European inflation – consumer prices were up +1.5% in August – and a better jobs picture yesterday gave more leeway for European Central Bank president Mario Draghi to commence a stimulus withdrawal program. Today, eurozone (and UK) manufacturing purchasing managers index (PMI) data emerges which may give Draghi more headroom.
The eurozone economic recovery has been all the more impressive – European stocks yesterday re-bounded from multi-month lows – given the surging performance of the common currency, making exports less competitive.
Overnight the euro slipped -0.13% to $1.1894 while the pound was buying $1.2916 at close to 7am this morning – better news given the negative sentiment from EU Brexit negotiator Michel Barnier yesterday which piled more pressure on the pound. Watch later for US non-farm payroll numbers plus the ISM Manufacturing index, both market-moving reports.
- UK FTSE 100 7,430.62 +0.89%
- Dow 21,948.10 +0.25%
- S&P 500 2,471.65 +0.57%
- Nasdaq 6,428.66 +0.95%
- Nikkei 225 19,650 45 +0.02%
- DAX 12,055.84 +0.44%
- CAC 40 5,085.59 +0.58%
- Gold 1,292.70 +0.02%
- Oil WTI 47.07 -0.04%
Rio Tinto sells coal operation to Yancoal
We start with news that Rio Tinto has offloaded its Coal & Allied Industries operation to Yancoal, controlled by China’s Yanzhou Coal. Rio Tinto was paid $2.45bn cash for the deal. It’s understood there is additonal royalty payments linked to the price of coal.
Meanwhile it’s thought that Rio Tinto boss Jean-Sébastien Jacques may be considering a move from Rio’s London HQ (though there is a joint HQ in Melbroune) to Sydney, rather nearer the miner’s main assets and clients.
VW launches UK scrappage incentive
Joining other major car makers – Ford, Hyundai, BMW and Vauxhall – VW UK is to offer trade-in discounts of up to £6,000 on its range of Audi, Seat and Skoda group vehicles.