Davos: a summary
This liveblog is creaking under the weight of another day of Davos, so here’s a round-up of the main events.
On Migration....
On UK matters...
Chancellor George Osborne has said Britain will not panic over the turbulence in the markets.
On gender equality
Canadian PM Justin Trudeau has urged delegates not to be afraid to call themselves feminists.
On the global economy....
Harvard professor Ken Rogoff said 2016 will be a rough year for emerging markets
The head of the WTO has told us he’s optimistic about making progress on trade liberalisation.
Christine Lagarde has thrown her hat into the ring to remain as IMF chief for a second term.
And in the markets....
And that may well be all for tonight..... If so, we’ll be back tomorrow.
Guet Nacht! GW
Stocks surge back
Global stock markets have bounced back at the end of a tumultuous week, as oil prices recovered and the European Central Bank president, Mario Draghi, raised hopes of morefurther stimulus measures.
It was a week that saw panic selling in global markets, pushing several of them, including London and Japan, into bear market territory, as oil prices tumbled to fresh 13-year lows below $28 a barrel.
On Friday, however, European markets rebounded, following a heavy hint from Draghi that the ECB was ready to inject fresh stimulus into the eurozone at the March meeting – sooner than many investors expected.
Here is how things look at Friday’s close:
- The FTSE 100 index in London has rallied 2.2%, or 126 points, to 5900.01. It is still down 5.5% since the start of 2016.
- Germany’s Dax is up 2.3%, France’s CAC added 3.3% and Spain’s Ibex added 3.5%.
- Brent crude is up 7.6%, or $2.24, at $31.48 per barrel. It started the year at $37.85.
On Wall Street, stock markets have followed their European counterparts higher. The Dow Jones industrial average is up 0.8% at 16,005 and the S&P 500 is up 1.4% at 1,895.
Draghi’s hints had kicked off a “full-on relief rally” said Jasper Lawler, market analyst at CMC Markets. He adds:
“Global stocks rebounded strongly on Friday, capping a massive two-day about turn that erased sharp declines early in the week. The rally was aided by a surging oil price and talk of stimulus from both the European Central Bank and the Bank of Japan.
The FTSE 100 has seen its first weekly gain this year. The gain is all the more impressive after Britain’s main stock index fell into bear market territory with a 20% decline to the lowest levels since 2012 on Wednesday.”
Trudeau: Don't be scared to call yourself a feminist
Canadian PM Justin Trudeau is living up to his reputation as a 21st century leader (complete with a gender-balanced cabinet).
Trudeau tells Davos that:
“Let’s start rewarding politicians and companies who aren’t driven by a macho approach.”
He also says feminism isn’t anything to be afraid of:
"We shouldn't be afraid to use the word feminist. Men and women should use it to describe themselves whenever they want": Canada PM Trudeau
— Jill Treanor (@jilltreanor) January 22, 2016
Melinda Gates has told the panel session that she always made sure there were science projects for her husband Bill to do with the children on Saturdays.
Their two daughters have ended up interested in maths and science.
Chinese businesswomen Zhang Xin, who set up property company SOHO with her husband, says she in favour of quotas to address gender balance.
She tells Davos:
“I think quotas are an effective way of breaking old habits and bias.”
Sheryl Sandberg is less convinced, pointing out that Norway introduced 40% quotes for boardrooms but only 3.4% of companies are run by women.
“It’s not trickling down,” she said.
Updated
Sandberg: Toddler wage gap driving inequality
There’s a toddler wage gap in the US, and different expectations between boys and girls, Sheryl Sandberg declares.
Gender inequality starts that early, she believes, because:
Little boys in home do fewer chores at home and get paid more.
We assign our chores to our children in the United States so that the boys are taking out the trash, it takes less time than cleaning the dishes and they get higher allowances.
So we start out with different expectations in our home, and the time spent on these different tasks is incredibly important, she adds.
Updated
Melinda Gates says companies need to have proper family leave policies, not just maternity leave policies.
Paternity leave is a way of distributing the burden, as men who take it will spend more time at home helping with the children and the household tasks.
America is particularly poor, she adds - just two states have proper family leave policies.
"We shouldn't be afraid to use the word feminist. Men and women should use it to describe themselves whenever they want": Canada PM Trudeau
— Jill Treanor (@jilltreanor) January 22, 2016
Sheryl Sandberg of Facebook started the session on gender parity with the same polling method that she started a session earlier in the week, asking women if they had been asked whether they should be working and if had been described as being too aggressive at work. She said that women were expected to nurturing roles in the office.
The irony of the boss of recruitment agency Manpower being on the panel has not be lost on the BBC reporter Lyse Doucet who has tried to convince Jonas Prising to change the name. He appears to have rejected the idea - a brand in 80 countries for 70 years, he says.
Sandberg: Our gender expectations are wrong
Sheryl Sandberg, Facebook’s COO, says that the big problem with gender parity is the expectations of what is appropriate for woman.
Culturally we are so different around the world, but there’s a really deep cultural similarity, says Sandberg, namely:
Men are expected to lead, to provide, to be decision makers. And women are expected to nurture.
So women end up doing the ‘housework’ in the office, and almost all of the housework at home.
And we also have an expectations that women won’t lead, says Sandberg.
She asks the men in the audience to put their hands up if they’ve ever been told they’ve been too aggressive at work.
A couple of hands rise.
Now for the women, put your hands up if you’ve ever been told you were too aggressive at work.... and a lot of hands go up:
Sandberg then asks “Men, have you been asked whether you should be working?”
I can’t see many hands at all.
Now the women....
Again, plenty of hands go up.
That’s the issue, Sandberg concludes.
A debate on gender equality is kicking off in the Congress Hall now, including Melinda Gates, Facebook’s Sheryl Sandberg, and Canadian prime minister Justin Trudeau. You can watch it here.
Jonas Prising of Manpower Group is also on the panel - the moderator jokes that he’s only allowed if he promises to change the name to Humanpower Group.
Melinda Gates speaks first, saying she’s encouraged that women and girls are at the heart of the new sustainable development goals.
We’ve all come to recognise that, if you want this increase in equity, if you want this increase in GDP, you’ve got to get the other half working.
And politicians are learning that you need to ensure your women and girls have health, and have education.
Updated
More from the UK chancellor:
In Davos for World Economic Forum.My message at CBI lunch is this: as markets around the world heat up, we in Britain will keep a cool head
— George Osborne (@George_Osborne) January 22, 2016
US manufacturing has performed more strongly than expected at the start of 2016.
The Markit manufacturing PMI for January rose from 51.2 in December to 52.7 in January, better than the dip to 51.1 which had been expected.
The future of newspapers discovered at Davos pic.twitter.com/1JFAsns5Dj
— Graeme Wearden (@graemewearden) January 22, 2016
Wall Street opens sharply higher
The global rally prompted by hopes of further stimulus from the European Central Bank, as well as a surge in the oil price, is continuing in the US.
On Wall Street, the Dow Jones Industrial Average has started the last day of a tumultuous week with a rise of 180 points or 1.1%. Like other markets it is now in positive territory since Monday.
The S&P 500 is up 1% and Nasdaq has opened 1.8% higher.
Meanwhile Brent crude is now up 8% at $31.6 a barrel, helped by comments from Saudi Arabia that $30 oil is irrational and a rebound is likely, as well as the current cold spell boosting demand.
In Europe the FTSE 100 is up 2%, Germany’s Dax is 2.2% better and France’s Cac has climbed 3.4%.
Lagarde: I've got the energy and enthusiasm for a second term
Christine Lagarde has just spoken to the press, confirming that she will run for a second term as managing director of the International Monetary Fund.
In a brief statement, the IMF MD says she has pushed through “quite a few initiatives” and “moved the institution on, together with a fantastic team of staff”.
And I’m prepared to serve the membership longer.
So I’m full of energy and enthusiasm to do so.
Lagarde first told French TV this morning that she would run again, having been nominated by several finance ministers including the UK’s George Osborne.
Updated
Osborne on Brexit contingency planning
George Osborne says that the referendum debate in Britain will get “interesting” when voters learn what the alternatives are.
Answering a question after his speech in Davos on what contingency plans the Government has for Brexit, the chancellor said the civil service, the foreign office and the Treasury were currently “100% focused” on the negotiations.”
When it comes to the debate the Government will be required publish alternatives to membership of the EU and what arrangements we will have with our neighbours”, Osborne says.
“That’s going to be one of the most interesting aspects of the referendum debate”.
Osborne did not spell out the choices, but they include the Norwegian, Swiss and WTO options.
The Norwegian and Swiss options provide access to the European single market on payment of a fee but without any say in how the rules are made. The WTO option means Britain would get the same access to the EU market as any other country that was party to global free trade deals.
The chancellor played a straight bat when asked about Brexit, saying it was important the talks succeeded and that Britain had the right sort of relationship.
He placed special emphasis on how the UK would co-exist with a eurozone that was going to become more integrated due to necessity. But he seemed to be suggesting that the staying in camp would get a boost when the alternatives are laid out.
The Telegraph’s James Quinn helpfully tweeted some key points from the lunch too:
Osborne sends love note to China - says won't fret about each bump in the road, in it for the long term #WEF16
— James Quinn (@jamesrquinn) January 22, 2016
Osborne says we in Britain will keep a cool head
— James Quinn (@jamesrquinn) January 22, 2016
Elsewhere in Davos, the new Canadian prime minister has been chatting to the boss of Chinese e-commerce giant Alibaba.
The biggest star of this year's #Davos, Justin Trudeau, hanging out with Jack Ma at the @wef pic.twitter.com/crgj2UaML5
— Felix Salmon (@felixsalmon) January 22, 2016
We hear that it might have been a lunch of economic policy leaders - with the Archbishop of Canterbury thrown in for good measure.
Anyway, Christine Lagarde and entourage just breezed past at speed, and Bono came the other way, warbling happily (I don’t think *he* was in this lunch). So normal service is restored.
Mark Carney has now emerged from this lunchtime meeting, and we believe that George Osborne may have nipped into.
We don’t think there’s anything particularly unusual about this gathering - probably just a chance for all the key players to catch up.
Big crowd in Davos as we wait for world leaders to finish a lunchtime meeting pic.twitter.com/nJR5zpawKz
— Graeme Wearden (@graemewearden) January 22, 2016
It appears that some of the heavy hitters in Davos have held a lunchtime meeting.
A few have just left, including Kofi Annan, Ukranian president Poroshenko, Former US vice-president Al Gore, OECD chief Angel Gurria, and the Archbishop of Canterbury, Justin Welby.
Japan’s central bank chief, Haruhiko Kurodo, also emerged.
A big crowd has gathered, to see who is next.
Updated
George Osborne addresses UK businesses
After a weary time at Davos, UK reporters are resting their legs, tucking into a good lunch, and listening to George Osborne talk to business leaders (the things we go through for you.....)
George Osborne UK chancellor updates British business leaders over lunch in @Davos. @AccentureStrat glad to sponsor pic.twitter.com/ZvMuCTEyNq
— Peter Lacy (@peterlacy) January 22, 2016
It’s a typically business-friendly speech from the chancellor; he’s telling CEOs that his door is always open to them.
He’s also sounding relaxed about the turmoil in the markets, saying that Britain won’t panic because China has hit a few bumps in the road. The two countries are partners for the long term.
There’s a few curious quotes too:
Osborne: we should use it as a year of action - references Chinese proverb 'talk does not cook rice' #WEF16
— James Quinn (@jamesrquinn) January 22, 2016
Osborne is very Davos man this year: “Let us forge ahead and let others follow our dust tracks”
— Ed Conway (@EdConwaySky) January 22, 2016
Updated
Former UK prime minister Tony Blair is also in Davos (you’ll be unsurprised to hear), and has spoken about the UK’s upcoming EU referendum.
Blair doesn’t think Brexit would be sensible - again, not a shock given the man once rather fancied being president of Europe. The big issue is how we compete with emerging markets like India and China, rather than quitting the largest commercial market and biggest political union in the world.
In the end, Blair thinks, and hopes, David Cameron will get a “perfectly good deal from Europe”.
But he also predicts that there will be “more and more uncertainty” as the vote nears.
A quick look at the markets, which are continuing their rebound.
The FTSE 100 is now up 135 points or 2.3%, Germany’s Dax has added 197 points or 2% and France’s Cac has climbed 132 points or 3%. All three indices are in positive territory for what has been a tumultuous week.
On Wall Street, the Dow Jones Industrial Average is expected to open around 190 points higher.
Oil is also rising again, buoyed by comments from Saudi Arabia that prices could rebound later this year and also by the recent cold snap which is expected to have lifted demand.
Brent crude is now up nearly 6% at $30.95 a barrel.
Updated
Kerry: We can fight refugee crisis and protect security
Secretary of state John Kerry turns to the refugee crisis, saying President Obama will host a summit at the UN this autumn to rally the world community.
The aim is to:
- Increase by 30% the response to humanitarian funding appeals,
- Increase the number of humanitarian donors.
- To a least double the number of refugees resettled or given other safe channels.
- Expand by 10 the number of countries taking refugees
- Get a million children into school and a million people working legally.
The private sector, civil society, religious groups will be called on to integrate refugees and give them access to employment.
And Kerry insists that this isn’t a security threat, saying:
I know we can do it in a way that protects the security of our countries.
That sounds like a rebuttal to Donald Trump’s promise to impose a ban on Muslims from entering the US, if he become president, which caused such outrage.
Updated
Last year, people were claiming that Ebola would claim a million lives by last Christmas, Kerry continues. But with international co-operation, including US soldiers sent in by President Obama, the outbreak was stemmed (it killed around 11,000 people).
The US and Cuba still have differences, but we are much closer and able to discuss how to close then and “march down his road”, says Kerry.
Kerry: Iran's path to a bomb is blocked
John Kerry’s relentlessly upbeat message to Davos is not to give up, there is a lot of positivity in the world too.
Between 1990 and 2015 - child mortality has halved.
Life expectancy has increased dramatically. The number in extreme poverty has more than halved.
And progress is being made on getting more girls into education.
The nuclear deal with Iran is also vital, Kerry says, bringing the world back from the brink of war.
We were on the cusp of confrontation. I can’t tell you how many leaders, as I travelled through certain areas, told me ‘you’ve got to bomb it’.
Every one of Iran’s pathway to a bomb is now blocked, due to the 98% cut in its uranium stocks and reductions in its ability to refine then.
Updated
US secretary of state John Kerry is giving his keynote address to Davos.
He reminds delegates of the terrible scenes of 2015, from the tiny boy found drowned on a Turkish beach to the Jordanian pilot burned alive by ISIS.
I can’t think of a time in my life when I have seen so much atrocity live, thrown at us so relentlessly.
Some people wonder if we are trapped in an irreversible decline, a new normal. And if that were true, no politician could fight it.
I do not believe that is where we find ourselves. We are not the victims of a pre-destined future, Kerry continues. We feel frustration, because we want to change it.
People don’t fly to Davos to celebrate the status quo. You’ve come here to change the world for the better, and define the future.
Updated
Away from Davos for a moment. Bundesbank president Jens Weidmann, a notable hawk on the European Central Bank’s governing council, is thought to be one of the committee members who helped temper the bank’s stimulus programme in December. The meeting disappointed markets by taking less action than analysts had expected.
On Thursday ECB president Mario Draghi hinted at further measures at the bank’s meeting in March, and played down suggestions of splits on the council. And there may be a sign that his dovish words could be followed through:
Another reason to think #ECB will follow through on its dovish signals at March's meeting. Jens Weidmann has no vote pic.twitter.com/R9DL5HBEEi
— Capital Economics (@CapEconEurope) January 22, 2016
Updated
The only time Syrian refugees smile, if you meet them in Jordon or Lebanon or Greece, is when you ask them if they’ll ever go home, David Miliband continues.
They say ‘Inshallah’, God Willing. I want to go home.
And they’re not fleeing for economic reasons, they’re fleeing out of utter desperation that if Assad’s barrel bombs don’t get them, and ISIS don’t get them, the Russians will get them.
If we fail to see this as problem of monumental political failure inside Syria, we’ll never get to the source of it.
Miliband also hits back at suggestions that Europe could tighten its borders to stem the flow from the Middle East.
“Let’s get real about this”, the International Rescue chief says (channelling his old boss, Tony Blair?)
If any of us were in Syria, or in Lebanon where the average monthly paymen for refugee is $13 per month, we would be trying to get into Europe
And equally, all our experiences around the world shows that the higher you build the wall, the more you empower the smugglers.
Desperate people will always get around walls - the solution must be to fix the problems in their homeland.
Updated
David Miliband: Those who don't qualify as refugees shouldn't stay in Europe
Europe is playing catch-up, says David Miliband. The Syria war started in 2011.
And you’ve got to act at the source and in Europe, with a proper relocation process. Germany is showing leadership here, with its promise to screen asylum seekers.
@DMiliband says he supports Germany's screening of #refugees #BBCWorldDebate #Davos2016 #WEF16
— Suzanne Lynch (@suzannelynch1) January 22, 2016
And this might sound surprising from the head of a refugee agency, Miliband adds, but:
It’s right not just that people are screened, but it’s also right that those who don’t qualify for refugee status shouldn’t stay.
It’s absolutely vital to the integrity of the system that the distinction between a refugee, which is someone fleeing persecution, and someone on the other hand who is simply an economic immigrant, needs to be maintained.
In the US, where Miliband’s International Rescue charity is based, it has the geographical ability to set up a screening pipeline, and work with the UN to bring people over from the Middle East.
Relocation is part of the answer in Europe, but not the whole answer, he concludes.
Updated
Mogherini: Europe has woken up to refugee crisis
Federica Mogherini, high representative for Foreign Affairs and Security Policy, is arguing that Europe has now woken up to the migration crisis, after a slow start.
I don’t see it as a failure that we finally have less people dying at sea. In 2013, I saw the hundreds of people dying at sea in 2013, and not even one summit.
Now, we have realised it is a European problem.
Yes it took too long, but finally we are doing somthing
Is Europe failing on migration?
Federino Mogherini argues that Europe can’t afford to fail.
In 2015, we learned that European Union is not luxury -- not just the Erasmus student project, a single currency, free movement to go on holiday within European.
Finally, the leaders and citizens of Europe have realised that without European union we would not be able to face these challenges of migration and security.
So the debate moderator, Lyse Doucet, reads out a readers’ comment that EU leaders are failing and need to stop unlimited entry into Europr.
Who in the audience thinks Europe is taking too long to react to this crisis, Doucet asks?
There’s a big show of hands.
The next session, on the future of Europe, is getting underway shortly. You can watch it here. Miliband (D), Macron, and Mogherini are all on the panel, discussing migration and terrorism.
Updated
It sounds like today’s session on the Russian economy was quite tasty, with former finance minister Alexey Kudrin clashing with deputy PM Yury Trutnev.
#Davos Russian session. Kudrin asks Dep PM Trutnev when the Russian government is going to stop terrorizing business pic.twitter.com/c46YnW2VAe
— Bill Browder (@Billbrowder) January 22, 2016
We’ll dig the quotes out shortly. In the meantime:
1/2 @ianbremmer asks what can be done to bridge the divergent narrative btw EU, USA and Russia at #wef in Davos
— Mirela Mazalu (@mirelamazalu) January 22, 2016
2/2 Replies from A.Kudrin & Y. Trutnev: OECD, beware double standards & a more just world will bring better understanding #DiplomaticReplies
— Mirela Mazalu (@mirelamazalu) January 22, 2016
Updated
WTO chief optimistic for trade deal
Roberto Azevêdo, the director general of the World Trade Organisation is in Davos seeking to push forward with trade liberalisation in 2016.
He will host a small gathering of trade ministers tomorrow but thinks the mood is positive.”
I have never seen talks on trade so exciting. I have never heard the words “WTO” and “urgency” in the same sentence”, Azevêdo says.
That’s perhaps hardly surprising given that the WTO spent the period from November 2001 until last December fruitlessly trying to conclude the Doha round - a comprehensive package that included agriculture, services, manufactured goods, the rules of trade and special help for the poorest countries.
Azevêdo says the WTO has had to become more flexible, seeking a multilateral deal amongst all its 160-plus members but willing to negotiate coalitions of the willing when unanimity proves impossible.
“The system can work. It is working. We have learned how to live with the different views and the very strong disagreements among our members.”
Future areas for talks include e-commerce, investment, digital trade and data flows, Azevêdo says.
Here’s the Treasury on the UK borrowing figures:
Today’s figures show that borrowing is down compared to last year, as a number of one-off factors that have affected the data in recent months have unwound.
But there is more to do. At a time when we face a dangerous cocktail of risks from the global economy we must continue to work through our plan to deliver a surplus and provide economic security for working people.
And here’s the Office for National Statistics on the disappointing retail sales numbers:
Promotions during the 2015 Christmas period were more spread out compared with 2014, with retailers offering discounts over a longer period of time rather than a one day event. Clothing and footwear stores struggled in December due to the milder weather.
Meanwhile Dennis de Jong, managing director at UFX.com, said:
UK retail sales figures for December always had the potential to be a banana skin for Chancellor George Osborne, and he will be disappointed to see sales slide at such a critical time for the sector.
The government would have hoped to see high streets up and down the country flooded with shoppers in the run up to the festive period in a bid to boost the economy, but today’s figures tell a markedly different story.
All eyes will now be on the UK’s GDP reading next week to see how much poor retail sales figures have affected the bigger picture.
Updated
..But better news on public finances
UK public borrowing - excluding state controlled banks - dropped to £7.4bn in December from £11.7bn in December 2014.
But chancellor George Osborne - who is warning at Davos of a “hazardous mix” of risks to the global economy - will still need a big surplus in next month if he is to reach his full year target of £68.9bn as laid out in the Autumn Statement.
UK retail sales fall in December
Retail sales in the UK came in weaker than expected during the crucial Christmas period.
Sales volumes fell 1% in December compared to a 1.3% rise in November - itself revised down from an initial 1.7% increase - and below analysts forecasts of a 0.5% decline. That leaves them up 2.6% year on year, again below expectations of a 3.5% rise.
These were the weakest figures since September 2014.
UK retail spending fell 1% in December year on year compared to a 0.9% rise in November, the biggest decline since May 2009.
Updated
Eurozone manufacturing and services weaker than expected
The eurozone economy got off to a weaker than expected start to the year, according to the latest data.
The Markit composite Purchasing Managers Index - which measures services and manufacturing - fell from 54.3 in December to 53.5 in January in the initial estimates. This was the weakest growth for almost a year, and follows ECB president Mario Draghi’s cautious comments on the effect of the recent oil price slump and market turbulence. Price cutting and a weak euro failed to boost demand, said Markit.
Flash #Eurozone #PMI shows that economic growth cools at start of 2016. More here: https://t.co/totS2OR80e pic.twitter.com/rqXp80JZwH
— Markit Economics (@MarkitEconomics) January 22, 2016
But its chief economist Chris Williamson, said it would be wrong to get too worried:
The cooling in the pace of growth in euro area business activity at the start of 2016 is a disappointment but not surprising given the uncertainty caused by the financial market volatility seen so far this year.
It would be wrong to get too worried. The survey data are consistent with GDP rising at a steady quarterly rate of 0.3-0.4% at the start of the year.
Howard Archer at IHG Global Insight said:
The January purchasing managers’ surveys for Eurozone manufacturing and services activity are weaker than expected -showing overall expansion moderating to an 11-month low - and raise concerns that heightened global economic uncertainty and financial market turmoil are weighing down on a relatively fragile Eurozone cyclical upturn.
Global economic uncertainties and problems are clearly a significant threat to Eurozone growth prospects not only through limiting exports but also potentially weighing down appreciably on business confidence, which could affect employment and investment decisions. Further constraints to Eurozone growth comes from high debt levels in some countries and structural limitations.
Nevertheless, the Eurozone January purchasing managers’ surveys are far from disastrous, and they still show reasonable new business growth, rising backlogs of work and decent employment growth. Furthermore, confidence in the services sector was at the highest level since May 2011...
However, there are likely to be questions about just how much extra stimulus the ECB is likely to deliver in March having been disappointed in December
Updated
Here’s our story on the recovery in stock markets:
European and Asian stock markets bounced back at the end of a tumultuous week, as oil prices recovered and the European Central Bank president, Mario Draghi, raised hopes of further stimulus measures.
It was a week that involved panic selling in global markets, pushing several of them, including London and Japan, into bear market territory, as oil prices tumbled to 13-year lows below $28 a barrel and further intensified fears over the health of the global economy.
On Friday, however, Japan’s Nikkei rallied nearly 6%, its biggest one-day gain in four and a half months, helped by a weaker yen and speculation that the Bank of Japan could unveil new stimulus measures at its meeting next week.
In Europe, Draghi hinted that the ECB was ready to inject fresh stimulus into the eurozone at the March meeting – sooner than many investors had been expecting.
The comments pulled European markets off their lows on Thursday afternoon, and gave them a further boost on Friday, with the FTSE 100 index in London gaining nearly 100 points, or 1.7%, to 5872.74 in early trading. Germany’s Dax and France’s CAC were both up 1.8% and Spain’s Ibex rose 2%.
Earlier came more signs of uncertainty in the eurozone’s economy, confirming ECB president Mario Draghi’s concerns.
In France, the manufacturing sector stalled in January although the services sector picked up after the November terror attacks in Paris.
Markit’s initial reading for January showed the French manufacturing Purchasing Managers’ Index falling from 51.4 in December to 50 in January.
But the services index rose from 49.8 to a better than expected 50.6, so the composite index - which tracks both sectors - climbed from 50.1 to 50.5 in January.
Over in Germany, Markit’s composite Purchasing Managers’ Index fell from 55.5 in December to 54.5 in the preliminary reading for January. This was slightly below expectations. But Markit economist Oliver Kolodseike said the index still suggested growth in the country’s economy, and it appeared unfazed by recent turbulence:
Germany’s private sector economy was largely unaffected by the recent stock market turmoil and intensifying uncertainty stemming from the so-called migrant crisis at the beginning of the year, according to latest survey results. Although the headline index (which measures the combined output of manufacturing and service sector firms) fell to a three- month low, the latest reading was higher than the 2015 average and indicative of robust, although unspectacular, growth of the German economy.
Updated
Is France’s next president at Davos today?
In #Davos, @flacqua asks @EmmanuelMacron the big question on @BloombergTV : "Would you consider running for president?". He doesn't answer.
— Maxime Sbaihi (@MxSba) January 22, 2016
Elsewhere in Davos, Harvard professor Ken Rogoff has warned that 2016 is a “rough year” for emerging markets, due to the concentration of problems.
We don’t quite know what’s happening in China, it’s slowed down significantly.
There’s Russia, where the central bank governor did a “wonderful job” letting the ruble flow. They would have been in crisis otherwise.
Then there’s Brazil’s huge political problems. Brazil’s recession might be its worse in 100 years.
I’m very happy about what’s happening in Argentina, though, Rogoff adds, to his fellow panelist Alfonso Prat-Gay, the new Argentina’s finance minister.
Prat-Gay clenches his fists in triumph.
But Prat-Gay then warns that Argentina has “unacceptable and immoral” poverty rates of 30%, with 10 million people who cannot make ends meet.
So, nothing sensational from Draghi on monetary policy -- but a level-headed argument that Europe could ride out the migration crisis, and a warning that it cannot afford to fail.
I don’t think the architects of the “ever closer union” had in mind a linear process: Mario Draghi https://t.co/Egeq8ppLum #wef #draghi
— World Economic Forum (@Davos) January 22, 2016
Q: Is Draghi worried that the ‘linear’ push towards ever-closer European union is faltering?
Draghi isn’t convinced by this argument.
I don’t think it was ever meant to be a linear process. The founders of the EU, because they were pretty intelligent, they expected some bumps on the way.
On Greece, Mario Draghi says Europe is in a much better situation than last June. The Greek government has made progress on reforms, and fiscal consolidation.
Negotiations are taking place right now [between Greek officials and its creditors]
There are three areas of interest:
- The fiscal targets for 2018-19
- Pension reforms - which seems to be a ‘key point’, Draghi says.
- Financial sector reforms . There are still a high-level of non-performing loans in Greek banks. So we need a process by which these loans can be sold.
I’m pretty sure that an agreement will be found, so that the first review can be swiftly concluded, Draghi conclu
The sooner it’s concluded, the sooner the Greek economy can go back to normal, Draghi concludes.
Updated
Draghi effect lifts European markets
As ECB president Mario Draghi speaks in Davos, his comments on Thursday suggesting there may be further stimulus measures at the bank’s meeting in March continue to give a boost to markets.
At the open in Europe, the FTSE 100 has jumped 100 points or 1.7%, while Germany’s Dax is up 1.8%, France’s Cac has climbed more than 2% and Spain’s Ibex is up nearly 2%.
Updated
Draghi: Refugee crisis will change Europe
The refugees heading to Europe are a challenge and an opportunity for Europe, says Mario Draghi.
Our society will be changed by this. In which direction, we can only guess.
It is also premature to know how long it till take to transform this challenge into an opportunity.
But if there is determination, and confidence. that’s the most important thing, because the size of the challenge could actually undermine the confidence and make fear prevail over any other consideration. And the challenge is lost.
Right now, we are all working to make it into an opportunity, the ECB president adds.
But we mustn’t underestimate the scale of the crisis - the education levels of the refugees, their age, and the willingness of the European countries themselves to invest and co-operate.
Draghi says he’s also confident that a way will be found to share the financial burden of the refugee crisis across Europe.
Not to co-operate would be to ignore the challenge, and that would not make it disappear.
Updated
Draghi: Refugee crisis will push up public spending
Mario Draghi, head of the European Central Bank, is discussing the European economy now.
He has warned that Euro governments will have to spend more to tackle the refugee crisis. In economic terms, that works out as a fiscal stimulus that could actually push up Europe’s anaemic growth rate.
Draghi: new driver of growth will be increase of public spending to cope w #refugeecrisis-growth perspectives haven't changed #Davos2016
— Jorge Valero (@europressos) January 22, 2016
Draghi is also blaming the slump in the oil price, and problems in the emerging markets, for pushing Europe’s inflation outlook even lower.
Having made her announcement, Christine Lagarde is now being congratulated by fellow Davos delegates while she snatches a quick breakfast. Two security guards just made it very clear that she’s not speaking to the press right now.
Lagarde’s term of office ends in July. Yesterday, Osborne said she was an ‘outstanding leader’, who would take the world economy forward.
But she does also face the prospect of trial in a French court over the Tapie Affair, so there could be a few twists in this tale yet.
Lagarde to run for second term as IMF chief
Breaking news from Davos- Christine Lagarde, managing director of the IMF, has said she will run for a second term.
She made the announcement on French TV a few minutes ago, having already been nominated by several finance ministers, including George Osborne.
Lagarde said:
“I am candidate to a new mandate. I was honoured to receive from the start of the process the backing of France, Britain, Germany, China, Korea.”
Updated
European markets set to open higher
Super Mario Draghi seems to have done it again. Ahead of his speech to Davos the ECB president has lifted markets with his hints of further stimulus at the bank’s March meeting. Also helping was talk from Saudi Arabia of a recovery in oil prices later this year, which has pushed Brent Crude more than 5% higher to $30.81 a barrel.
So on Wall Street the Dow Jones Industrial Average jumped... while in Asia the Nikkei soared nearly 6% and the Hang Seng 3%. A tumultuous week looks set for a positive end.
That even applies to the Shanghai Composite, which is up 1.3% on the day and 0.5% on the week - a surprising outcome given the chaos in the markets over the past few days. Michael Hewson, chief market analyst at CMC Markets UK, said:
A sharp rebound in crude oil as well as some warm words from ECB President Mario Draghi turned out to be the perfect ingredients to prompt a sharp snapback in equity markets yesterday after Wednesday’s rout, and this rebound has spilled over into the Asia session with crude oil recovering above the $30 level. The big question now is whether this marks a medium term base, or just a minor relief rally before another leg lower. Given yesterday’s rebound and the subsequent positive session in Asia there now remains the very real possibility that we could well finish the week in positive territory, and if that happens it would be a remarkable turnaround after Wednesday’s carnage.
The opening calls for Europe from IG show an upbeat start:
Our European opening calls: $FTSE 5821 up 47 $DAX 9671 up 97 $CAC 4246 up 39 $IBEX 8515 up 71 $MIB 18887 up 164
— IGSquawk (@IGSquawk) January 22, 2016
Updated
Davos 2016: Draghi, Kerry, Macri to speak
Good morning from Davos, where the third day of the World Economic Forum is getting underway.
There’s a big focus on geopolitics today, with US secretary of state John Kerry giving a big keynote address.
The migration crisis is also in focus, as Europe braces for another inflow of refugees from the turmoil in the Middle East.
Overnight, France’s prime minister, Manuel Valls, has warned that the crisis is destabilising Europe.
But there’s no escape from economic worries - European Central Bank chief Mario Draghi is due to address Davos shortly.
Investors around the world will be watching closely; yesterday, Draghi hinted that the ECB could take fresh action in March.
SuperMario due to speak at the World Economic Forum, in Davos at 7.45am
— Brenda Kelly (@Brenda_Kelly) January 22, 2016
Meanwhile, UK prime minister David Cameron and chancellor George Osborne will be going round Davos, trying to stir British businesses into supporting them in the EU referendum.
And Argentina’s president, Mauricio Macri, is in town. Might he mention the Falklands Islands?
Here’s some of the things we’ll try to cover:
- 8.45am CET (7.45am GMT): Mario Draghi discusses the outlook for the eurozone economy
- 10.30am: Securing the Middle East and North Africa, with Iraqi prime minister Haïdar Al Abadi and Lebanon’s Tammam Saeb Salam.
- 11am CET : Europe at a tipping point: with French economy Emmanuel Macron, EU foreign affairs chief Federica Mogherini, and David Miliband, President, International Rescue Committee
- 11.30am CET: John Kerry’s special address
- 1.15pm CET: Press conference with the President of Argentina, Mauricio Macri,
- 4.45pm CET: Preparing for the next pandemic, including Bill Gates and Jim Kim, head of the World Bank.
Updated
