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Wall Street suffers worst opening this year after Trump allegations – business live Wall Street suffers worst opening this year after Trump allegations – business live
(35 minutes later)
4.39pm BST
16:39
And more on the dollar falling:
"I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me.” - D Trump, April. pic.twitter.com/8LI89Aikdq
4.33pm BST
16:33
While the Dow Jones Industrial Average, Germany’s Dax and France’s Cac are all down more than 1%, the FTSE 100 is off just 0.2%.
FTSE is on drugs. World is collapsing on Trump impeachment story and FTSE says 'That's nothing mate, you should try Brexit...'
4.27pm BST
16:27
Pressure on #dollar coming from #Trump concerns sees #pound sniffing US$1.30 for first time in almost 8 months. #Euro at US$1.115
Updated
at 4.29pm BST
4.15pm BST4.15pm BST
16:1516:15
The US dollar has now lost all the gains it made since Donald Trump was elected president: Dollar loses all its post-US election gains
The US dollar has now lost all the gains it made since Donald Trump was elected president. The dollar index shows:
David Madden, market analyst at CMC markets, said:David Madden, market analyst at CMC markets, said:
The decline in the US dollar has wiped out all the gains it has made since Donald Trump was elected. The speculation about his impeachment is rising and the dollar is falling in tandem. The decline in UK unemployment gave the pound a boost, and the steady inflation rate from the eurozone gave traders a minor reason to buy the respective currencies, but the moves were magnified by the weaker greenback. Make no mistake, the drop in the US dollar is the reason behind in move in the GBP/USD and the EUR/USD.The decline in the US dollar has wiped out all the gains it has made since Donald Trump was elected. The speculation about his impeachment is rising and the dollar is falling in tandem. The decline in UK unemployment gave the pound a boost, and the steady inflation rate from the eurozone gave traders a minor reason to buy the respective currencies, but the moves were magnified by the weaker greenback. Make no mistake, the drop in the US dollar is the reason behind in move in the GBP/USD and the EUR/USD.
Updated
at 4.20pm BST
3.43pm BST3.43pm BST
15:4315:43
Oil jumps as US stocks fallOil jumps as US stocks fall
US crude inventories declined by 1.75m barrels last week, a sign of increasing demand, even though the fall was lower than the expected 2.4m barrel drop.US crude inventories declined by 1.75m barrels last week, a sign of increasing demand, even though the fall was lower than the expected 2.4m barrel drop.
The news has pushed the oil price higher again, with West Texas Intermediate up 1.6% at $49.48 and Brent crude 1.7% better at $52.54.The news has pushed the oil price higher again, with West Texas Intermediate up 1.6% at $49.48 and Brent crude 1.7% better at $52.54.
3.31pm BST3.31pm BST
15:3115:31
European markets have seen their falls accelarate after Wall Street’s slide.European markets have seen their falls accelarate after Wall Street’s slide.
Germany’s Dax is down 121 points and France’s Cac has lost 68 points. The FTSE 100 has fared a little better, falling 26 points. Connor Campbell, financial analyst at Spreadex, said:Germany’s Dax is down 121 points and France’s Cac has lost 68 points. The FTSE 100 has fared a little better, falling 26 points. Connor Campbell, financial analyst at Spreadex, said:
After the brief morning distraction of the UK jobs report, focus turned firmly back to Trump’s latest foul-up following the US open.After the brief morning distraction of the UK jobs report, focus turned firmly back to Trump’s latest foul-up following the US open.
The Dow Jones set the tone this afternoon, the index plunging more than 200 points as the bell rang on Wall Street. That leaves the Dow at its worst price since April 25th, the day investors first got a sniff of Trump’s tax plan. The dollar fared no better; it slid 1.4% against the Japanese yen and 0.3% against the pound, while remaining at a 6 month low against the euro.The Dow Jones set the tone this afternoon, the index plunging more than 200 points as the bell rang on Wall Street. That leaves the Dow at its worst price since April 25th, the day investors first got a sniff of Trump’s tax plan. The dollar fared no better; it slid 1.4% against the Japanese yen and 0.3% against the pound, while remaining at a 6 month low against the euro.
Investors have been shaken by reports that Trump urged the then-FBI chief Comey to drop his investigation into Michael Flynn, the latest twist in the Russia saga that is gradually engulfing the President. There are a couple of reasons as to why this has caused such jittery trading. Firstly, it threatens to delay, or completely derail, Trump’s market-lifting infrastructure and tax policies. Secondly, and more drastically, it could actually lead to impreachment... an eventuality that would completely erase the foundations of the market’s recent record highs.Investors have been shaken by reports that Trump urged the then-FBI chief Comey to drop his investigation into Michael Flynn, the latest twist in the Russia saga that is gradually engulfing the President. There are a couple of reasons as to why this has caused such jittery trading. Firstly, it threatens to delay, or completely derail, Trump’s market-lifting infrastructure and tax policies. Secondly, and more drastically, it could actually lead to impreachment... an eventuality that would completely erase the foundations of the market’s recent record highs.
In the Eurozone the DAX and CAC performed just as badly as their US counterpart, dropping 0.9% and 1.2% respectively. The FTSE, on the other hand, was more resilient; though it did fall by 25 or so points, this still kept it at or around the 7500 mark. The UK index is being somewhat supported by the likes of Fresnillo and Randgold Resources, which both benefited from gold’s 1.6% rise.In the Eurozone the DAX and CAC performed just as badly as their US counterpart, dropping 0.9% and 1.2% respectively. The FTSE, on the other hand, was more resilient; though it did fall by 25 or so points, this still kept it at or around the 7500 mark. The UK index is being somewhat supported by the likes of Fresnillo and Randgold Resources, which both benefited from gold’s 1.6% rise.
3.27pm BST3.27pm BST
15:2715:27
Here is the damage to the Dow:Here is the damage to the Dow:
Dow -200pts; most since 21 Mar (-237), 11 Oct (-200) and 29 Sept (-196)Dow -200pts; most since 21 Mar (-237), 11 Oct (-200) and 29 Sept (-196)
Lots of red out there today. Only 2 of the Dow 30 stocks are up right now. $UNH $WMT. Biggest Dow losers? Banks. $GS $JPM off more than 2%.Lots of red out there today. Only 2 of the Dow 30 stocks are up right now. $UNH $WMT. Biggest Dow losers? Banks. $GS $JPM off more than 2%.
3.11pm BST3.11pm BST
15:1115:11
Banks are among the fallers as the US market decline continues. The S&P 500 banking index is down 1.8% with Bank of America off 2% and JP Morgan 1.7% lower. Meanwhile the Dow is now down 215 points or just over 1%.Banks are among the fallers as the US market decline continues. The S&P 500 banking index is down 1.8% with Bank of America off 2% and JP Morgan 1.7% lower. Meanwhile the Dow is now down 215 points or just over 1%.
With #Dow down 200 & #financials underperforming,watch for the tug of war between the unwinding of crowded trades & the buy on dips strategyWith #Dow down 200 & #financials underperforming,watch for the tug of war between the unwinding of crowded trades & the buy on dips strategy
2.42pm BST2.42pm BST
14:4214:42
Meanwhile the VIX volatility index - the fear index - has moved higher after hitting a 24 year low earlier this week. It has jumped 20% to 12.69 in the wake of the latest Trump revelations.Meanwhile the VIX volatility index - the fear index - has moved higher after hitting a 24 year low earlier this week. It has jumped 20% to 12.69 in the wake of the latest Trump revelations.
2.35pm BST2.35pm BST
14:3514:35
Wall Street opens sharply lowerWall Street opens sharply lower
US markets have made their worst start to the year following the latest allegations about Donald Trump trying to interfere with a federal investigation.US markets have made their worst start to the year following the latest allegations about Donald Trump trying to interfere with a federal investigation.
After news of a leaked memo from sacked FBI director James Comey, the Dow Jones Industrial Average has dropped 180 points or 0.88%. The S&P 500 opened 0.8% lower and the Nasdaq Composite down 0.94%. Of course both the S&P and Nasdaq have been at or close to their record highs until now.After news of a leaked memo from sacked FBI director James Comey, the Dow Jones Industrial Average has dropped 180 points or 0.88%. The S&P 500 opened 0.8% lower and the Nasdaq Composite down 0.94%. Of course both the S&P and Nasdaq have been at or close to their record highs until now.
it's a good day for gold, up $20 today as Trump's political woes deepen, sending investors for cover into safe havens.it's a good day for gold, up $20 today as Trump's political woes deepen, sending investors for cover into safe havens.
2.19pm BST2.19pm BST
14:1914:19
Back in the US, and the Dow Jones Industrial Average is now forecast to open around 170 points lower, as investors fret about the latest shennanigans in the White House. But it doesn’t seem to be panic level yet.Back in the US, and the Dow Jones Industrial Average is now forecast to open around 170 points lower, as investors fret about the latest shennanigans in the White House. But it doesn’t seem to be panic level yet.
Dow off 170 points. Means Wall Street is troubled, but not full blown panicked yet over Trump https://t.co/6vqS717Ish via @LaMonicaBuzzDow off 170 points. Means Wall Street is troubled, but not full blown panicked yet over Trump https://t.co/6vqS717Ish via @LaMonicaBuzz
2.07pm BST
14:07
Lunchtime round-up
Time for a quick recap.
Britain is facing a new cost-of-living squeeze after wages failed to keep up with rising prices.
Basis pay only rose by 2.1% per year during the January-March quarter, figure released by the Office for National Statistics showed. That’s weaker than CPI inflation, which averaged 2.3% during the quarter, and jumped to 2.7% in April.
Public sector workers face the biggest pressure; their regular pay only rose by 1.3% year-on-year, meaning their real wages are falling fast.
Economists say that the figures show that the slump in the pound since the Brexit vote is now hitting earners. It is likely to dent consumer spending this year.
However, the UK economy is still creating jobs. The unemployment rate has fallen to 4.6%, the lowest since Harold Wilson was running the country in 1975.
Employment is at a record high, too, with 31.95 million people in work. That’s 122,000 more than in October to December 2016 and 381,000 more than for a year earlier. ING called it “astonishing”.
Here’s our news story on the figures:
1.53pm BST
13:53
London has highest jobless rate in UK
Now this might surprise you...
London now has a higher unemployment rate than any other region in the UK.
Unemployment in the capital has risen to 6.1% in the first three months of 2017, new ONS statistics show, up from 5.5% in the previous quarter. The lowest unemployment rate was in the South East, at just 3.5%.
The ONS says:
Allowing for some individual volatility, the overall pattern for the last few years has been for gently falling unemployment rates. The highest unemployment rate in the UK for January to March 2017 was for London at 6.1%. This follows a period of a number of years when the highest unemployment rate was consistently the North East.
Londoners also worked the longest average working week, at 33.7 hours; the lowest was in Yorkshire and The Humber at 31.3 hours.
For the first time since 2012, London now has the highest unemployment rate in the UK
1.22pm BST
13:22
The latest stunning developments from the Trump White House are likely to weigh on the US stock market today.
The Dow Jones industrial average, and the wider S&P 500 index, are both expected to fall by around 0.75% when trading begins in around one hour.
Should be an interesting US session: overnight trading has brought S&P500 down to the May lows, 2380/82: pic.twitter.com/MoQjBjhp4T
FXTM Research Analyst Lukman Otunuga says “a feeling of unease” has gripped the markets today, pushing shares down in Asia and Europe.
With the latest bombshell developments in the Trump saga seen as an obstacle that may delay the proposed fiscal spending further, Wall Street should follow the bearish cues from Asian and European markets this afternoon.
Updated
at 2.16pm BST
1.10pm BST
13:10
The pound has gained half a cent today, to $1.296, as traders applaud the latest rise in UK employment.
Sterling is also benefitting from the political upheaval on the other side of the Atlantic, following those reports that Donald Trump had pushed former FBI director James Comey to drop investigations into Michael Flynn, former national security advisor.
The pound hasn’t traded over $1.30 since last September.
Chris Saint, senior analyst at Hargreaves Lansdown, says:
The $1.30 level is again coming into sight, with the dollar weighed down by worries that President Trump could find it trickier to forge ahead with his intended economic reforms amid reports of interference into an FBI investigation into links between his campaign team and Russia.
12.52pm BST
12:52
Greek anti-austerity protests turn violent
Helena Smith
Over in Greece, clashes have broken out between demonstrators and riot police during protests against the country’s austerity programme.
Violence erupted outside parliament between hooded “anti-establishment” demonstrators throwing rocks and flares, and riot officers, who fired tear gas.
Raw Video: Protesters fire flares at police outside Greek parliament#Greece #Vouli pic.twitter.com/u8xbR8Pqm9
Earlier, thousands of strikers had marched through Greece, opposing the latest package of tax rises and economic reforms agreed between Athens and its lenders -- which MPs vote on tomorrow night.
Addressing crowds in Athens’ square of national resistance, the leader of the communist party Dimitris Koutsoumbas said:
“Essentially a class war is underway .. these harsh unpopular measures, the fourth memorandum along with all the previous memorandums, should be thrown in the basket of history.”
As Greek MPs began debating the measures, trade unionists told the Guardian that there will be a massive show of protest culminating with a demonstration outside parliament on Thursday night when the chamber is expected to pass the bill.
“This is the 32nd general strike since 2010 [when the Greek debt crisis erupted] and we are not going to give up,” said Grigoris Kalomoiris who heads the public sector workers’ union, Adedy.
Kalomoiris added:
“For some the pension cuts that these policies will bring will amount to the loss of two pensions while the lowering of the tax [threshold] will mean the loss of a monthly salary. Some of us are not going to accept that without a fight.”
There is major disquiet in the ranks of the ruling Syriza party with leftwing MPS saying they have been “pushed to the limit” by the latest cost-cutting measures. Although no defections are expected – with the prospect of losing power viewed as the biggest incentive now spurring MPs in the governing two-party coalition to endorse the policies – many have privately described the measures as unconstitutional.
“Many [cadres] would like to be out in the streets [protesting] not in parliament supporting these measures,” said one. “But the alternative [default and euro exit] is just not on the cards. Everyone agrees it would be catastrophic.”
The policies, which will see pensions being pared back by another 18%, will not be enforced until 2019 towards the end of the present government’s four-year term in office. Prime minister Alexis Tsipras has argued that counter-measures offsetting losses will effectively neutralise the cuts for those expected to be hardest hit by them.
11.58am BST
11:58
Britain’s poor productivity and weak pay are inextricably linked, argues the CBI, which represents UK businesses.
To get wages higher, firms need to boost their output -- and the key is to boost research and development spending. UK R&D is equivalent to just 1.7% of gross domestic product today; the CBI is pushing the government to set a target of 3%.
Alpesh Paleja, CBI Principal Economist, says:
“Rising employment continues to reinforce the importance of the UK’s flexible labour market.
“However, weakening productivity and slower pay growth, coupled with rising inflation, will continue to squeeze real household earnings.
“Therefore maintaining the UK’s reputation as a great place to do business, for example by increasing R&D spend to 3% of GDP by 2025, will help boost the UK’s productivity. This is the only sustainable route to higher wages, and better living standards.”
11.36am BST
11:36
If Britain’s jobless rate is really at a 40-odd year low, why doesn’t it feel like a nation at full employment?
Our economics editor Larry Elliott has highlighted three reasons:
One reason for the weakness of earnings growth is the ferocious squeeze on public sector pay, which – stripped of bonus payments – is rising at just 1.3% a year.
A second factor is that employers are able to buy in cheap labour from overseas. Migration from other EU countries has not fallen off a cliff despite the result of last summer’s referendum: according to the Office for National Statistics, the number of non-UK nationals from the EU working in the UK rose by 171,000 to 2.32 million between the first quarter of 2016 and the first quarter of 2017. This continues a trend, which has seen the number of workers from the other 27 EU countries double since the recession of 2008-09.
Finally, the nature of work seems to have changed. Work by David Blanchflower, Rui Costa and Stephen Machin has shown that earnings growth for the self-employed – who account for 15% of the workforce – has been particularly weak in recent years. People are working flat out in the gig economy but still struggling to make ends meet. The labour market has, for want of a better word, been Uberised.
11.13am BST
11:13
Labour: Families suffering falling living standards
Here’s John McDonnell, Labour’s Shadow Chancellor, on today’s labour market report:
“These figures bring home the Tories’ total failure to improve the living standards of working families.
“Real wages are lower than they were in 2010 and, after seven years of the Tories, they are now falling again.
“The choice at this election couldn’t be clearer: either a Tory party presiding over a crisis in living standards or a Labour government that will build a Britain for the many, not the few.”
Updated
at 11.19am BST
11.11am BST
11:11
New productivity figures have also been released this morning, and they’re a shocker.
Productivity across the UK economy shrank by 0.5% in the first three months of 2017, the first fall since the end of 2015.
It’s because the UK economy took on more workers, who worked longer hours, but didn’t deliver a corresponding rise in economic output.
Britain: really depress yourself this morning - look at the dreadful productivity figures pic.twitter.com/cojHEh5YT5
10.46am BST
10:46
The decline fall in real wages is particularly painful for workers, because pay packets hadn’t clawed back all the losses since the financial crisis.