Good morning! Here’s what you need to know in markets on Friday.
The Bank of England cut interest rates to a record low and announced a major new programme of quantitative easing. Britain’s central bank cut rates from 0.5% to 0.25%, while also saying it will buy as much as £60 billion of new government debt and up to £10 billion of corporate bonds can also be purchased. The bond buying will begin in September, the bank says.
Governor Mark Carney reassured people that the Bank will take “whatever action is needed” to support the British economy. In a move reminiscent of European Central Bank president Mario Draghi’s famous “Draghi put” — when he reassured markets that the ECB would do “whatever it takes” to save the euro in 2012 — Carney told reporters that the Bank of England is ready to take further measures to protect the British economy.
Goldman Sachs has warned it may be forced to restructure parts of its UK business following the Brexit vote. In a US regulatory filing on Thursday, Goldman said the vote has the potential to”adversely affect the manner in which we operate certain of our businesses in the European Union and could require us to restructure certain of our operations,” according to a report in the Financial Times.
Oil is sliding on Friday morning. Oil prices eased in early trading on Friday, but remained well above this week’s lows as traders covered short positions after profiting from sharp declines since June. Just after 6:50 a.m. BST (1:50 a.m. ET) both major oil benchmarks are down roughly 0.9%.
Rothschild & Co., one of the oldest banks in the UK, has made a big move on Wall Street. The firm has hired James M. Neissa, who most recently served as joint global head of investment banking at UBS, as head of North America. Lee LeBrun, who was formerly cohead of M&A Americas at UBS, has joined Rothschild Global Advisory as head of M&A in North America.
Russia’s inflation plunged to its lowest level in over two years. The headline inflation figure fell to 7.2% year-over-year in July, down from 7.5% in June, according to the Federal State Statistics Service. This is the lowest rate since March 2014 — around when Russia annexed Crimea — and below economists’ expectations of a slight dip to 7.4%.
It’s Jobs Report day in the USA. That means that monthly data on everything from nonfarm payrolls to the average hours worked per week will be released. The July jobs report and the next few after it will be all about November. Economists project that the Labour Department’s report out on Friday will show that the labour market remains in good, steady shape.
In an ominous sign, Italy has suddenly stopped shopping. Italy’s shoppers have stopped going to the shops, according to new retail purchasing managers’ index data from IHS Markit.
The rally in the US stock market isn’t going to last. The recent run-up in stocks to an all-time high comes in the eighth year of the current bull market, making it the second-longest such market in history. Given the bull market’s “old age,” this recent upswing isn’t going to last very long, according to Jonathan Glionna at Barclays.
Tesla’s fully autonomous cars will be here before you know it. “Autonomy is going to come a hell of a lot faster than anyone thinks it will,” CEO Elon Musk said on the company’s earnings call.