Bank of England governor Andrew Bailey said he is “optimistic” that inflation is moving in the right direction as it held interest rates 5.25% yesterday. “Big global shocks” that drove inflation in the UK are fading, the governor said, adding that inflation is expected to fall close to target levels soon, Reuters reports.

Still, a rate cut soon is not a “fait accompli,” he said, saying the bank needs more evidence that inflation is falling before making the move.

Analysts now expect August or September to be the likely date for its next rate cut.

Over in Spain, Spanish bank Banco Sabadell was the subject of a rare hostile takeover in the European banking sector by domestic rival BBVA, sending shockwaves across European markets, CNBC reports.

The hostile takeover is the first in Spain since the 1980s, and comes as more European banks look at consolidating amid financial distress.

BBVA had earlier submitted a EUR 12 bn takeover bid to Sabadell’s board that the board rejected, claiming it “significantly undervalues” the bank’s growth prospects. The board stood its ground yesterday.

THE MARKETS THIS MORNING-

Asian markets are in the green this morning on the back of strong consumer data in Japan and renewed hopes of a US Federal Reserve rate cut. Japan led gains, with the Nikkei up 1.52%, while South Korea’s Kospi was up 1% and the Australian S&P/ASX 200 rose 0.33%. US futures point to a strong open as markets extended gains coming on the back of cooling Treasury yields and hopes for a rate cut.

ADX

9,119

-0.6% (YTD: -4.8%)

DFM

4,179

-0.3% (YTD: +3.0%)

Nasdaq Dubai UAE20

3,577

-0.7% (YTD: -6.9%)

USD : AED CBUAE

Buy 3.67

Sell 3.67

EIBOR

5.0% o/n

5.4% 1 yr

TASI

12,284

-1.4% (YTD: +2.7%)

EGX30

26,003

+0.1% (YTD: +4.5%)

S&P 500

5,214

+0.5% (YTD: +9.3%)

FTSE 100

8,381

+0.3% (YTD: +8.4%)

Euro Stoxx 50

5,054

+0.3% (YTD: +11.8%)

Brent crude

USD 83.88

+0.4%

Natural gas (Nymex)

USD 2.31

+0.5%

Gold

USD 2,354.10

+0.6%

BTC

USD 62,950.75

+3.4% (YTD: +42.5%)

THE CLOSING BELL-

The DFM fell 0.3% yesterday on turnover of AED 611.7 mn. The index is up 3.0% YTD.

In the green: Dubai Refreshment Company (+10.8%), Spinneys (+4.6%) and Al Salam Bank (+2.1%).

In the red: Orascom Construction (-8.4%), Takaful Emarat (-3.7%) and Union Coop (-1.6%).

Over on the ADX, the index closed down 0.6% on turnover of AED 949.8 mn. Meanwhile Nasdaq Dubai fell 0.7%.

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