delays trading figures
Shoppers walk past a Ted Baker store on Regents Street in London – Simon Dawson /Reuters
British fashion brand Ted Baker has told investors that its initial trading figures for the year will be delayed by two weeks due to “disruption caused by Covid on the audit processes”.
The company said it will now reveal its latest sale and profit figures on June 10 instead of May 27 but added that the delayed full-year results will be in line with analyst expectations.
In February, the company reported a £5m hit from Brexit as well as a 47pc slump in sales for the three months to January as closures impacted trading.
Ibis to expand business by a third
The Ibis hotel chain said it plans to expand business by a third, opening nine new sites shortly after government restrictions allow UK hotels to reopen.
The chain, which is run by French hospitality giant Accor, said the new hotels will be located in Burton-upon-Trent, Cumbernauld, Bromsgrove, Dundee, Bromley, Peterhead, Portishead Harbour, Lancaster and Stansted Airport.
The brand, which also opened a Heathrow location during the lockdown, said it has increased its UK room numbers by almost a quarter this year.
Royal Mail set to deliver for investor Kretinsky with FTSE 100 return
Royal Mail is poised for a red-letter day with a return to London’s blue-chip index this week, writes Oliver Gill.
The company’s share price has almost trebled over the last year as it was boosted by a surge in demand for parcels during lockdowns – proving a shrewd investment for billionaire investor Daniel Kretinsky, who has a 15.6pc stake.
Known as the “Czech sphinx” because of his inscrutable nature, Mr Kretinsky is now Royal Mail’s biggest shareholder. The rise in Royal Mail shares over the past 12 months has netted his company an estimated £450m paper profit – equivalent to £1.2m a day – as well as benefiting many thousands of retail investors who bought stock when the company was privatised in 2014.
Read the full story here.
Bitcoin pares back losses as oil rises on recovery hopes
Bitcoin is continuing to claw back the weekend’s losses, with the cryptocurrency up 6.2pc in the past 24 hours, trading at $ 37,648.68.
Oil prices edged higher as recovery hopes outstripped concerns about added Iran supply if sanctions are lifted as a result of the ongoing talks in Vienna.
Goldman Sachs said in a note today oil prices are on track to hit $ 80 this summer.
Brent was last up 1.6pc at $ 67.50 a barrel, while U.S. crude added 1.6pc to $ 64.60 per barrel.
Branson’s Virgin Galactic soars after successful space flight
Virgin Galactic shares soared as much as 36pc in premarket trading following the company’s first test flight to space for more than two years.
The company, founded by British billionaire Richard Branson, launched The VSS Unity into space from New Mexico on Saturday. The test is seen as a critical step in its path toward commercial service.
The success means the company can resume planning to fly Branson himself into suborbital space as early as this summer.
Liberty Steel plans sale of Stocksbridge plant
Liberty Steel is looking for a buyer for its aerospace and steel business in Stocksbridge, South Yorkshire as part of a major restructuring, the business announced today.
PA has more details:
The company also said it has started a formal sale process for Coventry’s Liberty Pressing Solutions, and Liberty Aluminium Technologies, with sites in Essex and Kidderminster.
The steel giant was heavily reliant on Greensill Capital, a financing company which went out of business earlier this year, raising worries about Liberty’s future, and the 5,000 people it employs in the UK.
Liberty said that the restructuring of its business would protect thousands of jobs.
The announcement follows a weekend of meetings in Dubai between Liberty founder Sanjeev Gupta and Swiss bank Credit Suisse.
The two sides have reached a so-called standstill agreement over Liberty Primary Metals Australia.
Sharp increase in shoppers in central London last week
Shoppers carry Primark bags as they walk along Oxford Street in central London – GLYN KIRK /AFP
Footfall in central London jumped 11.8pc last week, as the return of indoor hospitality helped lure back shoppers.
The latest data from Spingboard showed that the capital experienced a marked increase in shoppers compared to the rest of the country, where footfall as a whole went up by 1.1pc.
Footfall on high streets rose 2.4pc while shopping centres logged a 1pc increase. Retail parks however were down 1.7pc.
US futures rise as inflation fears subside
US stock futures are up, pointing to a positive start to the week as investors grow more relaxed about the outlook for inflation.
The S&P 500 was up 0.5pc while Nasdaq Futures rose 0.7pc.
“Inflation concerns have lessened, there’s more of a wider recognition that inflation will be transitory,” Fahad Kamal, chief investment officer at Kleinwort Hambros, told The Wall Street Journal.
“This is reflecting the fact that we hit the fastest part of the recovery. Growth, while continuing, is going to be at a decelerating pace.”
Bitcoin climbs back to $ 36,478
Bitcoin is continuing its ascent today, clawing back its losses after the weekend’s sell off.
Here’s today’s best from The Telegraph’s Money team:
Oil climbs as Iran nuclear deal snags
Oil climbed above $ 64 a barrel as snag over how a UN watchdog would inspect nuclear sites emerged in talks between parties attempting to revive the 2015 nuclear deal.
Talks between Iran and world powers will continue in Vienna this week to try and resolve outstanding issues over the nuclear pact.
The prospect of Iranian supply returning to the market once sanctions are lifted has hit oil prices in recent weeks.
However Goldman Sachs said in a note the market is underestimating the upcoming recovery in demand and prices are on track to hit $ 80 this summer.
“The specter of Iranian sanctions relief looms large over the oil market,” PVM Oil Associates analyst Stephen Brennock told Bloomberg.
“Additional supply from Tehran is poised to be absorbed by the market as a result of a vaccine-spurred surge in demand over the coming months.”
Ofgem invests £300m in electric car charging network
The UK’s largest high power motorway electric vehicle charging site, which features 24 high-powered 350kW EV chargers provided by GRIDSERVE, Ecotricity and Tesla at Moto’s new Rugby Services – Doug Peters/PA
Energy regulator Ofgem has today announced a £300m push to triple the number of electric vehicle public charging points around the country.
Ofgem plans to build new infrastructure which will support 3,550 new ultra-rapid charging points – 1,800 at motorway service stations and 1,750 in towns and cities.
The UK plans to ban the sale of new petrol and diesel cars from 2030, and phase out hybrid vehicles from 2035. However, last week the public accounts committee (PAC) said one of the major challenges in reaching this target within the decade will be the poor infrastructure.
Keith Bell, Member of the Climate Change Committee, said:
This joint initiative by Ofgem and the electricity distribution network companies is a welcome development, showing flexibility in the regulatory arrangements in the long-term interests of energy users.
On the journey to Net Zero, we need to make it as easy as possible for people to manage without their combustion engine cars. Electric vehicles are looking more and more attractive, but we need to make sure they can be charged easily, and that means having the right infrastructure – charge points and network capacity – in the right place at the right time.
Crytpo too volatile for HSBC says chief executive
Noel Quinn was appointed HSBC group chief executive in March 2020 – Takaaki Iwabu /Bloomberg
The chief executive of HSBC has publicly criticised Bitcoin, rejecting it as an asset class over concerns about its volatility, reports James Cook.
“Given the volatility we are not into Bitcoin as an asset class, if our clients want to be there then of course they are, but we are not promoting it as an asset class within our wealth management business,” Noel Quinn told Reuters.
HSBC has no plans to launch a cryptocurrency trading desk, as Goldman Sachs did earlier this month.
Mr Quinn was also sceptical of Bitcoin’s ability to handle payments. “I view Bitcoin as more of an asset class than a payments vehicle, with very difficult questions about how to value it on the balance sheet of clients because it is so volatile,” he said.
The price of Bitcoin has fallen to almost 50pc of its all-time high following crackdowns in China on use of cryptocurrencies.
Mr Quinn’s comments come after Deutsche Bank published a similar criticism last week. In an analyst note, the bank said Bitcoin will remain “ultra-volatile” because of its “limited tradeability.”
“A few additional large purchases or market exits could significantly impact the supply-demand equilibrium,” the bank continued.
MJ Gleeson benefits from strong demand and higher house prices
Housebuilder MJ Gleeson has announced it expects to exceed expectations amid strong demand in its full year results, reports Ben Gartside.
In a brief update, the company said strong demand and higher prices for homes had offset increased production costs, and that demand for consented land has returned to pre-Covid levels.
Following the update, MJ Gleeson’s share price was up 1.5pc at 876p.
Vodafone lifts 1.55pc after being awarded Ethiopia’s first telecoms license
Vodafone is among the stocks leading the subdued FTSE 100 for gains this morning, up 1.55pc following news a consortium including the UK carrier had been awarded a new telecoms license in Ethiopia.
The consortium which includes Vodafone, Kenya’s Safaricom and Japan’s Sumitomo paid $ 850m (£601m) for the license to operate in a country of 110m where less than half have mobile phone subscriptions.
The opening up of the world’s largest remaining telecoms monopoly had been billed by the Ethiopian government as the “deal of the century”.
The slight rise however does little to offset last week’s slump after the group reported lower than expected profits and a decline in revenues due to the loss of roaming charges as pandemic travel restrictions halted most overseas tourism.
Thailand says tourism may not recover until 2026
Thailand’s tourism industry could take five years to bounce back to normal, the country’s National Economic and Social Development Council said today in an ominous sign for one of the most tourism-dependent economies in the world.
The slow return of the sector, which contributed about one-fifth of Thailand’s economy before the pandemic, will impact more than 7m workers, the council said.
Thailand welcomed nearly 40m visitors in 2019, earning $ 60bn (£42bn) in revenue.
The country closed its borders to most foreign visitors in March 2020 but is trying to gradually reopen some destinations to vaccinated visitors.
ICYMI: George Osborne’s firm hits jackpot after bet on little known cryptocurrency
George Osborne, former U.K. chancellor of the exchequer, poses for a photograph following a Bloomberg Television interview on the opening day of the World Economic Forum in Davos, Switzerland, on Tuesday, Jan. 22, 2019 – Simon Dawson /Bloomberg
George Osborne’s venture capital firm is sitting on gains of 3,000pc following a bet on an obscure cryptocurrency that has surged to a $ 16bn (£11bn) valuation in a little over a fortnight, reports Matthew Field.
The Silicon Valley fund 9Yards Capital is understood to have invested in digital currency Internet Computer, known as ICP, which was launched by the non-profit group Dfinity a fortnight ago.
9Yards was founded by George’s brother Theo and counts the former Chancellor as a strategic adviser.
It backed Dfinity in 2018. Rather than taking equity, Dfinity investors were awarded tokens in its digital coin ICP.
Early backers who invested $ 97m in 2018 currently hold 23.2m coins in total, according to analysts Messari.
Read the full story here.
The pound inches up
At 9am, the pound inched up to $ 1.4170, compared to $ 1.4160 at the previous close. At the same time, the euro was £0.8609 compared to £0.8603 at the previous close.
Forced grounding of Ryanair flight in Minsk was “state-sponsored hijacking” says O’Leary
Ryanair Chief Executive Michael O’Leary speaks during a Reuters Newsmaker event in London, Britain October 1, 2019 – PETER NICHOLLS /Reuters
A decision by authorities in Belarus to force a Ryanair jet to land in Minsk on Sunday and detain a dissident blogger was a “state-sponsored hijacking”, Ryanair Chief Executive Michael O’Leary has said this morning.
“This was a case of state-sponsored hijacking … state-sponsored piracy,” O’Leary told Irish Newstalk radio.
“It appears the intent of the authorities was to remove a journalist and his travelling companion … we believe there were some KGB agents offloaded at the airport as well,” he said.
Latvian airline airBaltic said today it would now be avoiding Belarus airspace.
“Yesterday when mixed information was received about the diverted commercial flight to Minsk, as an immediate action, airBaltic decided to avoid entering Belarus airspace until the situation becomes clearer or a decision is issued by the authorities,” a spokeswoman said.
My colleague Theo Merz has more on this story here.
G7 close to agreeing ‘global minimum tax’
The UK is among a group of seven top economies which are close to reaching an agreement on the corporate taxation of multinationals, the Financial Times reported earlier today.
A G7 pact creating new rules for imposing levies on some of the world’s largest companies could be agreed as early as Friday, the FT said.
The US last week lowered its ambitions for a global minimum corporate tax rate, from 21pc to 15pc.
Germany and Italy have been vocal supporters of the plan while France and the UK Have put more emphasis on the location of tax payments.
China targets ‘speculators and hoarders’ to stop commodity boom
China intensified its weeks-long campaign to cool a raw-materials boom, vowing severe punishment for violations ranging from excessive speculation to spreading fake news.
Bloomberg has more details:
The government will show “zero tolerance” for monopolies in spot and futures markets, and for speculation and hoarding, the National Development and Reform Commission said in a statement after leaders of top metals producers were called to a meeting on Sunday.
The push to rein in surging metals prices rippled across markets, with steel dropping more than 5pc and iron ore tumbling by close to the daily limit.
Commodities have risen rapidly this year – with a Bloomberg gauge of materials near the highest in a decade – as optimism over the global economic recovery from the pandemic improved the demand outlook. That’s fueled a debate about the risk that inflation poses as the pandemic recedes.
In targeting commodity prices, Beijing is fighting trends over which it has only partial control as the world economy reboots with supply chains stretched. But the government is also tackling the consequences of its own efforts to reduce greenhouse gas emissions, which have contributed to price gains.
The NDRC’s statement is the toughest comment yet from the government, which started warning about higher raw materials prices in April. The officials from the iron ore, steel, copper and aluminum firms that met with five state agencies in Beijing on Sunday were told excessive speculation and rising international prices were to blame for recent advances.
Popcorn and Peter Rabbit boost reopening weekend for Cineworld
A pedestrian passes at a Cineworld Group Plc cinema in Leicester Square in London, U.K. – Jason Alden /Bloomberg
Cineworld said this weekend’s performance “went beyond our expectations”, after indoor cinemas were able to reopen to the public last week.
The chain said the UK’s strong opening weekend was led by the success of the film ‘Peter Rabbit 2: The Runaway’ and strong concession income from popcorn sales.
Cineworld said it expects most of its cinemas will be open by the end of the month. Over 97pc are now open in the US, with plans to reopen chains in Poland and Israel this week.
Mooky Greidinger, CEO, commented:
With the releases next week of ‘Cruella’ and ‘A Quiet Place 2’, we expect next weekend’s results to be strong.
When combined with improving consumer confidence and the success of the vaccination rollout, we expect a good recovery in attendance over the coming months, noting the record breaking success of F9 in the Asian market.
FTSE 100 edges higher on opening
London’s FTSE 100 inched higher this morning, after posting its second straight weekly drop.
The blue-chip index is up 0.2pc with oil majors BP and Royal Dutch Shell and consumer staple stocks such as drinks company Diageo providing the biggest boosts.
The domestically focused FTSE 250 index dropped immediately after opening and is now trading flat, down 0.004pc.
Cineworld lifted 2.4pc after the cinema chain said its UK cinemas pulled in more people than expected on reopening, boosted by Sony’s “Peter Rabbit 2: The Runaway”.
Bitcoin’s wild weekend
The Bitcoin rout continued over the weekend, with the world’s largest cryptocurrency down nearly 50pc from all time highs after a State Council in China issued new promises to crack down on digital currencies on Friday.
A series of cryptocurrency miners halted their China operations and exchange Huboi suspended both crypto mining and trading services to Chinese clients, prompting the coin to shed 13pc on Sunday alone.
Bitcoin climbed up to $ 35,970 from Sunday’s low point of $ 31,107. This morning, it is trading higher, at $ 36,570.
Rival cryptocurrency ether also hit an almost two-month low of $ 1,730 on Sunday before bouncing up to $ 2,241, where it is currently trading.
Bitcoin, Ether and meme currency Dogecoin are still sitting on major gains over longer time-frames, such as the past year – about 12,000pc in the case of Dogecoin.
Markets to edge higher
Good morning. The FTSE 100 is tipped to edge slightly higher, while Bitcoin suffered another bruising weekend.
5 things to start your day
1) Netflix surge throws PM’s green agenda in doubt, says BT: Telecom giant complains it is footing the bill for video streaming power spikes as network providers push for rules shake-up.
2) Used car prices soar as industry faces perfect storm: Chip shortage and pandemic push up secondhand car prices, with Mini Cooper S model rising by £3,000 last month.
3) George Osborne’s firm hits jackpot after crypto bet: Investment in Internet Computer by firm advised by former Chancellor pays off as new crypto coin surges 3,000pc.
4) Wind slump risks blackouts as Britain goes green: Researchers urge UK to invest in alternatives as growing reliance on wind and solar leaves energy grid exposed to extreme weather.
5) HSBC and Barclays demand shake-up of open banking: Lenders complain of ‘significantly higher’ costs to share customer data with smaller rivals than original estimates.
What happened overnight
Asian shares got off to a cautious start on Monday as investors awaited key US inflation readings for guidance on monetary policy, while Bitcoin tried to steady after being hammered on news of China’s crackdown on mining and trading of the cryptocurrency.
MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.4pc in slow trade. Japan’s Nikkei added 0.2pc and Chinese blue chips lost 0.5pc.
Nasdaq futures were flat and S&P 500 futures firmed 0.2pc. EUROSTOXX 50 futures and FTSE futures added 0.1pc.
Coming up today
Full-year results: Kainos, Sirius Real Estate
Trading update: Hilton Food Group