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What’s happening: UK stocks closed higher on Monday, after British Prime Minister Rishi Sunak announced a cabinet reshuffle.
What happened: PM Sunak announced the return of former PM David Cameron and fired interior minister Suella Braverman.
Led by insurers, the FTSE 100 climbed on Monday, after recording losses last week.
Why it matters: UK PM Rishi Sunak sacked his interior minister, Suella Braverman, and appointed James Cleverly as a replacement, after Braverman criticised the police’s handling of pro-Palestinian marches. Clevery, former foreign minister, was named as the new home secretary. David Cameron was named the foreign secretary.
The latest move by Sunak, which was the first major reshuffle after coming into power thirteen months back, signals a reset for a party that is trailing behind the Labour Party, with elections coming up next year.
Investors around the world also continued to monitor how businesses will respond to the restrictive policy stance signalled by the Bank of England and US Federal Reserve.
Shares of Phoenix Group Holdings surged around 5.7% on Monday, after the insurer raised its cash generation guidance following the completion of the merger of Standard Life and Phoenix Life. The broader life insurance index gained 2.3% during the session.
British Land Company’s shares rose around 1.9% after the company reported upbeat earnings for the third quarter. Melrose Industries and Rolls-Royce Holdings also gained more than 2% on Monday, amid an increase in global aviation stocks.
The blue-chip FTSE 100 added 0.89% to close at 7,425.83 on Monday, while the FTSE 250 rose 0.34% to settle at 17,913.65.
The GBP/USD forex pair also recorded gains on Monday following the reshuffle in the UK cabinet.
What to watch: Investors await the release of inflation data from the UK and US this week, which is expected to provide more insights into the future policy of the BoE and the Fed. UK’s inflation data, due to be released on Wednesday, is expected to ease to 4.8% in October, from 6.7% in the previous month. US headline consumer prices, scheduled for release today, is projected to ease to 3.3% in October, from 3.7% a month ago.
UK will release data on its unemployment rate and average earnings today. The adjusted experimental unemployment rate, which increased to 4.2% in the three months to August, is expected to rise further to 4.3% in September. Average weekly earnings, including bonuses, which rose by 8.1% year-over-year to £661 per week in the three months to August, is projected to increase by 7.2% year-over-year in September.
Context: Oil prices settled higher on Monday, after the OPEC’s (Organization of the Petroleum Exporting Countries) report eased concerns related to demand.
Details: In a monthly report, the OPEC said that market fundamentals remained strong despite economic growth concerns impacting oil prices and blamed the recent decline in prices to financial market speculators.
The OPEC also slightly increased its 2023 forecast for global oil demand growth to 2.46 million barrels per day, while reiterating the projections for 2024.
Downbeat economic reports from China last week had raised concerns of faltering demand for oil, sending prices lower by around 4%. The EIA estimated the decline in US oil consumption at 300,000 barrels per day in 2023.
Last week, Saudi Arabia and Russia confirmed plans to continue with their additional voluntary oil output cuts until yearend. The OPEC+ will hold its next meeting on November 26.
Brent crude futures gained $1.09, or 1.3%, to close at $82.52 per barrel on Monday, while WTI crude futures climbed $1.09, or 1.4%, to finish at $78.26 per barrel.
In other energy trading, wholesale gasoline for December delivery gained 5 cents to $2.24 a gallon, while December heating oil increased 10 cents to $2.84 a gallon and December natural gas rose by 17 cents to $3.20 per 1,000 cubic feet.
What to watch: Investors await the release of the API’s (American Petroleum Institute) data on crude oil stockpiles today. US crude oil inventories had risen by 11.9 million barrels in the week ended November 3, compared to a rise of 1.347 million barrels in the prior week.
Other Markets: US trading indices closed mixed on Monday, with the S&P 500 and Nasdaq 100 down by 0.08% and 0.30%, respectively, and the Dow Jones index up by 0.16%.
US Secretary of State Antony Blinken promised continued support for Ukraine after meeting Andriy Yermak, a top aide to President Volodymyr Zelenskyy. The news sent the safe-haven US dollar index slightly higher this morning.
Australia’s NAB business confidence index declined to -2 in October, versus a flat reading a month ago. This signalled the weakest figure since May and exerted pressure on the AUD/USD forex pair.
South Korea’s export prices fell 9.5% year-over-year in October, following a 8.9% decline in the prior month, which sent the KRW/USD pair lower in forex trading this morning.
New Zealand’s annual food inflation eased to 6.3% in October, from 8% in the previous month, lending support to the NZD/USD forex pair.
Argentina’s monthly inflation rate accelerated to 8.3% in October, from 12.7% a month ago. Although the figure came in better than market expectations of 11%, the ARS/USD pair declined slightly in forex trading this morning.
India’s wholesale prices, UK’s claimant count change and HMRC payrolls change, Spain’s consumer price index, South Africa’s unemployment rate and number of unemployed persons, Eurozone’s employment Change, GDP growth rate and ZEW indicator of economic sentiment, Germany’s ZEW indicator of economic sentiment and ZEW current conditions, US NFIB small business optimism index and Redbook index, Argentina’s interest rate decision, as well as Turkey’s total motor vehicles production.
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