This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2017/sep/20/us-federal-reserve-decision-janet-yellen-markets-uk-retail-business-live
The article has changed 25 times. There is an RSS feed of changes available.
| Version 2 | Version 3 |
|---|---|
| Pound jumps as UK retail sales beat forecasts – business live | |
| (35 minutes later) | |
| 10.06am BST | |
| 10:06 | |
| UK retail sales: instant reaction | |
| The acceleration in UK retail sales last month is surprising, given household incomes are being squeezed by inflation. | |
| It may show that people are borrowing more, warns Neil Wilson of ETX Capital: | |
| Those retail sales numbers are not going to assuage fears about the consumer credit splurge | |
| Economics journalist Dharshini David also flags this up: | |
| Sturdy 1% rise in @ons retail sales Aug rounds off solid summer for consumer spending despite pay squeeze (but more reliant on borrowing?) | |
| Economist Rupert Seggins points out that these monthly figures can be volatile... | |
| Third consecutive monthly rise in retail sales growth. Will be lots of focus on August, but the monthly growth figures are VERY volatile. pic.twitter.com/DvimMHHJ77 | |
| ...but the underlying picture is that people are still spending. | |
| Underlying trends in retail sales - price inflation still up and volume growth holding up. Growth in sales values is very strong. pic.twitter.com/4OpSumtDB8 | |
| 9.43am BST | |
| 09:43 | |
| UK retail sales have now risen for three months in a row, as this chart shows: | |
| 9.38am BST | |
| 09:38 | |
| Pound jumps as retail sales smash forecasts | |
| Breaking! UK retail sales were much stronger than expected in August. | |
| The Office for National Statistics reports that retail sales jumped by 1.0% last month, beating City forecasts, and suggesting that consumers are still hitting the high street. | |
| The ONS says: | |
| This has sent the pound jumping over half a cent against the US dollar, to $1.3587, as traders calculate that this makes a November interest rate rise more likely. | |
| Stroooooong retail sales and the British pound is officially on another mad one pic.twitter.com/oopj4NOAH4 | |
| Reaction to follow.... | |
| 9.26am BST | 9.26am BST |
| 09:26 | 09:26 |
| Britain’s small businesses don’t share the sense of optimism in the markets. | Britain’s small businesses don’t share the sense of optimism in the markets. |
| Confidence among UK firms has taken a tumble in the last three months, according to the Federation of Small Businesses. It’s Small Business Index has dropped to just +1 this quarter, down from +15 in April-June, and near to the -3 seen after last summer’s Brexit vote. | Confidence among UK firms has taken a tumble in the last three months, according to the Federation of Small Businesses. It’s Small Business Index has dropped to just +1 this quarter, down from +15 in April-June, and near to the -3 seen after last summer’s Brexit vote. |
| Mike Cherry, FSB National Chairman, blamed economic factors: | Mike Cherry, FSB National Chairman, blamed economic factors: |
| “Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among small firms and consumers alike. | “Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among small firms and consumers alike. |
| Optimism among UK small firms has tumbled to its lowest level since EU referendum a/c Fed of Small Businesses survey | Optimism among UK small firms has tumbled to its lowest level since EU referendum a/c Fed of Small Businesses survey |
| Updated | Updated |
| at 9.26am BST | at 9.26am BST |
| 9.06am BST | 9.06am BST |
| 09:06 | 09:06 |
| Tata Steel to merge European operations with ThyssenKrupp | Tata Steel to merge European operations with ThyssenKrupp |
| There’s big news in the steel industry this morning. | There’s big news in the steel industry this morning. |
| Tata Steel has signed a “memorandum of understanding” with German steel manufacturer ThyssenKrupp to merge, creating Europe’s second largest steel group. | Tata Steel has signed a “memorandum of understanding” with German steel manufacturer ThyssenKrupp to merge, creating Europe’s second largest steel group. |
| This ends uncertainty over the future of Tata’s operations in the UK, including the Port Talbot steelworkers which was recently threatened with closure. | This ends uncertainty over the future of Tata’s operations in the UK, including the Port Talbot steelworkers which was recently threatened with closure. |
| But it’s not all good news; Tata and ThyssenKrupp are already planning around 4,000 job cuts. | But it’s not all good news; Tata and ThyssenKrupp are already planning around 4,000 job cuts. |
| The FT’s Jonathan Eley sees further consolidation ahead: | The FT’s Jonathan Eley sees further consolidation ahead: |
| If I worked at Port Talbot, I wouldn't much like the look of this para in Thyssen/Tata statement pic.twitter.com/iAqCDoyRwY | If I worked at Port Talbot, I wouldn't much like the look of this para in Thyssen/Tata statement pic.twitter.com/iAqCDoyRwY |
| Unions have said they “cautiously welcome” the deal. Here’s the full story: | Unions have said they “cautiously welcome” the deal. Here’s the full story: |
| 8.55am BST | 8.55am BST |
| 08:55 | 08:55 |
| Peter Rosenstreich of Swissquote Bank fears that markets could react badly if the Federal Reserve announces that it will start unwinding its stimulus programme, and cut the size of its balance sheet. | Peter Rosenstreich of Swissquote Bank fears that markets could react badly if the Federal Reserve announces that it will start unwinding its stimulus programme, and cut the size of its balance sheet. |
| He argues that investors are simply too relaxed, given the risks of geopolitical instability around the globe: | He argues that investors are simply too relaxed, given the risks of geopolitical instability around the globe: |
| The big news event on 20 September will be the report of the US Federal Reserve’s Open Market Committee – we believe the central bank will finally announce plans to start selling its massive holding of bonds. This is likely to begin in October. Meanwhile, the Fed is unlikely to move interest rates. | The big news event on 20 September will be the report of the US Federal Reserve’s Open Market Committee – we believe the central bank will finally announce plans to start selling its massive holding of bonds. This is likely to begin in October. Meanwhile, the Fed is unlikely to move interest rates. |
| What does this mean for the US dollar? Possibly a shock. Markets are calm – too calm, really, like those western films where the sheriff rides into an empty town. Despite the tensions in North Korea and the Middle East, despite a see-sawing US president, despite implied volatility, willingness to take risks is historically unprecedented, which we know could end in tears. Markets continue to rationalize this, by seeing low inflation, solid growth and gradual central bank normalization. We’re not so sure. A balance-sheet unloading could end the ‘feel good’ environment, sending both bond and stock markets southward. | What does this mean for the US dollar? Possibly a shock. Markets are calm – too calm, really, like those western films where the sheriff rides into an empty town. Despite the tensions in North Korea and the Middle East, despite a see-sawing US president, despite implied volatility, willingness to take risks is historically unprecedented, which we know could end in tears. Markets continue to rationalize this, by seeing low inflation, solid growth and gradual central bank normalization. We’re not so sure. A balance-sheet unloading could end the ‘feel good’ environment, sending both bond and stock markets southward. |
| 8.37am BST | 8.37am BST |
| 08:37 | 08:37 |
| Asian markets remained calm today, despite Donald Trump’s threat to ‘totally destroy’ North Korea. | Asian markets remained calm today, despite Donald Trump’s threat to ‘totally destroy’ North Korea. |
| The South Korean won strengthened a little, shrugging off Trump’s remarkable attack on ‘rocket man’ Kim Jong Un. | The South Korean won strengthened a little, shrugging off Trump’s remarkable attack on ‘rocket man’ Kim Jong Un. |
| Today's front page 👇 - Trump, Boris, Gaga... pic.twitter.com/4jOgWV2sw8 | Today's front page 👇 - Trump, Boris, Gaga... pic.twitter.com/4jOgWV2sw8 |
| European markets have also opened softly too, with the FTSE 100 gaining 9 points to 7283, and Germany’s DAX pretty flat. | European markets have also opened softly too, with the FTSE 100 gaining 9 points to 7283, and Germany’s DAX pretty flat. |
| Connor Campbell of SpreadEx says: | Connor Campbell of SpreadEx says: |
| Despite myriad different macro-events fighting for attention – including a deadly earthquake in Mexico, the latest hurricane devastation in the Caribbean, Donald Trump’s sabre-rattling speech at the UN and Boris Johnson’s Brexit boasting – the markets are only interested in one thing this Wednesday: September’s Federal Reserve meeting. | Despite myriad different macro-events fighting for attention – including a deadly earthquake in Mexico, the latest hurricane devastation in the Caribbean, Donald Trump’s sabre-rattling speech at the UN and Boris Johnson’s Brexit boasting – the markets are only interested in one thing this Wednesday: September’s Federal Reserve meeting. |
| 8.14am BST | 8.14am BST |
| 08:14 | 08:14 |
| World markets at new peaks | World markets at new peaks |
| World stock markets are at record highs as investors await tonight’s Federal Reserve decision. | World stock markets are at record highs as investors await tonight’s Federal Reserve decision. |
| The MSCI All Country World Index has nudged up to 487.66, up from 487.37 yesterday. | The MSCI All Country World Index has nudged up to 487.66, up from 487.37 yesterday. |
| That extends its recent run of record highs, as markets begin the autumn in good spirits. | That extends its recent run of record highs, as markets begin the autumn in good spirits. |
| That follows another solid day’s trading on Wall Street, where the Dow Jones and the S&P both hit record highs. | That follows another solid day’s trading on Wall Street, where the Dow Jones and the S&P both hit record highs. |
| Mike van Dulken of Accendo Markets says: | Mike van Dulken of Accendo Markets says: |
| Investors are buckling up for another Fed policy update which may contain news and/or hints about the timing of further policy tightening by way of balance sheet unwinding and the next rate hike. | Investors are buckling up for another Fed policy update which may contain news and/or hints about the timing of further policy tightening by way of balance sheet unwinding and the next rate hike. |
| 7.59am BST | 7.59am BST |
| 07:59 | 07:59 |
| The agenda: All eyes on the Federal Reserve | The agenda: All eyes on the Federal Reserve |
| 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. |
| Investors around the globe have one thing at the top of their agenda today - the Federal Reserve. America’s top central bankers are meeting today to set monetary policy, and it could be a red letter day in the recovery from the financial crisis. | Investors around the globe have one thing at the top of their agenda today - the Federal Reserve. America’s top central bankers are meeting today to set monetary policy, and it could be a red letter day in the recovery from the financial crisis. |
| The Fed is expected to take the historic move to start unwinding its massive stimulus programme, concluding that the US economy is strong enough to cope without a helping hand. | The Fed is expected to take the historic move to start unwinding its massive stimulus programme, concluding that the US economy is strong enough to cope without a helping hand. |
| “Massive” isn’t an understatement. After the crisis began in 2008, the Fed bought tens of billions of dollars of government bonds each month, swelling its balance sheet to a mighty $4.5 trillion. It now has to decide how to unwind this money-printing programme without spooking the financial markets. | “Massive” isn’t an understatement. After the crisis began in 2008, the Fed bought tens of billions of dollars of government bonds each month, swelling its balance sheet to a mighty $4.5 trillion. It now has to decide how to unwind this money-printing programme without spooking the financial markets. |
| The Fed is likely to tread carefully; it’s not expected to raise interest rates today, for example. | The Fed is likely to tread carefully; it’s not expected to raise interest rates today, for example. |
| Policymakers will also indicate whether they expect borrowing costs to rise this year, and where they expect rates to peak in a few years, by using the Fed’s famous Dot Plot. | Policymakers will also indicate whether they expect borrowing costs to rise this year, and where they expect rates to peak in a few years, by using the Fed’s famous Dot Plot. |
| Here’s the old dot plot (each blob shows where one Fed committee member expects rates to be each year). | Here’s the old dot plot (each blob shows where one Fed committee member expects rates to be each year). |
| (Fed dot plot) FOMC members estimate a 3% interest rate in the long run, chart @FT https://t.co/4B6OV7J3s1 pic.twitter.com/O172AaKCcC | (Fed dot plot) FOMC members estimate a 3% interest rate in the long run, chart @FT https://t.co/4B6OV7J3s1 pic.twitter.com/O172AaKCcC |
| Today’s arrangement of dots will be closely scrutinised, says Naeem Aslam of Think Markets: | Today’s arrangement of dots will be closely scrutinised, says Naeem Aslam of Think Markets: |
| The element that investors are going to pay a lot of attention is the update on the dot plot. We expect the Fed to show more softer approach to the future interest rate hike. | The element that investors are going to pay a lot of attention is the update on the dot plot. We expect the Fed to show more softer approach to the future interest rate hike. |
| According to their last projection, the Fed expected seven rate hikes by the end of 2019. However, in the new forecast, the market is widely expecting them to drop one interest rate hike. | According to their last projection, the Fed expected seven rate hikes by the end of 2019. However, in the new forecast, the market is widely expecting them to drop one interest rate hike. |
| The immediate question is whether the Fed still expects to make one more interest rise this year (assuming they don’t hike tonight). | The immediate question is whether the Fed still expects to make one more interest rise this year (assuming they don’t hike tonight). |
| The Fed will also release new economic forecasts, and could also talk about the impact which the hurricane season will have on US growth. | The Fed will also release new economic forecasts, and could also talk about the impact which the hurricane season will have on US growth. |
| The markets aren’t really sure what to expect, so we’re looking at a cautious day’s trading until the Fed announcement comes at 7pm UK time, or 2pm in New York. | The markets aren’t really sure what to expect, so we’re looking at a cautious day’s trading until the Fed announcement comes at 7pm UK time, or 2pm in New York. |
| European opening call @LCGTrading $FTSE +3 points at 7278$DAX -8 points at 12553$CAC -6 points at 5231#EuroStoxx -7 points at 3524 | European opening call @LCGTrading $FTSE +3 points at 7278$DAX -8 points at 12553$CAC -6 points at 5231#EuroStoxx -7 points at 3524 |
| The agenda: | The agenda: |
| 9.30am BST: UK retail sales for August. They’re expected to be flat month-on-month, having risen 0.5% in July. | 9.30am BST: UK retail sales for August. They’re expected to be flat month-on-month, having risen 0.5% in July. |
| 10am BST: OECD publishes its latest global economic outlook. Will it repeat its warning of a Brexit slowdown in 2018? | 10am BST: OECD publishes its latest global economic outlook. Will it repeat its warning of a Brexit slowdown in 2018? |
| 7pm BST: Federal Reserve decision released. | 7pm BST: Federal Reserve decision released. |
| 7.30 BST: Fed chair Janet Yellen’s press conference | 7.30 BST: Fed chair Janet Yellen’s press conference |