US equity markets drifted lower last night – S&P 500 (-0.1%), Nasdaq (-0.4%). AMD hit a roadblock in attempting to sell an AI chip tailored for China, people familiar said. US officials told AMD that the chip was still too powerful and that the company must obtain a license to sell it.
This morning in Asia, markets were mixed – Nikkei 225 (flat); Hang Seng (-2.7%, on the AMD report); Shanghai Composite (+0.3%) – as China’s new targets and measures to build confidence in its economy received a lukewarm response from investors. The country will set a growth target of around 5% for the year, raising expectations of more stimulus, though Premier Li Qiang acknowledged the challenges. Beijing is also targeting unemployment of about 5.5% in 2024, while defence spending is set to increase by 7.2%, the most in five years.
The FTSE 100 is currently trading 0.2% lower at 7,610. Spirent is trading 58% higher following a recommended cash offer for the company from Viavi. The 175p bid is 61.4% above last night’s close.
The Fed’s Raphael Bostic said he expects the first US rate cut, which he’s penciled in for the third quarter, will be followed by a pause. The 10-year Treasury yields slipped back to 4.20%, while gold enjoyed another strong session and now trades at $2,115 an ounce, a record high. Bitcoin also hit a record high and now trades at $66,600.
UK retail sales grew at their slowest pace in 18 months, with the industry blaming rainy weather for keeping shoppers away. Like-for-like sales growth of 1.0% in February was below the 1.6% expected. The UK is seen selling fewer long bonds amid dwindling demand. The government is expected to announce a target of £258bn in gilt sales for the coming fiscal year, according to a Bloomberg survey, with the share of long-dated debt forecast to fall to 19% from 22% in March 2023. Sterling trades at $1.2681 and €1.1687.
