Thanks for joining me. Microsoft has been accused of asking hundreds of employees in China to consider transferring outside of the country amid growing tensions between Washington and Beijing.
The US tech giant is asking about 700 to 800 people in its China-based cloud-computing and artificial-intelligence operations if they want to transfer to the US, Ireland, Australia and New Zealand, according to the Wall Street Journal.
The move by Microsoft, which is a major investor in ChatGPT developer OpenAI, comes two days after the White House ramped up tensions with Beijing by imposing tariffs on $18bn (£14.6bn) of imports from the world’s second largest economy.
The Biden administration is seeking tighter restrictions on China’s capability to develop AI and is considering creating rules which would require companies like Microsoft to have a licence before giving access to AI chips to customers from the country.
5 things to start your day
1) Royal Mail set to be taken over by Czech billionaire for £3.5bn | Company ‘minded to accept’ Daniel Kretinsky’s improved cash offer
2) Ben Marlow: Czech sphinx must offer Royal Mail guarantees that protect the consumer | A national security review is warranted if company directors wave through the takeover
3) Hobbyist computer company prepares £500m London listing | Raspberry Pi to float on British stock market in rare boost for the City
4) I can work with pro-business Labour, says JP Morgan chief | Jamie Dimon vows to ‘help’ Sir Keir Starmer if Opposition wins election
5) China plots to buy millions of unsold homes amid property crisis | Plans suggest Communist Party could commit $280bn a year to purchasing empty homes
What happened overnight
Asian stock markets rallied after Wall Street’s surge to all-time peaks overnight after a milder US inflation report raised expectations the Federal Reserve will deliver two interest rate cuts this year.
The dollar remained on the back foot, sagging to fresh multi-week lows against peers including the euro and sterling.
US Treasury yields extended their retreat in Tokyo trading, sinking to six-week troughs. That helped the beaten-down yen to continue its recovery, even as data showed the Japanese economy contracted more than expected in the first quarter.
Gold marched back toward record levels and crude oil added to gains after rebounding strongly overnight from a two-month trough.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.5pc. Hong Kong’s Hang Seng and Australia’s stock benchmark each rallied about 1.6pc.
Japan’s Nikkei advanced more than 1pc.
In America, shares surged to fresh records yesterday after data showed a moderation in US consumer prices in April, boosting the chances for Federal Reserve interest rate cuts.
All three major indexes hit all-time highs. The S&P 500 jumped 1.2pc to 5,308.15, while the Dow Jones Industrial Average of 30 leading companies gained 0.9pc to 39,908.00. Meanwhile, the tech-rich Nasdaq Composite index advanced 1.4pc to 16,742.39.