Trump rattles markets as US economy adds 164,000 jobs in July – as it happened
Markets fell sharply as Trump threatens fresh tariffs; US non-farm payrolls matched economists' expectations in July, while June figures were revised down
- Global markets take fright as Trump ramps up US-China trade war
- Trump's threat of new China tariffs sparks backlash from US retailers
- US extends record-breaking growth streak by adding 164,000 jobs in July
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2.41pm BST
The Bank of Finland governor Olli Rehn has confirmed that he has withdrawn from the race to become the next managing director of the International Monetary Fund.
EU is about to vote on Europe's candidate for IMF managing director. It is an exceptionally meaningful and motivating job. However, at this stage I withdraw my name from the ballot, so that we can achieve a broad-based consensus for the European candidate, and world-wide support.
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The S&P 500, Nasdaq and Dow have all opened at one-month lows:
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US futures are pointing to a lower open for stocks stateside, though the declines look relatively muted compared to the slump we saw in yesterday's session:
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Nancy Curtin, chief investment officer at Close Brothers Asset Management, says:
The US jobs market is in a good place. Unemployment has stayed flat while productivity goes from strength to strength. Moderate wage growth will give the Fed pause for thought when it comes to further monetary easing but, so long as productivity gains continue to gather pace, inflation shouldn't be cause for concern.
More worrying is the business spending landscape.
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Here's our full story on the jobs figures:
Related: US extends record-breaking growth streak by adding 164,000 jobs in July
1.50pm BST
With most of the data matching economists' forecasts, there is not a lot of market reaction to the non-farm payroll figures.
However, we're seeing a slight rise in the US dollar, which took a spill after Trump's trade threats overnight:
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More on the US jobs data:
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US non-farm payroll data shows that there were 164,000 jobs added to the US economy in July, exactly as economists polled by Refinitiv had forecast.
The June figure of 224,000 was revised down to 193,000.
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Trump's pending trade tariffs on the remaining $300bn worth of Chinese goods are likely to have severe ramifications for global growth, Richard Partington reports.
Related: Global markets take fright as Trump ramps up US-China trade war
12.43pm BST
Less than an hour to go before US non-farm payroll data for July is released at 13:30 BST.
Economists estimates suggest around 164,000 jobs were added last month, which would be a drop from 224,000 in June.
The US NFP data is due later today. It has always been the centre of attention but today it can no longer occupy that space. I am not saying that this event is going to be meaningless, I believe the importance of this event is going to be in a different way.
A good number isn't going to support anything and traders should not expect any cautious stance from the Fed on the back of this. The new tax levies introduced by Donald Trump on China have made the Fed's monetary policy path a one way street.
12.17pm BST
Investors are also turning to low-risk German bonds in an attempt to safeguard their cash.
Higher demand has driven up prices, but sent yields - which measure the rate of return - on Germany's 30-year bonds near 0%
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While safe haven assets like gold are riding high on the back of market jitters, prices for metals like copper are falling.
The US-China trade dispute stands to weaken global economic growth and demand for metals.
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Trump may be gambling with his voter base by inching towards tariffs on consumer goods that come from China like tech and toys, says CMC Markets UK analyst Michael Hewson:
European markets have sunk like a stone this morning after President Trump's unexpected decision to announce 10% tariffs on the remaining $300bn of Chinese goods, from the 1st September. It is difficult to understand the President's thinking here given that these particular tariffs are likely to hit his base the hardest, given that these goods will include the staples of the US consumer, like apparel, toys and electrical goods.
This helps explain why US retailers felt the brunt of last night's sell off in the US yesterday, as pressure builds to absorb any price increases into their margins. It's also important to remember that US consumer confidence rebounded strongly in July. It's likely to take a big hit lower if these tariffs come to pass.
11.27am BST
Back in the UK, holidaymakers are being hit with news that two travel companies have gone bust. Mark Sweney reports:
Holiday firms Late Rooms and York-based Super Break have collapsed, affecting more than 50,000 travellers.
We are aware that ABTA Member @SuperBreak (ABTA Number Y1453) has regrettably ceased trading today, 1 August 2019. We have advice for customers who have future bookings with the company and those currently on a Super Break holiday at https://t.co/ut7n002auI
11.03am BST
China has warned that it will retaliate if Trump follows through with his latest tariff threats.
At a news briefing in Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying said:
If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country's core and fundamental interests.
We won't accept any maximum pressure, intimidation or blackmail. On the major issues of principle we won't give an inch.
10.44am BST
The German stock market is one of the worst-hit among major European indices caught in the middle of the US-China trade war.
The Xetra DAX opened lower by around 2.3% and is now down 2.5%
Caught in the crossfire European markets plunged on opening with the FTSE dropping 1.78% and the heavily China-exposed DAX falling 2.3%.
The German index could end up having an even worse day later when President Trump is due to make an announcement about European trade.
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And in corporate news, we've had at least three FTSE 100 firms announce results this morning:
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The prospect of a ramped up US-China trade war has caused investors to dump stocks in favour of safe haven assets including gold.
The precious metal's price could face higher demand if this afternoon's US jobs numbers fail to meet forecasts.
Gold glittered with extreme intensity on Thursday, jumping to a fresh two week high above $1445 as Trump's tariff tweets sent investors stampeding for safety.
The precious metal has scope to push higher this afternoon if the pending US jobs report fails to meet market expectations. With concerns over slowing global growth, renewed US-China trade tensions and Brexit uncertainty accelerating the flight to safety, Gold is fundamentally bullish.
9.50am BST
Brexit uncertainty has left construction firms with little confidence that business will pick up in the months ahead, according to the IHS Markit/Cips Construction PMI report:
Construction companies meanwhile reported a sharp drop in their confidence regarding the year-ahead outlook for business activity.
The latest reading was the lowest since November 2012.
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Howard Archer, chief economic adviser to the EY ITEM Club, reminds us that this is the third straight month of contraction for the UK construction sector:
Poor survey as purchasing managers report #UK #construction sector contracted for 3rd month running in July & at rapid rate: index only up to 45.3 from 43.1 in June (lowest since April 2009). House building, civil engineering & commercial activity all contracted. New orders fell
9.34am BST
The IHS Markit/Cips construction purchasing managers' index (PMI) has come in at 45.3.
That is slightly higher than the June reading of 43.1, which was a 10-year low. However, it missed economist expectations for a reading of 46.
UK Construction PMI comes in at 45.3 in July, up from June's 10-year low of 43.1, but still indicative of a sharp drop in activity across the sector. New orders dropped sharply, reducing likelihood of a turnaround anytime soon. More: https://t.co/Nk0UgcY6D2 pic.twitter.com/nZCni8mlFy
9.23am BST
European luxury stocks are weaker this morning, amid worries that China could retaliate against Trump's tariff threats.
French and Swiss luxury brands including LVMH, Kering, Hermes, Moncler and Ferragamo are each down by around 2-3%.
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Connor Campbell, a financial analyst at SpreadEx, laments that even the by-election win for the Liberal Democrats in Wales wasn't enough to buoy the pound:
Morning Market Comment: Trump kicks markets in the gut with latest tariff threat; GBP continues to fall... https://t.co/ODdoMSLCvt
You'd think Trump's latest trade war cannon blast might take some of the spotlight off of sterling. Well, that wasn't the case. Even the Lib Dems victory in the Brecon and Radnorshire by-election, a win that reduces Boris Johnson's Commons majority to one, couldn't prevent the pound from another round of losses.
9.11am BST
All eyes have been on the pound in recent days, having slipped below $1.21 against the US dollar for the first time since since January 2017 yesterday.
But sterling seems to have stabilised slightly, down around 0.06% versus the dollar at $1.2122.
8.47am BST
Of the 10,000 businesses the Bank of England surveys across the country, three quarters are saying "they are ready as they can be" for the EU divorce, while 10% say they are ready for Brexit.
When those businesses are asked what they think will happen in a no deal scenario, Carney said most believe output will fall, jobs will be cut and investment will drop.
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Carney has also highlighted that major industries including the automotive, food and chemicals, and transport sectors have held back investment in light of Brexit uncertainty:
One of the reasons why the economy has slowed is that business investment is very, very weak. And it's unusually weak at this stage in an economic expansion, it's unusually weak given that there's not spare capacity, and that the financial sector is wide open.
And the reason is because of uncertainty.
8.31am BST
Bank of England governor Mark Carney is speaking to the BBC's Today programme following yesterday's inflation report and the decision to keep interest rates on hold at 0.75%.
He has said that while the UK is "not aiming for a no deal Brexit" there is a "significant possibility that a deal will not be struck" which is why preparations are being made.
8.14am BST
More trade news is expected from the White House today.
Trump's daily itinerary for Friday includes "an announcement on EU trade", which sounds a bit foreboding after the threats against China overnight.
8.05am BST
The London stock market has fallen into the red at the start of trading, with the FTSE 100 opening lower by 1.6% or 114 points to 7,463 points.
France's Cac 40 opened lower by around 2.5% while Spain's IBEX dropped 1.6%.
7.55am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Global shares tumbled overnight in reacted to Donald Trump's plans to ramp up the US trade war with Beijing.
...buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States - this never happened, and many Americans continue to die! Trade talks are continuing, and...
...during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...
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