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Stock markets slide after 'mixed-bag' US jobs report - live updates Stock markets slide after 'mixed-bag' US jobs report - live updates
(35 minutes later)
3.36pm BST15:36
And here’s the positive version of the jobs data from the President’s twitter account:
The economy added 173,000 jobs in August—a record-breaking 66 consecutive months of private-sector job growth.
3.20pm BST15:20
And this sums it up:
- Bank of Tokyo: "We would be shocked if Fed officials delay any further!’" - Goldman: "No hike" ... who to believe
2.59pm BST14:592.59pm BST14:59
The market slide is accelerating:The market slide is accelerating:
2.54pm BST14:542.54pm BST14:54
Meanwhile over in Greece, a new poll ahead of this month’s election and it’s not good news for former prime minister Alexis Tsipras and his Syriza party:Meanwhile over in Greece, a new poll ahead of this month’s election and it’s not good news for former prime minister Alexis Tsipras and his Syriza party:
GREECE'S SYRIZA PARTY TO WIN 23.4 PERCENT OF VOTES AT SNAP ELECTION, NEW DEMOCRACY PARTY TO WIN 24 PERCENT - METRON ANALYSIS POLLGREECE'S SYRIZA PARTY TO WIN 23.4 PERCENT OF VOTES AT SNAP ELECTION, NEW DEMOCRACY PARTY TO WIN 24 PERCENT - METRON ANALYSIS POLL
2.46pm BST14:462.46pm BST14:46
The jobs report muddies the monetary policy outlook, says Unicredit Research economist Harm Bandholz:The jobs report muddies the monetary policy outlook, says Unicredit Research economist Harm Bandholz:
Fed Vice Chair Stan Fischer said during his Jackson Hole speech that “we now await the results of the August employment survey.” If he had hoped that the numbers will speak a clear language and basically make the decision for the FOMC – in the one or other direction – he will be disappointed...Fed Vice Chair Stan Fischer said during his Jackson Hole speech that “we now await the results of the August employment survey.” If he had hoped that the numbers will speak a clear language and basically make the decision for the FOMC – in the one or other direction – he will be disappointed...
In our view, a generally risk-averse Federal Reserve does not want to risk to add to the uncertainty, and prefers to get a better sense of how the global headwinds might affect the US economy.In our view, a generally risk-averse Federal Reserve does not want to risk to add to the uncertainty, and prefers to get a better sense of how the global headwinds might affect the US economy.
To be sure, that view is far from being shared by all [Federal Reserve] members. Only today, Richmond Fed President Lacker reiterated his view that the US no longer requires zero interest rates – a view that we fundamentally share. And Mr. Lacker will certainly dissent at the upcoming meeting, if the Fed leaves its target rate unchangedTo be sure, that view is far from being shared by all [Federal Reserve] members. Only today, Richmond Fed President Lacker reiterated his view that the US no longer requires zero interest rates – a view that we fundamentally share. And Mr. Lacker will certainly dissent at the upcoming meeting, if the Fed leaves its target rate unchanged
But while the hawks are usually more vocal, they in our view do not have the majority to get the rate hike just yet. Other voting regional Fed presidents, such as Charles Evans and Dennis Lockhart, will probably be more than happy to stand pat for now. Finally, in a divided Committee, it is up to the Chair to forge the Consensus. And while Janet Yellen has not spoken in public about the policy outlook since mid-July (!), her approach so far has always been to err on the side of caution.But while the hawks are usually more vocal, they in our view do not have the majority to get the rate hike just yet. Other voting regional Fed presidents, such as Charles Evans and Dennis Lockhart, will probably be more than happy to stand pat for now. Finally, in a divided Committee, it is up to the Chair to forge the Consensus. And while Janet Yellen has not spoken in public about the policy outlook since mid-July (!), her approach so far has always been to err on the side of caution.
2.39pm BST14:392.39pm BST14:39
Wall Street opens sharply lowerWall Street opens sharply lower
As expected, US markets have fallen back in the wake of the mixed jobs data.As expected, US markets have fallen back in the wake of the mixed jobs data.
The Dow Jones Industrial Average is down 204 points or 1.27% in the first few minutes of trading, while the S&P 500 is 1.01% lower.The Dow Jones Industrial Average is down 204 points or 1.27% in the first few minutes of trading, while the S&P 500 is 1.01% lower.
2.34pm BST14:342.34pm BST14:34
Meanwhile G20 finance ministers and central bankers, currently meeting in Turkey, will not call on the US to delay a rate rise, Reuters is reporting:Meanwhile G20 finance ministers and central bankers, currently meeting in Turkey, will not call on the US to delay a rate rise, Reuters is reporting:
The U.S. Federal Reserve is coming under pressure from emerging markets not to raise rates too soon as turmoil in China threatens global growth, but the G20 will not publicly call for any delay, delegates meeting in Turkey said on Friday.The U.S. Federal Reserve is coming under pressure from emerging markets not to raise rates too soon as turmoil in China threatens global growth, but the G20 will not publicly call for any delay, delegates meeting in Turkey said on Friday.
Slower growth in China and rising market volatility have boosted the risks to the global economy, the International Monetary Fund warned ahead of the G20 meeting. It cited a mix of potential dangers such as depreciating emerging market currencies and tumbling commodity prices.Slower growth in China and rising market volatility have boosted the risks to the global economy, the International Monetary Fund warned ahead of the G20 meeting. It cited a mix of potential dangers such as depreciating emerging market currencies and tumbling commodity prices.
Finance ministers and central bankers from the Group of 20 leading economies were pressing for more on China’s plans to tackle its slowdown, delegates at the meeting in Ankara said. Emerging market economies are concerned that a U.S. rate hike on top of the Chinese turmoil would pile on extra pressure, they said...Finance ministers and central bankers from the Group of 20 leading economies were pressing for more on China’s plans to tackle its slowdown, delegates at the meeting in Ankara said. Emerging market economies are concerned that a U.S. rate hike on top of the Chinese turmoil would pile on extra pressure, they said...
[But] a push by emerging market countries to characterise possible rate hikes in developed nations as a serious risk for the global economy was rejected by drafters of the G20 communique, a source from the Russian delegation said.[But] a push by emerging market countries to characterise possible rate hikes in developed nations as a serious risk for the global economy was rejected by drafters of the G20 communique, a source from the Russian delegation said.
“Some emerging market countries wanted to fix a position,” the source told reporters, when asked whether the Fed’s expected rate hike would be mentioned in the communique...“Some emerging market countries wanted to fix a position,” the source told reporters, when asked whether the Fed’s expected rate hike would be mentioned in the communique...
Another G20 source said the wording would probably not go beyond a general caution to central banks to bear in mind the consequences of policy shifts.Another G20 source said the wording would probably not go beyond a general caution to central banks to bear in mind the consequences of policy shifts.
“There will be no open demand to the Fed to act,” the source told Reuters.“There will be no open demand to the Fed to act,” the source told Reuters.
2.25pm BST14:252.25pm BST14:25
Take your pick. #NFP pic.twitter.com/M2h4dUPFBUTake your pick. #NFP pic.twitter.com/M2h4dUPFBU
2.24pm BST14:242.24pm BST14:24
For all those believing the jobs data makes a rate rise this month less likely, there are others believing the opposite:For all those believing the jobs data makes a rate rise this month less likely, there are others believing the opposite:
34% chance of Sep hike from 30% yesterday34% chance of Sep hike from 30% yesterday
2.20pm BST14:202.20pm BST14:20
Markets selloff deepens after US jobs reportMarkets selloff deepens after US jobs report
We warned earlier that a middling jobs report might not be good for markets.We warned earlier that a middling jobs report might not be good for markets.
And it turns out we were right. Europe’s stock markets are falling deeper into the red, knocking at least 2% off the main indices.And it turns out we were right. Europe’s stock markets are falling deeper into the red, knocking at least 2% off the main indices.
Wall Street is expected to fall back when it opens in 10 minutes.Wall Street is expected to fall back when it opens in 10 minutes.
Investors are still anxious, because there’s still no clarity on whether the Fed will push the button on rate hikes. Nor is it any clearer whether the US economy is strong enough to take it.Investors are still anxious, because there’s still no clarity on whether the Fed will push the button on rate hikes. Nor is it any clearer whether the US economy is strong enough to take it.
Marcus Bullus, trading director at MB Capital, says:Marcus Bullus, trading director at MB Capital, says:
“It has been a turbulent fortnight and this latest jobs data will not assuage market fears.“It has been a turbulent fortnight and this latest jobs data will not assuage market fears.
The August figure is an unconvincing start to the Fall and will trigger even more concern in the markets about the state of the global economy.”The August figure is an unconvincing start to the Fall and will trigger even more concern in the markets about the state of the global economy.”
Here’s the damage in Europe right now:Here’s the damage in Europe right now:
Updated at 2.20pm BSTUpdated at 2.20pm BST
2.19pm BST14:192.19pm BST14:19
Millennials are still struggling to break into the labor market:Millennials are still struggling to break into the labor market:
The share of prime age Americans (25-54 years old) who have jobs still has not increased at all this year. pic.twitter.com/LeWdueD7ioThe share of prime age Americans (25-54 years old) who have jobs still has not increased at all this year. pic.twitter.com/LeWdueD7io
Updated at 2.19pm BSTUpdated at 2.19pm BST
2.09pm BST14:092.09pm BST14:09
It may not feel like it, but the US economy has now achieved “full employment”.It may not feel like it, but the US economy has now achieved “full employment”.
So says Paul Ashworth of Capital Economics:So says Paul Ashworth of Capital Economics:
The decline in the unemployment rate leaves it in line with the Fed’s 5.0% to 5.2% estimate of the equilibrium long-run unemployment rate.The decline in the unemployment rate leaves it in line with the Fed’s 5.0% to 5.2% estimate of the equilibrium long-run unemployment rate.
In short, the Fed just achieved the full employment part of its dual mandate.In short, the Fed just achieved the full employment part of its dual mandate.
Admittedly, the participation rate remained at a depressed 62.6% and that decline in the unemployment rate was partly due to a 41,000 decline in the labour force last month. But it was notable that the wider U6 measure of unemployment also fell again, to 10.3% from 10.4%.Admittedly, the participation rate remained at a depressed 62.6% and that decline in the unemployment rate was partly due to a 41,000 decline in the labour force last month. But it was notable that the wider U6 measure of unemployment also fell again, to 10.3% from 10.4%.
Ashworth also believes a September rate hike is 50:50 toss-up, given today’s “fairly mixed” report.Ashworth also believes a September rate hike is 50:50 toss-up, given today’s “fairly mixed” report.
Updated at 2.09pm BSTUpdated at 2.09pm BST
2.05pm BST14:052.05pm BST14:05
ING: not strong enough for a rate hikeING: not strong enough for a rate hike
This is a particularly difficult Non-Farm Payroll to interpret, sighs Rob Carnell of ING.This is a particularly difficult Non-Farm Payroll to interpret, sighs Rob Carnell of ING.
It’s a “very mixed bag”. And for that reason, he doesn’t see the Fed raising rates this month:It’s a “very mixed bag”. And for that reason, he doesn’t see the Fed raising rates this month:
The August US labour report delivered something for everyone. But in the end, we don’t think it is sufficiently strong enough for the Fed to proceed with a September rate hike without markets worrying that the data is not good enough to support it.The August US labour report delivered something for everyone. But in the end, we don’t think it is sufficiently strong enough for the Fed to proceed with a September rate hike without markets worrying that the data is not good enough to support it.
For that, we think we needed to see less ambiguity in these numbers – e.g. a clear surge in payrolls to back up falls in the unemployment rate and rising wages. And this didn’t happen.For that, we think we needed to see less ambiguity in these numbers – e.g. a clear surge in payrolls to back up falls in the unemployment rate and rising wages. And this didn’t happen.
Updated at 2.34pm BSTUpdated at 2.34pm BST
1.59pm BST13:591.59pm BST13:59
The FT’s economics editor suggests Janet Yellen and colleagues shouldn’t give today’s Payroll much attention:The FT’s economics editor suggests Janet Yellen and colleagues shouldn’t give today’s Payroll much attention:
Mixed bag US labour market figs are a perfect example why it is ALWAYS nuts to base policy on monthly dataMixed bag US labour market figs are a perfect example why it is ALWAYS nuts to base policy on monthly data
1.58pm BST13:581.58pm BST13:58
Analysts aren’t really sure what to make of this Non-Farm Payroll report.Analysts aren’t really sure what to make of this Non-Farm Payroll report.
One the one hand, fewer jobs were created than expected, suggesting the jobs market is weakening.One the one hand, fewer jobs were created than expected, suggesting the jobs market is weakening.
On the other, the unemployment rate continues to hit levels not seen since the financial crisis began, indicating ultra-loose monetary policy has done its job.On the other, the unemployment rate continues to hit levels not seen since the financial crisis began, indicating ultra-loose monetary policy has done its job.
Who’d be a Fed policymaker, eh?Who’d be a Fed policymaker, eh?
This is just about what a labour market report would like if *designed* to give few clues about the Fed.This is just about what a labour market report would like if *designed* to give few clues about the Fed.
1.55pm BST13:551.55pm BST13:55
Labor force participation rate still at 38-year lowLabor force participation rate still at 38-year low
At 62.6%, the US labor force participation rate is actually the joint-lowest rate since 1977.At 62.6%, the US labor force participation rate is actually the joint-lowest rate since 1977.
That helps explain how the unemployment rate has dropped so much -- as it doesn’t include Americans who have dropped out the jobs market.That helps explain how the unemployment rate has dropped so much -- as it doesn’t include Americans who have dropped out the jobs market.
1.51pm BST13:511.51pm BST13:51
There are still 8.0 million unemployed in America, the BLS says. That includes 2.2 million who have been unemployed for at least 27 weeks.There are still 8.0 million unemployed in America, the BLS says. That includes 2.2 million who have been unemployed for at least 27 weeks.
And 6.5 million people were working part time for economic reasons in August.And 6.5 million people were working part time for economic reasons in August.
The full report is here.The full report is here.
1.49pm BST13:491.49pm BST13:49
America’s health care, social assistance and financial services firms all took on more staff last month, reports the Bureau for Labor Statistics.America’s health care, social assistance and financial services firms all took on more staff last month, reports the Bureau for Labor Statistics.
Manufacturing and mining firms shed jobs, though.Manufacturing and mining firms shed jobs, though.
The BLS also reports that the labor force participation rate was 62.6% in August for the third consecutive month. That means firms didn’t manage to lure more people into the labor market.The BLS also reports that the labor force participation rate was 62.6% in August for the third consecutive month. That means firms didn’t manage to lure more people into the labor market.
Updated at 1.53pm BSTUpdated at 1.53pm BST
1.41pm BST13:411.41pm BST13:41
The ‘underemployment rate’, which measures whether people want to put in more hours, also dropped last month to 10.3% from 10.4%.The ‘underemployment rate’, which measures whether people want to put in more hours, also dropped last month to 10.3% from 10.4%.
"Underemployment" is declining alongside official unemployment rate, although still above prerecession level. pic.twitter.com/tJMgCoJMl4"Underemployment" is declining alongside official unemployment rate, although still above prerecession level. pic.twitter.com/tJMgCoJMl4
1.40pm BST13:401.40pm BST13:40
US workers’ hourly earnings beat expectations last month.US workers’ hourly earnings beat expectations last month.
They rose by 0.3% in August, to $25.01, which is a 2.2% gain on last year. Wall Street expected 2.1%.They rose by 0.3% in August, to $25.01, which is a 2.2% gain on last year. Wall Street expected 2.1%.
1.38pm BST13:381.38pm BST13:38
The Labor Department points out that August’s initial non-farm payroll reading tends to be revised up in future months (as mentioned earlier)The Labor Department points out that August’s initial non-farm payroll reading tends to be revised up in future months (as mentioned earlier)
1.37pm BST13:371.37pm BST13:37
July’s payroll has been revised up from 215,000 to 245,000, making up for some of August’s shortfall.July’s payroll has been revised up from 215,000 to 245,000, making up for some of August’s shortfall.
June has been revised up by 14,000.June has been revised up by 14,000.
Updated at 1.51pm BSTUpdated at 1.51pm BST
1.32pm BST13:321.32pm BST13:32
US unemployment rate hits seven-year low of 5.1%US unemployment rate hits seven-year low of 5.1%
Here we go!Here we go!
173,000 new jobs were created across the US economy last month, according to the Non-Farm Payroll.173,000 new jobs were created across the US economy last month, according to the Non-Farm Payroll.
That’s rather weaker than the 217,000 which economists expected. But June and July’s figures have been revised higher (details to follow).That’s rather weaker than the 217,000 which economists expected. But June and July’s figures have been revised higher (details to follow).
And importantly -- the unemployment rate has fallen to its lowest level since March 2008, to just 5.1% from 5.3%.And importantly -- the unemployment rate has fallen to its lowest level since March 2008, to just 5.1% from 5.3%.
That’s a bigger drop than Wall Street had pencilled in.That’s a bigger drop than Wall Street had pencilled in.
More to follow....More to follow....
BREAKING: US created 173,000 jobs in Aug vs 220,000 expected; unemployment rate at 5.1% » http://t.co/tjCRv48D4ZBREAKING: US created 173,000 jobs in Aug vs 220,000 expected; unemployment rate at 5.1% » http://t.co/tjCRv48D4Z
Updated at 2.26pm BSTUpdated at 2.26pm BST
1.29pm BST13:291.29pm BST13:29
Just one minute to go.....Just one minute to go.....
1.23pm BST13:231.23pm BST13:23
Could Jeffrey Lacker suspect that today’s report will miss forecasts, so he’s getting his rebuttal in early by arguing that it doesn’t matter too much?Could Jeffrey Lacker suspect that today’s report will miss forecasts, so he’s getting his rebuttal in early by arguing that it doesn’t matter too much?
Hint from Lacker? "Should the US jobs report for August turn out to be a weak one, it shouldn't deter the #Fed from raising rates this year"Hint from Lacker? "Should the US jobs report for August turn out to be a weak one, it shouldn't deter the #Fed from raising rates this year"
1.17pm BST13:171.17pm BST13:17
Heads-up: Jeffrey Lacker, the president of the Richmond Fed, is arguing that today’s non-farm payroll shouldn’t derail the case for raising rates.Heads-up: Jeffrey Lacker, the president of the Richmond Fed, is arguing that today’s non-farm payroll shouldn’t derail the case for raising rates.
In a speech in Richmond, Lacker, a hawkish Fed policymaker, says that a poor August report would be a “one-month blip” that shouldn’t distract from the recent labour market recovery.In a speech in Richmond, Lacker, a hawkish Fed policymaker, says that a poor August report would be a “one-month blip” that shouldn’t distract from the recent labour market recovery.
Lacker says:Lacker says:
“I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring.”“I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring.”
Sounds like he’ll vote to raise rates this month.Sounds like he’ll vote to raise rates this month.
Lacker says he has not made up his mind yet, will listen to debate at Sept FOMC.Lacker says he has not made up his mind yet, will listen to debate at Sept FOMC.
Updated at 1.19pm BSTUpdated at 1.19pm BST
12.56pm BST12:5612.56pm BST12:56
Non-Farm Payroll: What to watch for, and what we expectNon-Farm Payroll: What to watch for, and what we expect
The final, and most important, economic news of the week is going to be released in just 30 minutes time.The final, and most important, economic news of the week is going to be released in just 30 minutes time.
The US employment report is published at 1.30pm BST, or 8.30am EDT, giving important new insight into the state of America’s economy.The US employment report is published at 1.30pm BST, or 8.30am EDT, giving important new insight into the state of America’s economy.
People have a habit of getting too excited about the Non-Farm Payroll. But this one does matter.People have a habit of getting too excited about the Non-Farm Payroll. But this one does matter.
It will show how the world’s largest economy is faring, at a time of global unease. And it will be a crucial factor in deciding if the Federal Reserve raises interest rates this month.It will show how the world’s largest economy is faring, at a time of global unease. And it will be a crucial factor in deciding if the Federal Reserve raises interest rates this month.
The consensus is that around 217,00 new jobs were created last month. However, there’s massive uncertainty around that figure, which is why stock markets are all still in the red.The consensus is that around 217,00 new jobs were created last month. However, there’s massive uncertainty around that figure, which is why stock markets are all still in the red.
The unemployment rate is expected to drop again, from 5.3% to 5.2%. That would be fresh meat to the hawks on the Fed, who feel the economy doesn’t need ultra-low interest rates.The unemployment rate is expected to drop again, from 5.3% to 5.2%. That would be fresh meat to the hawks on the Fed, who feel the economy doesn’t need ultra-low interest rates.
But other Fed policy makers will be watching the average hourly earnings figure. They are expected to show a rise of just 2.1% year-on-year; not a sign of a red-hot labour market that could drive inflation up.But other Fed policy makers will be watching the average hourly earnings figure. They are expected to show a rise of just 2.1% year-on-year; not a sign of a red-hot labour market that could drive inflation up.
If we get a strong payroll, the chances of an early rate rise will surely increase.If we get a strong payroll, the chances of an early rate rise will surely increase.
Ric Spooner, chief market analyst at CMC Markets in Sydney, says:Ric Spooner, chief market analyst at CMC Markets in Sydney, says:
Given that the Fed is comfortable with the broad trend of job growth, a strong number would improve the atmosphere for a September rate hike.”Given that the Fed is comfortable with the broad trend of job growth, a strong number would improve the atmosphere for a September rate hike.”
And that might drive shares up; after all, a strong labour market means a solid economy.And that might drive shares up; after all, a strong labour market means a solid economy.
Shares could fall, though, if NFP is a bit weak. An increase of, say, 165,000 to 180,000 new jobs wouldn’t end the uncertainty gripping the markets.Shares could fall, though, if NFP is a bit weak. An increase of, say, 165,000 to 180,000 new jobs wouldn’t end the uncertainty gripping the markets.
As Chris Weston of IG put it:As Chris Weston of IG put it:
This is a grey area and the scenario I feel would actually prove to be the worst case for market participants.This is a grey area and the scenario I feel would actually prove to be the worst case for market participants.
If you are an economist who has September or October pencilled in for Fed rate hikes then you probably wouldn’t amend that view, but the growth in job creation is lacklustre and would provide the least amount of clarity.If you are an economist who has September or October pencilled in for Fed rate hikes then you probably wouldn’t amend that view, but the growth in job creation is lacklustre and would provide the least amount of clarity.
And we can’t rule out a really bad number -- which would probably spook traders:And we can’t rule out a really bad number -- which would probably spook traders:
BAML says the worst payrolls result for risk would be "a stinker" eg under 125K. #stinkerBAML says the worst payrolls result for risk would be "a stinker" eg under 125K. #stinker
Unfortunately, August is a notoriously unpredictable month where Non-Farm Payroll is concerned. The initial number is usually revised by around 80,000 jobs!Unfortunately, August is a notoriously unpredictable month where Non-Farm Payroll is concerned. The initial number is usually revised by around 80,000 jobs!
Since 2010, no month has been upwardly revised more than August cc: @steveliesman pic.twitter.com/gDqXTkXkG7Since 2010, no month has been upwardly revised more than August cc: @steveliesman pic.twitter.com/gDqXTkXkG7
11.53am BST11:5311.53am BST11:53
More gloominess, this time from airline industry group IATA.More gloominess, this time from airline industry group IATA.
It reports that the amount of freight shipped by air aroug the world fell by 0.6% in July, having risen by 1.2% in June.It reports that the amount of freight shipped by air aroug the world fell by 0.6% in July, having risen by 1.2% in June.
IATA Director General Tony Tyler warns that tough times are ahead, given the economic situation:IATA Director General Tony Tyler warns that tough times are ahead, given the economic situation:
“The combination of China’s continued shift towards domestic markets, wider weakness in emerging markets, and slowing global trade indicates that it will continue to be a rough ride for air cargo in the months to come.”“The combination of China’s continued shift towards domestic markets, wider weakness in emerging markets, and slowing global trade indicates that it will continue to be a rough ride for air cargo in the months to come.”
11.25am BST11:2511.25am BST11:25
The futures markets suggests US stocks will fall by around 1% when Wall Street opens in three hours time.The futures markets suggests US stocks will fall by around 1% when Wall Street opens in three hours time.
However, the US jobs report comes an hour earlier, and will have a major impact on the markets. Although as explained earlier, we could get a ‘middling’ reading that doesn’t give much clarity.However, the US jobs report comes an hour earlier, and will have a major impact on the markets. Although as explained earlier, we could get a ‘middling’ reading that doesn’t give much clarity.
11.09am BST11:0911.09am BST11:09
10.31am BST10:3110.31am BST10:31
European shares keep droppingEuropean shares keep dropping
The selloff in Europe is accelerating, pushing the FTSE 100 down by 101 points or 1.6%.The selloff in Europe is accelerating, pushing the FTSE 100 down by 101 points or 1.6%.
Almost every share is down, led by retailers after it emerged August was the worst month for the sector since 2008:Almost every share is down, led by retailers after it emerged August was the worst month for the sector since 2008:
Related: UK high street has worst month since 2008Related: UK high street has worst month since 2008
Worries over the global economy, China, and the upcoming US employment report are all weighing on the markets and wiping out Thursday’s gains.Worries over the global economy, China, and the upcoming US employment report are all weighing on the markets and wiping out Thursday’s gains.
Yesterday’s rally, after the ECB suggested it could do more QE, looks rather overenthusiastic now.Yesterday’s rally, after the ECB suggested it could do more QE, looks rather overenthusiastic now.
As Conner Campbell of SpreadEX puts it:As Conner Campbell of SpreadEX puts it:
It looks like the flip-flopping nature of markets is set to continue this Friday; after the Draghi-boosted highs on Thursday afternoon, the European indices seem to be in the midst of a harsh come-down this Friday morning, with all the major indices falling by over a percent.It looks like the flip-flopping nature of markets is set to continue this Friday; after the Draghi-boosted highs on Thursday afternoon, the European indices seem to be in the midst of a harsh come-down this Friday morning, with all the major indices falling by over a percent.
Germany’s DAX is suffering even more, down 1.8%, as investors react to the worrying drop in German factory orders.Germany’s DAX is suffering even more, down 1.8%, as investors react to the worrying drop in German factory orders.
So its official then, we were over enthusiastic yesterday? #FTSE #DAX #CAC #INDU pic.twitter.com/KFHIp2lnMmSo its official then, we were over enthusiastic yesterday? #FTSE #DAX #CAC #INDU pic.twitter.com/KFHIp2lnMm
Updated at 11.16am BSTUpdated at 11.16am BST
10.05am BST10:0510.05am BST10:05
The slump in German factory orders in July (see 8.03am) shows that the Chinese slowdown is hurting, say economists.The slump in German factory orders in July (see 8.03am) shows that the Chinese slowdown is hurting, say economists.
Ulrike Kastens, economist at German private bank Sal. Oppenheim, said the fall in factory orders in July was “disappointing,” though the “modest” upward trend in German industry continues thanks to growth in recent months.Ulrike Kastens, economist at German private bank Sal. Oppenheim, said the fall in factory orders in July was “disappointing,” though the “modest” upward trend in German industry continues thanks to growth in recent months.
While economic trends have improved within the eurozone, “developments in emerging markets, especially China, give cause for concern”.While economic trends have improved within the eurozone, “developments in emerging markets, especially China, give cause for concern”.
“This will be a drag on German exports in coming months and will also dampen prospects for the world economy.”“This will be a drag on German exports in coming months and will also dampen prospects for the world economy.”
Stefan Schilbe, economist at HSB Trinkaus, said domestic orders and from the rest of the eurozone had done well and falling oil prices should help.Stefan Schilbe, economist at HSB Trinkaus, said domestic orders and from the rest of the eurozone had done well and falling oil prices should help.
“But the main problem is what happens to global trade. Orders from the rest of the world fell by nearly 10%. There aren’t enough growth drivers in the global economy. The USA looks solid, but many developing countries such as China, Brazil and Russia are under pressure. Countries that depend on raw materials like Canada and Australia are also struggling.”“But the main problem is what happens to global trade. Orders from the rest of the world fell by nearly 10%. There aren’t enough growth drivers in the global economy. The USA looks solid, but many developing countries such as China, Brazil and Russia are under pressure. Countries that depend on raw materials like Canada and Australia are also struggling.”
(quotes via Reuters. Thanks to Julia Kollewe for the translations)(quotes via Reuters. Thanks to Julia Kollewe for the translations)
9.51am BST09:519.51am BST09:51
The European Central Bank has shaken off its anxiety over the eurozone economy, and pressed on with installing a large artwork shaped like a tree outside its headquarters.The European Central Bank has shaken off its anxiety over the eurozone economy, and pressed on with installing a large artwork shaped like a tree outside its headquarters.
No that’s not a joke.No that’s not a joke.
See -->See -->
@ecb The tree is currently installed and nice pic.twitter.com/5NCzUdtBPC@ecb The tree is currently installed and nice pic.twitter.com/5NCzUdtBPC
Created by Italian artist Giuseppe Penone, it’s called “Gravity and Growth” -- (neatly encompassing the gravity of Europe’s growth problem). It’s made of bronze and granite, and a staggering 17 metres tall.Created by Italian artist Giuseppe Penone, it’s called “Gravity and Growth” -- (neatly encompassing the gravity of Europe’s growth problem). It’s made of bronze and granite, and a staggering 17 metres tall.
And how much has this little enterprise set us back? There’s no price tag on the tree, but the total competition to find three new artworks to brighten up the ECB HQ cost €1.25m!And how much has this little enterprise set us back? There’s no price tag on the tree, but the total competition to find three new artworks to brighten up the ECB HQ cost €1.25m!
Money better spent on a project to tackle eurozone unemployment, or the refugee crisis, perhaps.Money better spent on a project to tackle eurozone unemployment, or the refugee crisis, perhaps.
9.28am BST09:289.28am BST09:28
The G20 will also resist blasting Beijing over the turbulence caused by its recent devaluation of the yuan, according to CNBC’s Steve Sedgwick.The G20 will also resist blasting Beijing over the turbulence caused by its recent devaluation of the yuan, according to CNBC’s Steve Sedgwick.
#G20 Sources telling me (not unsurprisingly) NO criticism or even mention of #China specifically in draft Communique.#G20 Sources telling me (not unsurprisingly) NO criticism or even mention of #China specifically in draft Communique.
9.25am BST09:259.25am BST09:25
G20 meeting: All about the Fed, eurozone QE, China and commoditiesG20 meeting: All about the Fed, eurozone QE, China and commodities
There are four challenges facing finance chiefs at their G20 meeting, Luxembourg finance minister Pierre Gramegna tells Bloomberg TV.There are four challenges facing finance chiefs at their G20 meeting, Luxembourg finance minister Pierre Gramegna tells Bloomberg TV.
He’s hoping for a “frank and open” discussions on these points:He’s hoping for a “frank and open” discussions on these points:
On China, Gramegna pointed out that China is still aiming for 7% growth this year, despite the slowdown in its manufacturing sector. That would be an “outstanding result”, compared to Europe.On China, Gramegna pointed out that China is still aiming for 7% growth this year, despite the slowdown in its manufacturing sector. That would be an “outstanding result”, compared to Europe.
But on the financial side, Gramegna warns that it’s “very difficult” to go against the market. As we may see on Monday, when the Shanghai index reopens....But on the financial side, Gramegna warns that it’s “very difficult” to go against the market. As we may see on Monday, when the Shanghai index reopens....
9.05am BST09:059.05am BST09:05
G20 finance ministers fret about US rate hikeG20 finance ministers fret about US rate hike
The prospect of a US interest rate hike is worrying top finance ministers and central bankers as they gather in Ankara for the G20 meeting.The prospect of a US interest rate hike is worrying top finance ministers and central bankers as they gather in Ankara for the G20 meeting.
A draft communique, seen by Bloomberg, warns that:A draft communique, seen by Bloomberg, warns that:
In line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies, which may remain one of the main sources of uncertainty in financial markets.In line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies, which may remain one of the main sources of uncertainty in financial markets.
However, the G20 meeting isn’t expected to lobby the Federal Reserve not to raise borrowing costs; it would, after all, be a sign of normalisation returning to the world economy.However, the G20 meeting isn’t expected to lobby the Federal Reserve not to raise borrowing costs; it would, after all, be a sign of normalisation returning to the world economy.
Updated at 9.25am BSTUpdated at 9.25am BST
8.45am BST08:458.45am BST08:45
Look who’s back!Look who’s back!
Yanis Varoufakis, the former Greek finance minister, has just told CNBC that he won’t back Syriza’s Alexis Tsipras in the general election on September 20th.Yanis Varoufakis, the former Greek finance minister, has just told CNBC that he won’t back Syriza’s Alexis Tsipras in the general election on September 20th.
BREAKING: Yanis Varoufakis tells CNBC: I'm not endorsing Tsipras in this election; he is still a friend but we have political disagreementBREAKING: Yanis Varoufakis tells CNBC: I'm not endorsing Tsipras in this election; he is still a friend but we have political disagreement
That disagreement is Tsipras’s decision to accept the tough conditions attached to Greece’s third bailout, rather than exiting the eurozone.That disagreement is Tsipras’s decision to accept the tough conditions attached to Greece’s third bailout, rather than exiting the eurozone.
LIVE: Varoufakis: A 10 year old would know that (Greece's debt situation) would not end well http://t.co/bJppuJzX5m pic.twitter.com/auHdpiRG98LIVE: Varoufakis: A 10 year old would know that (Greece's debt situation) would not end well http://t.co/bJppuJzX5m pic.twitter.com/auHdpiRG98
Varoufakis also declared that the political situation in Greece is toxic, with the country “on the foundations of an economy that’s imploding”.Varoufakis also declared that the political situation in Greece is toxic, with the country “on the foundations of an economy that’s imploding”.
Six months of brinksmanship and fruitless negotiations, leading to the introduction of capital controls, didn’t exactly help, of course....Six months of brinksmanship and fruitless negotiations, leading to the introduction of capital controls, didn’t exactly help, of course....
Updated at 8.59am BSTUpdated at 8.59am BST
8.31am BST08:318.31am BST08:31
European stocks fall around 1.4% in early tradingEuropean stocks fall around 1.4% in early trading
So much for the Draghi rally.So much for the Draghi rally.
Europe’s stock markets are sliding back as trading gets underway.Europe’s stock markets are sliding back as trading gets underway.
In the City, the FTSE 100 quickly shed 80 points, led by retailers Next and Dixons Carphone (both down 3% after a broker downgrade) and then BP (down 2.7% as the oil price slides again)In the City, the FTSE 100 quickly shed 80 points, led by retailers Next and Dixons Carphone (both down 3% after a broker downgrade) and then BP (down 2.7% as the oil price slides again)
This follows a late selloff on Wall Street, showing nervousness ahead of today’s US jobs report.This follows a late selloff on Wall Street, showing nervousness ahead of today’s US jobs report.
Tony Cross, market analyst at Trustnet Direct, says:Tony Cross, market analyst at Trustnet Direct, says:
A fair chunk of yesterday’s gains have been wiped off London’s FTSE-100 index in the first few minutes of trade this morning with selling in the latter part of yesterday’s Wall Street session clearly taking a toll on sentiment.A fair chunk of yesterday’s gains have been wiped off London’s FTSE-100 index in the first few minutes of trade this morning with selling in the latter part of yesterday’s Wall Street session clearly taking a toll on sentiment.
Traders are now looking at screens awash with red numbers and even if today’s non-farm payrolls are seen as having no meaningful implications in driving a September rate hike, the Fed still has time to act before the year is out. Yesterday’s nascent rebound for commodity prices is also looking to be rather short lived – crude oil is slumping once again and as a result it’s little surprise that the natural resources stocks have been shunted towards the foot of the index.Traders are now looking at screens awash with red numbers and even if today’s non-farm payrolls are seen as having no meaningful implications in driving a September rate hike, the Fed still has time to act before the year is out. Yesterday’s nascent rebound for commodity prices is also looking to be rather short lived – crude oil is slumping once again and as a result it’s little surprise that the natural resources stocks have been shunted towards the foot of the index.
8.18am BST08:188.18am BST08:18
John Lewis, that barometer of UK high street spending, has reported that sales at its department stores slid by 3.4% year-on-year in the last week of August. Not a great signal.John Lewis, that barometer of UK high street spending, has reported that sales at its department stores slid by 3.4% year-on-year in the last week of August. Not a great signal.
It admitted that “a tough trading period closed with another difficult week”, but is pinning its hopes on targeting “pent-up demand” in September.It admitted that “a tough trading period closed with another difficult week”, but is pinning its hopes on targeting “pent-up demand” in September.
Updated at 8.19am BSTUpdated at 8.19am BST
8.03am BST08:038.03am BST08:03
We also have fresh signs of weakness in Europe’s powerhouse economy this morning.We also have fresh signs of weakness in Europe’s powerhouse economy this morning.
German factory orders shrank by 1.4% in July, according to new data from the Economy Ministry. That’s a big reversal on June’s 1.8% rise in orders.German factory orders shrank by 1.4% in July, according to new data from the Economy Ministry. That’s a big reversal on June’s 1.8% rise in orders.
It’s a volatile measure, so caution is needed. But it reinforces Mario Draghi’s point yesterday - Europe’s economy isn’t too rosy.It’s a volatile measure, so caution is needed. But it reinforces Mario Draghi’s point yesterday - Europe’s economy isn’t too rosy.
Eurgh...some rather horrible factory orders from Germany -1.4% July vs June...much worse than expectedEurgh...some rather horrible factory orders from Germany -1.4% July vs June...much worse than expected
7.55am BST07:557.55am BST07:55
Nikkei index hits seven-month lowNikkei index hits seven-month low
A fresh bout of gloom swept Japan’s trading floor today, pushing the Nikkei index down by 2% to a fresh seven-month low.A fresh bout of gloom swept Japan’s trading floor today, pushing the Nikkei index down by 2% to a fresh seven-month low.
Nikkei tumbles 2.2% to 17792.16 lowest since Feb on global de-risking. Falls 7% this week, worst week since Apr2014. pic.twitter.com/JZfgn3BoZ0Nikkei tumbles 2.2% to 17792.16 lowest since Feb on global de-risking. Falls 7% this week, worst week since Apr2014. pic.twitter.com/JZfgn3BoZ0
The selloff appears to have been triggered by renewed worries over the state of the global economy, after Mario Draghi warned yesterday that eurozone growth has slowed.The selloff appears to have been triggered by renewed worries over the state of the global economy, after Mario Draghi warned yesterday that eurozone growth has slowed.
Tokyo traders also weren’t impressed by the latest Japanese wage data, which showed real earnings rose just 0.3%. That’s not enough to get Japan’s economy roaring.Tokyo traders also weren’t impressed by the latest Japanese wage data, which showed real earnings rose just 0.3%. That’s not enough to get Japan’s economy roaring.
Japanese wages: still stagnant http://t.co/Zgxe0rtST3 pic.twitter.com/qGRidw0qWsJapanese wages: still stagnant http://t.co/Zgxe0rtST3 pic.twitter.com/qGRidw0qWs
7.37am BST07:377.37am BST07:37
Introduction: Nervous markets await US jobs reportIntroduction: Nervous markets await US jobs report
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today is all about the US jobs report, and the possibility that the long run of record low interest rates is about to end.Today is all about the US jobs report, and the possibility that the long run of record low interest rates is about to end.
Investors are hunkering down ahead of the Non-Farm Payroll, released at 1.30pm BST (8.30am EDT). It will show how many new jobs were created in August.Investors are hunkering down ahead of the Non-Farm Payroll, released at 1.30pm BST (8.30am EDT). It will show how many new jobs were created in August.
A strong reading could persuade the Federal Reserve to raise borrowing costs soon, perhaps this month, especially if it is accompanied by a decent rise in wages. A poor NFP could kick the first rate hike into 2016.A strong reading could persuade the Federal Reserve to raise borrowing costs soon, perhaps this month, especially if it is accompanied by a decent rise in wages. A poor NFP could kick the first rate hike into 2016.
A middling report, though, will leave investors baffled about when the Fed will act, at a time when the global economy is looking weaker.A middling report, though, will leave investors baffled about when the Fed will act, at a time when the global economy is looking weaker.
The Wall Street consensus is that the NFP will rise by 218,000, but as usual there’s wide variation, so it could be lively day.The Wall Street consensus is that the NFP will rise by 218,000, but as usual there’s wide variation, so it could be lively day.
Especially as Federal Reserve policy maker Jeffrey Lacker will give a speech just before the Non-Farm payroll is released, called “the case against further delay”......Especially as Federal Reserve policy maker Jeffrey Lacker will give a speech just before the Non-Farm payroll is released, called “the case against further delay”......
Good Most-Important-NFP-ever-Day MorningGood Most-Important-NFP-ever-Day Morning
European stock markets are expected to slide by at least 1% this morning, having jumped yesterday after European Central Bank chief Mario Draghi hinted at more stimulus measures.European stock markets are expected to slide by at least 1% this morning, having jumped yesterday after European Central Bank chief Mario Draghi hinted at more stimulus measures.
Our European opening calls: $FTSE 6106 down 88 $DAX 10155 down 163 $CAC 4576 down 77 $IBEX 9867 down 176 $MIB 21829 down 348Our European opening calls: $FTSE 6106 down 88 $DAX 10155 down 163 $CAC 4576 down 77 $IBEX 9867 down 176 $MIB 21829 down 348
Asian markets have already dipped, even though the Chinese bourses are shut until Monday.Asian markets have already dipped, even though the Chinese bourses are shut until Monday.
I guess #Draghi's speech never made it to Asia. #Nikkei turns sharply lower. pic.twitter.com/uSbxCOAzIoI guess #Draghi's speech never made it to Asia. #Nikkei turns sharply lower. pic.twitter.com/uSbxCOAzIo
We’ll also be tracking reaction to yesterday’s ECB press conference, and monitoring events in Turkey as G20 finance ministers and central bank chiefs meet.We’ll also be tracking reaction to yesterday’s ECB press conference, and monitoring events in Turkey as G20 finance ministers and central bank chiefs meet.
Updated at 7.49am BSTUpdated at 7.49am BST