Oil slump drags eurozone into deflation – business live
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Version 0 of 1. 4.31pm GMT16:31 OK, time to wrap up. A reminder of the main story: The European Central Bank (ECB) is expected to come under intense pressure to boost the supply of cheap credit to the eurozone after figures showed a much-feared period of deflation started in December, triggered by falling oil prices. A flash estimate of inflation found that a dramatic fall in fuel costs following the halving of oil prices dragged prices down by 0.2%. Separate data for unemployment in the eurozone turned the screw on the ECB board after the figure rose by 34,000 to maintain the unemployment rate at 11.5%. One analyst described the figures as dire news that would put strong pressure on the ECB to “pull the quantitative easing (QE) trigger” at its next meeting later this month. See here for more: Eurozone deflation puts pressure on ECB to launch QE stimulus The euro continues to hit new nine-year lows, now at $1.1805 to the US dollar. Europe’s stock markets have gained ground as investors anticipate fresh easy money. The FTSeurofirst index provisionally closed 0.4% higher. David Madden, market analyst at IG, says: Volatility is high as equity traders cheered the dismal inflation figures from the eurozone. The struggling southern European nations are dragging down their northern counterparts, and when you add crumbling commodity prices into the mix the result is deflation. Mario Draghi will find it very difficult to deny the eurozone is suffering from a fall in the cost of living at the ECB meeting later this month, and this could force him to fire up the printing press. Trader still can’t shake the looming political uncertainty in Greece but for now they are content to ride the QE gravy train. And after a volatile day, the oil price is heading down again tonight -- Brent crude is changing hands at $50.52 per barrel, a fall of 1.1%. Goodnight. GW 4.07pm GMT16:07 Jasper Lawler, market analyst at CMC Markets UK, sums up the day: The Eurozone officially fell into deflation on Wednesday but European markets were unperturbed, taking the data to mean improved chances of the European Central Bank introducing an asset price-boosting quantitative easing program. Oil prices crashed below $50 but subsequently recovered as investors stepped in to try and pick the bottom at the big psychological round number. A hoax rumoured death of Saudi Arabia’s King Abdullah helped create initial spike in demand for oil around the $50 per barrel level. European consumer prices were shown to fall -0.2% in December, worse than the -0.1% expected. The fact that we’ve moved from the threat of deflation to actual deflation gives Mario Draghi more firepower to push through quantitative easing. Draghi’s policy throughout has been to offer the possibility of QE should the data warrant it. The ECB head was surely hoping the data would never justify QE, but with this latest reading, it has. 2.46pm GMT14:46 The euro continues to fall to new nine-year lows, amid speculation that the ECB will agree a QE bond-buying programme soon. It’s now lost 0.65% against the US dollar today, to $1.1809. Kerry Craig, global market strategist at J.P. Morgan Asset Management, questions whether QE would do much good: “The Eurozone’s move into deflation territory today was widely expected and reinforced expectations the ECB will announce sovereign bond buying on 22 January. However, whether this kind of US-style “quantitative easing” can have a major effect on the flow of credit in the Eurozone remains open to debate. Nevertheless, talk of QE has certainly had a major effect on the exchange rate, with the Euro hitting a nine year low.” The euro's getting totally smoked today pic.twitter.com/oFF7Uj4jO3 Updated at 2.51pm GMT 2.34pm GMT14:34 US shares are following Europe’s lead by rising at the start of trading in New York. After five days of falls, the Dow Jones has risen by 124 points, or 0.7%, to 17496. The main European markets are all up around 1.2%. Updated at 2.35pm GMT 2.05pm GMT14:05 Our economics editor, Larry Elliott, writes that the slide in the oil price should be welcomed, and ought to deliver stronger growth over time: What’s happened in the past six months or so is more of a supply shock. Sure, there has been a slight easing in global demand for crude caused by the slowdown in China and the stagnation in the eurozone. But this has been nothing like as dramatic as the collapse in activity during the winter of 2008-09. Instead, falling oil prices are more to do with over-supply from three big sources. The first has been the expansion of shale production in the US, the big structural change to the market since the financial crisis. The second has been the decision by Saudi Arabia to flood the market with cheap crude, thus forestalling any attempts by Opec to put a floor under the price by limiting output. The third has been increased production from countries – such as Russia – which are trying to protect their oil revenues as prices fall. Consumers are already feeling the benefits of this positive supply shock through cheaper petrol and rising real incomes. This will eventually feed through into stronger growth, which in turn will put a floor under the oil price. Crude may edge lower over the coming weeks, but it is unlikely to go much lower. Here’s the full piece: Oil price plunge should raise real incomes and boost growth 1.57pm GMT13:57 America’s trade figures should continue to benefit from the fall in the oil price, says Capital Economics’ Paul Dales: The more recent drop in oil prices will soon reduce the trade deficit by a further $5bn or so, to take it to a five-year low of $34bn. 1.48pm GMT13:48 The slide in the oil price has helped America narrow its trade gap. The US trade deficit hit an 11-month low of $39bn in November, compared to estimates of $42bn. Petroleum imports fell to their lowest value in around 20 years, helping to cut overall imports by around 2.2%. Exports declined by 1.0%. U.S. trade deficit falls to $39B in November to its lowest level in 11 months: http://t.co/pepWTN0mT8 pic.twitter.com/uadbQ5k2Zb 1.36pm GMT13:36 Encouraging news from America -- US private firms created 241,000 new jobs in December, around 15,000 more than expected. November’s private sector payroll figures were also revised higher, to show 227,000 new jobs were created, up from 208,000 previously. It suggests America’s labor force ended 2014 quite robustly. The wider Non-Farm Payroll, measuring employment across the US economy, is released on Friday. 1.24pm GMT13:24 Investors continue to push down the value of Greece’s government bonds, ahead of its general election on 25 January. The interest rate, or yield, on Greek 10-year debt has risen to 10.7%, up from 9.6% last night. Bond buyers are preparing for Greece's economy to worsen. MT: @burgessansm Greek 10-Year Bond Yields Exceed 10% http://t.co/eoqQMptnVE #Greece's bonds roiled in the run-up to a Jan25 election, Greek 3yr bonds jumps by 168bps to 15.7% highest since 2012 pic.twitter.com/QzRyM2Pv3Q Greece’s deputy premier, Evangelos Venizelos, has warned today that the country is in a race against time to form a new government and cannot afford to have inconclusive elections. Athens correspondent Helena Smith reports: “We cannot go to a second round of elections,” said the socialist leader addressing the issue of a second vote taking place the following month if Greeks fail to elect a government on January 25. “If we waste February, too, the train will have derailed,” Venizelos told Skai TV insisting that Athens faced an excruciatingly tight deadline to conclude negotiations with creditors and draft a precautionary credit line to replace the bailout funds that formally ended last year. “The memorandum ended on 31st December and with it the loans,” he said. “There is nothing else. They have kept the last instalment of €1.8bn euro, there is only [help from] the IMF which is small.” The radical left Syriza party is leading polls, but if it doesn’t achieve an outright majority then Greece could face protracted negotiations to form a coalition government. Updated at 1.27pm GMT 12.49pm GMT12:49 Lunchtime summary: Deflation hits the eurozone Time for a recap. Pressure on the European Central Bank has intensified after the eurozone’s inflation rate turned negative for the first time since 2009. Consumer prices fell by 0.2% year-on-year in December, raising fears that the single currency region will enter a prolonged period of deflation. However, core inflation inched up to 0.8% annually, Eurostat reported. Europe sinks back into deflation. Ouch. http://t.co/RgF442gn8H pic.twitter.com/rWPDN7lwgO The fall in the oil price dragged the inflation rate down – energy prices have shrunk by 6.3% over the last year. Food prices were flat. Several economists reckon the ECB will announce some form of new QE programme later this month; European stock markets have rallied this morning. But Jonathan Loynes, chief economist at Capital Economics, reckons the ECB has waited too long: “Today’s figures pile yet more pressure onto the ECB to deliver a sizeable quantitative easing programme at its policy meeting later this month. But it’s too late to head off deflation now,” said “Without a rebound in oil prices, energy effects alone could push the headline inflation rate down towards -1 percent in the early months of this year and keep it in negative territory for most of 2015.” Full reaction starts here. The oil price has weakened today, sending Brent crude down to a new 5 1/2-year low of $49.66 per barrel this morning. The eurozone’s unemployment rate remains unchanged, at 11.5% in November. But the difference between its largest members is stark – Germany’s jobless rate has hit a record low of 6.5%, while Italy’s rate is at a record high of 13.4%. Το πρόβλημα της Ευρωζώνης σε ένα γράφημα... Οικονομία δύο ταχυτήτων pic.twitter.com/SfaPEz6xPd 12.34pm GMT12:34 Germany has led the opposition to a full-blown eurozone QE programme, arguing that buying up government bonds with new money would be ineffective and illegal. But Nick Beecroft, senior market analyst at Saxo Capital Markets, reckons the Bundesbank may now cave in at the next ECB meeting: “The news that the estimate for December Eurozone headline inflation fell to -0.2% yoy will surely set the seal on the ECB’s much anticipated introduction of Quantitative Easing and could serve to silence, or at the very least mollify, likely Governing Council dissenters, i.e. the Bundesbank. Very significantly, the descent into deflation was not due only to the recent precipitous decline in energy prices; food, alcohol and tobacco inflation also fell from 0.5% yoy to zero, yoy. Although there is obviously a big energy input component into those prices, there is also a large Euro area labour price input into local food production, and the fall in these CPI components should add great weight to voices calling for full-blown QE to be announced on January 22nd, and of an appropriate size, i.e. at least €500bn for two years, with mutualized risk.” 12.17pm GMT12:17 Danae Kyriakopoulou, economist at the Centre for Economics and Business Research, also argues that the European Central Bank may feel that the current deflation is the ‘good’ variety. Given that the ECB has for so long resisted QE even while some countries were in “bad” deflation, there may be little hope in expecting action now that deflation has spread to the rest of the bloc due to factors beyond its control. Overall, Cebr would welcome a move to QE but maintains its view that it would be insufficient to kick-start the recovery. A softer take on austerity and the setting of both fiscal and monetary policies in expansionary mode are imperative to avoid another crisis. 11.32am GMT11:32 The Wall Street Journal’s Richard Barley is also in the ‘low inflation is good’ camp. Strange days. Investors pay Germany to lend to it and everyone apparently wants the ECB to make oil and food more expensive. 11.31am GMT11:31 Back to the eurozone’s lurch into negative inflation (-0.2% in December). Samy Chaar, chief economist at Swiss bank Lombard Odier, argues that Europe is experiencing ‘good’ deflation, thanks to the falling energy prices Though prices contracted by 0.2% in December, core prices (excluding energy, food, alcohol and tobacco) remain stable at 0.8% (slightly increasing by +0.1%). The figures indicating prices fell are skewed because of the low oil price, which means there is slightly less pressure. Nonetheless, this forces the hand of the ECB and the data still makes the case for Draghi to act because of recent signals, market expectations, and the Greek saga. Quantitative easing might stabilise inflation expectations –the key driver of inflation – but the central problem is one of liquidity. Overall, what we have is good disinflation and it will be interesting to see how much this will add to the pressure on the ECB to introduce full-blow QE when it meets on January 22nd.” 11.15am GMT11:15 Ah.... it appears that a false rumour that Saudi Arabia’s King Abdullah had died also pushed up the oil price in the last hour: spurious rumour of #Saudi king passing away cited as reason for move higher in #crude.. Saudi market still up +1.7% so unlikely to be true.. 11.01am GMT11:01 Markets rally, oil rebounds Europe’s stock markets are now rallying, on speculation that the ECB will announce a new stimulus programme soon. The FTSE 100, German DAX and French CAC indices are all up around 1.1%. And even the oil price is recovering -- Brent crude, which hit $49.66 per barrel this morning (a near six-year low), is back up around $51.60 now. Updated at 11.02am GMT 10.52am GMT10:52 There is no improvement in Europe’s jobless crisis. The eurozone unemployment rate was unchanged in November 2014 at 11.5%. As usual, the lowest unemployment rates were recorded in Austria (4.9%) and Germany (5.0%), and the highest in Greece (25.7% for September 2014) and Spain (23.9%). More details here. 10.50am GMT10:50 ABN Amro: negative inflation will force ECB to act Nick Kounis, economist at ABN Amro, predicts that eurozone inflation will remain negative for several months: We expect headline inflation to remain negative over the next few months. The exact path depends crucially on oil prices. If they were to remain at current levels, inflation would likely remain negative until June of this year. Having said that, core inflation is likely to move sideways. Despite high unemployment, there is little disinflationary pressure coming from the labour market. In addition, import prices (outside of oil) will rise due to the fall in the euro. And this could help European Central Bank president Mario Draghi to win enough support for a new quantitative easing programme, despite opposition from Germany. Kounis says: The Greek issue could complicate the announcement. We expect the ECB to announce that it will embark on a large scale asset purchase programme, including sovereign bonds, at its January meeting. However, it may well hold off from providing any further details until March, giving it a chance to see how the situation in Greece turns out. 10.41am GMT10:41 Economists can get into quite a lather arguing about what, exactly, counts as deflation. Back in 2008, ECB board member Lorenzo Bini Smaghi argued that prices would have to be falling for some time before an economy was truly in the grip of deflation (speech here). So you could argue that we’re only seeing disinflation right now...... To all the 'deflationists', the usual reminder: deflation, if you can define it, has to be broad-based and protracted http://t.co/Xlue8h9BgF 10.39am GMT10:39 The euro is weakening, down 0.33% today to a new nine-year low of $1.1846 against the US dollar. 10.26am GMT10:26 Jeremy Cook, chief economist at the international payments company, World First, argues that oil cannot take all the blame for Europe’s slide into negative inflation. The European Central Bank must take some of the blame, he says: “You will only need one guess as to what represents the biggest nail in the European inflationary coffin. “A 6.3% fall in oil price inflation in the year to December has put year-on-year prices into negative territory for the first time since 2009 in the Eurozone. “Although oil is a convenient scapegoat for those policymakers that believe that the weakness in prices is ‘transitory’, the lack of willingness on the part of ECB policymakers to actively engage in a scheme to help promote demand in the euro area is the ultimate harvest that has been reaped. “This has not increased the chances of a European Central Bank QE scheme; that much has already been made clear to be on its way in my opinion. “What today’s number has done is show the alarming lack of foresight that the ECB has exercised once again, and how close to the fire the European economy remains.” Updated at 10.27am GMT 10.20am GMT10:20 Expert reaction to eurozone inflation hitting -0.2% Here’s some of the best instant comment on the news that the eurozone inflation rate has turned negative: it may be oil-driven, and oil prices may go back up. but this is still significant. #deflation If you're a euro hawk and are relying on core inflation of 0.8%, you've already lost the argument Beautiful. Pro QE camp can use headline inf for their argument, hawks are being served with core inf. Let the fight begin. #ECB #QE #Draghi Core Eurozone inflation has been below 1% in 13 of the last 15 months. This is about more than oil. 10.18am GMT10:18 One important point – core inflation across the eurozone rose in December, to +0.8%. Core inflation strips out volatile measures such as food and energy prices, so central bankers see it as a better measure of underlying inflationary pressures. But it’s still a long way below the European Central Bank’s target of inflation close to, but below, 2%. 10.11am GMT10:11 The eurozone is officially back in deflation. Consumer Price index fell by 0.2% Y/Y in December 2014: pic.twitter.com/Z6C2UIlBVG 10.11am GMT10:11 The drop in eurozone inflation is due to the slump in the oil price -- as this chart from Eurostat shows: Euro area annual inflation down to -0.2% in December 2014 - flash estimate from #Eurostat http://t.co/LvqHgCcf0j pic.twitter.com/TTKnlWvdEx 10.03am GMT10:03 If you really want a current 1930s economic analogy the Eurozone is the place to look. 10.02am GMT10:02 EUROZONE INFLATION TURNS NEGATIVE BREAKING: The eurozone has fallen into deflation. Harmonised consumer prices across the single currency region fell by 0.2% annually in December, according to Eurostat. That’s a bigger fall than expected, and surely raises the pressure on the European Central Bank to take fresh stimulus measures. Perhaps as early as this month’s meeting? Details and reaction to follow! Updated at 10.14am GMT 9.56am GMT09:56 Just a few minutes to go until the eurozone inflation data, and jobless rate, is released. Economists expect to see the consumer prices index fall into negative territory, at minus -0.1% year on year. Due at the top of this hour: Eurozone CPI estimate for Decc, the market expects -0.1% ^KB #FX #EUR Updated at 9.57am GMT 9.47am GMT09:47 Michael Fuchs, a senior member of Angela Merkel’s party, has reportedly blamed Italy’s dire unemployment rate on its failure to reform its economy. Here are the newswire snaps: *FUCHS SAYS RECORD ITALY UNEMPLOYMENT IS DUE TO LACK OF REFORMS *FUCHS SAYS `ITALY HAS TO DO ITS HOMEWORK' 9.41am GMT09:41 Consumer group uSwitch has urged utility firms to feed the slump in energy prices onto their customers, and criticised the industry for not acting faster. Tom Lyon, uSwitch.com energy expert, says: “It’s only right that consumers should benefit from lower wholesale energy costs. Whilst quick to pass on rising costs, the big six energy suppliers are yet to reduce bills for the majority of their customers who are on standard tariffs. “It’s now high time for one of the big six to cut their standard prices and help hard-pressed households, and lay down the gauntlet to the others to do the same. “With the average bill now an eye-watering £1,265 – 168% higher than a decade ago – it’s little wonder that energy costs top consumers’ concerns. The best advice for those worried about energy bills is to shop around, as our experience shows that on average most people who do can save over £220 a year.” 9.33am GMT09:33 A reminder of the struggle faced by young people in Italy looking for work: Italy Nov Youth Unemployment Rate 43.9% vs 43.3% in Oct pic.twitter.com/YL5bPyySsP 9.30am GMT09:30 Brent crude oil has inched back over the $50 per barrel mark, but is still down 1.6% today. 9.24am GMT09:24 German unemployment rate hits record low, Italy hits record high If Dickens was writing the story of Europe’s economic plight, he might reprise A Tale of Two Cities – Berlin and Rome. Data just released shows that Germany and Italy’s fortunes continue to diverge, and workers are feeling the impact. The German unemployment rate has fallen to a record low of just 6.5% in December, as Europe’s largest economy continues to shrug off the worst of the eurozone crisis. It’s the lowest rate since reunification in 1990; the jobless total fell by 27,000 last month, to 2.841m. But over in Italy, it’s a bleaker situation. The Italian jobless rate hit a record high at 13.4% in November, highlighting its economic plight (Italy is currently in recession, and has been either contracting or stagnating for the last three years). The youth unemployment rate rose again, to 43.9%. Italy touches new unemployment record. Yet country seems resigned to decline, afraid of innovation and reforms, stuck in a sorry status quo These charts show the two country’s unemployment rates over the last decade: Reminder, the latest eurozone unemployment and inflation (or deflation?) data is released at 10am GMT. 9.00am GMT09:00 In the City, the slide in the oil price is hurting the energy sector. Weir Group, the Glasgow-based engineering firm which serves the industry, is leading the FTSE 100 fallers, down 1%. Exploration firms Tullow Oil and BG Group are both down 0.8%. The FTSE 100 is up 38 points, after falling on Monday and Tuesday. Supermarkets and retailers are leading the risers, after Sainsbury beat forecasts over Christmas. Sainsbury’s enjoys better Christmas than expected despite sales fall 8.39am GMT08:39 UK motorists should hopefully see the benefits of the lower oil price on the forecourt soon. Although, as consumer journalist Paul Lewis points out, only a small proportion of the petrol price actually pays for the hydrocarbons. Brent crude falls below $50 a barrel. That is 159 litres. So oil is about 20p a litre. Unleaded average 111p of which 76.45p is duty and VAT Yesterday, Ladbrokes said petrol is odds-on (1/2) to fall below 100p/litre this month. 8.32am GMT08:32 US crude oil is also being driven lower -- down another 1.5% below the $47/barrel mark. 8.27am GMT08:27 Chart: 10 years of Brent The speed of the slump in the oil price mirrors the selloff in autumn 2008, when Brent fell from around $100/barrel to just $36/barrel after the collapse of Lehman Brothers. As mentioned at 7.28am, oversupply and weak demand are both being blamed. Here’s Reuters’ explanation: The low prices are a result of high output clashing with sluggish demand, especially in Europe, which is still struggling with its debt crisis, and in Asia, where China’s growth is slowing and Japan is battling recession. On the demand side, output from North American shale producers remains high, although drilling is slowing, and producer club OPEC has so far resisted calls to cut production in support of prices. Instead, it is trying to defend its market share through offering low price 8.04am GMT08:04 The slump in the oil price is undoubtedly good news for the global economy, argues Boris Johnson’s economic advisor, Dr Gerald Lyons: There seems to be lot of debate about weak oil prices. As these reflect ample supply not collapsing demand the net effect is good for world. 8.03am GMT08:03 Wow!!! Bloomberg breaking news: Brent Crude Falls Below $50 Per Barrel for First Time Since May 2009 8.01am GMT08:01 Brent falls below $50/barrel Brent Crude has just fallen below the $50/barrel mark for the first time in five and a half-years. The benchmark oil price has shed another 2% this morning, as the oil price continues to be pushed down by global economic growth fears and excess supplies. #Brent crude falls below $50/BBL for 1st time since May 2009 Economists suggest oil has further to fall too. Nobuyuki Nakahara, a former oil executive and ex-member of the Bank of Japan’s policy board, told Reuters: “I would not be surprised if the price falls to as low as around $20... It is purely due to supply and demand. There is a ceiling for oil because high energy prices dampen economic growth.” The weak oil price puts more pressure on utility firms, airlines and petrol suppliers to pass savings onto customers -- as chancellor George Osborne tweeted last night. Oil price was $53 pbl last night - lowest in 5yrs. Vital this is passed on to families at petrol pumps, through utility bills and air fares As we reported last night, the cost of living will be a big issue in May’s general election: George Osborne fires warning shot over tumbling oil prices Updated at 8.07am GMT 7.55am GMT07:55 The fall in the oil price is hurting Russia’s currency -- the rouble has lost another 0.5% this morning to 63.5 roubles to the US dollar. #Russia Ruble continues to drop in sync w/ #oil. Now 63.70 per Dollar as Brent has hit fresh 5.5yr low at $50.22/bbl. pic.twitter.com/U6b23fdsiM 7.47am GMT07:47 Brent crude oil is weakening further, and is now just a few cents above $50/barrel. Brent about to break through $50 a barrel pic.twitter.com/FsgD9fHvkT Twitter, get ready for the " #Brent #Crude #Oil hits $50" storm... just got within 3 cents... 7.46am GMT07:46 This chart shows how the cost of Brent crude has halved since last summer, down to the brink of $50. 7.30am GMT07:30 Today’s selloff means Brent crude could fall below $50 today, suggests Bloomberg’s Andrew Barden: Here's an #oil chart to start your day. Will #Brent follow #WTI south of $50 today? #FreeFall pic.twitter.com/GMsRjncjej 7.28am GMT07:28 Brent crude tumbles close to $50/barrel mark The oil price has continued to fall overnight, pushing Brent crude down towards the $50 mark for the first time since the last global downturn in 2009. Brent has shed another 1.6% so far today, or $0.87 per barrel, to just $50.22. That’s a new five and a half-year low. Oil prices continue to drop, Brent just shy of $50/bbl. Petrodollar drought is risk for mkts. http://t.co/ez9mmBC1Tz pic.twitter.com/obeU2G7gJu Brent has now shed more than 50% of its value since the summer – six months ago, it was changing hands for $110 per barrel. US crude is down again too today, at $47.21 per barrel. Oil has been sliding for months, especially since the OPEC cartel refused to cut production in November despite signs of a supply glut. Weak economic data has also pushed the price down -- surveys released yesterday showed a slowdown in service sector growth in the US and UK, and parts of Europe. The weak oil price is likely to push inflation rates lower across the globe, raising the chance that the eurozone will fall into deflation. And while it should be good news for consumers, it means more economic pain for oil producers who will be struggling to break even at the current prices: How $50 oil changes almost everything http://t.co/N924K3qWx9 pic.twitter.com/AR0XBBh569 7.24am GMT07:24 The Agenda: Eurozone inflation and unemployment Good morning, and welcome to our rolling coverage of events across the world economy, the financial markets, the eurozone and business. Today could be D-Day for Europe’s struggling economy. D for Deflation, that is. The latest consumer price index data is released at 10am GMT, and economists believe it will show that harmonised inflation across the euro area fell by 0.1% over the last year. Prices have been dragged down by falling oil and cost-cutting from Europe’s struggling firms. That would surely heighten calls for the European Central Bank to take fresh action to stimulate Europe’s economy, but might not sway hawkish members of the ECB. Core inflation (stripping out volatile items like energy and fuel) is expected to remain at 0.7%. We also get the latest eurozone unemployment data at 10am GMT, and it’s likely to confirm that Europe’s labour markets remain tough. Italy’s unemployment rate could hit a new record high of 13.3%, keeping the eurozone-wide rate at 11.5%. What else is afoot? Investors will be watching events in Greece, as the general election campaign heats up. Overnight, the left-wing Syriza party had promised to crack down on the country’s wealthiest businesspeople, as the FT reports: The oligarchs are high on our agenda,” George Stathakis, the shadow development minister and Syriza’s senior economic spokesperson said in an interview with the Financial Times. “They will be a priority for action.” Could be a popular move with the electorate.... Wednesday's FT: Greek hard-left party pledges to loosen economic grip of ‘oligarchs’ #tomorrowspaperstoday pic.twitter.com/QfScnnHaRX And in the City, supermarket chain Sainsbury’s is revealing how it fared over Christmas, in one of the toughest festive periods in decades. Like-for like sales fell by 1.7% in the six-weeks around Christmas (if you ignore petrol) -- not as bad as expected, but not great either. Sainsbury's l4l sales down 1.7% over Christmas - not as bad as feared - so taken share from or are the major grocers fighting back? I’ll be tracking all the main events through the day.... Updated at 7.28am GMT |