Good morning. Here's what happened overnight and what you need to know today.
1.
Snail's pace: The latest US economic data showed a significant slowdown in growth, with GDP expanding at a 1.6% annualised rate in the first quarter – far below expectations of around 2.5% and a sharp pullback from the 3.4% pace in the prior quarter. However, core inflation remained elevated at 3.7%, above the 2% target and defying hopes that the Fed's interest rate hikes would bring it down faster. This mixed data sparked a market selloff as investors pared back bets on the Fed cutting rates soon, despite the slower growth which would typically raise chances of such a move. The resilient labour market, high consumer spending and overall economic strength have thrown off projections, increasing concerns that sticky inflation could persist and complicating the outlook for additional Fed tightening. (Wall Street Journal)(Financial Times)
2.
Bid rise: Traders are bidding up shares of Anglo American above the implied value of BHP's £31 billion ($59.4 billion) takeover proposal, signalling expectations of a higher offer from BHP or the emergence of rival bidders. While the current premium over BHP's offer is modest at around 4%, takeover targets typically trade below the bid price to account for deal risks. Analysts and traders polled by Bloomberg expect mining giants like Rio Tinto and Glencore could enter the fray, or BHP may sweeten its bid, given Anglo American's attractive copper assets which are critical for the energy transition. The rally in Anglo American's stock price reflects the increasing demand and higher prices for copper amid supply constraints, with analysts noting BHP may need to pay a premium valuation for Anglo's copper business. (Bloomberg)
