Rolling business and financial news through the day:Sorrell: Scottish referendum increases uncertainty ...and Russia has replaced eurozone as main risk Morning summary: City cheered by prospect of eurozone QEShares up, eurozone bond yields downFrench cabinet reshuffle after austerity row 10.49am BST South Africas economy has returned to growth, avoiding a new recession, but not expanding as fast as hoped.Statistics South Africa reports that the countrys GDP rose by 0.6% in the second quarter of 2014, reversing the 0.6% contraction recorded in January-March. Economists had predicted growth of 0.9%.#SA #GDP prints 0.6% q/q below consensus 0.9%. 1.0% y/y below consensus at 1.2%. No #recession but a terrible number showing a sick #economyRT @andrewbtodd: SA GDP still showing solid downtrend pic.twitter.com/y64B4mJ6Hh 10.34am BST Over to Greece where the debt-stricken countrys central bank has devised a new code of ethics to deal with the ever worsening problem of non performing loans.Its a problem that has mirrored Greeces seemingly never ending debt crisis: the issue of non performing loans. With some 35% of all lender loans no longer being serviced, the countrys central bank reckons that an estimated 75bn in total is currently owed to banks, among the largest amounts in global financial history and for a nation off just over 11 million proportionately by far the largest in the EU. Its the biggest headache for our banking system and a major drain on our ability to provide credit, said one banker requesting anonymity. The new code has been a priority over the summer. 10.22am BST As if all these grey swans werent bad enough, WPP is also suffering from the strong pound.The ad company said its revenues had been ravaged by the strength of sterling (which meant that overseas revenues were worth less when converted into pounds). 10.19am BST 10.14am BST Sorry, I should have explained what Sorrell means by saying Scottish independence and Britains potential exit from the EU are Grey Swan risks. Hes harking back to Nassim Talebs Black Swan theory, which argued that financial markets (and the rest of us) fail to predict certain events because they fall outside previous experience so cant be anticipated, even though they have seismic consequences. 9.35am BST Martin Sorrell has also voiced his concerns about Scottish independence to the BBC:Sir Martin Sorrell at @WPP tells me that 'uncertainty is not good for business and regardless of yes/no vote, firms need to plan' @BBCNewsMartin Sorrell warns 'in a world of geopolitical challenges, Scotland voting for independence could cause firms to delay investment plans' 9.33am BST Sir Martin Sorrell has also warned that the prospects of Scotland voting for independence, and Britain leaving the European Union, could both threaten the UK economy.The head of advertising giant WPP told Reuters this morning that these issues are grey swans that could disrupt the recovery.There is all to play for as we go into the election.Obviously it does increase uncertainty in the UK, its not good. 9.08am BST Tragedy that #Hollande didn't appoint reform cabinet when elected two years ago 9.01am BST Russia has replaced the eurozone as the major worry facing the global economy, WPP boss Sir Martin Sorrell has warned.The eurozone was the big topic of conversation and concern this time last year. This year its been replaced by the Middle East, and in particular by Russia and the impact of sanctions. 8.36am BST The ten year government bond yield in #Germany is 0.94% this morning #QE #Euro 8.28am BST European government bonds are also strengthening in value this morning, driven by the prospect of an ECB QE programme.Yesterdays fall in business confidence in Germany is also pushing investors into safe-haven assets such as German bunds.Draghis speech has been construed as a significant departure from the usual rhetoric usually used by ECB heads, in that he has ventured into areas normally reserved for politicians, and is particularly notable at a time when the political temperature in Europe looks set to rise further in the wake of the collapse of the French government, which is under increasing pressure from Brussels and Berlin to get its spending under control.Despite these political concerns and yet another poor German IFO business confidence survey yesterday European stock markets rose sharply on Monday as markets looked to price in the prospect of further policy easing by the ECB in an attempt to try and boost economic growth in the euro area. 8.14am BST The London stock market is open after the long weekend, and staging a small rally.Mario Draghis pledge to use all available instruments to help the eurozone is cheering the City.Big highlight was Draghi on late Friday : The speech described as possibly one of the landmarks in the ECB's history. 8.05am BST Reuters has a good piece on the French political crisis, sparked by the dismissal of economy minister (and austerity critic) Arnaud Montebourg:Frances prime minister will scramble to put together a new pro-reform government on Tuesday, a day after the surprise eviction of rebel ministers who had opposed budgetary rigor.Manuel Valls will seek as wide a basis as possible for his second cabinet in five months ahead of tough negotiations at home and with EU peers on Frances 2015 budget and he is expected to try to poach politicians from other parties.The whole world is begging us to put an end to these absurd austerity policies which are burying the euro zone deeper and deeper in recession and which will soon end up with deflation.French PM to unveil pro-reform cabinet after rebel ministers' eviction http://t.co/GRjOCH6Bnp 7.56am BST FTSE100 set to play catch up this morning after another strong US performance on Monday. Forecast to start +33 at 6808. 7.55am BST Good morning, and welcome to our rolling coverage of the financial markets, the economy, the eurozone and business.#FTSE100 futures indicating a 35 point higher opening.Driving sentiment across the globe at the moment are bets we will see further stimulus from some of the major central banks.In European trade [yesterday] investors responded to Mario Draghis comments from the weekend in an overwhelmingly positive way and euro weakness helped to give equities an extra kicker.#France: The same headline on Liberation and Le Figaro on the government crisis. pic.twitter.com/23xE4rbsqy Continue reading...
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