US consumer prices data revealed a thumping surge today – at least on the surface. Underlying prices saw their biggest climb for 11 months while consumer price inflation (CPI) climbed to +0.3% in December.
However the US inflation figure overall fell to 0.1% in December from 0.4% the previous month. Retail sales also looked poor. All this helped send the dollar south. But the US currency – the spot price slumped -0.67% to 91.27 mid-afternoon – was also up against two pieces of major European news.
First, Bloomberg reported that Spanish and Dutch finance insiders could be seeking a soft Brexit. (That is just two member states persuaded – there are 25 other countries to deal with.) This saw the pound soar more than +1% to 1.3676.
This performance beat – just – the euro’s ascent to 1.2141, up +0.94% against the dollar on news of improved German coalition discussions. A tumultuous day on the currency markets. The euro ends the week on a three-week high against the dollar. The gold price is also looking positive with the yellow metal up almost +0.50% today to $1,328.
The FTSE 100 finished tonight at another all-time high – 7,778 points. GKN shares surged more than +25% as the engineering company considers splitting into two. Nothing on the table but a lot of noise following a £7bn bid from Melrose. Smiths Group shares saw a +5.3% share price climb.
- UK FTSE 100 7,778.64 +0.20%
- DAX 13,219.47 +0.13%
- CAC 40 5,506.21 +0.32%
- Euro Stoxx 600 398.12 +0.22%
- Dow 25,714.61 +0.55%
- S&P 500 2,776.75 +0.33%
- Nasdaq 7,229.32 +0.24%
- Nikkei 225 23,653.82 -0.24%
- Gold 1,328.70 +0.48%
- Oil WTI 63.69 -0.17%
Sterling tied to German coalition improvement hope
The pound’s giddy ascent today against the dollar was in contrast to how it performed against the euro. While the euro blasted higher the pound was just +0.14% ahead against the European currency this afternoon.
Despite the positive German political news today of coalition progress – compromise agreements have been made in principle on migration quotas and EU integration amongst other issues – Barclays analysts have warned that Merkel is not out of the woods yet.
“A number of hurdles remain, including the SPD party members vote on the final agreement. Polls show that more SPD party supporters think that a Grand Coalition will be bad for the SPD. The ‘Grand Coalition’ is not over the finishing line yet."
Carillion shares sink a further -26%
Embattled Carillion endured further humiliation today as its shares plunged more than -26% stoked by media reports that a rescue plan has been rejected.
Carillion is in intense discussions with the Government and the Pensions Regulator to seek a compromise credit arrangement that will allow it time to stay afloat. It has breached its loan agreements with several major banks and has issued several profit warnings.
It is also weighed down by £1.5bn of debt and a £600m pension shortfall. This afternoon its shares touched 14.03p. This means Carillion’s share price has plunged more than -93.2% in 12 months.