Markets rally as China calls for calm in trade war - as it happened
Rolling coverage of the latest economic and financial news, as Beijing promises not to hit back straight away over Trump's latest tariffs
- Latest: China urges calm over trade war
- Beijing says it won't immediately retaliate to latest US tariffs
- UK tech company's shares tumble
4.43pm BST
Finally, the FTSE 100 index of top London-listed shares has ended the day nearly 1% higher at 7184, a gain of 69 points.
David Madden of CMC Markets says hopes of trade war progress, and the prospect of a new Italian government, lifted stocks.
The Chinese ministry for commerce made it clear they are keen to strike a deal, but at the same time they will not be pushed around. Beijing admitted that further trade tensions will be harmful to everyone, and foreign firms operating in China won't come under pressure, but at the same time, the country is willing to flex its financial muscles to inflict pain on the US should it see fit.
The political mood in Italy has lightened too as there is a possibility the Five Star Movement and the Democratic Party might form a government and in turn avoid a political crisis, at least in the near-term.
2.58pm BST
Just in: President Trump appears to have given an interview to Fox News, and revealed that talks are taking place with China today, at a "different level" (not quite sure what that means).
*TRUMP: #CHINA WANTS TO MAKE A DEAL, `SORT OF HAS TO' MAKE DEAL - BBG (citing FOX NEWS RADIO INTERVIEW)
*TRUMP: `SURPRISED' CHINA HASN'T DONE MORE ON FENTANYL
*TRUMP: A TALK SCHEDULED FOR TODAY ON CHINA AT A DIFFERENT LEVELa-
TRUMP SAYS U.S.-CHINA TRADE TALKS SCHEDULED FOR THURSDAY 'AT A DIFFERENT LEVEL' -FOX NEWS RADIO INTERVIEW
2.51pm BST
Reuters has an interesting exclusive - they've heard that India is hoping to woo foreign companies such as Apple, to encourage then to move operations from China to avoid the trade war.
India is targeting companies including Apple, Foxconn and Wistron Corp with a charm offensive aimed at encouraging them to shift business out of trade war-hit China, according to a source and a document seen by Reuters.
Several Indian officials met on Aug. 14 and discussed a list of "target companies" that also include Taiwan-headquartered contract manufacturer Pegatron Corp, a source with direct knowledge said.
JUST IN: India draws up list of foreign companies to lure for investments amid U.S.-China trade war: source, document pic.twitter.com/RSLL7eGyXU
MORE: MORE: India plans to woo apple, Wistron, Foxconn, Volkswagen in pitch for investments during U.S.-China trade war: sources
2.42pm BST
As predicted, stocks are rallying in New York following the conciliatory comments from Beijing.
The news that China's commerce ministry spokesman Gao Feng said Beijing wouldn't immediately respond to Trump's latest tariffs has cheered Wall Street.
Dow, S&P, Nasdaq open higher by more than 1% after positive China trade comments https://t.co/tKLt5VWZOg pic.twitter.com/YO7JKWzDKN
2.23pm BST
Meanwhile, Greece's new Prime Minister Kyriakos Mitsotakis is making his first official trip to Berlin since his election last month.
"We will not be making any such requests.
"Instead, this visit is going to be about setting a new tone, turning a new page in a new era."
"I'd like to thank the Germany people for the understanding they showed Greece."
"I want to change the narrative ... Greece is no longer the "problematic country" in a Europe faced with Brexit and so many other challenges."
2.09pm BST
This chart shows how US exports fell in the last quarter, and companies ran down their inventories rather than restocking -- two factors that slowed economic growth.
Final sales up relatively strong 3% (saar) but business inventory destocking led to 0.9ppt drag while trade subtracted 0.7ppt from #GDP growth as exports plunged 5.8% and companies shied away from imports (+0.1%)
> Complete offset from Q1 in part due to #trade distortions pic.twitter.com/SyaFapPiY0
1.46pm BST
Just in: Updated growth figures from the US have confirmed that the economy slowed in the second quarter of 2019.
They show that GDP rose at an annual rate of 2.0%, very slightly lower than the 2.1% first estimated (but basically still 0.5% growth on a quarterly basis). That's down from 3.1% in the first three months of 2019.
1.07pm BST
Today is the final deadline for UK bank customers to file compensation claims for missold PPI insurance.... and there's a predictable scramble.
Despite having had literally years to get their claims in, plenty of people are only making inquiries today. And just as predictably, some banks are struggling to cope.
We're sorry for the wait Martin. Have you submitted a PPI claim? ^GC
Hi Lizzy, we are sorry for the hold times. We are experiencing a higher volume of calls due to the deadline. Have you submitted a claim? ^GC
"As predicted, there is unprecedented last-minute demand for reclaiming PPI. We've seen our own traffic to our tool increase by over twentyfold in the last two days since we started the media campaign. And that huge demand is causing even major bank systems to creak and struggle.
"The obvious first advice is to take time, be prepared and be patient. However, it is simply not fair or right that people who have tried to submit a claim before the deadline and have been disenfranchised by bust bank tech miss out.
12.32pm BST
Italian credit-default swaps (a measure of concern that Italy could default on its debts) have fallen to a one-month low, following Conte's reinstatement as PM.
Stocks are rallying in Milan too, where the FTSE MIB index of top Italian companies is up 1.9% today, outpacing the rest of Europe.
12.18pm BST
Back in the eurozone, Italian bond yields have hit record lows after prime minister Giuseppe Conte was sworn in to lead a new government.
We must transform this crisis into an opportunity.
11.49am BST
The reassuring comments from Beijing are likely to push shares higher in New York.
Wall Street is tipped to rally by almost 1% when trading begins in under three hours, as investors welcome the prospect of fresh negotiations between the US and China next month.
"The markets are so desperate for any sign of progress
"Warranted or not, that seems to have been enough for them to jump significantly this morning."
Related: Business owners, there's no need to be concerned over a recession - for now | Gene Marks
11.35am BST
In less good news, UK economic confidence has hit its lowest level in almost eight years, according to the EC's monthly healthcheck.
That suggests that the Brexit crisis, and the ongoing trade war tensions, are hurting:
UK consumers' expectations for the economy now lowest since Dec 2011.
Worth noting however that economic pessimism over the past few years hasn't translated into weaker household spending. pic.twitter.com/gbh7cFZTCy
Confidence indicators can exaggerate trends in actual economic activity but it is striking how #Brexit uncertainty has hit Irish sentiment. The chart shows the @EU_Commission monthly sentiment indicator which has plunged and is now well below the long term average, as in the UK. pic.twitter.com/Su1JJAHbTj
11.21am BST
Economic confidence across the eurozone has risen, calming fears of a recession.
The European Commission's economic sentiment indicator recorded a surprise increase in August, from 102.7 to 103.1. That's a two-month high, up from July's three-month low.
While this is a marginal improvement and by no means suggests a growth recovery, it at least shows that the eurozone is not moving closer to a recession in these rather uncertain economic times.
With a deadline on Brexit coming up, the heating trade war between the US and China and possible car tariffs still hanging over the eurozone economy, concerns about continued industrial weakness could become bigger before they retreat.
10.52am BST
Heads-up, travellers. Climate emergency activists have announced they'll fly drones near Heathrow next month in an attempt to stop the airport functioning.
They reckon it will force flights to be suspended, with "up to 100" people apparently taking part. More here:
Related: Activists to fly drones at Heathrow in attempt to ground flights
10.36am BST
This sudden burst of trade war optimism has swept the FTSE 100 up by over 1%, or 73 points, back to 7188 points. That's a one-week high.
Clearly traders are desperate for good news on the US-China trade war front -- but they should remember that similar hopes have been dashed before.
A spokesperson for China's ministry of commerce, said that an escalation in trade tensions is not good for China, the US, or the rest of the world. Beijing reiterated its opposition to a trade war, and it will not discriminate against foreign firms operating in China, but at the same time it reminded the US it has ample retaliatory measures.
The largely hopeful tones of the update from China has lifted market sentiment, and that sparked buying this morning. US-China relations have been volatile recently, but for now there is a sense that things are heading in the right direction, and that has coaxed some traders back into the market.
10.04am BST
Beijing appears to be taking a grown-up approach to the trade war, says Shane Oliver, chief economist at AMP Capital.
Bloomberg -- China Ministry of Commerce Gao Feng indicated it wouldn't immediately retaliate against the latest US tariff increases "the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war,"
Some adults in the room!
9.51am BST
NEWSFLASH: Market are rallying after China's government officials tried to calm the trade war with America.
In a potentially significant move, Ministry of Commerce spokesman Gao Feng has suggested Beijing will not immediately retaliate to America's latest tariffs, when they kick in on Sunday.
"China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war,"
"China is lodging solemn representations with the U.S. on the matter."
*China discussing September trade talks with U.S.: commerce ministry
Another timely headline at 3AM ET. Worth around 30 points in the S&P 500 this time. $DIA $SPY $SPX $ES_F $QQQ $NQ_F pic.twitter.com/7NQMYvKzAS
9.10am BST
Good news from France: Its economy is growing faster than expected.
9.01am BST
Over in Australia, policymakers are fretting about the consequences of the US-China trade war.
Thinktank China Maters has warned that Australia "will not be able to avoid economic disruption" if China were to suffer a 'hard landing'. That could include mine closures and job losses across Australia's mining industry -- and leave a big hole in the country's finances.
Related: If China's economy crashes Australia will be hit hard, report says
8.37am BST
Ouch! Shares in one of Britain's biggest tech companies have tumbled by nearly a third this morning, after it slashed its revenue outlook.
Weak sales execution has been compounded by a deteriorating macro environment resulting in more conservatism and longer decision making cycles within our customer base.
8.29am BST
No-deal Brexit fears are pushing the FTSE 250 index of medium-sized firms down.
The FSE 250 has lost 53 points, or 0.3%, to 19,149. Consumer credit firm Amigo is the top faller, slumping by 26% after missing profit expectations this morning, and cutting its forecasts.
8.25am BST
European stock markets have opened cautiously, with small losses in France and Germany.
Italy is looking brighter, though, after Movement 5 Star and the Democratic Party agreed to form a new coalition, avoiding snap elections.
8.19am BST
US retailers are extremely unhappy that fresh tariffs will be imposed on Chinese goods on Sunday.
"Imposing tariffs in September on the majority of all footwear products from China - including nearly every type of leather shoe - will make it impossible for hardworking American individuals and families to escape the harm that comes from these tax increases"
8.09am BST
There's now a 50-50 chance that Britain crashes out of the EU without a deal in two months time, says Deutsche Bank analyst Jim Reid.
The decision to prorogue parliament will trigger a major political battle next month, they say, which could potentially lead to a unity government.
The reality now is that under the new schedule, UK parliament has just under a week in early September followed by just over a week in late October to prevent a no deal outcome.
Assuming the timings are too tight and therefore legislation to block a no deal Brexit fails, the only option left for MPs would be a motion of no confidence in the government - either next week or in the last two weeks of October. Much will now depend on the strategy taken by anti no deal MPs over the next two weeks.
7.51am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
"We continue to have conversations. We're planning for them to come."
"I can tell you that it's unlikely anything quick will happen given the structural basis of the problems."
Related: More than 1m people sign petition to stop proroguing of parliament
Related: Pound slides after Johnson reveals plan to suspend parliament
The PM's move is likely to precipitate a no-confidence vote in his government as soon as parliament returns after its summer break at the start of September.
The challenge for those opposed to the government's actions lies in their ability to effectively organise the apparent majority against "no deal" within the time constraints now in place. They must either bring legislation to prevent this type of Brexit or find a unity candidate to lead a new administration within the coming days.
Related: Backlash after Boris Johnson prorogues parliament ahead of Brexit - live news
Continue reading...