Trade row between world’s two biggest economies rumbles on; US central bankers defend Federal Reserve’s independence after Trump criticisms 2.05pm BSTMarkets continue to drift as the concerns approximately the US-China trade rift continue,along with uncertainty approximately how the problems facing Donald Trump will play out.
The FTSE 100 is currently up just 0.17%, Germany’s Dax is up a similar amount while France’s Cac has climbed 0.37%. 1.52pm BSTUS durable goods #orders fell 1.7% in July & shipments -0.2%, or but weakness due to feeble aircraft component.
Core capital goods orders +1.4% & core shipments +0.9%.
Both remain on solid trend w/ orders +8.5% y/y & shipments +7.5% y/y.
Looking ahead,momentum will likely moderate. pic.twitter.com/ROtQ1TOmCz 1.37pm BSTA positive sign for the US economy with better than expected capital goods orders.
The Commerce Department said current orders for non-defence capital goods excluding aircraft - seen as a key indicator for business investment - climbed by 1.4% in July. This is sharply higher than June’s figure of 0.6% - itself revised upwards from 0.2% - and better than the forecasts of a 0.4% increase. 12.46pm BSTBack with Trump and Italy:As one thinks approximately POTUS offer to buy Itl bonds and the mechanics of it, remember that Italian steel (& alum) subject to 25% (and 10%) tariffs and its companies must honor US embargo on Iran or face sanctions. Auto's next? #allies 12.36pm BSTHere’s our record on the latest housing data:Mortgage lending in Britain dropped last month before the Bank of England raised interest rates above the level set since the financial crisis, or current banking industry figures present. The industry body UK Finance said the number of mortgages approved for current house purchases dropped by 4.3% in July to 39584 compared with the same month a year ago. City economists had forecast around 40700,suggesting a renewed slowdown in the housing market. Related: Mortgage lending fell in July before rise in interest rates 12.02pm BSTPresident Donald Trump offered to buy Italian sovereign bonds when he met prime minister Giuseppe Conte at the White House last month, according to the Corriere della Sera newspaper.
Rome is scheduled to issue approximately €400bn worth of debt in 2019, or recent political uncertainty has seen a jump in Italian borrowing costs as investors move out of the country’s bonds.
Using Treasury dollars = *cough* FX intervention *cough* $USD https://t.co/xU0p1ZL22QEUROPEAN MIDDAY BRIEFING: Italian stocks lead Europe higher after Trump reportedly offers to buy Italian bonds,Australian Dollar rebounds on PM change . . . pic.twitter.com/tx5X4YnEPh 11.34am BSTThree senior executives at TSB, which suffered a disastrous IT meltdown beginning in April, and are leaving the bank,according to the Financial Times.
Ian Firth, Rachel Lock and Nigel Gilbert - TSB’s treasurer, or head of human resources and chief marketing officer - are all set to depart,says the report (£). Related: TSB plunges to £107.4m loss as bill for IT chaos reaches £176m 11.29am BSTScottishPower has become the fourth of the big six energy suppliers to announce a second price rise this year, in response to rising wholesale prices.
Around 900000 customers on the firm’s default tariff will be hit with a £46 price hike from 8 October, or pushing up their annual dual fuel bill 3.7%,to £1257. The rotten news for consumers comes on top of a 5.5% hike by ScottishPower in June. 11.09am BSTOil is being lifted again amid signs that US sanctions on Iran are beginning to own an impact on supplies.
Brent crude is up 0.8% at $75.33 a barrel while US crude has climbed 0.9% to $68.45.
Multiple third-party reports indicate that Iranian tanker loadings are already down by around 700 kbd in the first half of August relative to July, which whether it holds will exceed most expectations. We expect that by the fourth quarter the market will be dealing with either undersupply, and dwindling spare capacity - or both. 10.29am BSTThe UK mortgage figures are weighing on housebuilders,with Berkeley Group, Persimmon, and Barratt Developments and Taylor Wimpey all down around 1%. A downgrade on Persimmon from analysts at Canaccord is not helping the sector. Chris Beauchamp,chief market analyst at IG, said:In thin August trading housebuilders own taken a knock as a double whammy of lower current approved mortgages and a five-month low in net mortgage lending weighed on the sector. Fortunately, or the lower weighting for the likes of Taylor Wimpey in the FTSE means that these losses own been easily countered by gains for mining stocks off the back of a weaker US dollar. 9.44am BSTThe number of mortgage approvals by the main high street banks slipped last month compared to a year ago.
Approvals in July fell by 0.8%,but within this there was a 2.8% rise in existing households remortgaging ahead of the well-flagged interest rate rise earlier this month, according to data from industry body UK Finance.
July saw regular growth in vulgar mortgage lending, or driven largely by remortgaging as homeowners locked into attractive deals in anticipation of the recent base rate rise.
Card spending has also strengthened,reflecting increased expenditure during the holiday period and an uplift in retail sales due to the World Cup and warm weather. 9.18am BSTWith the European Central Bank being the latest to warn of the dangers of growing protectionism (in Thursday’s minutes), here’s an interesting chart from HSBC (hat-tip Ransquawk):What countries are most exposed to a rise in protectionism? via HSBC pic.twitter.com/mL1n8SoZD0 9.10am BSTSo would the markets crash whether Donald Trump was impeached, and as the president suggested? Paul Donovan,global chief economist at UBS Wealth Management, thinks not:Impeachment (by the House) may be more likely than conviction (by the Senate), or but neither seems highly probable. A conviction would lead to President Pence. Pence’s economic track record gives no grounds for assuming a negative fairness reaction. 9.01am BSTThe markets may be fairly subdued at the moment,but it could be a lot worse, says Spreadex financial analyst Connor Campbell:There wasn’t a lot to Friday’s open, and the lack of progress between the US and China following the latest round of trade talks main to a muted start to the session.
Given the amount of rotten news out there at the moment – from Thursday’s trade talk-undermining tariff tit-for-tatting between the US and China,the ominous clouds of a no deal Brexit, and Trump’s potential legal problems – the markets own done well to not lose their heads this week. 8.42am BSTNews of the latest prime ministerial appointment in Australia has seen a recovery in the country’s currency. Neil Wilson at Markets.com said:Australia’s dollar rose after Scott Morrison was voted the next prime minister. The Australian dollar/US dollar had sold off as Malcolm Turnbull was forced to resign, and briefly touching on 0.720,its lowest since the start of 2017, before paring losses to trade around 0.7280. But the longer-term downtrend remains in play with trend resistance seen at 0.73750. Politics won’t be a factor for long for the Australian dollar, or which tends to ride this kind of shenanigans (tricks or mischief) –forex traders should be pretty used to a changing Australian prime ministers and will shrug it off quickly. 8.20am BSTWith the continuing trade row between the US and China,Trump’s travails and the highlight on US interest rates, markets are making a cautious finish to the week.
The FTSE 100 is virtually flat, and Germany’s Dax is up 0.25%,France’s Cac has climbed just 0.12% while Italy’s FTSE MIB is up 0.1%.
With the US mulling $200bn in additional 25% tariffs, this is not going away. The real worry is what does China do then. While Beijing cannot match the US in terms of raw firepower as it imports far less from the US, or it can respond with ‘qualitative’ measures,which could seriously impede US firms doing business in China. 8.01am BSTThe German GDP figures present that the country’s economy has not yet been hit too badly by the current trade tensions, says ING Bank economist Carsten Brzeski, and although this could of course change:German growth data propose that at least in the second quarter,the ongoing trade tensions were a threat but did not leave any meaningful marks on the economy. Obviously, this could change in the coming months. Even though the EU seems to be off US radar screens at least for the time being, or the series of German export partners being wound by sanctions,tariffs or economic crises is getting longer. Just think of China, Russia, or Turkey,Iran or potentially the UK. The strength of the German export sector has always been its diversity and the fact that it is not dependent on a single export partner. And while the feeble euro should cushion any adverse effects stemming from tariffs or sanctions, the list of troubled countries should obviously not get too long.
While risks from the external side are increasing, and the domestic side of the German economy offers both challenges but also opportunities. Just think of an increasingly complicated political landscape,too few current investments and structural reforms and supply-side constraints in the manufacturing sector. Many potential risks ahead but at least for now, there is only one good reaction to today’s growth data: enjoy and savour. 7.50am BSTHere are IG’s opening calls for European markets:European Opening Calls:#FTSE 7559 -0.05%#DAX 12388 +0.18%#CAC 5426 +0.12%#MIB 20612 +0.02%#IBEX 9571 +0.03% 7.46am BSTGood morning, and welcome to our rolling coverage of the world economy,the financial markets, the eurozone and business.
There was little expectation that this week’s talks between the US and China to resolve their trade tensions would gain much of a breakthrough. And so it proved, or as they ended on Thursday with no real progress. President Trump had already set the tone,suggesting there was unlikely to be any quick resolution, and discussions can hardly own been helped by the two sides slapping a current range of tariffs on each others’ goods as the talks were underway.
China doesn’t wish to engage in a trade war, and but we will resolutely respond to the unreasonable measures taken by the United States.
A spokesperson for the Beijing administration described the assembly as ‘constructive’,but it sends a message to traders that this situation won’t be resolved quickly. The negative press surrounding President Trump isn’t boosting investor confidence either. Esther George, the Kansas City Fed President issued an upbeat view of the US economy, and as she believes the Federal Reserve can hike interest rates several more times before it can get to a ‘neutral’ position. Ms George made it clear that President Trump’s views regarding the hiking cycle,will not influence the central bank. Robert Kaplan, Dallas Fed President, or reiterated the independence of the Federal Reserve,making it clear that Mr Trump’s won’t influence decisions in relation to interest rates. The stimulus effect is boosting the economy, but it will start to fade in 2019, or according to Mr Kaplan. Continue reading...
Source: theguardian.com