Stocks rise as Beijing pumps extra cash into China's economy – business live – The Guardian, Theguardian.com
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UK factory output has contracted at the fastest pace since July (*****************************************************************************************************************************************************************************************************. It has now been below the neutral mark of for eight months straight.
But given the poor factory reading from the Eurozone, some analysts are pointing out that the UK performed relatively better:
Shaun Richards(@ notayesmansecon)
UK Manufacturing PMI at 047. 5 shows a contraction but is relatively good as the Euro area PMI was 047. 3# GBP
The final reading for UK manufacturing PMI for December came in at .5. That is slightly higher than the flash estimate of (**************************************************************************************************************************************************************************************************************************************************************************************. 4 but below November’s reading of 1. ************
It is also the second weakest level for nearly seven and a half years, having hit 47. 4 in August this year.
Chris Williamson, chief business economist at IHS Markit commenting on the latest eurozone PMI reading, says it will be a challenge to keep the eurozone economy out of recession in light of such a deep manufacturing contraction.
(********************************************************************************************************************** (***************************************************(**************************************** (********************************************************************************************(************************************** (****************************************************** (****************************************************** (**************************************(******************************************************** A robotic arm manufactured by Kuka AG scans the body of a fully assembled a Volkswagen AG (VW) ID.3 electric automobile during quality checks at the automaker’s factory in Zwickau, Germany. Photograph: Bloomberg / Bloomberg via Getty Images
Williamson said:
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Eurozone manufacturers reported a dire end to 2020, with output falling at a rate not exceeded since (****************************************************************************************************************************************************************************************************. The survey is indicative of production falling by 1.5% in the fourth quarter, acting as a severe drag on the wider economy.
Although firms grew somewhat more optimistic about the year ahead, a return to growth remains a long way off given that new order inflows continued to fall at one of the fastest rates seen over the past seven years.
Firms sought to reduce inventory levels and cut headcounts as a result, focusing on slashing capacity and lowering costs. Such cost cutting was again also evident in further steep falls in demand for machinery, equipment and production-line inputs.
Only homes provided any source of improved demand in December, underscoring how the consumer sector has helped keep the economy out of recession in recent months.
The ability of the wider economy to avoid sliding into a downturn in the face of such a steep manufacturing contraction remains a key challenge for the eurozone as we head into (**********************************************************************************************************************************************************************************************. **********
Updated (at 4.) ************************************************************************************************************************************************************************************************************************************************************************************************************ am EST
IHS Markit explained that both production and new orders continued to deteriorate in December, with output falling for an eleventh successive month and at a rate that match September’s 81 – month record.
The PMI report said:
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There was a broad-based softening of PMI figures during December, with seven of the eight countries covered by the survey recording weaker PMI numbers compared to November (the exception being Austria, which registered an unmoved reading).
Germany was again the weakest-performing country, whilst the deteriorations seen in Italy and the Netherlands were the sharpest in over six-and-a-half years.
Conversely, growth was sustained to a solid degree in Greece, whilst a marginal gain was seen in France.
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Manufacturing PMI data for the Eurozone economies is in and the figures are not pretty.
IHS Markit’s Final manufacturing Purchasing Managers’ Index came in at .3 in December.
That is higher than flash estimates of 9 but is still below November’s reading of 9.
It means manufacturing PMI has now been contracting for straight months, having been below the 50 mark – which is the baseline for sector expansion – since February.
Eurozone manufacturing PMIs are expected in less than five minutes time, but there are poor readings already coming out of individual countries including France, Germany and Italy.
Howard Archer, economic advisor to the EY ITEM Club has details on the data:
Howard Archer(@ HowardArcherUK)Poor news on# Italyas purchasing managers report
# manufacturingactivity contracted at fastest rate since April & for th month running in December. # PMIdown to (2) 2) ****************************************************************************************************************************************************************************************************************************************************************************. 6 in Nov). Output contracted at fastest rate for nearly 7 years; new orders fell sharply as did jobs (January 2,Howard Archer(@ HowardArcherUK)
as# PMIshows# manufacturingexpansion slowed markedly in December & marginal (PMI at 3-month low of
************************************************************************************************************************************************************************************************************************************************************************ 4 (flash reading was******************************************************************************Howard Archer(@ HowardArcherUK)December# German# manufacturing# PMIshows deeper contraction as index down to 45. 7 (flash was. 4) from November 5-mont h high of 1. Output fall deeper & marked and jobs cut but area of hope was new orders fell least since December (************************************************************************************************************************************************************************************************. Confidence at 18 – month high (January 2, **********************************************************************************************************************************************************************************************
The pound’s decline is helping prop up the UK’s blue chip stocks this morning, as foreign earnings are worth more to multinational UK firms when sterling is weaker.
The UK currency is suffering as we edge closer to Brexit, set for the end of January.
(********************************************************************************************************************** (***************************************************(**************************************************** (****************************************************** (**************************************** (********************************************************************************************(******************************************************** A session chart showing the pound’s 0.2% decline against the US dollar. Photograph: Refinitiv
Connor Campbell, a financial analyst. at SpreadEx, says:
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TheFTSE, which struck 9867 towards the end of last year before tumbling at its close, added 0.8%, lifting back to 7650 in the process.
The index was helped by sterling’s 0.3% decline against the dollar and euro alike, the currency feeling the pressure now that we are less than one month away from leaving the EU.
The pound will be hoping for a better than forecast UK manufacturing PMI to act as a bit of reassurance.
Connor Campbell(@ ConnorSpreadex)
Morning Market Comment: China RRR cut and ongoing trade deal goodwill propels markets higher … (https://t.co/ODdoMSLCvt
Mining giants Glencore and Antofagasta are among the top movers on the (FTSE) **********************************************************************************************************************************************************************************************************************************************************, up 2.5% and 2.2% respectively.
Education publisher Pearson is ticking higher alongside, up 2.3%.
But positive sentiment has swept across London’s blue chip index, leaving just seven stocks in the red, though the declines are relatively muted: none are trading lower than -1%.
(********************************************************************************************************************** (***************************************************(************************************** (****************************************************** (****************************************************** (************************************ (****************************************************** (*************************************************** () (**************************************(******************************************************** (********** (A list of stocks at the bottom of the FTSE) . Photograph: Refinitiv
European stocks have jumped at the start of their first trading day of (***********************************************************************************************************************************************************************************************: (**************************************************************************************************** (FTSE) ********************************************************************************************************************************************************************************************************************************************************** (up 0.) **************************************************************************************************************************************************************************************************************************************************************************** (%) ****************************************************************************************************************** (**************************************************************** French Cac ****************************************************************************************************************************************************************************************************************************************************************************************************************************************************************: 0.6%(**************************************************************** Spain’s IBEX (****************************************************************************: up 0.8% (****************************************************************************************************************** Italy’s FTSE MIB (*****************************************************************************: up 0.5%
****************************** ******************************************(**************************************************** (****************************************************** (**********************(******************************************************** US President Donald Trump takes part in a welcoming ceremony with China’s President Xi Jinping in Beijing, China. Photograph: Damir olagolj / Reuters
********************************************************************************** David Madden, a market analyst at CMC Markets UK, explains:
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President Trump said that phase one of the trade deal will be signed on January, and even though a lot of the good news has already been factored in, it should assist with the bullish mood.
Once the phase one hurdle has been cleared, traders will start to think about phase two.
The second-leg of the trade deal will address trickier topics like intellectual property rights. Seeing as the first stage of the trade dispute dragged on for approximately months, the next leg could last even longer – seeing as it is likely to be much complex.
Mr Trump needs to show that he is standing up for American interests, but Beijing can play the long game, so the Chinese government have no incentive to meet all his demands.
Introduction: Stocks rise on China liquidity boost
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Chinese stocks have led the charge in Asia, helped by news that the central bankwill cut lenders’ reserve ratio requirement, freeing up around bn yuan (£) bn) in new funds for loans. It’s hoped that the extra liquidity will prevent growth slowing in 2020.
(**************************************************************************************************** (China CSI) ************************************************************************************************************************************************************************************************************************************************: up 1.
********************************************************************************************************************************************************************************************************************************************************************************** (%) ****************************************************************************************************************** (Hong Kong’s Hang Seng: up 1.) ************************************************************************************************************************************************************************************************************************************************************************************************************ (%) ****************************************************************************************************************** Shanghai’s SSE Composite: up 1. (%)
The ratio requirement cut helped offset disappointment from the China’s Caixin manufacturing PMI, which came in at 55 .5 overnight. While it held above (**********************************************************************************************************************************************************************************************************************************************************************************, the baseline for expansion, it was below economist expectations for 066 .8.
Reaction to the PMI data may have been worse were it not for the Phase One trade deal having been secured between the US and China. The deal will be signed by Washington and Beijing officials January, but once that hurdle is cleared, jitters about Phase Two could revive uncertainty fears for markets.
Commenting on the PMI data, analysts from Pantheon Macroeconomics said:
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The index was well above its uptrend, so a decline is not surprising. Without the Phase One trade deal it would have been worse. We are reticent to read too much into the details, but the loss of momentum in new orders is disappointing, chiming with the official report. Export orders appear to have been aided by the deal prospects, falling by less than the overall orders gauge, though the subindex remained only slightly above 50.
We are also waiting for final manufacturing PMI readings for December, covering the eurozone and UK economies. Stay tuned!
(1:) ****************************************************************************************************************************************************************************************************************************************************************************************************** (GMT GMT: US weekly jobless claims for (December) ****************************************************************************************************************** (2:) pm GMT: US manufacturing PMI (final) (******************************************************************************************************************
Updated (at 2.) **************************************************************************************************************************************************************************************************************************************************************************************** am EST
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FTSE, which struck 9867 towards the end of last year before tumbling at its close, added 0.8%, lifting back to 7650 in the process.
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