Good morning! Here’s what you need to know in markets on Wednesday.
Intercepted phone calls show members of President Donald Trump’s campaign had multiple communications with senior Russian intelligence officials before the US election, The New York Times reported on Tuesday night. Citing US law-enforcement and intelligence agencies, The Times said the contact between Trump associates and Russian officials was discovered during a concurrent FBI investigation into election-related cyberattacks by Russia that targeted Hillary Clinton
At her first appearance in front of the Senate Banking Committee since Trump’s inauguration, Federal Reserve chair Janet Yellen said the central bank can continue to raise interest rates slowly although it would be “unwise” to wait too long. “As I noted on previous occasions, waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession,” Yellen said.
During her testimony to the Committee, Yellen also outlined the potential economic impact of a repeal of the Affordable Care Act (ACA), better known as Obamacare. We would have to look at what the shifts in healthcare have on the economic outlook,” she said. “Healthcare, as you mentioned, does account for a very significant share of spending and a loss of access to health insurance could have a significant impact on spending of households for other goods and services. Beyond healthcare itself, it could have impacts on the economy.”
It is jobs day in the UK. At 9.30 a.m. GMT (4.30 a.m. ET) Britain’s Office for National Statistics will release its latest data on the state of employment in the UK. The headline unemployment rate is expected to show no change and remain at 4.8%, while polls of economists suggest that the UK’s Claimant Count will rise by around 1,000.
Shares of Toshiba Corp tumbled 10% on Wednesday morning after the electronics conglomerate said it would book a $US6.3 billion hit to its U.S. nuclear unit, a writedown that wipes out its shareholder equity. Highlighting the scale of its financial concerns, Toshiba also ramped up plans to raise cash, announcing it would consider selling most, even all, of its stake in its prized flash-memory chips business.
Soros Fund Management took a handful of new positions in financial stocks during the fourth quarter as the sector was buoyed by Donald Trump’s presidential victory. The firm that invests the personal fortune of billionaire investor and philanthropist George Soros, disclosed a $US14.9 million position in Goldman Sachs and made a new bet on Bank of America worth $US3.9 million.
Canadian home prices in January saw the largest 12-month increase in a decade amid the housing boom in Toronto. National house price inflation climbed to an annual rate of 13.0% year-over-year, according to the Teranet-National Bank Composite House Price Index.
UK inflation surged once again in January, coming within just 0.2 percentage points of its officially mandated target for the first time in more than two years, according to the latest data released by the Office for National Statistics on Tuesday. The ONS said that the UK’s consumer price index — the key measure of inflation — was 1.8%, up from 1.6% in December. That was actually a smaller rise than economists polled before the release expected. The forecast had been for a 1.9% headline reading.
UK tech companies are missing out on millions of pounds worth of export deals because they aren’t getting the funding to attend international trade shows. The government is more than four months late in allocating up to £10 million in grants to small companies in every sector from fashion to pickles to life sciences, to help them go to industry tradeshows and begin exporting, according to affected trade organisations speaking to Business Insider.
The pound’s post-Brexit vote downturn is nowhere near done yet, and the UK’s currency could fall by as much as 16% more, according to one of Deutsche Bank’s most senior staff dealing with foreign exchange. Speaking to Bloomberg TV on Tuesday morning Deutsche’s global co-head of FX research, George Saravelos said that the bank sees sterling falling to as low as 1.05 against the dollar, as the “incredibly complicated” nature of Brexit becomes ever more clear.