Stock markets rise as investors shrug off inflation worries - as it happened
All the day's economic and financial news, as shares recover from last week's rout
- Latest: US producer prices rise
- Lunchtime: European markets in the green
- Pound at two-week high, but would Rees-Mogg weaken it?
- Markets in cheerier mood again
- Zuma's resignation boosts South African stocks
10.07pm GMT
A late PS: Wall Street ended Thursday with fresh gains.
The Dow Jones industrial average rose 306 points, or 1.2%, to end at 25,200. The S&P also gained 1.2%, while the Nasdaq finished 1.8% higher.
Investors are piling back into equities after fears of higher interest rates and recent volatility have both eased.
With the market showing signs of having carved out the bottom and optimism seemingly back on the agenda, bargain hunters are seeing this as a good time to jump in.
5.54pm GMT
And finally, here's a flavour of Reuters' latest market report:
World equity markets climbed on Wednesday as investors shrugged off the latest indication of
rising U.S. inflation, while the dollar slipped to a 15-month low against the Japanese yen as strong global growth weighed on the U.S. currency.
"There were a lot eyes fixating on the PPI number this morning, it came in a little hot. But much like yesterday, the market's shaking it off."
4.50pm GMT
After a notably undramatic day, European stock markets have ended the day mostly higher.
Here's the closing prices:
The FTSE 100, DAX and CAC 40 reached one week highs earlier today, but since then investors have been locking in their profits and now the FTSE 100 and DAX are in the red.
The mood remains optimistic despite the small bit of selling we has seen lately. It would appears that we are slowly recovering from the major declines of last week.
Standard Life Aberdeen's merger last year didn't just give it an awkward name. Thursday's confirmation that Lloyds Banking Group will pull 109bn of asset management business reveals the cost of awkward structural problems created by Standard Life and Aberdeen's tie-up last year. SLA said Lloyds accounted for less than 5% of 2017 revenues.
The group could unveil turnover of 19.34bn, when it reports annual results next week. But the future hit should also include a 40m impairment charge. That means the eventual impact on SLA revenues could approach 140m.
4.42pm GMT
After two hours of trading, Wall Street remains up - although not by a huge amount.
A sliding VIX and a weak dollar have sent a much needed Valentine's week love letter to stocks. With the risks of a global recession and a systemic crisis low, investors sense that last week's VIX jump over 50 marks the peak for now, and so the subsequent normalisation plus the monthly technical VIX expiration this week have invited algo-led trend-following strategies back into the markets. And with the VIX sliding, the need for covering short options positions (many of which have now expired) is also easing, and that is providing support for topline stock benchmarks and headline market news impulses.
Thus, the pain has subsided but this is not to say that reflation and the great Fed QE unwind haven't turned the dial on market risk fundamentals, at the tail end of the secular stagnation phenomenon of weak productivity, a ballooning fiscal deficit and mounting private sector debt (despite weak investment and productivity). Investors now realise that the bond cycle has turned and, in a strong growth and inflation environment, high-grade equities are a safer place to be than high-grade long bonds (hence the breakdown in correlations between bonds and stocks).
2.55pm GMT
US traders have joined the rally, driving shares higher and extending the recovery from last week.
The Dow jumped some 215 points, with almost every company on the index gaining ground.
Dow rises more than 200 points at the open, tries for 5-day winning streak https://t.co/4FeO05oTkf pic.twitter.com/QEudF9dOXp
1.55pm GMT
Here's Brian Wesbury, chief economist at First Trust Portfolio, on the jump in US producer prices:
Producer prices up 0.4% in January, overall and core. The Fed is behind the curve and as long as excess reserves exist, inflation is a threat. It's a double edge sword, though. Increased velocity drives inflation and real growth higher. Faster growth is good for stocks.
No relief from inflation pressures in the latest gauge of the nation's wholesale prices. Both headline and core (minus food/energy) UP 0.4%.
1.44pm GMT
Boom! US factories hiked their prices again last month, putting fresh pressure on America's central bankers to raise borrowing costs.
The producer prices index rose by 0.4% during January, new figures from the Labor Department show. On an annual basis, the PPI jumped by 2.7% - up from 2.6% in December.
Producer Prices Rise More Than Expected In January, Markets Shrug- https://t.co/o76VIAnMJg pic.twitter.com/qPFXw7TKze
US Opening Calls:#DOW 25061 +0.65%#SPX 2709 +0.36%#NASDAQ 6720 +0.65%#IGOpeningCall
1.34pm GMT
Finally, the flurry of US economic data is coming through....
1.24pm GMT
As European traders munch into a quick lunchtime sandwich, the main indices are all up.
Buoyed by the resilience of the last few sessions the markets started to stretch their legs this Thursday, gradually clawing back some of the hefty losses seen in early February's bloodbath.
12.50pm GMT
You know it's a quiet day when you're looking at soybean futures.
Weather forecasters are not expecting anything like soaking rain, nor a decline in high temperatures.
We are expecting prices to gain further."
Worrisome...#soybeans pic.twitter.com/5MNEq12aQD
11.57am GMT
Volatility in the markets has fallen back today (possibly because, er..., there's not a great deal going on).
The VIX volatility index has dropped by around 4% today to 18.5, its lowest level since shares started crashing nearly two weeks ago.
Volatility has remained quite elevated in recent sessions but we are slowly returning to more normal levels and are far from what we were experiencing last week. It would currently appear that last week's plunge was just a sharp correction in an otherwise bullish market, although it may be too soon to say that with any real confidence.
11.41am GMT
Over in Greece former prime minister Antonis Samaras has announced that he has acted on his pledge to take legal action against current PM Alexis Tsipras.
"All the great economic scandals, like the Panama papers have been revealed thanks to the action of [protected] public witnesses .. they are the modern heroes of our times. There has to be protection of witnesses in our country."
Related: Greece rocked by claims drug giant bribed former leaders
11.11am GMT
Losing your biggest client is rarely good for your share price. So it's no surprise that asset management firm Standard Life Aberdeen is leading the FTSE 100 fallers today.
'This is a blow for Standard Life Aberdeen, but has been on the cards ever since the merger. Standard Life and Scottish Widows are long standing rivals, and the prospect of one group managing the fund range of the other was never going to sit entirely comfortably in the corridors of power in Edinburgh.
Losing this book of business would strike a sour note for the Standard Life Aberdeen merger, and undermines some of the rationale for joining forces, which was built on scale. However while almost a fifth of Standard Life Aberdeen's assets look like they might be walking out the door, this only equates to 5% of revenues, as these investment services are relatively low margin. It's also worth noting the sort of funds involved are not run by the star managers of the stable, rather they are the sort of strategies that feature in older pension contracts sold under the Scottish Widows banner.
10.38am GMT
It's not been a great morning for Laura Ashley.
SeaIn Anglim, Laura Ashley's finance director, talked of an "overall toughening of the market" with like-for-like sales declines of 4.4% in furniture and 3.9% in decorating products such as fabrics, curtains and wallpaper.
Related: Laura Ashley profits fall as furniture sales slump hits home
9.43am GMT
The pound has now risen to its highest level against the US dollar in two weeks, at $1.4070.
We note that prediction markets now have Labour and the Conservatives neck-and-neck as likely to be the largest party after the next election. At the turn of the year, there was a 10% point gap in the implied probabilities (55/45 in favour of Labour).
The probability of this government serving its full five years has also risen to a new high (36%), though the risk of an earlier election is still high.
Related: After decades in the making, Rees-Mogg's time may be coming
8.55am GMT
The pound and the euro are both rallying against the US dollar today.
Sterling is up half a cent at $1.4047, while the euro has gained 0.3% to $1.249.
A slightly higher-than-expected US CPI print was enough to get 10-year bond yields up to 2.92%, while equity and commodity prices both rallied sharply and the Vix [volatility index] fell back under 20.
The dollar, on the other hand, got absolutely no support from any of this.
8.45am GMT
European stock markets are gaining ground this morning, as traders shake off their recent jitters.
In London, the FTSE 100 has gained around 37 points or 0.5%, to 7250.
A soft retail number simply gives the message that consumers have started to ease off from their spending or they are not digging deep into their pockets.
A sensible approach would be that the Fed isn't going to increase the interest rate when they can clearly see that the retail data was soft.
8.25am GMT
A solid day's trading in Asia:
Asia Close#ASX200 +1.16%#Nikkei +1.47%
Hang Seng +1.97%
Shanghai market holiday
USD/Yuan 6.3442
A/US$ 0.7963
(As at 7:24pm AEST)
8.25am GMT
South Africa's stock market is surging this morning, after president Jacob Zuma resigned.
Zuma ended a long battle with his own party by stepping down last night, before a no confidence vote.
Related: Jacob Zuma resigns as South Africa's president on eve of no-confidence vote
Cape Town, the country's second city, is running out of water. According to government statistics, the total number of people living with HIV increased from an estimated 4.72 million in 2002 to 7.03 million by 2016, though the rate of infection is declining.
Unemployment remains at an historic high of 27.7% across the general population, and as high as 68% among young people. Economic growth has been limited in recent years, averaging little more than half the rate of population growth of 1.2%. Zuma's departure has sent the rand surging and will spur a rush of much-needed foreign investment.
Related: Who is Cyril Ramaphosa? South Africa's next leader faces huge challenges
8.03am GMT
China and South Korea's stock markets are closed today, as traders celebrate the Lunar New Year.
"Having just gone through the roller coaster of equity sell-off induced by bond yield rises, I am frankly at a loss to explain what is now happening.
"I can only assume that we are in a temporary lull before the turmoil returns.
7.49am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Japan's benchmark Nikkei 225 rose 1.5% to 21,464.98 and Australia's S&P/ASX 200 climbed 1.2% to 5,909.00. Hong Kong's Hang Seng advanced 2% to close at 31,115.43 in a half-day trading session.
Indexes in Southeast Asia, New Zealand and India also rose.
Asia stocks climb despite rising US inflation & stronger Yen as equity investors showed signs of warming to a world w/ #inflation & sustained pace of tightening in US monetary policy. Dollar remains on defensive, hits 15-month low vs yen. Oil, gold supported by dollar weakness. pic.twitter.com/IHqv933Onm
Whilst the market is showing signs of carving out a bottom and the volatility index (VIX) or fear gauge, has dropped back below 20, after peaking at over 50 just last week, it is unlikely that this is the last we have seen of the volatility as markets claw back these recent losses.
Morning all!
- Asian stocks traded higher as the region received a tailwind from US
- The USD languished from the prior day's losses. AUD/USD remained firmer post-jobs data
- Highlights: US weekly jobs, Philly Fed, PPI, IP and a slew of speakers