Closing summary
Time for a recap.
The new US administration has opened up a new front against Europe, accusing Germany of unfairly profiting from the “grossly undervalued” euro. Peter Navarro, who heads up Donald Trump’s new National Trade Council, made the comments in an FT interview today.
The comments sent the euro spiking; it’s now at its highest level since November.
Eurozone GDP rose by 0.5% in the last three months of 2016, new data shows, meaning that it grew faster last year than America.
Inflation is also on the rise; the consumer prices index jumped by 1.8% year-on-year. But the increase was mainly due to energy prices, with core inflation remaining at 0.9%.
There was also relief that the eurozone jobless rate fell again, to 9.6% in December. But the divisions in Europe were clear to see - with Germany’s unemployment rate hitting a post-reunification low, while Italy’s remains at the highest since July 2015.
Elsewhere in the eurozone, Greece’s deadlocked talks with creditors have once more raised the spectre of Grexit.
And back across the Atlantic, US consumer confidence dropped in January from the fifteen year high seen in December.
On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow.
European markets end lower
Despite a busy day for economic and corporate news, the actions of the Trump administration were once again at the forefront of investors minds. The fallout of Trump’s ban on travel, his firing of the acting attorney general, followed by the attack on the euro and Germany by his top trade advisor, have all added to the mood of growing uncertainty. Some unimpressive updates have not helped. Chris Beauchamp, chief market analyst at IG, said
A double whammy in the form of misses for the Chicago PMI and consumer confidence on the economic front, plus a poor set of numbers from economic bellwether UPS, have resulted in a continuation of yesterday’s risk-off atmosphere. Only in London is the mood more optimistic, where once again it is the FTSE’s mining contingent that is helping to [support] the index.
In the end the FTSE also succumbed to the negative mood. The final scores showed:
- The FTSE 100 finished down 0.27% or 19.33 points at 7099.15
- Germany’s Dax dropped 1.25% to 11,535.31
- France’s Cac closed 0.75% lower at 4748.90
- Italy’s FTSE MIB fell 0.9% to 18,590.73
- Spain’s Ibex ended 0.49% lower at 9315.2
- In Greece, the Athens market lost 0.38% to 611.75
On Wall Street, the Dow Jones Industrial Average is currently down 138 points or 0.7%.
It’s probably no surprise that market volatility is on the rise after the first few days of the Trump presidency. And after a dip on Monday it is back up again:
The Vix is climbing again after weaker US economic data and more messages from the Trump administration, any move above 15 is worth noting.
— City Index (@CityIndex) January 31, 2017
Despite the drop in US consumer confidence, it is still at fairly high levels. Paul Sirani, chief market analyst at Xtrade, said:
Although slightly down on last month’s historic high US consumer confidence remains strong in the face of uncertainty.
The US economy is enjoying robust numbers at the moment and Fed Chair Janet Yellen will likely be inching closer to the first of three possible interest rate rises this year.
American citizens appear to be confident in the potential growth of business conditions, stock prices and jobs. However, the world’s largest economy is now being steered by an unpredictable new leader in the form of Donald Trump and the year ahead could still be bumpy.
US consumer confidence falls back
That didn’t last long...
US consumer confidence has dropped, having spiked in the aftermath of the US election victory.
America’s Conference Board reports that its consumer confidence index dipped to 111.8 this month, down from the fifteen-year high struck in December.
Conference Board says the spike in % of U.S. consumers expecting higher incomes in December following the election unwound this month pic.twitter.com/W8KAts0R2G
— Matthew B (@boes_) January 31, 2017
Grexit talk returns to Greece
Over to Greece where deadlocked talks with creditors keeping the debt-stricken country afloat have once again raised the spectre of Grexit and the need for contingency plans.
Our correspondent Helena Smith reports from Athens:
It is a scenario that in the ranks of Syriza, the governing left-wing party, no one openly wants. But as the extent of the impasse between Greece and its creditors becomes ever clear – with lenders insisting that without further cuts further bailout loans cannot be made – prominent Syriza figures have begun to talk publicly of the need to address Grexit as a possibility.
Speaking on Skai TV this morning, Nikos Xydakis, former alternate foreign minister for European affairs, said discussion of euro exit should not longer be considered “taboo.”
“There should be no taboos when we’re talking about the nation’s fate. We have come to a point where the populace has run out of stamina. I believe we need an in-depth political and national discussion that has not taken place in seven years and, of course, this discussion needs to start in parliament.”
Given that Germany’s finance minister had repeatedly raised the issue of Greece returning to the drachma it was, he added, impossible to avoid the subject. “What can you say? I’m not going to discuss it when Mr Schauble is saying it,” he asked.
Expounding on his belief that the euro zone will some day dissolve, Syriza MEP Stelios Kouloglou similarly said Athens should be working on contingency plans for a scenario that should not be discounted. “We have to be prepared for every eventuality … the government should be working on a plan,” he told the radio station, Action FM, insisting that if euro exit were to happen Greece should not do it alone but on the coattails of another euro zone member also exiting.
“Italy may leave. If that happens Greece should hide behind it and leave at the time.”
In the wake of virulent response to his comments Xydakis later tried to clarify on his FaceBook page that he was not in favour of Grexit. But his remarks appeared to have opened the door to something far bigger than he may have intended.
In a letter to EU commission president Jean-Claude Juncker, the former commissioner Anna Diamantopoulou demanded to know what plans had been drawn up around Grexit at the height of the country’s debt crisis in 2015.
“Xydakis’ statements - expected although we did not know who would utter them or when - have formally brought the views and thoughts of members of today’s Syriza-Anel coalition government to public discussion. The dilemma, drachma or euro, will sow division with civil war passion in a country which should urgently unite and stand on its feet.”
Over in New York, Wall Street has opened lower as investors continue to watch political developments closely, and nervously.
The Dow Jones industrial average shed 72 points, or 0.35%, in early trading to 19,901.
Trump’s decision to fire his acting attorney general overnight, following the travel ban that sparked protests in America and beyond, is clearly worrying some traders.
FXTM Vice President of Market Research, Jameel Ahmad says that:
Although some of the selling momentum experienced yesterday throughout the stock markets has cooled down, the market headlines across the globe continue to be dominated by the executive order from Donald Trump to ban certain nationals from entering the United States.
While it has to be taken into account that the record moves seen in the stock markets last week would increase the risks of some investors being tempted to take profits from positions, there is no doubting that this move from Trump has caused outrage across the globe and such actions represent a risk to the market sentiment.
Reuters have helpfully published Angela Merkel’s response to Peter Navarro’s criticism:
Speaking in Stockholm, on a visit to Sweden, the German chancellor said:
“Germany is a country that has always called for the European Central Bank to pursue an independent policy, just as the Bundesbank did that before the euro existed.
“Because of that we will not influence the behaviour of the ECB. And as a result, I cannot and do not want to change the situation as it is.”
City experts aren’t convinced by Peter Navarro’s comments about the euro:
Now FT reports Trump's top trade adviser accusing Germany of using a “grossly undervalued” euro to exploit the US and its EU partners 2/2
— Andrew Neil (@afneil) January 31, 2017
Here’s former UBS chief economist George Magnus:
Which of course is hogwash because it isn't Germany ms currency to influence or manage https://t.co/UBdCZTmgNi
— George Magnus (@georgemagnus1) January 31, 2017
Bloomberg’s Maxime Sbaihi tweets:
Anyone claiming that the euro is an "implicit Deutsche Mark" has missed 5 years of #ECB policies shaped against the will of the Bundesbank.
— Maxime Sbaihi (@MxSba) January 31, 2017
Keith McCullough, CEO of Hedgeye Risk Management, is even less impressed:
ridiculously wrong comment of the day from #Navarro >
— Keith McCullough (@KeithMcCullough) January 31, 2017
Navarro says Germany is benefiting from gross undervalued euro -FT@realDonaldTrump
Updated
Merkel: We can't influence euro rate
Newsflash: German chancellor Angela Merkel has responded to Peter Navarro’s attack.
She says that Germany cannot influence the value of the euro, and that the country has always pushed for the European Central Bank to be independent.
*MERKEL SAYS DOESN'T WANT TO INFLUENCE EURO EXCHANGE RATE
— Arne Petimezas (@APetimezas) January 31, 2017
Merkel response over weak Euro claim - Germany can't influence Euro and has always called on ECB to have independent policy
— Rachel Kennedy (@rachelkennedy84) January 31, 2017
Does Peter Navarro have a point, when he claims Germany is exploiting other countries through its cheap currency?
Well.... Germany posted a record trade surplus in 2015, and will probably do the same when 2016’s numbers are added up. Cheap currencies boost exports, and no-one would argue that the euro would be more valuable if you removed the weaker members from the currency bloc.
Back in 2015, former Federal Reserve chief Ben Bernanke blogged that the German trade surplus was “a problem” for the global economy. He argued that Berlin should boost government spending, and workers’ wages, to help drive it down.
However.... Bernanke also pointed out that Germany has little control over the value of the euro.
It has fallen near to parity with the US dollar because the European Central Bank has slashed interest rates to record lows (unpopular in Germany), imposed negative rates on banks (unpopular in Germany) and created tens of billions of euros to buy government bonds (unpopular in Germany).
Currency wars aren’t a new issue either. NBC correspondent Hans Nichols points out that the Obama administration had its own concerns about the euro, when it was stronger:
Worth noting that many of Obama's eco aids (@Austan_Goolsbee?) held a similar view, but back when EURUSD at 1: 1.35. https://t.co/ZCqUIT9V15
— HansNichols (@HansNichols) January 31, 2017
Updated
The prospect of a currency spat between the US and the eurozone has pushed the euro up against all major currencies.
The single currency is up 0.7% against the dollar now, to $1.0764, after Trump adviser Peter Navarro claimed it was “grossly undervalued”.
This means the US dollar is still on track to post its worst January since 2008 (as recorded earlier).
The euro has also gained 0.6% against the pound to 86.1p, meaning one pound is worth €1.1608.
Updated
Peter Navarro’s attack on Germany over the euro shows that the Trump administration are concerned about countries who run a trade surplus with the US.
Speaking on Bloomberg TV a moment ago, Citigroup global econonomics director Ebrahim Rahbari says that “talking about a currency is much easier than taking specific measures”.
Currency rates have clearly been under discussion for some time, at forums such as the G20, Rahbari points out.
So Navarro is “ratcheting up the discussions that have previously taken place”, he concludes.
FT: Trump’s top trade adviser accuses Germany of currency exploitation
Hold onto your hats, folks.
The Financial Times is reporting that one of Donald Trump’s advisers has hit out at Germany, saying it gets an unfair advantage due to the weakness of the euro.
Here’s the story, by the FT’s Shawn Donnan:
Germany is using a “grossly undervalued” euro to exploit the US and its EU partners, Donald Trump’s top trade adviser has said in comments that are likely to trigger alarm in Europe’s largest economy.
Peter Navarro, the head of Mr Trump’s new National Trade Council, told the Financial Times the euro was like an “implicit Deutsche Mark” whose low valuation gave Germany an advantage over its main partners. His views suggest the new administration is focusing on currency as part of its hard-charging approach on trade ties.
In a departure from past US policy, Mr Navarro also called Germany one of the main hurdles to a US trade deal with the EU and declared talks with the bloc over a Transatlantic Trade and Investment Partnership dead.
Here’s the full story:
Trump’s top trade adviser accuses Germany of currency exploitation
The euro is now rising sharply against the US dollar, as traders anticipate action from Washington over this issue. It’s gained almost 0.5% to €1.074.
Dollar is trading lower in the wake of these comments: Trump trade adviser accusing Germany of manipulating currency https://t.co/2qu7sxB4Qi
— Alice Ross (@aliceemross) January 31, 2017
Updated
Eurozone data splurge: What the experts say
Here’s some early reaction to the news that eurozone growth and inflation have risen, while the unemployment rate has hit a new seven-year low.
Michael Hewson of CMC Markets:
In the Eurozone GDP figures have been released this morning. Inflation in Spain has increased to 3% as has the cost of living in France, up by 1.4%; while the broader EU CPI measure jumped to 1.8% largely driven by a jump in energy prices.
The French economy grew 1.1% in 2016 slightly less than expected but despite this Michel Sapin, the French minister of finance, insisted the French economy is still moving in the right direction and reducing unemployment.
Overall, Eurozone GDP came in at 0.5% for the last quarter which was better than forecast and unemployment fell. All this positive data suggests the Eurozone is recovering slowly, though Italy continues to remain a weak point.
Anna Stupnytska, global economist at Fidelity:
#Eurozone headline inflation accelerates, big surprise in #Spain and #France. Good for #EUR. Decision time for #ECB #Draghi ahead. pic.twitter.com/GOgAfPX0Ho
— Anna Stupnytska (@AnnaStupnytska) January 31, 2017
In 2016 #Eurozone #economy grew faster than #US, for the first time since the crisis. #Trump #Brexit #ECB #BOE #Fed pic.twitter.com/XPSmxeHTl1
— Anna Stupnytska (@AnnaStupnytska) January 31, 2017
Alex Lydall, Head of Dealing at Foenix Partners,
A fresh and intricate new conundrum has reared its ugly head for Mario Draghi this morning as the pressure of a significant uplift in German inflation has pushed the Eurozone figure up to 1.8% for January.
The renown ‘powerhouse’ of the Eurozone is now putting significant pressure on the ECB President as euro-sceptics are quickly pointing out that stimulus measures are falling far short of creating a balanced and improved bloc state. Whilst GDP saw an uplift this morning, as well as a diminishing Unemployment rate also posted, inflation has, and will be for the foreseeable future, the focus.
With such wild swings upwards, Draghi will have to adopt Monetary policy accordingly, which at present isn’t hugely clear as to what path he should, or is willing to take. Many analysts suggest Quantitative Easing is falling far short of improving the economic situation, and Draghi always notes ‘other tools’ which he can, and will adopt - perhaps now is the time for him to lay his cards on the table, so to speak.
Neil Wilson of ETX Capital:
The ECB has been wont to point out that core inflation remains a problem and the uptick in prices might not last. And again this remains stubbornly below the headline figure at just 0.9%.
No cause for the ECB to tighten monetary policy just yet but refreshingly upbeat figures nonetheless. The data is improving in Europe but there is as yet no sign of anything other than monetary policy divergence between the Fed and European Central Bank. Greece’s debt problems won’t go away and political risks are abundant.
The eurozone didn’t manage to match Britain’s economy, though.
UK GDP grew by 0.6% in the last three months of 2016, and by 2.2% during the year.
The eurozone outperformed the United States last year.
Today’s growth figures show that the eurozone expanded by 1.8% in 2016; last Friday, we learned that America only grew by 1.6%.
This is the first time the Eurozone has grown faster than the US in a calendar year since 2008, when the financial crisis struck.
Updated
Eurozone unemployment falls: the details
Eurozone politicians will be delighted to see the region’s jobless rate fall to 9.6% (not 9.8% as I mistyped earlier, sorry).
This is the lowest rate recorded in the euro area since May 2009.
The jobless rate across the European Union came in at 8.2%, unchanged from November, and the lowest since February 2009.
The lowest rates were recorded in the Czech Republic and Germany, while Greece suffered the worst jobless rate (23.0% in October 2016) followed by Spain (18.4%).
There are still 20.065 million men and women out of work in the EU, including 15.571 million in the euro area.
And young people are still finding it hard to find work; in December 2016, the youth unemployment rate was 18.6% in the EU28 and 20.9% in the euro area, compared with 19.5% and 21.8% respectively in December 2015.
Important point: eurozone core inflation (which strips out food and energy) was only 0.9% this month, rather than the headline figure of 1.8%.
That’s little comfort to households facing a cash squeeze, but it does give the European Central Bank a good reason not to be bounced into changing monetary policy.
Julien Lafargue, European equities strategist at JP Morgan, explains:
“Headline inflation is clearly picking up in the Eurozone, but a lot of that is linked to energy price base effects (+8.1% compared with +2.6% in December). As highlighted in their most recent press conference, the ECB itself is willing to look through these transient gains.
As such, we believe that it is too early to call for any sort of further “tapering” in the region, especially ahead of a very busy political agenda.
The eurozone's headline inflation rate is at a 4-year high but core inflation is still lagging behind. https://t.co/eB5pQv6Z0T pic.twitter.com/csR7WN8nXR
— fastFT (@fastFT) January 31, 2017
Growth up, inflation up, unemployment down....
The Euro Area economy right now. pic.twitter.com/1xzCmF443V
— Rupert Seggins (@Rupert_Seggins) January 31, 2017
On an annual basis, the eurozone grew by 1.8% last year - up from 1.5% in 2015.
Euro area GDP +0.5% in Q4 2016, +1.8% compared with Q4 2015: preliminary flash estimate from #Eurostat https://t.co/8krAFeAw45 pic.twitter.com/yyci1wEQU7
— EU_Eurostat (@EU_Eurostat) January 31, 2017
Eurozone growth jumps to 0.5%; inflation leaps
My Reuters machine is gasping for air as a burst of newsflashes ripple out from the eurozone, giving new insights into the European economy.
New growth figures show that the euro area grew by 0.5% in the last three months of 2016, up from 0.4% in the previous quarter.
That’s an encouraging sign, suggesting the region’s recovery is picking up pace.
But inflation has jumped by more than expected, to 1.8% in January. That’s the highest in almost four-years, driven by a steep rise in energy prices.
Euro area inflation up to 1.8% in January 2016; the highest since February 2013: see flash estimate from #Eurostat https://t.co/X0q2tkKeDb pic.twitter.com/C3KvvIEnqn
— EU_Eurostat (@EU_Eurostat) January 31, 2017
The European Central Bank’s target is to keep inflation just below 2% - these figures are surely going to fuel calls for the ECB to stop its bond-buying stimulus programme, and consider pushing interest rates up.
And the unemployment rate across the region has dropped to 9.6% in December <corrected>, a new seven-year low.
Wow - Eurozone inflation jumps to 1.8% in Jan, near ECB target of 2%. Unemployment also at seven year low - @AFP
— Danny Kemp (@dannyctkemp) January 31, 2017
Details and reaction to follow....
Updated
The latest unemployment news from Italy is rather disappointing.
The Italian jobless rate came in at 12% in December, higher than expected, while November’s reading has been revised up from 11.9% to 12%.
These are the highest readings since July 2015.
Dollar on track for worst January since 2008
The US dollar is poised to suffer its worst start to any year since 2008.
The greenback has fallen by 1.9% against a basket of currencies this month, partly thanks to yesterday’s selloff as Donald Trump’s flurry of executive orders alarmed traders.
The pound, for example, has gained over 1.5 cents against the US dollar this month, from $1.233 to $1.25.
Kit Juckes, currency expert at Societe Generale, says it’s very hard to know how the markets will react to Trump.
President Trump’s travel ban - and his associated decision to fire the acting Attorney General - dominates sentiment and remains good for Treasuries, the yen (and gold), but bad for bonds and the dollar.
How long will market sentiment to be affected? How far can the dollar and yields fall on this? I’m not sure serious analysis is possible, and I don’t trust my gut instincts on something as far from the usual state of affairs, but my bias is still that we’ll get back to the Trump economic program, and the implications for Fed policy, before too long.
More prosaically, markets will focus on the US jobs data due Friday.
German unemployment rate falls to 5.9%
Newsflash: Germany’s jobs market remains as strong as ever.
The unemployment total in Europe’s largest economy has fallen again this month, by 26,000 people, to 2.605m.
That takes Germany’s jobless rate down to 5.9%.
*GERMAN JAN. UNEMPLOYMENT FALLS ADJUSTED 26,000; EST. 5,000 DROP
— Michael Hewson (@mhewson_CMC) January 31, 2017
*GERMAN JAN. ADJUSTED JOBLESS RATE AT 5.9%; EST. 6.0%
— Michael Hewson (@mhewson_CMC) January 31, 2017
UK online supermarket group Ocado is the best performing stock across Europe, jumping by 6.5%.
It posted a 21% jump in pre-tax profits this morning, to £14.5m, and told shareholders it was busier than ever, in its long-running attempt to sign an overseas deal.
The only problem is that we’ve been waiting YEARS for Ocado to team up with an international partner. The company insists there are plenty of suiters in the wings, but there’s still no actual agreement.
Retail analyst Nick Bubb predicts:
Management will have to put up with more questions from the City today about the failure to deliver an Overseas deal in the analysts meeting at 9.30am…
Updated
European stock markets have opened nervously, following those losses in Asia overnight.
Britain’s FTSE 100 has inched up by 0.2%, while the French CAC and German DAX are both flat.
Kathleen Brooks of City Index says investors are juggling political and economic concerns right now.
It’s been an interesting start to the week, with protests against President Trump’s immigration ban dominating market news and reaction. Trump’s use of executive power has not stopped with immigration; on Monday he signed a new order that will cap business regulation.
While politics took centre stage at the start of the week, earnings from Apple and Exxon on later today, along with a flurry of central bank meetings this week will be critical for determining what matters more to markets right now: politics or economics.
Back to GDP....and Austria has posted another quarter of solid growth.
Austrian GDP expanded by 0.5% in the last three months of 2016, matching the (upwardly revised) growth in July-September.
Austria’s statistics body said that consumer spending and investment were the main factors behind the growth, as in France.
#Austria: Economy ends 2016 on a solid footing. 4Q16 GDP growth at 0.5% QoQ
— Inga Burk (@IngaBurk) January 31, 2017
Inflation leaps in Spain and France
Newsflash: Inflation in Spain has surged this month, to 3% on an EU-harmonised basis.
The cost of living in France has accelerated too, jumping from 0.8% to 1.6% .
The rises are mainly due to higher energy prices, and it suggests the eurozone inflation rate, due in two hour’s time, has also risen sharply this month.
If so, there’ll be a lot more pressure on the European Central Bank to consider tightening its stimulus programme, especially from Germany (where inflation jumped to 1.9%, according to figures released on Monday).
*FRENCH JAN. EU-HARMONIZED CPI RISES 1.6% Y/Y; EST 1.2%
— Michael Hewson (@mhewson_CMC) January 31, 2017
French HICP inflation jumps to 1.6% YoY in January (from 0.8%), adding upside risks to the euro area figure to be released this morning.
— Frederik Ducrozet (@fwred) January 31, 2017
Asian stock markets have had another poor day, as fears about Donald Trump’s actions continue to rile investors.
Japan’s Nikkei fell by 1.7%, its biggest drop since October, while Australia’s S&P/ASX 200 lost 0.7%.
On Monday, global markets suffered their biggest one-day drop in six weeks, amid global condemnation of the US president’s travel ban on seven countries in the Middle East.
The news that Trump had fired attorney general Sally Yates after she instructed lawyers not to defend the ban has added to the nervous mood, and fears that Trump is destabilising the world order.
Yoshinori Shigemi, global market strategist at JPMorgan Asset Management, says (via Reuters):
Investors are becoming worried as it appears as if he was setting fire to geopolitical risks that already exist.
Updated
We don’t have any growth figures from Germany today. Instead, we’ve got a nasty fall in retail spending.
German retail sales fell by 0.9% month-on-month in December, dashing hopes of a recovery after a 1.7% drop in November.
These figures are often volatile, but it could suggest consumers in Europe’s largest economy were cautious in the run-up to Christmas.
Outgoing French president Francois Hollande will surely be pleased that the economy is growing, but his successor still faces a big challenge:
The problem with the French economy? Not growing fast enough to close its output gap. It's all positive but also weak. Same old, same old.
— Maxime Sbaihi (@MxSba) January 31, 2017
French GDP: instant reaction
German journalist Gesche Wüpper points out that France’s growth during 2016 was weaker than hoped, at just 1.1% for the year.
France: GDP growth only 1,1% in 2016, below expectations of French government which predicted 1,4%. https://t.co/pvaKVVE9cF via @Boursorama
— Gesche Wüpper (@GescheW) January 31, 2017
Bloomberg’s Maxime Sbaihi tweets this graph, showing how France’s growth has been volatile and unspectacular over the last few years:
FRANCE: GDP up 0.4% in 4Q, but overall 2016 performance (+1.1%) is weaker than 2015 (+1.2%). Same for 2017. My take: https://t.co/59iVCDd9l9 pic.twitter.com/eq6SOQVUlv
— Maxime Sbaihi (@MxSba) January 31, 2017
Arne Petimezas, analyst at AFS Group, shows how France (in green) has lagged behind Sweden, the US, Germany and the UK over the last decade.
Sweden, US stellar performers. Dutch growth accelerating, French GDP growth stays mediocre. Suspiciously little volatility in Spain GDP. pic.twitter.com/AX09AcnclR
— Arne Petimezas (@APetimezas) January 31, 2017
Updated
French GDP rises by 0.4%
France has got Eurozone GDP Day off to a good start, by reporting that its economy accelerated in the last three months of 2016.
French GDP expanded by 0.4% in the October-December quarter, twice as fast as in July-September. This suggests that France’s recovery from the financial crisis continues, despite the uncertainty created by the Brexit vote last summer.
The figures also show that France’s economy grew by 1.1% during 2016.
Statistics body INSEE says that consumer and business spending drove the recovery.
“Household consumption expenditures” rose by 0.6% during the month. while “gross fixed capital formation” jumped by 0.8%.
Exports were “more dynamic”, rising by +1.1% during the quarter while imports grew by 0.8%. And that means foreign trade balance contributed slightly to GDP growth: +0.1 points after −0.7 points in the previous quarter.
I’ll pull some reaction together now....
Updated
The agenda: It's eurozone GDP Day
Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.
We’ll be looking at Europe’s economy this morning, as new data are released showing how the eurozone is performing.
The first estimate of eurozone GDP for the last quarter of 2016, due at 10am GMT, may show that growth picked up to +0.4%, from +0.3%. We’ll also get some figures from individual countries, including France.
The latest eurozone unemployment figures are also due at 10am GMT; economists reckon the jobless rate will stick at 9.8% again, the lowest since 2009. But Italy’s figures, due at 9am GMT, will surely show that its recovery is lagging behind.
Plus, the latest estimate of eurozone inflation is released (yup, also at 10am GMT).
We also get German retail sales figures for December at 7am; they’re expected to bounce back by around 0.6% after shrinking by 1.8% in November.
And at 8am, European Central Bank chief Mario Draghi is giving speech on “Into the future: Europe’s digital integrated market” in Frankfurt, Germany.
Europe’s financial markets are expected to be subdued, following yesterday’s losses as investors watched the backlash against Donald Trump’s travel ban.
Our European opening calls:$FTSE 7112 -0.09%
— IGSquawk (@IGSquawk) January 31, 2017
$DAX 11669 -0.11%
$CAC 4785 +0.01%$IBEX 9359 -0.03%$MIB 18770 +0.06%
We’ll be tracking all the action through the day...
Updated
