Asian markets were comprehensively lower on Thursday with the Nikkei falling more than -1.1%. Some of the fall was down to more dollar concern, given a helping shove lower yesterday by Steve Mnuchin, US Treasury Secretary, praising the benefits of a weakened home currency. The Hang Seng was down -0.76% while the Shanghai Composite fell -0.31%.
The falling dollar has meant more support for oil prices: Brent crude hit more than $71 overnight, the first time since 2014. There was more zip to sterling also, hitting $1.43 overnight while the euro dipped -0.29% against the pound to 0.8701. Sterling is out-performing all G10 currencies by some margin.
There’s also a growing feeling that increased UK economic robustness will support another UK interest rate rise by early summer. Bank of England governor Mark Carney is taking part in a Davos panel tomorrow – one to watch.
An ECB rate decision arrives later today. The eurozone economy is powering ahead but the ECB needs inflation to pick up. Expect less talk about QE and more focus on inflation and interest rates overall. In short, little change is likely.
- UK FTSE 100 7,643.43 -1.14%
- DAX 13,414.74 -1.07%
- CAC 40 5,495.16 -0.72%
- Euro Stoxx 600 400.79 -0.50%
- Dow 26,252.12 +0.12%
- S&P 500 2,837.54 -0.06%
- Nasdaq 7,415.06 -0.61%
- Nikkei 225 23,669.49 -1.13%
- Gold 1,370.10 +0.63%
- Oil WTI 66.28 +1.02%
Diageo sales up but currency issues linger
Drinks maker Diageo – think flagship brands Johnnie Walker and Smirnoff – this morning released interim six month numbers: reported sales and operating profit are +1.7% and +6.1% higher; organic operating profit is +6.7% up.
“We have,” says Diageo, “delivered broad based improvement in both organic volume and net sales growth. We have increased investment behind our brands and expanded organic operating margin.”