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Yahoo Finance UK's Vicky McKeever writes:

Chinese technology company Baidu (BIDU, 9888.HK) has launched two new AI models, as competition in the space continues to intensify.

According to a Reuters report, Baidu said on Sunday that its ERNIE X1 model "delivers performance on par with DeepSeek R1 at only half the price".

Meanwhile, the company reportedly said that its ERNIE 4.5 model has "excellent multimodal understanding ability. It has more advanced language ability, and its understanding, generation, logic, and memory abilities are comprehensively improved."

Baidu is not the only Chinese tech company looking to compete with DeepSeek, with Tencent (0700.HK) having also recently released a new AI model. Tencent claimed that its Hunyuan Turbo S could reply faster to queries than DeepSeek's latest R1 model.

Brent crude futures rose 1.3% to near $71 per barrel, while US West Texas Intermediate (WTI) crude climbed 1.4% to $68.11 per barrel.

The US airstrikes, which the Houthi-run health ministry reports have killed at least 53 people, represent the most significant US military operation in the Middle East since Trump took office. A US official told Reuters that the campaign could last for several weeks.

The Houthis have launched several attacks on shipping in the Red Sea, a crucial international trade route, disrupting global commerce. These actions have prompted an expensive military response by the US to intercept missiles and drones aimed at commercial vessels.

The ongoing conflict has raised concerns about the security of maritime trade in the region, which could lead to tighter oil supplies and further volatility in prices.

The Federal Reserve is widely expected to hold interest rates steady when it meets this week, but investors will be watching for something else — any sign that President Trump's policies are changing the central bank’s future expectations for the economy.

The Fed’s latest round of projections released Wednesday will include the much-studied "dot plot," a chart updated quarterly that shows each Fed official's prediction about the direction of the central bank's benchmark interest rate.

The last dot plot, released in December, revealed a consensus among Fed officials for two cuts this year, revised down from four, as some were already factoring President Trump’s expected economic policies into their projections.

Now that Trump is putting those policies into action, including an aggressive slate of tariffs, the question is whether central bank policymakers will tweak their outlook for economic growth and inflation — and thus the direction of rates.

Read more on Yahoo Finance

Yahoo Finance UK's Vicky McKeever writes:

Warren Buffett's Berkshire Hathaway (BRK-B) has increased its stakes in Japan's largest trading houses, according to reports.

Bloomberg reported that filings with Japan's finance ministry showed Berkshire had raised its holdings in Mitsubishi Corp. (8058.T), Marubeni Corp. (8002.T), Mitsui & Co. (8031.T), Itochu Corp. (8001.T) and Sumitomo Corp. (8053.T). The average position across the five stocks went up to around 9.3%.

According to Bloomberg's report, Jumpei Tanaka, head of investment strategy at Pictet Asset Management Japan, said the increase in Berkshire's positions may “provide a sense of security about buying Japanese stocks at a time when the Nikkei is seeing some weakness."

Japan's Nikkei 225 (^N225) index is down more than 6% year-to-date, while the broader Topix index is 0.3% in the red so far this year.

Read more on Yahoo Finance UK

In the latest headache for chancellor Rachel Reeves, the OECD has said it is cutting the UK's GDP growth forecast for 2025 to 1.4%, a three percentage point decrease from its previous estimate.

It also said it thinks growth will slow to 1.2% in 2026, after cutting its forecast for the year by 0.1%.

Reeves is set to make her spring statement next week, updating her plans for the economy. The chancellor faces an increasingly difficult environment, as traders wait to see how US president Donald Trump's trade war plays out for major economies.

The FCA said on Tuesday that it is fining Crispin Odey, the hedge fund manager of Odey Asset Management, and banning him from financial services.

The regulator said he had "showed reckless disregard for OAM’s governance" and "lacked candour" in his behaviour towards OAM and the FCA.

"The FCA considers Mr Odey’s conduct demonstrated that he is not a fit and proper person to perform any function related to regulated activities," it added.

On 4 February 2021, after an internal investigation by OAM, Odey received a Final Written warning from OAM’s Executive Committee (ExCo), in relation to inappropriate behaviour.

The Financial Times previously reported multiple allegations of sexual assault and harassment against women.

The fine by the regulator totals £1.8m.

The CSI (a combination of survey gauges tracking household financial wellbeing, labour market conditions, household spending, savings and debt by S&P Global) posted 45.3 in March, down slightly from 45.4 in February. Any reading below 50 indicates contraction.

The headline index trended above its long run average, but was weaker than the recent highs recorded in the second half of last year and signalled pessimism overall.

March data revealed that financial wellbeing across UK households deteriorated sharply on the month. That said, the respective seasonally adjusted index posted at a three-month high to indicate reduced pressure on current finances.

At the more granular level, only higher-income households saw an improvement in their financial situation. Looking ahead, the 12-month financial outlook was the most downbeat in 15 months. Households anticipated increased concerns for the upcoming year.

Sentiment across households echoed business expectations seen in the recently released S&P Global UK Business Outlook report, which signalled subdued forecasts for both activity and employment.

AJ Bell investment director Russ Mould writes:

Yahoo Finance UK's Pedro Goncalves writes:

The pound rose towards a five-month high against the dollar, trading at $1.2938, as president Donald Trump’s ongoing tariff threats continued to inject volatility into global markets.

Goldman Sachs analysts Dominic Wilson and Kamakshya Trivedi said there had been a “sharp re-rating lower” of US assets “on the back of tariff volatility and the environment of broader policy uncertainty created by the new administration”.

The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six major currencies, is down almost 6% from a two-year peak set in mid-January amid worries that Trump's tariffs and retaliatory measures from other countries could push the US economy into a recession.

Data released on Friday revealed that US consumer sentiment had plummeted to its lowest level in nearly two and a half years, with inflation expectations rising amid fears over the impact of sweeping tariffs. These developments have added to the market’s growing anxiety about the intensifying trade war.

HSBC analysts said US retail sales figures due later today “will be a big test for the USD given the slump in consumer confidence surveys”.

The average price of a UK property coming to market has climbed to £371,870 in March, in a busy month that's seen a huge log-jam as home-seekers try to beat the upcoming stamp duty deadline.

The average asking price for properties hitting the market this month has increased by 1.1%, or £3,876, according to Rightmove (RMV.L).

According to the property site's data, February and March have historically been the best months for sellers to list their properties, with a higher proportion of homes sold in these months compared to others.

Read more on Yahoo Finance UK

The Resolution Foundation has called on chancellor Rachel Reeves to raise taxes and "act decisively to meet her fiscal rules" ahead of this month's spring statement.

It said higher interest rates, weaker growth and lower tax revenues mean that fresh fiscal tightening is likely to be needed when Reeves delivers her speech to the House of Commons on 26 March.

The group, however, warned that she must avoid hitting the living standards of lower income families in the process, given that the jobs market is already in recession territory.

"Extending the freeze in personal tax thresholds by a further two years to 2029-30 would raise around £8bn," the Foundation said. "Crucially, this would not affect living standards in the short term as the policy wouldn’t take effect until April 2028, while 80% of extra revenue would come from families in the richest half of the income distribution."

Read more on Yahoo Finance UK

From our US team:

US stock futures fell on Monday, signalling March's market struggles are set to continue in a week highlighted by the Federal Reserve policy meeting.

S&P 500 futures (ES=F) dropped 0.6%, while Dow Jones Industrial Average futures (YM=F) fell around 0.6%. Contracts on the tech-heavy Nasdaq 100 (NQ=F) slid 0.7%.

Markets are coming off a week that saw the benchmark S&P 500 (^GSPC) enter into correction territory after suffering a 10% loss from its 19 Feb high.

Meanwhile, the Dow saw its worst weekly performance since March 2023 as all three major indexes lost more than 2%. Investors have been rocked by economic concerns and continuing uncertainty over President Trump's unpredictable tariff policy.

Wall Street will be focused on the Federal Reserve in the coming week, looking to its decision on interest rates and chair Jerome Powell's thoughts on the path forward — and on the general health of the US economy. The expectation is that the Fed will hold rates steady, so investors will closely watch its latest "dot plot," which maps out policymakers' expectations for the rate path going forward.

Hello from London. Lucy Harley-McKeown here, ready to bring you the business and markets news of the day.

This morning we've already had the Nationwide house price survey. The corporate results calendar is sparse, but results are on the slate for Phoenix Group (PHNX.L) and Vanquis (PRVA.DU).

Let's get to it.