10 things you need to know in markets today

Good morning! Here are the 10 things you need to know in markets on Friday.

US stock markets enjoyed an explosive rally overnight. The Dow Jones rose 1.28%, the S&P 500 improved by 1.49%, and the Nasdaq climbed 1.82%.

Asia is up in response to the strong performance in the US. Japan’s Nikkei is 0.94% higher at 6.10 a.m. BST (1.10 a.m. ET), Hong Kong’s Hang Seng is up 0.68%, and the Shanghai Composite is 0.39% higher.

American manufacturing is in recession. On Thursday, regional manufacturing reports for October showed very slight improvement but made clear that the sector is in contraction. In September, all seven regional manufacturing purchasing manager’s indexes fell into contractionary territory.

The Bank of England is relaxing rules on “ring fencing” of banks’ retail and investment bank arms. The FT reports that banks will be able to transfer capital from their retail arms to other parts of their businesses in the form of dividends.

Eurozone inflation and trade balance figures are due at 10 a.m. BST (5 a.m. ET). Economists are expecting inflation to remain negative, at -0.1% compared to a year ago, but are hoping for an improvement in month-on-month figures, rising from 0% to 0.2%.

The European Union is expected to rule as soon as next Wednesday that Starbucks and Fiat Chrysler Automobiles have benefited from illegal tax deals in Europe, according to the Wall Street Journal. It will mark the end of the first two of four high-profile tax investigations launched by the EU last year.

Goldman Sachs reported third-quarter earnings that missed both top and bottom lines. Revenue was $US6.86 billion (£4.44 billion), against analysts’ forecasts of $US7.12 billion (£4.6 billion).

US beer giant AB InBev reportedly wants to sell up to $US55 billion (£35.5 billion) in bonds to finance its blockbuster £71 billion ($US109 billion) takeover of London-listed rival SABMiller. That would set a new record for debt issued to finance a corporate takeover, exceeding Verizon’s $US49 billion (£31.6 billion) bond sale back in 2013 when it was buying the chunk of Verizon Wireless it didn’t already own.

The US government’s budget deficit fell to an eight-year low in fiscal 2015, dropping to $US439 billion (£283.8 billion). The cut in the finance gap — which was $US1.4 trillion (£910 billion) in 2009 — brought the deficit down to 2.5% of gross domestic product, the lowest level since 2007.

Starbucks is in talks with an Italian partner to open branches in Italy, one of the few major markets where it has yet to make an entrance. Corriere della Sera newspaper reports that the US company is negotiating with Italian businessman Antonio Percassi to bring the Starbucks brand to Italy.

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