Rolling coverage of market reaction to Donald Trump’s trade optimism and US non-farm payrolls
Apple concerns after earnings report
While stock markets on the whole are still enjoying positive momentum from the Trump’s optimism on trade with China, Apple is the unlikely outlier giving investors pause ahead of the open of US indices.
The last note to be launched was the plastic tenner featuring Jane Austen, the author.
In money news of a different variety, the Bank of England today launched its campaign to nominate the new face of its £50 note.
Governor Mark Carney wants a scientist (and a dead one at that) to grace the new notes, which will be the latest to get a plastic makeover.
Midway through the morning, European indices are holding on to most of their early gains.
Simon Wright, the chief executive of Crossrail, will be replaced by the head of the London Underground following the government’s £350m bailout of the struggling project.
The construction PMI reading remains “above the magic 50 mark” – indicating a continued expansion in output – says Max Jones, global corporates relationship director for infrastructure and construction at Lloyds Bank Commercial Banking.
The October reading was “fairly modest”, he said, “neither racing ahead nor stuck in the doldrums”.
The commercial segment appears to be being sustained by urban-focused developers responding to the still-buoyant growth of many regional cities, while the UK’s insatiable appetite for online shopping is driving the construction of distribution space in and around key transport hubs.
The current output figures look fairly solid for the construction industry – at least in comparison to the last two years – with the second-strongest expansion in the last 16 months.
Civil engineering – big infrastructure projects like roads and railways – was the biggest driver of the output increase, after weakness earlier in the year, IHS Markit said.
New contracts increased at only a modest pace, and firms were the least optimistic regarding the 12-month outlook for nearly six years. Construction companies again linked uncertainty to Brexit negotiations, which influenced delays to final decisions at clients.
Breaking: UK construction output rises but outlook weak
The construction purchasing managers index (PMI), which is closely followed by economists, rose from a six-month low in September to a reading of 53.2 points for October, according to data firm IHS Markit.
Sterling is on course for its second best week of the year so far in the wake of the Bank of England’s latest interest rate decision.
The pound had its best day of 2018 so far on Thursday thanks to a combination of positive reports on Brexit talks and a relatively sanguine Bank of England.
Given [signs of wage growth] and resilient household confidence and momentum, the BoE maintained that gradual rate hikes were appropriate but that they could quicken the pace of hikes in the event of an orderly Brexit.
US president Donald Trump’s Twitter feed has set the tone for early trading.
He said his “long and very good conversation” with Chinese president Xi Jinping last night had “a heavy emphasis on Trade”, with a capital T.
Before breaking out the beautiful chocolate cake, it is worth remembering that China would also have to agree, and has the capacity to hold out against current sanctions.
Note his comments came as the US Justice Department is stepping up actions against China in cases of suspected economic espionage and as trade dove [Larry] Kudlow cautioned that Trump would “aggressively” pursue his agenda against China.
It’s worth taking a look at just how much Asia’s stock exchanges gained overnight.
While we are still cautious over a full resolution of recent tensions in the medium term, resumption of dialogue between Washington and Beijing would be good enough to investors for now.
Combined with the prospects of more economic stimulus from China and reasonable valuations in Asian equities, investors could use this opportunity to reload on emerging market and Asia assets. The US dollar is still edging higher but Asia has been more resilient on handling greenback strength than other emerging markets.
The FTSE 100 has taken its cue from Asian trading at the open, bouncing by more than 1% in its first few minutes before retreating to a 0.8% gain.
The positive sentiment is spreading across Europe, with Italian shares up by 1.2%. Investors in Sweden, Poland and even Russia are having a good time.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade. Those discussions are moving along nicely with meetings being scheduled at the G-20 in Argentina. Also had good discussion on North Korea!
I’m not entirely sure what to make of this. But it feels too big a change of direction following the [vice president] Mike Pence speech some weeks ago to be taken literally. It certainly isn’t in synch with the latest charge of a Chinese company for conspiring to steal trade secrets.
Link : Markets surge after Trump hints at China trade deal – business live