Oil continues rebound in the wake of output deal
Oil rose for a second day yesterday on signs the world's largest producers will honour a deal to pare a surplus, boosting currencies of exporters including the Ruble, while Chinese economic data dampened demand for equities.
Crude has gained 18pc in the past month, prompting concern that inflation will accelerate around the world.
Real wages in the UK are rising at the weakest pace since early 2015, as oil prices and the weaker pound stoke inflation, according to data published yesterday.
The pressure looks set to intensify with jobs growth slowing and some economists predicting price gains of as much as 3pc next year.
There are signs of cracks appearing in the UK labour market after resilience in the run-up to, and immediate aftermath, of June's Brexit vote," said Howard Archer, chief UK and European economist at IHS Global Insight. "Muted earnings growth threatens to weigh down on consumers' purchasing power along with markedly rising inflation."
The outlook for faster inflation and slower wage growth underscores the dilemma facing Bank of England policy makers as they consider whether to add to stimulus measures put in place following Britain's vote to leave the European Union. Officials have indicated they may loosen policy again. The dollar fell for a third day against its peers after a core US inflation gauge rose less than forecast in September, suggesting the pace of interest-rate increases by the Federal Reserve will be gradual.
The US currency dropped against most of its 16 major counterparts this week as the chances of a Fed rate hike by December, according to Fed fund futures pricing, receded amid mixed signals from the world's largest economy.
Traders see about a 64pc probability the central bank will raise rates by December, down from 66pc at the end of last week.
Morgan Stanley reported a better-than-expected quarterly profit yesterday, boosted by a surge in bond trading that followed Britain's surprise vote to leave the EU and bouts of anxiety about monetary policy around the world.
Saudi Arabia attracted massive investor demand of about $67bn (€61bn) yesterday for its first international bond offer, as the world's top crude exporter allayed concern about the impact of low oil prices on its finances.
In Dublin, the Iseq overall index of Irish shares was down 0.57pc in mid-afternoon trading at 5972.15 - a loss of 34.23 points. Insurance group FBD lost over 5pc in value, while Mainstay Medical was down by almost 2pc.