Must read: central banks, ITV, bank job cuts, Travis Perkins

Our head of investment rounds up the morning's big news.

GLOBAL MARKETS 

European markets have opened higher, with the FTSE 100 back above 7,600 after a strong week. Tesco (LSE:TSCO) is stuck near the bottom of the index after its trading update, while housebuilders are also struggling after a profit warning from Travis Perkins (LSE:TPK). 

The Bank of Japan stuck with its accommodative monetary policy stance on Friday. Its long history with deflation makes Japan less fearful about the prospect of growing price pressures, despite stronger-than-expected inflation data. Just this week Goldman Sachs sharply raised its forecasts for Japan’s consumer prices. 

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This week has seen a divergence in global central bank policy with China’s PBOC cutting its one-year policy rate, the Federal Reserve carrying out no change to its federal funds rate and the European Central Bank raising borrowing costs to a 22-year high. 

Later today is the ‘triple witching’, a key simultaneous expiry day for an estimated $4.2 trillion worth of stock options. This can lead to higher trading volumes and varied price action. 

Meanwhile, US banking job cuts look set to surpass 11,000, according to the Financial Times after Citigroup became the latest Wall Street lender to slash the size of its workforce, with 5,000 redundancies by the end of the second quarter.

ITV 

Responding to media speculation, ITV (LSE:ITV) has confirmed that it is actively exploring a possible acquisition of All3Media, which is owned by Warner Bros Discovery and Liberty Global. However, it said there can be no certainty as to whether any transaction will take place. 

All3Media is a TV and film production, digital and distribution group with bases in the UK, US, Germany, Belgium, the Netherlands and New Zealand. It has produced some popular shows including Fleabag and The Traitors. Reuters’ sources suggest All3Media could be valued at more than £1 billion. 

A deal would help ITV to diversify away from TV advertising revenues, a cyclical spend that could suffer if economic headwinds endure. Plus, there is a structural decline in TV ad spending amid the rise in digital ad spending and the shift away from linear viewing towards streaming and other forms of online media consumption.

TRAVIS PERKINS 

Travis Perkins issues a profit warning for 2023, sending shares into the red. It expects full-year adjusted profit to be around £240 million, reduced from its previous forecast for £272 million. 

The building materials supplier has been caught up in the cocktail of pressures facing the UK property market, including rising interest rates, build cost inflation and the cost-of-living crisis. The high price tag for building materials has inhibited construction and refurbishment demand.  

Shares in Travis Perkins have fallen sharply in today’s session, landing the stock down around 12% so far this year and 18% over the past 12 months.

The disappointing update has dragged housebuilders to the bottom of the FTSE 100 including Barratt Developments (LSE:BDEV), Kingfisher (LSE:KGF), and Berkeley Group Holdings (The) (LSE:BKG). While the sector got off to a strong start to the year, price action more recently has soured, pricing in the prospect of more rate hikes from the Bank of England as inflation remains stubbornly high.