Better UK manufacturing output numbers from the Office of National Statistics landed earlier: output soared almost +4% between September and November last year while industrial output climbed +0.4% in November (both good for Q4 GDP numbers due later in Jan) alone.
However the UK’s trade deficit widened more in November, expanding to -£2.8bn compared to -£2.3bn in October. Surging overseas growth and the cheap pound are powering UK optimism though the cheeriness does not extend to the UK’s construction sector. Construction output slumped -2% in the three months to November.
Late afternoon the pound was down -0.08% against the dollar at 1.3529 while the euro surged against both the dollar and pound, up to 1.1982 and 0.8853. Dollar weakness (again) has been stoked by concerns China will slow its US government debt buying spree – more below.
Tonight the FTSE 100 was up yet again at 7,748 with RBS and HSBC up +4.6% and +3.8% respectively. Investors weren't so impressed with Taylor Wimpey and Paddy Power Betfair, down -4.1% and -3.7%. Rolls-Royce also fell hard, down -3.2%.
- UK FTSE 100 7,748.5 +0.23%
- DAX 13,248.31 -1.03%
- CAC 40 5,495.90 -0.51%
- Euro Stoxx 50 3,604.19 -0.52%
- Dow 25,346.73 -0.15%
- S&P 500 2,745.29 -0.22%
- Nasdaq 7,127.24 -0.51%
- Nikkei 225 23,788.20 -0.26%
- Gold 1,319.40 +0.43%
- Oil WTI 63.30 +0.54%
Bond market jitters climb
Is the US bull bond market finally over? Several investors have warned it is. “Bond bear market confirmed,” came a Tweet from Janus Henderson Group today, the public face of bond veteran Bill Gross. “25 year long-term trendlines broken in 5 (year) and 10 (year) maturity Treasuries."
Earlier 10-year US Treasury yields inched up past 2.55% and early afternoon yields were up 10 basis points over the last day. The bond sell-off helped put some wind behind stock market valuations with some banks benefiting: RBS and HSBC were both up markedly.
Chinese concerns about the attractiveness of US bonds have made themselves felt. But higher global growth and surging oil prices have also done their bit to encourage speculation that central banks may call time on stimulus programs sooner than thought.
Lidl cheer for Sainsbury's and Morrisons
Despite better Christmas sales numbers from Morrisons and Sainsbury’s in the last 36 hours, it’s left to cheapie Lidl to really mash the accelerator: the German retailer says UK December sales broke an all-time record, up +16%.
"Lidl has had a fantastic 2017,” UK boss Christian Hartnagel. "Customers came into our stores to buy more of their Christmas items, knowing they could find high quality products at market-leading prices." Friday 22 December was Lidl’s strongest trading day. The UK is home to 700 Lidl stores.