This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jan/13/chinese-exports-trade-war-donald-trump-us-business-live

The article has changed 18 times. There is an RSS feed of changes available.

Version 11 Version 12
FTSE 100 extends record winning streak - business live FTSE 100 extends record winning streak - business live
(35 minutes later)
3.12pm GMT
15:12
#US consumer confidence remains high - has surged since Trump's victory. Consumers trust #Trump can in fact "make America great again" pic.twitter.com/wrIFff4BN9
3.09pm GMT
15:09
Unsurprisingly, US consumer sentiment was dominated by the political situation given the election of Donald Trump as president. The survey’s chief economist Richard Curtin said:
The post-election surge in optimism was accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration spontaneously mentioned when asked about economic news. The importance of government policies and partisanship has sharply risen over the past half century. From 1960 to 2000, the combined average of positive and negative references to government policies was just 6%; during the past six years, this proportion averaged 20%, and rose to new peaks in early January, with positive and negative references totaling 44%.
This extraordinary level of partisanship has had a dramatic impact on economic expectations. In early January, the partisan divide on the Expectations Index was a stunning 42.7 points (108.9 among those who favorably mentioned government policies, and 66.2 among those who made unfavorable references).
Needless to say, these extreme differences would imply either strong growth or a recession. Since neither is likely, one would anticipate that both extreme views will be tempered in the months ahead. Nonetheless, it should be noted that among the majority of consumers who referred to neither positive nor negative views on government, the Expectations Index was a strong 90.9, supporting a real consumption growth of 2.7% in 2017.
3.06pm GMT
15:06
US consumer confidence marginally disappoints but still high
After slightly disappointing US retail sales figures come some slightly disappointing confidence figures, although the figures remain high.
The preliminary University of Michigan survey of consumer sentiment came in at 98.1 in January, down from 98.2 in December and below expections of a figure of 98.5.
Updated
at 3.11pm GMT
3.00pm GMT
15:00
Pound falls and helps push FTSE 100 higher
Continuing worries about Brexit, reinforced after Thursday’s news that UK prime minister Theresa May will make a speech on the subject on Tuesday, have put more pressure on the pound.
It it on course for its fifth week of falls in the last six against the dollar, and is currently down 0.21% at $1.2137.
Against the euro it has fallen 0.16% to €1.1437. If it closes at this level it will be the lowest since 9 November.
The weak pound of course has boosted the prospects for the overseas earners which make up a large proportion of the FTSE 100, lifting the index 0.46% to 7325 and on course for yet another record closing high.
Meanwhile the Dow Jones Industrial Average is edging closer to the elusive 20,000 barrier, up 0.14% to 19,918.
2.47pm GMT2.47pm GMT
14:4714:47
In case you missed it, there is more controversy in the confectionary world following the decision by the makers of Toblerone to cut costs by widening the gaps between the chocolate peaks.In case you missed it, there is more controversy in the confectionary world following the decision by the makers of Toblerone to cut costs by widening the gaps between the chocolate peaks.
US food manufacturing giant Mondelēz, which makes Toblerone, has further angered consumers by announcing plans to hike the price of its Cadbury’s Freddo bars from 25p to 30p in the spring.US food manufacturing giant Mondelēz, which makes Toblerone, has further angered consumers by announcing plans to hike the price of its Cadbury’s Freddo bars from 25p to 30p in the spring.
Mondelēz said it was selectively increasing prices as a “last resort”. Read our full story:Mondelēz said it was selectively increasing prices as a “last resort”. Read our full story:
2.36pm GMT2.36pm GMT
14:3614:36
US markets open higherUS markets open higher
US markets are up a touch, with decent US retail sales and strong quarterly earnings from Bank of America and JP Morgan Chase providing some cheer.US markets are up a touch, with decent US retail sales and strong quarterly earnings from Bank of America and JP Morgan Chase providing some cheer.
Dow Jones: +0.1% at 19,919Dow Jones: +0.1% at 19,919
S&P 500: +0.1% at 2,274S&P 500: +0.1% at 2,274
Nasdaq: +0.2% at 5,558Nasdaq: +0.2% at 5,558
2.30pm GMT2.30pm GMT
14:3014:30
Here is our full story on the investigation into the “flash crash” in the pound last October, which stunned traders and policymakers:Here is our full story on the investigation into the “flash crash” in the pound last October, which stunned traders and policymakers:
2.19pm GMT2.19pm GMT
14:1914:19
IG expects US markets to open modestly higher:IG expects US markets to open modestly higher:
US Opening Calls:#DOW 19904 +0.07%#SPX 2272 +0.07%#NASDAQ 5046 +0.11%#IGOpeningCallUS Opening Calls:#DOW 19904 +0.07%#SPX 2272 +0.07%#NASDAQ 5046 +0.11%#IGOpeningCall
2.17pm GMT2.17pm GMT
14:1714:17
Reaction is coming in to those US retail sales figures, which showed growth of 0.6% in December. It was a touch below expectations of a 0.7% rise.Reaction is coming in to those US retail sales figures, which showed growth of 0.6% in December. It was a touch below expectations of a 0.7% rise.
Rob Carnell, chief international economist at ING, said the figures were good enough to justify a March hike in US interest rates:Rob Carnell, chief international economist at ING, said the figures were good enough to justify a March hike in US interest rates:
US December retail sales were not as good as had been expected. But having said that, the consensus was aggressively optimistic, and sales were not particularly weak in an absolute sense, with both main measures showing gains over the previous month.US December retail sales were not as good as had been expected. But having said that, the consensus was aggressively optimistic, and sales were not particularly weak in an absolute sense, with both main measures showing gains over the previous month.
There is therefore no good reason why this data should deter the Fed from hiking rates again at their March meeting if they want to do so, which we think they do.There is therefore no good reason why this data should deter the Fed from hiking rates again at their March meeting if they want to do so, which we think they do.
Markets are still anticipating a very cautious Fed, with only about a 30% chance of a March hike, in contrast to our own forecast that the Fed does hike by another 25 basis points at the March meeting.Markets are still anticipating a very cautious Fed, with only about a 30% chance of a March hike, in contrast to our own forecast that the Fed does hike by another 25 basis points at the March meeting.
Paul Ashworth, chief US economist at Capital Economics, said there was nothing to suggest consumer spending would weaken in the first half of 2017:Paul Ashworth, chief US economist at Capital Economics, said there was nothing to suggest consumer spending would weaken in the first half of 2017:
With consumer confidence surging to multi-year highs after the election and employment / wage growth still solid, there is no reason to suspect that consumption growth is going to weaken in the first half of this year.With consumer confidence surging to multi-year highs after the election and employment / wage growth still solid, there is no reason to suspect that consumption growth is going to weaken in the first half of this year.
Particularly not when households will be anticipating a potentially big decline in tax rates at some point this year.Particularly not when households will be anticipating a potentially big decline in tax rates at some point this year.
2.05pm GMT2.05pm GMT
14:0514:05
Sticking with the US, the reporting season for banks is underway.Sticking with the US, the reporting season for banks is underway.
Bank of America and JP Morgan Chase have both reported a sharp rise in quarterly earnings, boosted by a surge in activity following Donald Trump’s victory in the US presidential election.Bank of America and JP Morgan Chase have both reported a sharp rise in quarterly earnings, boosted by a surge in activity following Donald Trump’s victory in the US presidential election.
Jamie Dimon, chief executive of JP Morgan Chase, said America’s largest bank by assets had grown market share in virtually all of its businesses in the three months to 31 December.Jamie Dimon, chief executive of JP Morgan Chase, said America’s largest bank by assets had grown market share in virtually all of its businesses in the three months to 31 December.
He added:He added:
The US economy may be building momentum. Looking ahead there is opportunity for good, rational and thoughtful policy decisions to be implemented, which would spur growth, create jobs for Americans across the income spectrum and help communities.The US economy may be building momentum. Looking ahead there is opportunity for good, rational and thoughtful policy decisions to be implemented, which would spur growth, create jobs for Americans across the income spectrum and help communities.
1.42pm GMT
13:42
US retail sales rise 0.6% in December
US retail sales grew by 0.6% in December according to figures just in from the Commerce Department.
It was a touch below expectations of a 0.7% increase, but November’s growth figure was revised up to 0.2% from 0.1%.
Growth in December was fuelled by higher demand for cars, with sales up 2.4%. When cars were taken out of the equation, retail sales were up 0.2%.
Overall, the figures are likely to be taken as sign that the world’s largest economy was in decent shape at the end of 2016.
More pay, greater confidence lifts December retail sales https://t.co/ADIzq8xt5o
1.22pm GMT
13:22
Over in the US, figures are expected to show US retail sales rose 0.7% in December, following a 0.1% rise in November. The data lands at 13.30 UK time.
12.42pm GMT
12:42
Oil prices continue to slide and are on course for the first weekly fall since late December.
Crude has been hit by concerns about whether the production cuts agreed by Opec in November will stick, and the fall in Chinese exports reported earlier had added to the negative sentiment, since it casts doubt on the strength of the world’s second largest economy.
So Brent is currently down 1% at $55.43 a barrel, while West Texas Intermediate has fallen a similar amount to $52.44.
12.28pm GMT
12:28
The FTSE 100 is on course to close at a record high for the 12th straight day.
Here’s an update of trading across Europe’s main markets:
FTSE 100: +0.4% at 7,318
Germany’s DAX: +0.6% at 11,591
French CAC: +0.9% at 4,907
Italy’s FTSE MIB: +1.6% at 19,456
Spain’s IBEX: +0.9% at 9,489
Europe’s STOXX 600: +0.6% at 365
12.12pm GMT
12:12
BIS: no single factor caused flash crash in pound
The Bank for International Settlements has published its report on the “flash crash” in the pound in October.
The Guardian’s Jill Treanor reports:
October’s flash crash in the pound - when the currency nose dived 9% against the dollar in Asian trading hours - was caused by a combination of inexperienced traders, algorithmic trading and complex trading positions, according to an official report.
The flash crash sparked a range of theories about why the pound fell so fast in just a few seconds after midnight.After an investigation by the Bank for International Settlements it is far from clear what caused the slide in the pound, which nose dived from $1.26 to$1.1491, before recovering again.
While it says it cannot rule out “fat fingers” - mistaken trading - or attempts at market abuse, the BIS concludes there is little evidence to substantiate the claims. Instead it points to a combination of inexperienced traders, algorithmic trading and complex trading positions being implemented at a time of day when the pound would not usually be trading.
No big losses were suffered by the big players in the markets and some of the trades which took place as sterling plunged were cancelled, the report said.
Whatever the cause of the initial selling in sterling, the market was likely to be vulnerable at that time of day to sharp moves and an associated withdrawal of liquidity.
Updated
at 12.17pm GMT
11.42am GMT
11:42
Julia Kollewe
Gold has been hitting seven-week highs above $1,200 an ounce this week and is hovering just below that level this morning.
The World Gold Council believes gold will continue to shine this year, despite some concerns that the strength of the US dollar could limit its appeal.
In its outlook for 2017, the organisation argues that demand for gold will be underpinned by a number of factors including heightened geopolitical risks, currency depreciation (euro and pound) and growing inflation expectations.
Looking back at 2016, it says:
“The gold price had a strong performance in 2016, rising close to 10% in US dollar terms making it one of the best performing assets last year, despite a post-US election pullback. And the price has gained more than 5% since the Federal Reserve increased rates in mid-December.”
Gold always thrives on uncertainty and there is plenty of that at present. The unknowns presented by US president-elect Donald Trump, who will be inaugurated on 20 January, Britain’s exit negotiations with the EU, and elections in the Netherlands, France and Germany should all boost demand for bullion, seen as a safe haven in times of trouble.
11.25am GMT
11:25
Berenberg’s chart of the week features the global manufacturing sector.
The German bank says purchasing managers indices for major regions suggest an upturn is underway.
Holger Schmieding, chief economist, says:
All major regions, manufacturing is picking up. While turning at different times, purchasing managers indexes in the US, China, Germany and the UK are rising. Along with stable gains in employment, the pick-up in export-orientated manufacturing reflects growing optimism and willingness to spend by businesses and households. More investment in long-lived capital could generate the productivity gains that have been woefully weak recently.
He asks, will the upswing continue? Answer:
US households are the global consumer of last resort; their spending patterns shape global trends, for better, and for worse. Done right, pro-growth policies should boost US demand growth over the coming years, supporting gains in global goods demand and manufacturing output.
Of course, the downside risks linked to the new administration’s potential policies are profound. International trade remains a significant wildcard. Trump has proposed to impose tariffs and erect other barriers to imports, which could trigger tit-for-tat responses for trade partners, thus inhibiting international trade and cross border flows of goods. On balance, we do not expect Congress to approve such proposals and are optimistic the upturn will continue.
11.01am GMT
11:01
Germany poised for Brexit negotiations
German Chancellor Angela Merkel will chair a cabinet meeting on Brexit next week, a government spokesman has said.
The ministerial committee on Brexit will meet for the first time on Wednesday to discuss organisational and structural issues as it prepares for formal negotiations with Britain to begin.
Finance minister Wolfgang Schaeuble, economy minister Sigmar Gabriel, foreign minister Frank-Walter Steinmeier and Merkel’s chief of staff Peter Altmaier will be among those to attend the meeting.
Government spokesman Steffen Seibert, said:
The committee will deal with preparations for negotiations on Britain’s exit from the European Union, preparations within the federal government as well as by the European institutions.”
Updated
at 11.12am GMT
10.56am GMT
10:56
Arnaud Masset, market analyst at the internet bank Swissquote, considers the dollar’s prospects:
The dollar index rose almost 1% ahead of [Trump’s press] conference but quickly reversed gains, sliding as much as 2% since then, down to 100.72 before stabilising at around 101.30.
The market does not expect much from Trump’s investiture next week as it will most likely be in the same vein. Against this backdrop, we expect the market will pay increasing attention to US fundamentals and to the Federal Reserve. Obviously this will not happen overnight as investors still expect a lot from the Trump presidency; however, they have also started to realised that they were somewhat overoptimistic.
We remain bearish on the US dollar and expect high quality commodity and emerging market currencies to continue rallying. However, in the short-term, the Trump story will remain the main driver in the foreign exchange market, meaning that event risk is definitely something to monitor, especially the President-elect’s Twitter feed.
10.41am GMT
10:41
Dollar weakens on Trump uncertainty
The US dollar is heading for its worst week in two months when measured against a basket of six major currencies.
The dollar index was down slightly for a third day and 1% lower over the week.
Currency traders were left disappointed by lack of policy detail from Donald Trump when he gave a press conference on Wednesday. The US president-elect talked about his plans to build a wall on the border with Mexico, but there was no detail on potential fiscal stimulus.
Nomura’s Jordan Rochester has a view:
It opens up the possibility for the market that he could go down the more toxic route which is becoming more protective on trade. Therefore it’s quite prudent for investors that the dollar is a bit softer.
Updated
at 12.34pm GMT