Good morning! Here’s what you need to know in markets on Thursday.
1. Britain has suddenly woken up to the prospect that Russia may have interfered in last year’s EU referendum. These questions have been bubbling away for months and, as US investigators make progress in establishing whether Russian influenced last year’s presidential election, they have risen to the surface in the UK as well.
2. Labour shortages are growing in the UK’s vital construction industry, according to the Royal Institute for Chartered Surveyors. A survey from RICS found skills shortages are holding back the sector, with 62% of surveyors citing it as an impediment to growth. That figure is up from 40% in 2012 when RICS began its quarterly UK Construction and Infrastructure Market Survey.
3. Zimbabwe is on edge after its military seized power. While the military has denied its actions are a coup, the country’s President Robert Mugabe remains under house arrest, but relatively little information has been released.
4. Zimbabwe’s instability had a bizarre side-effect: the nation’s bitcoin market went bonkers. The highest price paid on a cryptocurrency exchange in Zimbabwe overnight was $US13,499 — almost double prices in the US. Zimbabwe doesn’t have its own currency, with the US dollar and South African rand both accepted as legal tender since 2009 after hyperinflation left the previous currency worthless.
5. Canada is increasing its lobbying efforts to block Trump from pulling out of NAFTA. Canadian officials have become increasingly concerned Trump will follow through on his promise to pull out of the trade pact.
6. Stocks are flashing an ominous signal not seen since the financial crisis. Stock market dispersion is widening as technical indicators show sell signals, suggesting a turbulent road ahead for equities. John Hussman, an investment manager, says these indicators haven’t flashed simultaneously since early in the financial crisis.
7. Oil markets on Thursday were weighed down by rising U.S. crude production and inventories, but prices were prevented from falling by expectations that OPEC will extend an ongoing production cut during a meeting at the end of this month. Both crude benchmarks have lost almost 5% in value since hitting 2015 highs last week.
8. One of the Bank of England’s most senior officials has warned that Brexit could cause a deepening of the productivity crisis that has plagued the British economy in the past decade. In a speech at the London School of Economics on Wednesday, Ben Broadbent, the bank’s Deputy Governor for Monetary Policy, said it is not “inconceivable” that Brexit could lead to a “sharp step down” in the UK’s productivity.
9. Venezuela won easier debt terms from Russia. Venezuela, which has a depressed economy, has borrowed billions of dollars from Russia and China and promised to honour its debt.
10. UK unemployment remained at its lowest level since 1975, while productivity finally started to pick up, according to the latest data from the Office of National Statistics. The unemployment rate was 4.3% in the three months to September, unchanged from the previous reading. While the headline rate didn’t change, unemployment did fall in the three months to September, with 59,000 fewer people out of work.