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| Markets await UK unemployment report and US interest rate decision - business live | Markets await UK unemployment report and US interest rate decision - business live |
| (35 minutes later) | |
| 8.58am GMT | |
| 08:58 | |
| Jordan Hiscott, chief trader at ayondo markets, believes European investors will be crossing their fingers and hoping that the liberal VVD party led by Mark Rutte wins the most seats in today’s Dutch election. | |
| Hiscott says: | |
| “Tomorrow’s Dutch elections could be yet another watershed moment for Europe, leading to further political fragmentation. With a country known for its liberal traditions, it’s been surprising that Geert Wilders and his PVV party have managed to assert themselves so much, taking the lead at some point in the last few weeks. | |
| “Most recently though the VVD - the People’s Party for Freedom & Democracy - has re-taken the lead and investors looking for stability in the financial markets will welcome this. The possibility of the PVV coming to power, with its anti-EU stance, could have had a dramatically effect on the EUR FX and Dutch equities markets, both largely negative. | |
| But as I flagged up earlier, the Dutch voting system - and its fragmented politics - means a coalition government is all-but certain. And with all the other main parties vowing not to work with Wilders, the blonde populist could be thwarted. | |
| Duncan Robinson of the FT has done a good preview: | |
| "In Dutch politics the vote is not the beginning of the end but the end of the beginning." https://t.co/potdgNGY7N | |
| 8.51am GMT | |
| 08:51 | |
| European stock markets are up across the board this morning. | |
| The FTSE 100 has gained 0.2% to 7,373 points - less than 20 points shy of its all-time high. | |
| That suggests investors aren’t too anxious about the UK jobs report, or the US rate decision. | |
| Connor Campbell of SpreadEx suspects traders will be watching the Dutch election closely: | |
| There isn’t a lot for the region to do today, so any political news out of the Netherlands might be its main driver of movement as Wednesday progresses. | |
| Analyst Jens Bastian points out that the Netherland’s political drama has implications for the rest of Europe. It could slow down the process of handing more bailout money to Greece: | |
| Any delays in government formation in #Netherlands spells trouble for #Greece and conclusion of second review. Dutch parliament must approve | |
| 8.36am GMT | |
| 08:36 | |
| The pound is having a good morning, jumping almost one cent against the US dollar to $1.223. | |
| Some traders are attributing the rise to a report in The Times today, which argues that the Bank of England should consider raising interest rates soon. | |
| The Times runs its own ‘shadow monetary policy committee’, which gives its own views on what the BoE ought to do. And three of its members believe rates need to rise now, back to 0.5%, to address the jump in inflation. Another three reckon rates should rise in April. | |
| Charles Goodhart, a former Bank ratesetter, argues that the Bank should send a signal when it announces this month’s decision, tomorrow: | |
| “They should lay the ground in the accompanying minutes for a possible increase in interest rates at their next meeting.” | |
| 8.16am GMT | 8.16am GMT |
| 08:16 | 08:16 |
| There’s a chance that Britain’s jobless rate could hit a new 11-year low of 4.7% today, down from last month’s 4.8%. | There’s a chance that Britain’s jobless rate could hit a new 11-year low of 4.7% today, down from last month’s 4.8%. |
| That’s according to RBC Capital Markets, who also predict that wage growth will slow. | That’s according to RBC Capital Markets, who also predict that wage growth will slow. |
| Last month’s strong report emphatically removed the skew of risks on the unemployment rate rising from 4.8% to 4.9%. Indeed, if anything, the skew of risks on this occasion is that it could actually drop to 4.7% but our central expectation is that unemployment holds at 4.8% for a fifth consecutive month. | Last month’s strong report emphatically removed the skew of risks on the unemployment rate rising from 4.8% to 4.9%. Indeed, if anything, the skew of risks on this occasion is that it could actually drop to 4.7% but our central expectation is that unemployment holds at 4.8% for a fifth consecutive month. |
| The 3m/3m employment level looks set to post a healthy gain too as the recently softness provides a relatively easy comparator for the latest data. The 37k 3m/3m gain last time should well at least be matched on this occasion. | The 3m/3m employment level looks set to post a healthy gain too as the recently softness provides a relatively easy comparator for the latest data. The 37k 3m/3m gain last time should well at least be matched on this occasion. |
| For average earnings we look for growth to ease to 2.4% 3m/y for both the including and excluding bonus measures from 2.6% 3m/y last time. This would be consistent with the message from the Bank of England Agents’ recent survey on pay settlements which pointed towards growth slowing from 2.7% on average in 2016 to 2.2% for 2017 | For average earnings we look for growth to ease to 2.4% 3m/y for both the including and excluding bonus measures from 2.6% 3m/y last time. This would be consistent with the message from the Bank of England Agents’ recent survey on pay settlements which pointed towards growth slowing from 2.7% on average in 2016 to 2.2% for 2017 |
| 7.46am GMT | 7.46am GMT |
| 07:46 | 07:46 |
| UK cuts stake in Lloyds below 3% | UK cuts stake in Lloyds below 3% |
| More than eight years after bailing Lloyds Banking Group out, the British government has taken another step towards the exit door. | More than eight years after bailing Lloyds Banking Group out, the British government has taken another step towards the exit door. |
| The UK has sold another slice of Lloyds shares, taking its stake below the 3% level. | The UK has sold another slice of Lloyds shares, taking its stake below the 3% level. |
| According to the Treasury, this means taxpayers have recovered over £19.5bn of the £20.3bn which they put into Lloyds, once share sales and dividends received are accounted for. | According to the Treasury, this means taxpayers have recovered over £19.5bn of the £20.3bn which they put into Lloyds, once share sales and dividends received are accounted for. |
| Economic Secretary to the Treasury, Simon Kirby, says: | Economic Secretary to the Treasury, Simon Kirby, says: |
| “Lloyds’ recent annual results show that we are in a good position to reduce our shareholding further and expect to recover all of the money taxpayers injected into the bank during the financial crisis.” | “Lloyds’ recent annual results show that we are in a good position to reduce our shareholding further and expect to recover all of the money taxpayers injected into the bank during the financial crisis.” |
| Government stake in Lloyds falls again to below 3% | Government stake in Lloyds falls again to below 3% |
| “Today’s announcement moves Lloyds another step closer to full private ownership" says Lloyds | “Today’s announcement moves Lloyds another step closer to full private ownership" says Lloyds |
| 7.43am GMT | 7.43am GMT |
| 07:43 | 07:43 |
| The agenda: UK unemployment and US rate hike (probably) | The agenda: UK unemployment and US rate hike (probably) |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Central bankers like to avoid surprising the markets. So with everyone expecting a US interest rate rise tonight, there’s no reason for the Federal Reserve to worry about announcing its first hike of 2017. | Central bankers like to avoid surprising the markets. So with everyone expecting a US interest rate rise tonight, there’s no reason for the Federal Reserve to worry about announcing its first hike of 2017. |
| But it’s not quite a simple as that. Investors across the globe want to know how rapidly the Fed will act this year - is it still expecting three rate hikes this year? Might we only see two, or should traders brace for as many as four? | But it’s not quite a simple as that. Investors across the globe want to know how rapidly the Fed will act this year - is it still expecting three rate hikes this year? Might we only see two, or should traders brace for as many as four? |
| That means we could see market volatility when the Fed releases its statement, and when Janet Yellen faces the press. | That means we could see market volatility when the Fed releases its statement, and when Janet Yellen faces the press. |
| We have to wait a few hours for this excitement, though: | We have to wait a few hours for this excitement, though: |
| 2pm EDT/6pm GMT: Fed interest rate decision | 2pm EDT/6pm GMT: Fed interest rate decision |
| 2.30pm EDT/6.30pm GMT: Press conference with Fed chair Janet Yellen | 2.30pm EDT/6.30pm GMT: Press conference with Fed chair Janet Yellen |
| But in the meantime, we’re also getting a new healthcheck on Britain’s jobs market at 9.30am. | But in the meantime, we’re also getting a new healthcheck on Britain’s jobs market at 9.30am. |
| Economists expect that the UK unemployment rate will remain at just 4.8% in the thee months to January, its lowest since the financial crisis. | Economists expect that the UK unemployment rate will remain at just 4.8% in the thee months to January, its lowest since the financial crisis. |
| But the wages figures could show a slight slowdown, with average earnings (excluding bonuses) tipped to rise by 2.5% per year, down from 2.6% last month. That would be a worry, given inflation is picking up. | But the wages figures could show a slight slowdown, with average earnings (excluding bonuses) tipped to rise by 2.5% per year, down from 2.6% last month. That would be a worry, given inflation is picking up. |
| Also coming up: | Also coming up: |
| It’s election day in the Netherlands. Can far-right leader Geert Wilders notch up another win for the populists and beat mainstream rivals, such as PM Mark Rutte’s VVD? | It’s election day in the Netherlands. Can far-right leader Geert Wilders notch up another win for the populists and beat mainstream rivals, such as PM Mark Rutte’s VVD? |
| Results are expected in the early hours of Thursday. No party is likely to win a majority meaning it could take weeks for a coalition to be agreed. | Results are expected in the early hours of Thursday. No party is likely to win a majority meaning it could take weeks for a coalition to be agreed. |
| Dutch PM Mark Rutte 'boosted by spat with Turkey' as election nears https://t.co/2WES97kp02 | Dutch PM Mark Rutte 'boosted by spat with Turkey' as election nears https://t.co/2WES97kp02 |
| European stock markets are expected to rise modestly in early trading. | European stock markets are expected to rise modestly in early trading. |
| Our European opening calls:$FTSE 7364 up 6$DAX 12000 up 11$CAC 4982 up 7$IBEX 9932 up 27$MIB 19582 up 44 | Our European opening calls:$FTSE 7364 up 6$DAX 12000 up 11$CAC 4982 up 7$IBEX 9932 up 27$MIB 19582 up 44 |