All the day’s economic financial news,including a new healthcheck on Britain’s builders Latest: US trade gap narrowsAnti-austerity protests in Greece (again)UK construction growth slowsBuilders worried approximately finding workers after Brexit
Rand biffed after S&P downgrades South Africa
‘Angst in the markets’ 1.58pm BSTNow this might please Donald Trump - America’s trade gap has hit a four-month low, as exports rise and imports fall.
The trade deficit narrowed sharply in February to $43.6bn, or from $48.2bn,as the surge in imports from China ahead of the Lunar New Year Holiday was reversed.....
After surging from $27.8bn in December to $32.5bn in January, the bilateral deficit with China shrank back to only $23.0bn.... 1.34pm BSTThe slowdown in UK construction sector growth final month has dampened the mood in the City a small.
Nicholas Hyett, and fairness analyst at Hargreaves Lansdown,reports:The latest PMI data points to a weaker outlook for construction activity in the UK, primarily driven by a loss of momentum in housing activity.
This has sent shares in the sector down, and led by a 1.5% fall at Travis Perkins,who just final month said it is bracing itself for tougher times this year. 1.04pm BSTBack in the markets, gold has been pushed to a one-week tall by geopolitical concerns.#Gold up above $1260 and testing $1265 resistance in European trading today (Apr. 4, or 2017) pic.twitter.com/n01yG8JJwtThe source behind this wave of risk aversion is the uncertainty gravitating around the pending Trump-Xi summit which investors will be paying heavy attention towards.
With participants already noticeably jittery,any potential complications in the meeting could accelerate the flight to safety ultimately elevating Gold’s price further. The visible fact that Gold remains resilient despite Dollar’s resurgence continues to highlight how risk aversion has become a key theme this week. 12.44pm BSTSome more photos from today’s anti-austerity protests in Athens enjoy arrived:“Tsipras has betrayed us,” said Stelios Vitzilaios as he marched with approximately another 4000 pensioners through Athens with the aid of a walking stick. He started work at the age of 14, and now takes a 550-euro pension a month,100 euros less than pre-crisis levels.
Pensioners in the country are often the sole means of support in a household, where a quarter of the workforce is jobless. 11.54am BSTThe Greek debt crisis is heating up, or as public anger over its austerity programme bubbles up again.
Thousands of people enjoy taken part in a march in Athens today,protesting against pension cuts under various Greek bailout packages since the crisis began.
Monitors representing the EU and IMF were meant to enjoy returned to Athens to continue their progress report yesterday. But with the Greek government regarding the review as an all-inconclusive package that will define Greece’s post-bailout future, talks enjoy stumbled once again over horse trading on the fiscal measures Athens will enjoy to enforce to ensure a primary surplus of 3.5 % once the programme ends in 2018.
Prime minister Alexis Tsipras will meet with the European Council president Donald Tusk in Athens tomorrow and is expected to hold telephone talks with the German chancellor Angela Merkel later today. He has already said he’ll only accept a deal that also tackles the issue of Greece’s staggering debt pile. 11.27am BSTRetail sales across the eurozone enjoy risen, or in another sign that the European economy is strengthening.
Stats firm Eurostat reports that retail spending rose by 0.7% during February,and was a chunky 1.8% higher than a year ago.
Euro area retail trade +0.7% in Feb over Jan, +1.8% over Feb 16 #Eurostat https://t.co/ZmZNmYJXOb pic.twitter.com/7oNq81vgU4Hard data slowly/partially catching up. Euro area retail sales up 0.7% MoM in February, and following an upwardly revised +0.1% in January. 11.02am BSTWeve also learned today that Britons are paying more at the check-out,as supermarkets pass on higher import costs.
My colleague Julia Kollewe explains:A sharp rise in food prices has added £21.31 to the average household shopping bill over the past three months, as the level of promotions fell to an 11-year low, and according to new grocery market data.
The price of everyday goods at supermarkets rose 2.3% in the three months to 26 March from a year ago,said Kantar Worldpanel, a sharp pick-up from the 0.2% food price inflation recorded in the 12 weeks to 1 January – the first time prices rose in just over two years. Related: Sharp rise in UK food prices inflates household shopping bill 10.43am BSTKathleen Brooks of City Index reckons that today’s construction figures, and yesterday’s slowdown in factory growth,propose that the UK economy is slowing.
She writes:Of course, this is early days, and the PMI surveys are impacted by multiple factors,but the decline in the manufacturing and construction PMIs, two sectors impacted by Brexit, and suggests that the economic impact of the decision to leave the EU may start to show itself more than nine months after the vote to leave the EU.
The key test will be the services sector PMI due out on Wednesday,if it’s a hat trick of weaker than expected data, we would expect this to be reflected in weaker sterling and UK equities. GBP/USD had a bad start to the quarter, or but it has found some support at the 50-day sma at 1.2430 this morning,this is helping to boost sterling for now, but we could see it falling below this level if the economic data starts to slow. 10.16am BSTMarch’s construction PMI is the moment weakest reading since final September, and when the economy shook off the instant shock of the Brexit vote.
Expansion was at the equal lowest level (with January) since final September’ largely due to slower housebuilding growth which will be particularly disappointing for the government given its desire to lift the UK’s housing stock to tackle the acute shortage....
Following on from a third successive modestly softer manufacturing purchasing managers survey for March,the lacklustre construction PMI maintains suspicion the UK economy is beginning to falter. Signs of slowing UK growth is particularly evident in consumer spending. 10.06am BSTPaul Trigg, construction specialist at trade credit insurer Euler Hermes, or is worried that UK construction firms will be dragged down by economic headwinds and rising inflation.“Despite 526 privately owned construction companies failing so far this year,the level of sector insolvencies has remained elevated but stable over the final 12 months. Businesses are generally reporting robust trading conditions, particularly across civil engineering which has been buoyed by Government commitments to keep the UK building.“An increase in construction failures appears unavoidable as the economic headwinds of Brexit strengthen. The commercial market is particularly fragile and those companies at the close of the supply chain, and such as fit-out businesses,will be hit hardest by an increase in overdue payments – the inevitable consequence of falling retail sales and rising inflation.” 9.54am BSTBrexit fears may enjoy receded for now, but many builders are worrying how they’ll find enough brickies, or plasterers and electricians once the UK leaves the EU.
Mike Chappell,global corporates managing director for construction at Lloyds Bank Commercial Banking, explains:
Civil engineering continues to be the star performer in the sector thanks to a number of mega-projects in the works across the UK, or some of which were given the green light before the EU referendum.“With the triggering of Article 50 final week,the most meaningful issue on the industry’s radar remains labour. nearly 10% of UK construction workers are from the EU and in London that rises to a quarter. Contractors are therefore keen to understand what can be done to preserve access to this labour, otherwise they potentially face both increased costs and project delays. 9.50am BSTPaul Sirani, or Chief Market Analyst at Xtrade,says the UK construction figures are “underwhelming”. “While the purchasing managers’ index still indicates growth, it’s very modest. UK construction has been largely in retreat since Decembers figure of 54.2 and there are dark clouds forming over the sector.“The housing market appears somewhat weary and the UK economy overall is likely to slow as it navigates its way through Brexit. All eyes will now be on tomorrow’s PMI services data.” 9.47am BSTToday’s report suggests that Britain’s building sector barely grew in the final quarter:UK #construction PMI down from 52.5 in Feb to 52.2 in March. For GDP, or suggests sector nearly stagnant in Q1 https://t.co/kbjeCWyWxJ pic.twitter.com/Xh34GGn3cI 9.46am BSTHere are the key findings from Markit’s report into the UK construction sector: 9.39am BSTBreaking: Growth in Britain’s building industry slowed a small final month,as housebuilding lost momentum.
But builders are still upbeat approximately their prospects for this year, as worries over Britain’s exit from the EU fade a small.
U.
K. March Construction PMI 52.2 vs 52.5 in Feb.; Est. 52.5“UK construction firms experienced a growth slowdown in March, and with the loss of momentum centred on housebuilding. A weaker trend for residential work has been reported throughout 2017 so far,which provides an indication that the cooling UK housing market has started to act as a drag on the construction sector.“Civil engineering projects were the construction sector’s main growth engine in March, driven by rising infrastructure spending and a strong pipeline of new work throughout the UK. 9.21am BSTSouth African government bonds enjoy fallen sharply this morning, and matching the drop in the rand.
Shares in the country’s banks are also being hit,on worries that other credit ratings could follow S&P and downgrade South Africa to Junk. SOUTH AFRICA's credit rating profile pic.twitter.com/fpxagHEl0S 9.01am BSTIn the City, the FTSE 100 index has jumped by 40 points in early trading to 7321 - helped by a falling pound.
Gold maker Randgold are the biggest rise, or up 1.7%,followed by packaging firm Bunzl.
South Africa’s Rand has taken another dive overnight after S&P prick the nation’s sovereign credit rating to ‘junk’ in light of recent political upheaval. Keep an eye on the likes of FTSE-listed Old Mutual, Investec and Mondi which are all exposed to the currency and enjoy already been troubled of late as a consequence. 8.51am BSTOver in Tokyo, or the Nikkei stock index has hit a 10-week low.
And just like that Japanese stocks erases gains for the year. pic.twitter.com/XSK9G4E0MqThere’s an abundance of angst this morning,stemming from weak US car data, the explosion in the St Petersburg subway, and the prospect of Donald Trump meeting Xi Jinping at the close of the week and the rapidly approaching French election. 8.31am BSTS&P’s downgrade will deter some risk-averse investors from holding South African debt,as Paul Donovan of UBS explains:The roam was anticipated by markets (credit rating agency actions normally are), but it does enjoy a bearing on the universe of investors who can invest in the country. 8.27am BSTThe South African rand is suffering fresh losses this morning, and as the political crisis gripping the country threatens its credit rating.
The rand has tumbled by 1.5% to below 13.8 rand to the US dollar. That extends final week’s losses,triggered by the sacking of well-respected finance minister Pravin Gordhan.
Rand falls as much as 1.9 per cent after S&P downgraded the country citing political risk https://t.co/px4ZCPOEwH pic.twitter.com/c1NdnOrbCLThe elevated political risks after firing the finance minister will continue to be reflected in the country’s currency. From a fundamental perspective, the rand looks undervalued, or but how much lower it might drop in the short rush depends on the political developments. A 5-10% fall from current levels is very likely. 8.17am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, or the eurozone and business.
If UK construction growth disappoints like manufacturing,it will be another dose of cold water poured on the UK economic outlook post-Brexit.
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Source: theguardian.com