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| Mario Draghi hints eurozone stimulus will last - business live | Mario Draghi hints eurozone stimulus will last - business live |
| (35 minutes later) | |
| 3.57pm GMT | |
| 15:57 | |
| Another public appearance by a Federal Reserve member, another step towards a rise in interest rates next month. Kansas City Fed president Esther George told an oil conference in Houston: | |
| My view is that monetary policy should .. slowly raise the federal funds rate to promote maximum employment commensurate with the economy’s long-run potential to increase production. | |
| But she added, as Reuters reports, that she did not advocate high rates: | |
| I do not think it will serve the economy well. I do think we have to move more systematically. | |
| She also said it was too soon to say how the incoming Donald Trump administration would affect the outlook for Fed policy. | |
| Updated | |
| at 3.59pm GMT | |
| 3.17pm GMT | 3.17pm GMT |
| 15:17 | 15:17 |
| While US markets have been hovering around new highs, Europe has been struggling to keep up. Fiona Cincotta, market analyst at City Index, said: | While US markets have been hovering around new highs, Europe has been struggling to keep up. Fiona Cincotta, market analyst at City Index, said: |
| European equity markets have failed to make much progress one way or the other this week, kicking the week off and ending it at more or less the same level. The post-election Trump rally is seen to be wearing thin this side of the Atlantic, as investors digest the growing divergence between European and US economies and the outlook for monetary policy. | European equity markets have failed to make much progress one way or the other this week, kicking the week off and ending it at more or less the same level. The post-election Trump rally is seen to be wearing thin this side of the Atlantic, as investors digest the growing divergence between European and US economies and the outlook for monetary policy. |
| The dollar has continued its ascent in the wake of Yellen’s hawkish testimony before Congress, where her positive comments regarding the US economy have spurred the currency to break through 101.00 and hit fresh 13 year highs. | The dollar has continued its ascent in the wake of Yellen’s hawkish testimony before Congress, where her positive comments regarding the US economy have spurred the currency to break through 101.00 and hit fresh 13 year highs. |
| Yet while Yellen was more or less confirming a rate hike in December and several rate hikes for next year, European Central Bank President, Draghi was clearly on the other side of the fence. Draghi stated that the Eurozone recovery was reliant on ECB stimulus possibly hinting that ECB monetary stimulus will continue beyond its planned conclusion next March. As a result, the Euro has continued to sell of against the dollar and is currently at $1.0609 setting its sights on $1.04 against the dollar going forward... | Yet while Yellen was more or less confirming a rate hike in December and several rate hikes for next year, European Central Bank President, Draghi was clearly on the other side of the fence. Draghi stated that the Eurozone recovery was reliant on ECB stimulus possibly hinting that ECB monetary stimulus will continue beyond its planned conclusion next March. As a result, the Euro has continued to sell of against the dollar and is currently at $1.0609 setting its sights on $1.04 against the dollar going forward... |
| Gold, like bonds, has been one of the more noticeable losers of a Trump president elect, with the precious metal falling over 10% since he clinched the White House. With plans for reflationary policies such as a $1trillion spending spree on infrastructure and control of both houses meaning political gridlock is less likely, inflation expectations have risen sharply, along with debt yields and interest rate hike expectations. Hawkish comments from Yellen in her testimony to Congress renewed selling pressure on gold and given that the US dollar index is trading at fresh 13 year highs, we could see expect to see a more significant correction yet, the trend remains bearish [and] precious metal miners could be set for more pain to come. | Gold, like bonds, has been one of the more noticeable losers of a Trump president elect, with the precious metal falling over 10% since he clinched the White House. With plans for reflationary policies such as a $1trillion spending spree on infrastructure and control of both houses meaning political gridlock is less likely, inflation expectations have risen sharply, along with debt yields and interest rate hike expectations. Hawkish comments from Yellen in her testimony to Congress renewed selling pressure on gold and given that the US dollar index is trading at fresh 13 year highs, we could see expect to see a more significant correction yet, the trend remains bearish [and] precious metal miners could be set for more pain to come. |
| 2.51pm GMT | 2.51pm GMT |
| 14:51 | 14:51 |
| Wall Street off to a mixed start | Wall Street off to a mixed start |
| With a US interest rate rise next month now seen as almost inevitable, US markets are taking a breather after their recent highs. | With a US interest rate rise next month now seen as almost inevitable, US markets are taking a breather after their recent highs. |
| The Dow Jones Industrial Average has dipped 23 points or 0.12% while the S&P 500 has edged up 0.09% and the Nasdaq Composite is 0.19% better. | The Dow Jones Industrial Average has dipped 23 points or 0.12% while the S&P 500 has edged up 0.09% and the Nasdaq Composite is 0.19% better. |
| Meanwhile the dollar remains at near-14 year highs against a basket of currencies, while US bond yields are looking at their best fortnightly rise for 13 years. | Meanwhile the dollar remains at near-14 year highs against a basket of currencies, while US bond yields are looking at their best fortnightly rise for 13 years. |
| 2.26pm GMT | 2.26pm GMT |
| 14:26 | 14:26 |
| The euro may be weakening against the dollar today, but there is no doubt which continues to be the worst performing currency this year: | The euro may be weakening against the dollar today, but there is no doubt which continues to be the worst performing currency this year: |
| The pound remains the worst performer this year among major currencies.https://t.co/iBak2Lu2zf via @@NettyIsmail pic.twitter.com/fmtcxb45uv | The pound remains the worst performer this year among major currencies.https://t.co/iBak2Lu2zf via @@NettyIsmail pic.twitter.com/fmtcxb45uv |
| Updated | Updated |
| at 2.27pm GMT | at 2.27pm GMT |
| 2.22pm GMT | 2.22pm GMT |
| 14:22 | 14:22 |
| Henry McDonald | Henry McDonald |
| Back to Brexit, and the impact it may have on Ireland. Henry McDonald in Belfast writes: | Back to Brexit, and the impact it may have on Ireland. Henry McDonald in Belfast writes: |
| One of Northern Ireland’s leading economists has warned that if the UK leaves the European Customs Union then a ‘hard border’ between the region and the Irish Republic is inevitable. | One of Northern Ireland’s leading economists has warned that if the UK leaves the European Customs Union then a ‘hard border’ between the region and the Irish Republic is inevitable. |
| Ulster Bank’s chief economist in the province Richard Ramsey also told a Dublin Business School conference on Brexit on Friday that the Northern Ireland government’s policy of a low corporation tax - 12.5% as in the Irish Republic - has “fallen far down the agenda” due to the UK voting to leave the European Union. | Ulster Bank’s chief economist in the province Richard Ramsey also told a Dublin Business School conference on Brexit on Friday that the Northern Ireland government’s policy of a low corporation tax - 12.5% as in the Irish Republic - has “fallen far down the agenda” due to the UK voting to leave the European Union. |
| Speaking in the Mac Arts Theatre in Belfast’s Cathedral Quarter, Ramsey said: “The Customs Union is looking at the trade in goods and common tariffs coming into that area. If you leave that you then have to have some sort of hard border on how you can check up things like, for example Argentinian beef. Say that beef was infected by some bacteria and if you didn’t have border checks then that meat could come into Northern Ireland, go across the border into the south and that would mean it was now inside the EU. Some people talk about using electronic tagging to track goods including that meat but I just cannot see how that would work. If we were to leave the Customs Union then a hard border even for those practical reasons would be inevitable.” | Speaking in the Mac Arts Theatre in Belfast’s Cathedral Quarter, Ramsey said: “The Customs Union is looking at the trade in goods and common tariffs coming into that area. If you leave that you then have to have some sort of hard border on how you can check up things like, for example Argentinian beef. Say that beef was infected by some bacteria and if you didn’t have border checks then that meat could come into Northern Ireland, go across the border into the south and that would mean it was now inside the EU. Some people talk about using electronic tagging to track goods including that meat but I just cannot see how that would work. If we were to leave the Customs Union then a hard border even for those practical reasons would be inevitable.” |
| Ramsey said the Northern Ireland Executive’s pursuit of a 12.5% corporation tax rate to compete with the Irish Republic in terms of foreign direct investment may be redundant once the entire UK including the region exits the EU. | Ramsey said the Northern Ireland Executive’s pursuit of a 12.5% corporation tax rate to compete with the Irish Republic in terms of foreign direct investment may be redundant once the entire UK including the region exits the EU. |
| He said that when the power sharing government in Belfast embarked on its campaign for low corporation tax “being in Europe was a given.” All this changed once the UK voted for Brexit in June, he said. | He said that when the power sharing government in Belfast embarked on its campaign for low corporation tax “being in Europe was a given.” All this changed once the UK voted for Brexit in June, he said. |
| The Ulster Bank chief economist said: “In many ways perhaps we in Northern Ireland thought 12.5% was a one way process in which the rate would attract foreign direct investment into the region. But the rules of the game have been changed with some foreign corporations who are already here reconsidering their position about staying here. In my view the impact of a potential 12.5% corporation tax rate has been weakened significantly. If you were a foreign investor thinking of coming here you would think, ‘hold on a minute there is no clarity about Northern Ireland and Europe whereas there is clarity in the Irish Republic.’ On that basis they would decide to locate in the Republic as low corporation tax inside the EU is already guaranteed.” | The Ulster Bank chief economist said: “In many ways perhaps we in Northern Ireland thought 12.5% was a one way process in which the rate would attract foreign direct investment into the region. But the rules of the game have been changed with some foreign corporations who are already here reconsidering their position about staying here. In my view the impact of a potential 12.5% corporation tax rate has been weakened significantly. If you were a foreign investor thinking of coming here you would think, ‘hold on a minute there is no clarity about Northern Ireland and Europe whereas there is clarity in the Irish Republic.’ On that basis they would decide to locate in the Republic as low corporation tax inside the EU is already guaranteed.” |
| 1.56pm GMT | 1.56pm GMT |
| 13:56 | 13:56 |
| Fed's Bullard leaning towards December rate hike | Fed's Bullard leaning towards December rate hike |
| The US, on the other hand, is set for a rate hike in December, most economists believe. Federal Reserve chair Janet Yellen hinted as much when she gave her testimony to Congress on Thursday, and Fed board member James Bullard has become the latest to back such a move. Reuters reports: | The US, on the other hand, is set for a rate hike in December, most economists believe. Federal Reserve chair Janet Yellen hinted as much when she gave her testimony to Congress on Thursday, and Fed board member James Bullard has become the latest to back such a move. Reuters reports: |
| Federal Reserve policymaker James Bullard is leaning toward supporting an interest rate increase in December, he said on Friday, adding that a plethora of potential changes under incoming president Donald Trump could affect future policy. | Federal Reserve policymaker James Bullard is leaning toward supporting an interest rate increase in December, he said on Friday, adding that a plethora of potential changes under incoming president Donald Trump could affect future policy. |
| St. Louis Federal Reserve President Bullard said the debate is now shifting toward the Fed’s rate path in 2017 and how Trump’s policies on taxes, infrastructure, spending and regulation will affect growth, productivity and ultimately Fed policy. | St. Louis Federal Reserve President Bullard said the debate is now shifting toward the Fed’s rate path in 2017 and how Trump’s policies on taxes, infrastructure, spending and regulation will affect growth, productivity and ultimately Fed policy. |
| “Markets are currently putting a high probability on a December move by the FOMC. I’m leaning toward supporting that,” Bullard, a voting member of the U.S. central bank’s rate-setting committee, told a conference in Frankfurt. “I think the question now is more about 2017.” | “Markets are currently putting a high probability on a December move by the FOMC. I’m leaning toward supporting that,” Bullard, a voting member of the U.S. central bank’s rate-setting committee, told a conference in Frankfurt. “I think the question now is more about 2017.” |
| Markets now put a 90 percent chance on the Fed hiking rates by 25 basis points on Dec 14. | Markets now put a 90 percent chance on the Fed hiking rates by 25 basis points on Dec 14. |
| Bullard said some of the new administration’s measures could have a significant impact on the economy in 2018 but some possible proposals to curb immigration and trade may take a decade to have a major impact. | Bullard said some of the new administration’s measures could have a significant impact on the economy in 2018 but some possible proposals to curb immigration and trade may take a decade to have a major impact. |
| Updated | Updated |
| at 2.20pm GMT | at 2.20pm GMT |
| 1.50pm GMT | 1.50pm GMT |
| 13:50 | 13:50 |
| Strong economic data from the UK - the latest being better than expected retail sales figures for October - have put the idea of an interest rate cut on hold. Indeed, the next move is likely to be upwards, despite the Bank of England maintaining it was keeping its options open. But don’t expect a hike too soon, or indeed a hefty rise when it comes: | Strong economic data from the UK - the latest being better than expected retail sales figures for October - have put the idea of an interest rate cut on hold. Indeed, the next move is likely to be upwards, despite the Bank of England maintaining it was keeping its options open. But don’t expect a hike too soon, or indeed a hefty rise when it comes: |
| There's a lot of chat about the *improving* interest rate outlook. Markets reckon you should set your watch for 1% around 4 years from now. pic.twitter.com/zlIBSqgpbK | There's a lot of chat about the *improving* interest rate outlook. Markets reckon you should set your watch for 1% around 4 years from now. pic.twitter.com/zlIBSqgpbK |
| 1.40pm GMT | 1.40pm GMT |
| 13:40 | 13:40 |
| Greece steps up calls for debt relief | Greece steps up calls for debt relief |
| Helena Smith | Helena Smith |
| After an action-packed week highlighted by Barack Obama’s 30-hour visit to Athens, the Greek government has stepped up calls for debt relief, with officials saying it is only a matter of days before the country concludes a second bailout review that can formally open discussion of the issue. | After an action-packed week highlighted by Barack Obama’s 30-hour visit to Athens, the Greek government has stepped up calls for debt relief, with officials saying it is only a matter of days before the country concludes a second bailout review that can formally open discussion of the issue. |
| In an interview with the Wall Street Journal, Greece’s straight-talking finance minister Euclid Tsakalotos said it would be “very shortsighted” if Greece’s monumental debt pile was not cut, echoing Obama’s assertion that people needed hope. | In an interview with the Wall Street Journal, Greece’s straight-talking finance minister Euclid Tsakalotos said it would be “very shortsighted” if Greece’s monumental debt pile was not cut, echoing Obama’s assertion that people needed hope. |
| If the euro zone is going to survive, the number-one requirement is to make sure people see that the eurozone can solve its problems. If it just postpones political decisions and kicks the can down the road, then people will say it’s not working. | If the euro zone is going to survive, the number-one requirement is to make sure people see that the eurozone can solve its problems. If it just postpones political decisions and kicks the can down the road, then people will say it’s not working. |
| At almost 180 % of GDP, the debt mountain is widely believed to be unmanageable with both the IMF and the outgoing US president saying economic recovery now depends on at least part of it being written off. | At almost 180 % of GDP, the debt mountain is widely believed to be unmanageable with both the IMF and the outgoing US president saying economic recovery now depends on at least part of it being written off. |
| Last night, the country’s hardline finance minister Wolfgang Schäuble shot down the suggestion, once again, saying it would be a deterrent to Greece forging ahead with reforms. | Last night, the country’s hardline finance minister Wolfgang Schäuble shot down the suggestion, once again, saying it would be a deterrent to Greece forging ahead with reforms. |
| 1.31pm GMT | 1.31pm GMT |
| 13:31 | 13:31 |
| As Philip Hammond prepares to present his maiden autumn statement on Wednesday, speculation is mounting about possible rabbits out of hats. | As Philip Hammond prepares to present his maiden autumn statement on Wednesday, speculation is mounting about possible rabbits out of hats. |
| The chancellor has already signalled that he will ease the pace of austerity set out by his predecessor George Osborne, but this does not mean he is planning big giveaways. | The chancellor has already signalled that he will ease the pace of austerity set out by his predecessor George Osborne, but this does not mean he is planning big giveaways. |
| Berenberg’s Kallum Pickering believes the announcement could well underwhelm markets: | Berenberg’s Kallum Pickering believes the announcement could well underwhelm markets: |
| With no immediate economic crisis to deal with, the new chancellor Phillip Hammond is unlikely to pander to markets’ desires and announce a major fiscal stimulus at next week’s autumn statement. | With no immediate economic crisis to deal with, the new chancellor Phillip Hammond is unlikely to pander to markets’ desires and announce a major fiscal stimulus at next week’s autumn statement. |
| Despite the better-than-expected near-term economic performance, the long-term economic outlook remains highly uncertain. | Despite the better-than-expected near-term economic performance, the long-term economic outlook remains highly uncertain. |
| Beyond the next couple of years, the long-term economic and fiscal outlook will be heavily influenced by the post-Brexit relationship between the UK and the EU. Pending such uncertainty, we anticipate a very cautious approach to fiscal policy from the new chancellor. | Beyond the next couple of years, the long-term economic and fiscal outlook will be heavily influenced by the post-Brexit relationship between the UK and the EU. Pending such uncertainty, we anticipate a very cautious approach to fiscal policy from the new chancellor. |
| 12.44pm GMT | 12.44pm GMT |
| 12:44 | 12:44 |
| Volkswagen announces 30,000 jobs cuts | Volkswagen announces 30,000 jobs cuts |
| Volkswagen, the German carmaker, is cutting 30,000 jobs as it restructures the business following the diesel emissions scandal. | Volkswagen, the German carmaker, is cutting 30,000 jobs as it restructures the business following the diesel emissions scandal. |
| Most of the jobs - 23,000 - will go in Germany. VW’s chief executive, Matthias Müller, described it as the “biggest reform package in the history of our core brand”. | Most of the jobs - 23,000 - will go in Germany. VW’s chief executive, Matthias Müller, described it as the “biggest reform package in the history of our core brand”. |
| Last year the company admitted it had falsified the results of 11 million emission tests on diesel cars. | Last year the company admitted it had falsified the results of 11 million emission tests on diesel cars. |
| Read our full story on the cuts here: | Read our full story on the cuts here: |
| Updated | Updated |
| at 1.10pm GMT | at 1.10pm GMT |
| 12.14pm GMT | 12.14pm GMT |
| 12:14 | 12:14 |
| First Toblerone, now Maltesers: | First Toblerone, now Maltesers: |
| Maltesers pouches have 'lost weight' according to one food retail expert https://t.co/uI4FiFGYdd | Maltesers pouches have 'lost weight' according to one food retail expert https://t.co/uI4FiFGYdd |
| And here’s a reminder of the Toblerone controversy: | And here’s a reminder of the Toblerone controversy: |
| 11.54am GMT | 11.54am GMT |
| 11:54 | 11:54 |
| Next boss Lord Wolfson: high street prices will rise from January | Next boss Lord Wolfson: high street prices will rise from January |
| Lord Wolfson, chief executive of Next, has told consumers to expect price rises on the high street from January, as the weak pound starts to feed through. | Lord Wolfson, chief executive of Next, has told consumers to expect price rises on the high street from January, as the weak pound starts to feed through. |
| He told Bloomberg Television: | He told Bloomberg Television: |
| I would expect it to begin to come through January next year. And really that inflationary bubble will last all year. But it is a one off bubble, it’s not likely to affect us the following year. It’s not likely to affect retail anything like as much as the devaluation of the pound. | I would expect it to begin to come through January next year. And really that inflationary bubble will last all year. But it is a one off bubble, it’s not likely to affect us the following year. It’s not likely to affect retail anything like as much as the devaluation of the pound. |
| So the pound’s fallen 15, 20%. We’re expecting prices at most to go up 5% but I’m expecting a bit less than that. And the reason for that is because there’s a lot of spare capacity in factories in the far east and retail is constantly looking for new and better sources of supply, cheaper sources of supply. So I think we’ll be able to mitigate most of the currency fall. But we’re still looking at prices rises around 4-5%. | So the pound’s fallen 15, 20%. We’re expecting prices at most to go up 5% but I’m expecting a bit less than that. And the reason for that is because there’s a lot of spare capacity in factories in the far east and retail is constantly looking for new and better sources of supply, cheaper sources of supply. So I think we’ll be able to mitigate most of the currency fall. But we’re still looking at prices rises around 4-5%. |
| 11.28am GMT | 11.28am GMT |
| 11:28 | 11:28 |
| JCB’s Staffordshire HQ hit by mini Tornado | JCB’s Staffordshire HQ hit by mini Tornado |
| My colleague Sean Farrell reports: | My colleague Sean Farrell reports: |
| Workers at JCB’s world headquarters in Staffordshire were stunned on Thursday when a mini tornado caused a wall to collapse and windows to crash to the ground. | Workers at JCB’s world headquarters in Staffordshire were stunned on Thursday when a mini tornado caused a wall to collapse and windows to crash to the ground. |
| Production of diggers stopped after the tornado tore into the side of the factory. No one was injured in the incident and the factory was back up and running after 30 minutes. The damaged areas have been cordoned off. | Production of diggers stopped after the tornado tore into the side of the factory. No one was injured in the incident and the factory was back up and running after 30 minutes. The damaged areas have been cordoned off. |
| JCB’s assembly manager, Richard Williams, said: “I was about 30 yards away at the time and I heard an enormous crash. I turned around and saw the wall and the windows had come out and a big whirlwind of leaves and branches blowing around outside. Luckily no one was in the vicinity at the time.” | JCB’s assembly manager, Richard Williams, said: “I was about 30 yards away at the time and I heard an enormous crash. I turned around and saw the wall and the windows had come out and a big whirlwind of leaves and branches blowing around outside. Luckily no one was in the vicinity at the time.” |
| The JCB factory was one of the sites hit by winds of more than 70mph that battered Staffordshire, Shropshire and mid-Wales. Trees were uprooted and buildings were damaged as a series of small, brief tornadoes left a trail of destruction. | The JCB factory was one of the sites hit by winds of more than 70mph that battered Staffordshire, Shropshire and mid-Wales. Trees were uprooted and buildings were damaged as a series of small, brief tornadoes left a trail of destruction. |
| Updated | Updated |
| at 11.29am GMT | at 11.29am GMT |
| 11.16am GMT | 11.16am GMT |
| 11:16 | 11:16 |
| David Rees, senior markets economist at Capital Economics, says the bonds sell-off in emerging markets is likely to continue: | David Rees, senior markets economist at Capital Economics, says the bonds sell-off in emerging markets is likely to continue: |
| Dollar-denominated government bonds have suffered disproportionately during the emerging market sell-off since Donald Trump won the US presidential election. We expect dollar-denominated bonds to continue to underperform equities and currencies. | Dollar-denominated government bonds have suffered disproportionately during the emerging market sell-off since Donald Trump won the US presidential election. We expect dollar-denominated bonds to continue to underperform equities and currencies. |
| Whereas equity prices have fallen by 3.5% on average in local currency terms since the November 8th election, and currencies have depreciated by a similar amount against the US dollar, dollar- denominated sovereign bonds have registered losses of nearly 4.5% on average. | Whereas equity prices have fallen by 3.5% on average in local currency terms since the November 8th election, and currencies have depreciated by a similar amount against the US dollar, dollar- denominated sovereign bonds have registered losses of nearly 4.5% on average. |
| The upshot is that we believe the underperformance of hard currency bonds will continue. | The upshot is that we believe the underperformance of hard currency bonds will continue. |
| 10.54am GMT | 10.54am GMT |
| 10:54 | 10:54 |
| Global bonds rack up biggest losses in more than 25 years | Global bonds rack up biggest losses in more than 25 years |
| Global bonds are on course for their biggest two-week loss in more than a quarter of a century, as rising inflation dampens demand. | Global bonds are on course for their biggest two-week loss in more than a quarter of a century, as rising inflation dampens demand. |
| Barclays Global Aggregate Bond Index is set for a 4% loss over the last fortnight - the biggest since at least 1990 according to Reuters. | Barclays Global Aggregate Bond Index is set for a 4% loss over the last fortnight - the biggest since at least 1990 according to Reuters. |
| Reuters reports: | Reuters reports: |
| Donald Trump’s shock win in the US election last week has stoked bets that economic plans under a Trump administration would boost business investments and spending while firing up inflation. | Donald Trump’s shock win in the US election last week has stoked bets that economic plans under a Trump administration would boost business investments and spending while firing up inflation. |
| Rising inflation erodes the value of bonds which offer set interest rates over their lifespan. | Rising inflation erodes the value of bonds which offer set interest rates over their lifespan. |