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| FTSE 100 extends record winning streak - business live | FTSE 100 extends record winning streak - business live |
| (35 minutes later) | |
| 2.19pm GMT | |
| 14:19 | |
| IG expects US markets to open modestly higher: | |
| US Opening Calls:#DOW 19904 +0.07%#SPX 2272 +0.07%#NASDAQ 5046 +0.11%#IGOpeningCall | |
| 2.17pm GMT | |
| 14:17 | |
| 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. | |
| 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. | |
| 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. | |
| 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. | |
| Particularly not when households will be anticipating a potentially big decline in tax rates at some point this year. | |
| 2.05pm GMT | |
| 14:05 | |
| 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. | |
| 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: | |
| 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 | 1.42pm GMT |
| 13:42 | 13:42 |
| US retail sales rise 0.6% in December | 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. | 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%. | 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%. | 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. | 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 | More pay, greater confidence lifts December retail sales https://t.co/ADIzq8xt5o |
| 1.22pm GMT | 1.22pm GMT |
| 13:22 | 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. | 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 | 12.42pm GMT |
| 12:42 | 12:42 |
| Oil prices continue to slide and are on course for the first weekly fall since late December. | 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. | 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. | 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 | 12.28pm GMT |
| 12:28 | 12:28 |
| The FTSE 100 is on course to close at a record high for the 12th straight day. | 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: | Here’s an update of trading across Europe’s main markets: |
| FTSE 100: +0.4% at 7,318 | FTSE 100: +0.4% at 7,318 |
| Germany’s DAX: +0.6% at 11,591 | Germany’s DAX: +0.6% at 11,591 |
| French CAC: +0.9% at 4,907 | French CAC: +0.9% at 4,907 |
| Italy’s FTSE MIB: +1.6% at 19,456 | Italy’s FTSE MIB: +1.6% at 19,456 |
| Spain’s IBEX: +0.9% at 9,489 | Spain’s IBEX: +0.9% at 9,489 |
| Europe’s STOXX 600: +0.6% at 365 | Europe’s STOXX 600: +0.6% at 365 |
| 12.12pm GMT | 12.12pm GMT |
| 12:12 | 12:12 |
| BIS: no single factor caused flash crash in pound | 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 Bank for International Settlements has published its report on the “flash crash” in the pound in October. |
| The Guardian’s Jill Treanor reports: | 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. | 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. | 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. | 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. | 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. | 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 | Updated |
| at 12.17pm GMT | at 12.17pm GMT |
| 11.42am GMT | 11.42am GMT |
| 11:42 | 11:42 |
| Julia Kollewe | 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. | 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. | 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. | 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: | 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.” | “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. | 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 | 11.25am GMT |
| 11:25 | 11:25 |
| Berenberg’s chart of the week features the global manufacturing sector. | 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. | The German bank says purchasing managers indices for major regions suggest an upturn is underway. |
| Holger Schmieding, chief economist, says: | 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. | 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: | 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. | 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. | 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 | 11.01am GMT |
| 11:01 | 11:01 |
| Germany poised for Brexit negotiations | Germany poised for Brexit negotiations |
| German Chancellor Angela Merkel will chair a cabinet meeting on Brexit next week, a government spokesman has said. | 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. | 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. | 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: | 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.” | 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 | Updated |
| at 11.12am GMT | at 11.12am GMT |
| 10.56am GMT | 10.56am GMT |
| 10:56 | 10:56 |
| Arnaud Masset, market analyst at the internet bank Swissquote, considers the dollar’s prospects: | 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 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. | 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. | 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 | 10.41am GMT |
| 10:41 | 10:41 |
| Dollar weakens on Trump uncertainty | 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 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. | 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. | 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: | 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. | 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 | Updated |
| at 12.34pm GMT | at 12.34pm GMT |