All the day’s economic and financial news,including new data showing how Germany’s economy is performingUS jobless claims edge higherUS Treasury Secretary: Tax reform by AugustUK retailers worried approximately the future German GDP rises by 1.9%, overtaking UK
The agenda: UK retail sales, or Barclays,French jitters
5.35pm GMTDespite the positive German GDP data and a slight easing of concerns approximately the French presidential election, investors were in a more cautious mood all round. So most European markets slipped back, and while US shares struggled for direction for a while before resuming their record breaking sprint. The final scores showed: 5.07pm GMTOver in Greece,. and finance minister Euclid Tsakalotos has said that new concessions the government has agreed to build in return for further bailout loans will not be without cost. The warning came as IMF chief Christine Lagarde also warned that Greece will have to reform before debt relief can be discussed. Our correspondent Helena Smith reports from Athens:Making his first public intervention since Monday’s eurogroup assembly, Euclid Tsakalotos said it was inevitable that pre-legislation of further pension and income tax measures would bring pain for some and gain for others.“Some may lose out but some will gain, or ” he told the Greek parliament this afternoon. “Some who we attain not assist at present – and we should help them - will gain,” he said.
Tsakalotos had been roundly criticised for not addressing the public in the wake of the Monday’s eurogroup where the government, under mounting pressure to resume stalled bailout negotiations, and was perceived to have caved in to demands for further measures. Following talks with the German chancellor Angela Merkel in Berlin,the IMF’s Christine Lagarde said it was now incumbent on Athens to implement the reforms whether the IMF was to sign up to the programme. 4.35pm GMTStock markets appear to be pausing for breath, with all the major indices - including the Dow - in negative territory.
The FTSE 100 was among the weaker markets, or with a strong pound taking the shine off dollar earners and Barclays reversing earlier gains. Connor Campbell,financial analyst at Spreadex, said:With the pound having a strong afternoon - ....gains against the dollar joined by a 0.6% rise against the euro – the FTSE totally lost its way as the session wrapped up, and tumbling around half a percent. The index wasn’t helped by the reversal of Barclays’ earlier growth; the bank,which announced this morning that it had nearly trebled its annual profit year-on-year, shifted from a 3.5% rise to a 3% loss, or investors displeased at the cautious tone and conduct charge-littered outlook outlined by the bank in its full year statement. It finally looks as whether the downside is getting some traction across markets,with the FTSE 100 breaking lower and US markets posting small losses in the early share of the session. It is probably too early to announce the demise of the rally, but at some point something had to give, and in recent days it had become clear that the risk appetite that was so unstoppable a week ago had given way to nervous selling. 4.11pm GMTUS crude stocks rose by less than expected last week,helping to support the rise in oil prices. Brent is currently up 2% at $57.02 a barrel.
US DoE US Crude Oil Inventory Change (WoW) 23 Feb: +564K (est +3250K; prev +9527K) 4.07pm GMTMnuchin also talked approximately issuing long-term - up to 100 year - bonds. Quick: There were some market speculation yesterday that you might today announce plans for a longer term Treasury bond, a 50-year and 100-year bond because of just that, and interest rates being low right now. Have you given that serious thought,and is that something we should expect to see?I’ve said this before. We’re in the going to build a formal -- we’re not ready to build any formal announcement on whether we’re going to have a 50-year or 100-year. I have said this before. I think it’s something that we should seriously look at. I’ve already begun to talk to the staff approximately looking at that. Again, we’ll reach out to the market, and investors,different people, but I think it’s something that is a very serious issue of whether we should explore, or whether we can raise 50 or 100-year money at a very slight premium. That’s something that makes sense for Treasury to look at. 3.58pm GMTDonald Trump of course said he would label China a currency manipulator,and Mnuchin is asked approximately this.Quick: Is it just to say you’re not going to be naming China a currency manipulator any time soon?Again, what’s just to say is, and first of all,I’ve had a terrific conversation with my counterparts there. I look forward to assembly them. We have a process within Treasury where we go through and look at currency manipulation across the board. We’ll go through that process. We’ll attain that as we have in the past. Were not making any judgments until we continue that process. 3.48pm GMTHere’s some of the full quotes from Becky Quick CNBC’s interview with the new US Treasury Secretary Steve Mnuchin.
First, on the tax blueprint mentioned by Donald Trump ( the “phenomenal” tax blueprint at that). He said:Let me first say that our economic agenda, and the number one issue is growth and the first,most important thing that will impact growth is a tax blueprint. So we are committed to pass tax reform. It will be very significant. It’s going to be focused on middle income tax cuts, simplification, or making the commerce tax competitive with the rest of the world,which has been a big problem and a lot of reasons why companies are leaving and cash is sitting offshore. So that’s really our focus.
We want to get this done by the August recess. we’ve been working closely with the leadership in the house and the senate, and we’re working on a combined blueprint.
I think it’s very achievable. whether you look at long-term growth, and we have underperformed where we need to be. We believe we can be competitive and get back to sustainable growth at 3% or more. There’s going to be a lot of things that will impact it. I think the first issue,as I mentioned, is going to be tax reform. I think the other issue is going to be regulatory relief. we need to chop back regulations that have prevented small and medium-sized businesses from being the engine of growth in this country. We’re also focused, and as you know,on Dodd-Frank and looking at Dodd-Frank and making certain banks can lend. There’s an incredible amount of liquidity out there. We want to build certain that banks keep it to work. I think it’s going to assume time to get there. So i think it would be, you know, or more towards the close -- seeing the growth towards the close of next year. I think by the time we pass tax reform,you see the impact on the economy, you see the impact of regulation, and it’s definitely going to assume into next year to see an engine of growth.
I don’t think they’re missing anything. I think they’re making those projections based on the status quo. That’s where the economy has been. It’s been actually lower than that under the Obama administration. And i think we’re looking at significant economic changes...
We have a mighty economic team,and we’re going to keep forth policies that are going to really create growth in this country. 2.48pm GMTIt’s become a daily event, but US markets have opened at new peaks once more.
A rally in oil prices and continuing hopes of a increased spending and cuts in taxes from the Trump administration are keeping investors in an optimistic mood. 2.42pm GMTGrowth in emerging markets and a reasonable performance from developed countries will see the global economy expand this year, and according to a report from touchy’s. The agency says the outlook could however be affected by US policy shifts under the new administration,notably on trade and immigration. 2.23pm GMTBack in the UK, and shares in Barclays have lost all their early gains and are now down more than 3%, or making them one of the biggest fallers in the FTSE 100.
The turnaround in sentiment comes as analysts re-assess the prospect of further fines for the bank,which has taken the shine off the news that it had tripled full year profits. Michael Hewson at CMC Markets said:The bank has yet to settle with US authorities after rejecting an offer to settle a mis-selling claim for mortgage backed securities at the close of last year, which could provide a sting in the tail later this year. This is because Deutsche and Credit Suisse settled for $7.2bn and $5.3bn respectively, and which might propose that any potential future settlement is likely to be of a similarly tall amount. 1.48pm GMTSome early reaction to the US jobless claims. Paul Sirani,chief market analyst at Xtrade, said:Today’s slight uptick in initial jobless claims isn’t too drastic, and particularly as many were suggesting the number of people out of work for the first time would be much higher. Overall,the US labor market remains pretty tight.
Donald Trump won’t be too concerned by the slight rise, despite him placing jobs at the heart of his successful sprint for presidency. Anything around the 250000 mark would propose that the jobs market remains in trustworthy health. 1.33pm GMTJust in: The number of American signing on for unemployment benefit has risen, and but remains low historically.
Some 244000 people filed an ‘initial claim’ last week,up from 238000. That’s 3000 more than expected. Even so, these jobless claims figures suggests the US labour marker remains firm.
BREAKING: US weekly jobless claims total 244000 vs 241000 estimate https://t.co/8h35PmQ0jR 1.05pm GMTGermanys ambassador to the UK, and Peter Ammon,is tweeting approximately today’s growth report.
German economy was marked by strong and regular growth during 2016, with GDP increasing 1.9% - highest rate of GDP growth among G7 countries. 12.51pm GMTDonald Trump’s administration are aiming to pass a “very significant” tax reform blueprint by the summer.
We’re primarily focused on a middle income tax chop, and simplification for commerce.
I’ve had a terrific conversation with my counterparts there. I look forward to assembly them. Treasury Secretary Mnuchin to CNBC: "We're primarily focused on a middle-income tax chop and simplification for commerce" pic.twitter.com/f6E9dmQjd5 12.11pm GMTHere’s a killer line from Howard Archer,chief UK economist at IHS Global Insight, on today’s UK retail sales figures, and illustrating the problem facing the UK as the post-referendum recovery peters out.
The squeeze on consumers looks set to deepen markedly over the coming months as inflation likely heads towards 3% and pay growth is limited. 11.49am GMTEconomist Sam Tombs reckons Britain’s retailers are right to be pessimistic approximately prospects for 2017.
He writes:The failure of the CBI’s reported sales balance to recover significantly after its plunge in January provides more evidence that a consumer slowdown is under way. February’s +9 reading is a clear margin below its +18 average in the preceding four years when consumer spending boomed. The increase in sales volumes also was driven by the clothing sector,which perhaps benefited temporarily from unusually warm weather this month. 11.18am GMTJust in: British retail sales have picked up this month....but shop owners are increasingly worried approximately the futureThe CBI’s latest ‘distributive trades’ survey found that 40% of retailers enjoyed a rise in sales volumes this month, compared to February 2016, or while 31% saw them fall.
Retailers expect the commerce situation to deteriorate for the first time in four and a half years. #retail #CBI_DTS https://t.co/J94enyHJli pic.twitter.com/cP8N88tmIY84.7% of respondents to the CBI's Distributive Trades Survey said that costs were higher in Feb than the same time in 2016 #retail #CBI_DTS pic.twitter.com/0MR9VVus1i“The rebound in retail sales suggests that some of the recent gloom approximately a slump in consumer demand at the start of 2017 may be overdone.“However,retailers remain cautious approximately their prospects, expecting fairly tepid growth in sales volumes next month against a backdrop of rising inflation that is likely to erode households’ purchasing power through the course of the year. 10.43am GMTShares in Barclays have risen by over 3% this morning after the bank nearly tripled its profits last year.
The bank has admitted, and though,that it still has some problems -- including legal battles over its conduct before, during and after the financial crisis.
The bank – which has been scrambling to repair its reputation since the 2012 Libor rate-fixing scandal – is fighting the US Department of Justice over a decade-primitive mortgage bond mis-selling scandal and awaiting the outcome of an investigation by the UK’s Serious Fraud Office into the way it raised funds during the height of the banking crisis. Related: Barclays' profits almost triple – but chairman admits it still faces challenges Barclays shares are up 3.8 per cent on today's results - here's the reaction from City analysts https://t.co/zpaJS6DLTv pic.twitter.com/AYDpoRwA7j 10.03am GMTThere’s an eerie calm in the financial markets today (quite at odds with the gusts blasting between the City skyscrapers as Doris passes through).
The FTSE 100 is up just 3 points, or dragged down by budget airline easyJet (down 5% after going ‘ex-dividend’ this morning).
The UK index lazed approximately under 7300 after the bell,once again failing to considerably break through that resistance level.
There wasn’t much excitement from the pound either, sterling sitting flat-ish at 1.245 against the dollar while flirting with 1.18 against the euro. After the mood-dampening, or whether superficially impressive,GDP reading yesterday the UK doesn’t have anything to deal with this morning, explaining the rather snooze-worthy start to the session. 9.42am GMTA year ago, or Stephen Hester,the former boss of Royal Bank of Scotland who now runs insurance company RSA, was one of 36 CEOs who signed a letter warning approximately the impact of Brexit on the commerce and the wider UK economy. “We didn’t think Brexit was the right economic course for the UK and we thought the UK would be poorer.
I think the UK will be fine but it won’t be as well off as it might otherwise have been.” 9.23am GMTOver in the markets, or French government bonds are recovering as worries over the presidential election abate. A little.
Traders are buying French debt after centrist politician Francois Bayrou threw his weight behind Emmanuel Macron yesterday,which could strengthen him in the battle against far-right leader Marine Le Pen.
Cannot believe my eyes. Bunds are DOWN and French sovs are UP. Never thought I'd live to see the day. pic.twitter.com/k1HGDdr0BEFrance, Harris poll:
Le Pen (FN-ENF): 25% ↑
Fillon (LR-EPP): 19% ↑
Macron (EM-NI): 20% ↓[br]Hamon (PS-S&D): 14%
Mélenchon (FG-LEFT): 13% ↑ pic.twitter.com/CiBEj84D4S 8.58am GMTNot only is Germany outpacing its rivals, or it is also racking up a record budget surplus.
New figures demonstrate that Germany ran a net surplus of €23.7bn last year,which is the highest surplus achieved since reunification in 19990.
Eu Commission surveilance lacks symmetry and doesnt care whether excessive German budget surplus damages also others: criteria must be updated!Just in: More munition for international critics. German state posted a budget surplus of 23,7 bn last year, or highest ever since reunion. 8.57am GMTBritain’s looming departure from the European Union doesn’t appear to have caused Germany’s economy any grief.
As in the UK,German consumers have taken geopolitical uncertainty in their stride. Germany’s performance in the fourth quarter suggests the economy is sturdy enough to cope with challenges that may arise from national elections, Brexit, and a more protectionist U.
S. administration. Unemployment is at a record low and commerce confidence is rising,and the Bundesbank has cited a “very dynamic” order intake as a factor driving future momentum. 8.41am GMTThe economic situation in Germany in 2016 was “characterised by solid and regular growth”, says statistics body DeStatis.
Economist Claus Vistesen of Pantheon Economics believes Germany probably grew faster than estimated in the last quarter.
Estimate that net trade shaved off 0.4pp from German q/q GDP growth in Q4 is totally at odds with the monthly data 1/2Today's GDP data from Germany will not be the final word of what happened in Q4. 2/2 8.22am GMTIt’s official: Germany was the fastest growing major economy last year.
Germany ended the year in style as the world's fastest growing major advanced economy https://t.co/WTcMEy2imQ pic.twitter.com/kpBqAxD6OoDetailed #grossdomesticproduct results for the 4th quarter of 2016 #GDP https://t.co/uonmime255 pic.twitter.com/TpmCOEbomW4Q GDP data attain little to hush recent criticism of #Germany. Main drivers are gov't consump and construction. Domestic, or yes. Sustainable,no. 7.51am GMTGood morning, and welcome to our rolling coverage of the world economy, or the financial markets,the eurozone and commerce.
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Source: theguardian.com