US expected to have added 223,000 jobs in JulyGerman exports, industrial output fallsGerman finance ministry favours bridge loan for Athens – reportBank of England’s Broadbent sanguine about housing marketSpain’s economy gathers momentumUK trade deficit shrinks in second quarter 10.49am BST Sterling has steadied after Thursday’s sell-off, when expectations of higher UK interest rates receded. News that the Bank of England’s rate-setting committee voted 8-1 to leave rates unchanged this month came as a surprise to markets, who had expected at least two (if not three) votes for a rate rise this month.The pound is trading 0.06% higher against the dollar at $1.5523. It was unmoved by data that showed Britain’s trade deficit widened in June, but narrowed in the second quarter.The widening of the UK trade deficit in June is likely to be the start of a further deterioration in the coming months. The overall trade deficit widened once more to £1.6bn in June, broadly in line with consensus expectations, after its sharp contraction in May. The drop in June was largely due to a sharp rise in import goods values after the 2.3% monthly decline in May. Meanwhile goods exports values fell by 1.0% on the month.Admittedly, over Q2 as a whole, goods exports (in volume terms) posted a strong 6.6% increase, owing to a monthly surge of 4.8% in April. So having subtracted 0.6 percentage points from GDP growth in Q1, net trade should have made a sizeable positive contribution to growth in the second quarter, perhaps as large as 1.0pp. 10.40am BST Germany’s finance ministry favours a bridge loan for Greece to give Athens and its international creditors more time to negotiate a comprehensive third bailout, the Sueddeutsche Zeitung daily reported on Friday.If true, this would be at odds with the view held by Greek prime minister Alexis Tsipras and French president François Hollande, who said on Thursday a new bailout should be agreed by late August. The day before, Tsipras said Athens is on the “final stretch” of concluding a bailout deal.“A programme that should last three years and be worth over €80bn needs a really solid basis. A further bridge loan is better than just a half-finished programme.” 10.25am BST Numbers just out show deflation persisted in Greece in July, with consumer prices falling 2.2% on the year. The pace of deflation was the same as in the previous month.Prices in the crisis-torn country have been falling for 29 months, as wages and pensions have been cut. Greece’s EU-harmonised deflation rate showed prices fell by 1.3% in July, compared with 1.1% in June.What news from Athens? Greece in charts http://t.co/cbLRQ6LsJp pic.twitter.com/PCH5yzgMjF 10.21am BST Greek stocks are in positive territory, with bank stocks outperforming after steep losses earlier this week. The moves signal a further calming of nerves for bank stocks, which are trading 2.85% higher this morning. The Athens market as a whole is up 1.55%.It’s been a more positive end to the week for the banks after the bank index fell 63% in the first three days. But, with heavy recapitalisation still needed, nervousness still remains. The EU estimates Greek banks will need between €10bn and €25bn in extra capital. 9.53am BST It’s a relatively quiet morning, after the excitement of Super Thursday.Connor Campbell, financials analyst at Spreadex, says:This morning things are looking slightly better in the commodity sector, leaving the chance for a recovery in the oil and mining stocks. So far, however, investors aren’t quite willing to buy into it yet, given how quickly the commodity sector has turned of late, leaving the FTSE pretty limp after the bell. With the UK’s trade balance expected to worsen, the UK index might struggle to improve much on its current 2 and a half week high.The DAX had a dismal start to Friday; a fall in the German trade balance was exacerbated by a huge miss in the country’s industrial production, from 0.3% expected to -1.4%. This left the DAX as one of the worst performing European indices as the day’s trading got underway, with the CAC not too far behind after France’s own disappointing, if not quite as extreme, drop in its industrial figures. 9.48am BST We’ve also had industrial production figures from France this morning. Output slipped 0.1% in June, wrongfooting economists who had expected a 0.3% rise.Chris Williamson, chief economist at economic survey firm Markit, says:Industrial production trends are diverging within the eurozone area, with signs of renewed weakness in the ‘core’ contrasting with resurgent growth in the periphery. Production growth slowed to a crawl in Germany in the second quarter and fell marginally in France, but Spain is enjoying strong growth and a sustained upturn is evident in Italy. However, the industrial sectors of Spain and Italy remain one-quarter smaller than their price crisis peaks, highlighting the mountains still needed to be climbed by these countries in terms of rebuilding their industrial sectors.”Eurozone Q2 industrial production trends show core weakness: Germany +0.2, France -0.7%, Italy +0.4%, Spain +1.8% pic.twitter.com/Qn8gf6iANj 9.41am BST You can read the ONS release here. 9.39am BST The UK trade figures are out, showing the trade in goods deficit widened to £9.2bn in June from £8.4bn. It was slightly smaller than expected.The stronger pound, coupled with weaker demand from the eurozone, one of Britain’s main trading partners, have hit British exports. 9.29am BST Commodities are still under pressure, hit by slowing demand from China, the world’s top consumer of metals. Copper and aluminium are trading near six-year lows.Copper eased 0.1% to $5,176.50 a tonne on the London Metal Exchange, down 1% so far this week. Aluminium dipped 0.3% to $1,587.50 a tonne. 9.24am BST Chinese shares rose, boosted by a Bloomberg report that the Chinese government agency tasked with buying stocks to prop up markets is seeking an extra 2 trillion yuan (£208bn) in funds.The additional funding would increase the war chest available to the China Securities Finance Corporation to 5 trillion yuan, according to Bloomberg. The CSF has been thrust into the spotlight since shares started plummeting in June as a conduit for China’s central bank to inject funding directly into stock markets. 9.03am BST The Bank of England is not concerned about the resurgent housing market, deputy governor Ben Broadbent said.He told BBC radio:Clearly there are going to be pockets where at any one time house price inflation is quite high but I think overall in the UK we don’t view that with great alarm.” 8.54am BST Viva España! Spain’s economy, the fourth-largest in the eurozone, is powering ahead: factories ramped up production in June, driving industrial output up 4.5% year-on-year. That’s the biggest annual increase since March 2010. 8.46am BST UK Mail Group saw its shares fall up to 15% in early trading after making a profits warning. The group said profits would be materially below market expectations due to the higher than expected costs of setting up a new automated hub near Coventry.William Hill, the bookie, was the biggest faller in the FTSE 250 after its profits tumbled by more than a third. The group is also spending $25m in cash for a 24.9% stake in NeoGames, a US-fcoused online lottery software provider. 8.33am BST Better data is expected from the US later in the day.A Reuters survey of economists forecast that nonfarm payrolls increased by 223,000 last month, matching June’s job gains, a number which would be slightly above the monthly average for the first half of the year.We expect this report to deliver a further jolt to the Fed’s confidence in their relatively optimistic economic outlook and further solidify the bias for a September [rate] hike.” 8.23am BST European stock markets have opened lower, after a surprising fall in German industrial output and exports.Germany’s Dax dropped 0.5%, while France’s CAC and Italy’s FTSE MiB both slipped 0.3%. Spain’s Ibex was down 0.4% in early trading. 8.10am BST It might be August but new Barclays chairman John McFarlane, who recently put the axe to former CEO Antony Jenkins, is not having any summer-time frivolity at the bank’s head office in Canary Wharf. Just like the equally stern Peter Cruddas at CMC Markets, McFarlane has banned flip flops and jeans at head office to encourage a more serious tone, even from Barclaycard colleagues when they are visiting.Barclays chairman John McFarlane bans flip-flops and jeans at head office http://t.co/6akxzAQwQJ #news #telegraph 7.46am BST The German economy has suffered a setback, with exports falling more than expected in June and industrial output also declining.Figures from the Federal Statistics Office showed exports dropped 1% on the month while imports fell 0.5%. The trade surplus still hit a record €24bn.German factories in June: Took loads of orders (+2%), didn't bother making any of it (-1.4%)@Accendo_Mike Backlog up? German IP can be volatile MoM 7.33am BST Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Following the Bank of England’s Super Thursday, attention shifts to the US on Friday.With the indie film of #SuperThursday out of the way the real summer blockbuster of payrolls can be released. Silo of popcorn at the ready. Continue reading...
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