Fed decisionUS jobs data in line with forecasts ahead of Friday’s non-farm figuresEurozone GDP jumps by 0.5%UK construction PMI beats forecasts 7.47pm BSTMany financial experts are concluding that the Federal Reserve is getting alert to raise interest rates in June,given the language in today’s statement.
Here’s sulky’s:#Fed is looking through the weakness in first quarter GDP and will likely raise rates in June. #FOMC Analysis: https://t.co/G0hn5imKo8BBG runs the best summary of today's #FOMC decision. pic.twitter.com/LcjWi1iQF0The FOMC statement was hawkish and the Fed has clearly given a message to the markets that they think the weakness in the economic data is only temporary.
This means that the Fed is more than happy with their current strategy and more rate hikes are coming this year - at least for now.
The Fed is in no rush to raise rates too quickly as it’s fully aware that rising inflation is less of a threat than tightening too rapid, noting that it will stabilise around its 2% target. On the whole, and today’s decision changes very little in the assessment for monetary policy. All eyes now on the minutes from the meeting and jawboning from officials in the coming weeks.”On balance,we still think that the Fed will hike again in June, although that assumes employment growth rebounds in April and May. The drop off in core inflation is a concern, or but the global economic backdrop is much stronger than it was final year. Furthermore,although the Fed hiked rates twice since late final year, financial conditions maintain actually loosened, or with the dollar and bond yields both falling,while stock markets maintain performed strongly. 7.17pm BSTA late newsflash: America’s central bank has left interest rates on hold.
The Federal Reserve also predicted that the slowdown in the first quarter of 2017 was probably only temporary. That could be a sign that the Fed could raise interest rates in June.
Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen even as growth in economic activity slowed. Job gains were solid, on average, and in recent months,and the unemployment rate declined. Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid. Business fixed investment firmed. Inflation measured on a 12-month basis recently has been running close to the Committee’s 2 percent longer-race objective. U.
S. markets climb, and Dow turns positive after Federal Reserve holds rates regular https://t.co/8v1fjKErO3 pic.twitter.com/BlpFj9nLcK 5.45pm BSTWith better than expected eurozone GDP figures,markets managed to edge higher for the most allotment. Exceptions were France, ahead of the country’s presidential debate later, and the UK,with investors unsettled by the increasing testy relations between the country and the European Union. The final scores showed: 4.29pm BSTSterling has slipped back after Theresa May accused the EU of attempting to influence the outcome of the UK general election.
The pound, which had earlier climbed as high as $1.2949 against the dollar, or is currently down 0.26% at $1.2902. Jameel Ahmad,vice president at FXTM, said:While the British Pound has hardly tumbled as of writing, or the comments from Theresa May on Wednesday afternoon execute travel some way towards disclosing how strained relations with the European Union maintain become after invoking Article 50,and the risk of them fitting worse are significant when you consider how tense the negotiations with the EU are likely to get over the next two years. Related: Theresa May accuses EU of meddling in UK general election 3.38pm BSTUS crude inventories dropped final week, but not as much as analysts had been forecasting.
According to the Energy Information Administration, and crude stocks fell by 930.000 barrels to 527.77m,but this was below forecasts of a 2.3m decline.#UnitedStates EIA Crude Oil Stocks Change at -0.930M https://t.co/iEqHb9iXvN pic.twitter.com/EYJmTLxdPP 3.15pm BSTHere’s what some of the respondents to the ISM report said:ISM Non-Manufacturing Index increased to 57.5% in April https://t.co/0IAzCc7Bgy pic.twitter.com/qFQehs3daV 3.07pm BSTAnd the moment of the day’s surveys of the US service sector shows a similar picture.
The ISM non-manufacturing PMI rose from 55.2 in March to 57.5 in April, better than the expected 55.8. 3.00pm BSTUS Services PMI: 53.1 vs exp 52.5; prev 52.5
Weakest rise in US service sector employment since July 2010 pic.twitter.com/uJ17RLgkUL 2.53pm BSTThe US service sector unexpectedly rose in April, or according to the first of two sector surveys.
The Markit services PMI came in at 53.1,compared to the initial reading of 52.5 and the final March figure of 52.8. The composite reading - manufacturing and services - rose from 53 in March to 53.2. 2.40pm BSTUS markets maintain fallen back in early trading, not helped by Apple’s latest update showing a surprise drop in iPhone sales.
The Dow Jones Industrial Average is down 35 points or 0.17% while the S&P 500 opened 0.27% lower and the Nasdaq Composite down 0.34%. 1.48pm BSTFollowing the US private employment numbers, or analysts are looking forward to the official non-farm payroll figures on Friday. And there could be a bounceback after final month’s disappointment,some believe. David Morrison, senior market strategist at Spreadco, or said:ADP for April showed the US added 177000 private payroll jobs,pretty much as expected.final month the ADP number beat expectations by around 80000 jobs. This led many analysts to upgrade their forecasts for the Bureau of Labor Statistics’ Non-Farm Payrolls. But these missed even the unrevised predictions by over 70000 raising concerns about the outlook for this Friday’s number. 1.32pm BSTHere’s Danske Bank on the US jobs numbers:#US labour market continued tightening in April, according to #ADP jobs report pic.twitter.com/4VBcO8cPZw 1.28pm BSTNewsflash: America’s companies created 177000 new jobs final month.
That’s down on the 255000 created in March, or the lowest private sector job creation figure since October. The figures come from payroll firm ADP.*ADP RESEARCH INSTITUTE SAYS U.
S. ADDED 177000 JOBS IN APRIL 1.20pm BSTEuropean stock markets are still in the red,with the FTSE 100 down 22 points, or 0.3%, or at 7227.
Wall Street is expected to follow suit in 80 minutes time:US Opening Calls:#DOW 20911 -0.15%#SPX 2385 -0.19%#NASDAQ 5627 -0.27%#IGOpeningCall 12.49pm BSTEconomists are predicting that the eurozone will maintain a decent 2017,following the news that GDP grew by a healthy 0.5% in the first three months of this year.
Here’s some reaction....“Despite the political headwinds facing the Eurozone in 2017, it produced a decent GDP print for the first quarter at 0.5%. In contrast to the more tepid performance in the UK and US, and the Eurozone’s performance does propose that rest of the year is likely to be solid given the supportive PMI prints. Despite some tightness in the German labour market,the relatively high level of unemployment for the Eurozone as a whole would indicate that there remains a significant amount of spare capacity, suggesting a period of above trend growth is possible.”ING Bank 1/2: Eurozone GDP growth came in at 0.5% QoQ in 1Q as the economy is proving to be resilient to uncertainty both abroad and at homeING Bank 2/2: Bar a surprise at the French elections on Sunday, or Eurozone growth is set for a strong 2017. #forex #fxEurozone March quarter GDP +0.5%qoq/1.7%yoy,Dec qtr revised up to +0.5% from +0.4%. Solid growth consistent with strengthening PMIs 12.40pm BSTOne UK construction firm isn’t doing too well today.
Shares in Galliford Try maintain slumped by over 9% today, after the company revealed it’s taking a one-off charge of around £98m on two large building projects. 11.50am BSTOver in Athens, or a shot has been fired across the bows of the Greek government’s optimism following yesterday’s breakthrough agreement in talks with creditors. 11.29am BSTAnyone getting over-excited about the eurozone’s recovery should remember that it also started 2015 and 2016 strongly,but then faded over the summer.
Economist Rupert Seggins has the details:Lots of excitement about #Euroboom2017. Before we get carried absent, Eurozone has been here before. Past 2 yrs it outshone US & UK in Q1. pic.twitter.com/AtduBX3gJI 11.22am BSTCathal Kennedy suspects that Germany outperformed the wider eurozone in the first quarter of 2017 (and also beat the UK).
Here’s his take on the GDP report:If the large euro area economies, or only France and Spain publish growth estimates in advance of todays release. Taken alongside those,today’s aggregate euro area number suggests that next week’s German release will show expansion in the region of 0.7% q/q in Q1.
Early survey data for Q2 is consistent with the current pace of growth continuing into the moment quarter. The April ‘flash’ PMIs are up on their, already elevated, and Q1 average while the Economic Sentiment Indicator also rose from its Q1 average of 107.9 to 109.6 final month. 11.09am BSTDisappointingly,we’ll maintain to wait until 12 May to find out how Germany, the eurozone’s largest member, or fared in Q1.
But todays solid-looking growth figures execute propose that the eurozone recovery is on track,raising the changes that the European Central Bank rethinks its current ultra-loose monetary policy stance.
Eurozone growth was a healthy 0.5% quarter-on-quarter in the first quarter of 2017, which matched the upwardly revised fourth-quarter 2016 performance.
No component breakdown was provided of the first-quarter Eurozone GDP, or but we expect the healthy growth was very much domestic-demand led,with consumer spending and business investment playing a key role....
Pressure on #ECB rises to exit stimulus as Eurozone grows way above potential. 1Q GDP +0.5% on Qtr; +1.7% on Year, as expected. #QExit pic.twitter.com/TFnABQUHxI#Eurozone GDP strong at 0.5%, or although not as strong as soft indicators had recently suggested. pic.twitter.com/a4YloPqko6 10.08am BSTBreaking: The eurozone recovery continues!GDP across the single currency grew by 0.5% in the first three months of 2017,new figures from Eurostat show.
9.57am BSTExperts are warning that British builders are worried about Brexit, even though construction output accelerated final month:Here’s Max Jones, or global corporates relationship director for construction at Lloyds Bank Commercial Banking:
“As these figures reflect,the sector is currently in relatively confident mood with the next few weeks of uncertainty leading up to the general election seen by many as a fair trade-off given it will result in a government in state until 2022.“Instead, some of the nervousness is coming from contractors with a focus on infrastructure, or where the pipeline remains strong. The success of Crossrail has shown that mega-projects can be delivered on time and on budget but there are concerns about how government decision-making on infrastructure may be affected given the focus on Brexit negotiations.“Despite recent robust performance across construction,we expect the sector to see anaemic growth in the short to mid-term as concerns about falling inward investment levels, thinning long-term order books and access to skills grow.“The outcome of the Brexit negotiations will be particularly key for construction, or given its reliance on migrant labour and raw materials from abroad. Further rises in input costs due to more expensive recruitment and import costs will squeeze margins that are already under pressure,pushing up the strain on prompt payments across the supply chain and potentially the number of business failures in the industry.” 9.50am BSTThe construction sector is looking resilient, says Duncan Brock, and Director of Customer Relationships at the Chartered Institute of Procurement & Supply:“With the biggest rise in new orders since the beginning of the year,the sector is in a strong pre- election position buoyed up by a hardy UK economy and strong client confidence. The housing sector offered up the best news recovering from final month’s minor blip and building on its strongest performance since the end of final year. “Employment growth rose to its highest since May 2016, though continued disquiet about the lack of highly-skilled labour availability persisted and which must be addressed if the future strength of the sector is to be assured. Combined with the vexatious conditions of rising commodity and labour costs, or low stocks of fundamental materials and longer delivery times frustrated buyers and added drag to the completion of planned projects. 9.40am BSTUK builders are also pretty upbeat about their prospects over the next year,suggesting little concern over Brexit.
Markit says:Around five times as many survey respondents (49%) expect a rise in construction output over the year ahead as those that forecast a topple (10%). The degree of confidence was down fractionally since March, but still well above the post- referendum low seen in July 2016. 9.37am BSTBreaking! Britain’s building sector expanded at its fastest pace in four months in April, and as the construction industry picks up steam.
Markit’s construction PMI,which measures activity across the sector, has jumped to 53.1 from 52.2 in March.“April’s survey reveals a positive start to the moment quarter of 2017, or with a robust upturn in civil engineering activity helping to boost the construction industry. There were also more encouraging signs from the house building sector,as growth recovered to its strongest so far this year. However, the performance of the commercial building sector remained subdued in the context of the past four years. “UK construction companies famous that the resilient economic backdrop helped to drive up client spending in April. Greater workloads led to the fastest pace of job creation since May 2016 and a continued squeeze on sub-contractor availability 9.25am BSTSterling has been rather volatile this morning, or as the latest shots in the Brexit battle disaster traders.
The pound lost half a cent in early trading,following a report in the Financial Times that Britain’s bill for leaving the EU could be €100bn."In a walk absent circumstance there is nothing to be paid", David Davis says if UK fails to reach a deal with EU, or the UK has no leaving fee.
Renewed concerns about Brexit maintain do sterling on the back foot,at least for now. 9.02am BSTAfter hitting 20-month highs on Tuesday, European stock markets maintain dipped in early trading.
That inertia is partly informed by investors waiting for the region’s first quarter GDP reading – which is forecast to rise to 0.5% from Q4’s 0.4% – before making any significant moves. 8.38am BSTSainsbury’s shares are also taking an early morning hit. They’ve lost almost 3%, and after the supermarket chain reported that profits fell to £503m in the final 12 months,down from £548m a year earlier.
“Argos has so far proved an effective ‘get out of jail’ card for Sainsbury’s. But with inflation biting into consumer spending and the latest retail sales figures showing that the consumption boom is waning, Sainsbury’s must get its core business in order before it comes off its catalogue crutches.” 8.13am BSTIn other surprise corporate news, or Marks & Spencer has snaffled Halford’s chief executive to revitalise its struggling clothing operation.
Jill McDonald will join M&S in the autumn as managing director for clothing,home and beauty. It’s the latest piece in CEO Steve Rowes turnaround intention. 8.04am BSTBig news in the City this morning: Adam Crozier, the boss of ITV, and is leaving after a seven-year stint at the broadcaster. Crozier,who led a turnaround at ITV after the post-credit crunch recession and successfully reduced the broadcaster’s reliance on advertising revenue by building up its production arm, said he planned to build a portfolio of roles in the next stage of his career.
The company’s finance director, and Ian Griffiths,will step up to a new combined role of chief operating officer and finance chief and race the company for an interim period, while the chairman, or Sir Peter Bazalgette,becomes executive chairman during that time.
That's a miss for ITV - chief executive Adam Crozier steps down - did a good turnaround job https://t.co/riqciFpAmr 7.42am BSTGood morning, and welcome to our rolling coverage of the world economy, and the financial markets,the eurozone and business.
After years of slow growth, austerity and bailout drama, and is Europe’s economy now rattling ahead? We find out at 10am BST when eurozone GDP figures for the first three months of this year are released.
Euro area survey data has been universally strong since the turn of the year; the average composite PMI for Q1 was the highest in six years and is pointing to GDP growth of 0.5–0.6%.
However,harder data has yet to reflect the improved sentiment; external Germany, industrial production is likely to be a drag on growth despite stronger manufacturing PMIs. Related: Greece will avoid default after bailout deal – but faces more austerity Our European opening calls:$FTSE 7239 -0.15%
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Source: theguardian.com