Markets rise after US jobs data and despite Chinese uncertainty - as it happened

Investors fret about the state of the world economy, as Australia's economy falters and Chinese stocks drop again

• Summary: Shares up despite growth concerns
• Lagarde: Hopes for 'orderly' rebalancing
• Chinese stock market falls despite interventions
• Fears of new turmoil next week
• In Greece, Syriza's lead narrows....

6.10pm BST

In Athens analysts are saying that the crisis-plagued country could be in for a nasty surprise - one that will further set back the Greek economy - when voters are called to cast ballots in the September 20 election. Our correspondent, Helena Smith reports from the capital:

Another day, another poll, another sign that Greece's future remains as precarious as ever. Eighteen days before elections and the only thing that is certain is that there is no certainty.

Investors, say analysts, have to be prepared for the unpredictable amid mounting evidence that the vote's outcome is likely to not only be surprising but inconclusive to boot. Opinion surveys revealed to date - and recent days have seen a barrage of them - have failed to "break the silence" of the vast majority of the electorate and therefore cannot be taken as read.

The neo-fascist Golden Dawn could stand to benefit from a parliament that emerged more fractured than ever. With the former governing Syriza party's lead over the main opposition conservatives down to a mere one percent (according to a poll released by Alco today) the possibility of forming a viable government is being put increasingly to question.

This afternoon Syriza's press spokeswoman (and former government spokeswoman) Olga Gerovasilli once again ruled out a coalition government being established with the conservatives, raising fears that a second round of elections may well be necessary to break the deadlock. That would be catastrophic for the economy and implementation of reforms required to unlock bailout funds in the months ahead.

GPO poll for Mega TV shows New Democracy just ahead of SYRIZA. ND 25.3% SYRIZA 25 #Greece

5.30pm BST

Meanwhile former Greek prime minister Alexis Tsipras is continuing his campaigning via Twitter, and linking to his speech at the Syriza conference:

We can only stand firm by being united, w/a plan, radical initiatives & consistence. #Greece http://t.co/eUNEBJAHhG pic.twitter.com/ASd6VDb3tP

5.04pm BST

Some positive news for Greece:

International passenger traffic at the #Athens International Airport +17.1% in Aug & +19.9% in 8-mon. #Greece #economy #tourism @setegreece

5.01pm BST

Investors faced another volatile day on the markets, but after Tuesday's declines, at least Europe ended in positive territory. Shares were drifting for much of the day, but traders took heart from a recovery in China after authorities intervened to support the market and help it regain most of its losses earlier in the session.

But later came a boost from - ironically - weaker than expected US jobs and factory data, which added to the idea that perhaps the Federal Reserve may not raise interest rates this month after all. (The Fed must surely also take into account the recent market turmoil caused by the devaluation of the Chinese currency and the growing fears over the outlook for global growth.)

4.32pm BST

On oil prices, IG market analyst Joshua Mahony said further falls looked likely:

Crude oil prices tumbled as inventories rose for only the second time in six weeks. This comes at a time when Saudi Arabia continues to produce more than its OPEC quota, making it clear that the supply glut dominating the oil market is not over.

With US driving season out the way, demand will certainly wane into the winter months, and with Iran bringing increasingly more crude to market, there is a good chance that oil prices could fall once more. As prices have tumbled in the face of rising stocks, this is being felt keenly by UK mining firms, which has helped pull the FTSE lower to erase many of today's early gains.

4.20pm BST

Greece is set to miss its 2015 target for asset sales, in what would be a setback for the success of its new bailout deal, according to the head of the privatisation agency.

As part of the terms of its a86bn rescue loan, Greece aims to raise a1.4bn from privatisations this year.

On the other hand I think it is realistic that we achieve the 2016 targets.

3.41pm BST

Oil prices, which had been moving higher, have gone into reverse after US crude stocks unexpectedly rose last week.

Crude inventories climbed by nearly 4.7m barrels, according to the latest figures from the Energy Information Administration. This was the biggest one week rise since April, and compared with analysts' expectations of no change.

#US #crude inventories rose 4.67mn barrels. #WTI declines post-#EIA report.

3.26pm BST

Over to Greece, and ratings agency Fitch says Greek depositors are unlikely to have to face a haircut as part of the bank recapitalisation. Fitch says:

It is likely the relevant authorities will try to exercise available discretion within the Bank Recovery and Resolution Directive (BRRD) to avoid imposing losses on some creditors of Greek banks, particularly depositors... Discretion may be more limited from 2016, when the BRRD and the EC's Single Resolution Mechanism come fully into effect, so whatever treatment is applied to Greek banks may not establish a precedent for how BRRD will be applied in other countries. Greece voted in its BRRD legislation on 22 July.

Under the a86bn bail-out agreement between Greece and its European creditors reached on 14 August, a25bn is earmarked for the banking sector to address recapitalisation and resolution costs. A a10bn tranche will be disbursed on Greece's request and confirmation of the amount by the Bank of Greece, the country's resolution authority. The balance is to be made available no later than 15 November, subject to completion of an Asset Quality Review and Stress Test (AQR) and implementation of steps to tackle impaired loans and address financial sector reform and governance.

3.18pm BST

Here's more on the dilemma facing the US Federal Reserve as it decides whether or not to raise interest rates this month. Writing before the latest ADP and factory orders data, Michael Hewson of CMC Markets said:

While yesterday's ISM manufacturing number was disappointing, there is a concern that it may not have been disappointing enough to prevent a potential increase in the Fed Funds rate from its 0%-0.25% window.

For what it's worth the prospect of a Fed rate rise still remains very much an outlier given the volatility seen in recent days, along with the consistent lack of inflationary pressure, not only in the global economy, but also the US economy, but given some of the current valuations in US equity markets, these remain the most vulnerable to a significant correction.

What is apparent is that Fed policymakers have a wide range of views on what the next policy steps are likely to be and are being deliberately opaque, by trotting out the same lines about data dependence and taking the data on a case by case basis. Against that type of backdrop it is hard to see how they could arrive at the necessary consensus to push rates higher against such a volatile backdrop.

This will of course put each US data release under much sharper focus, but we're now starting to see the results of the slowdown in the oil and gas sector start to trickle down into the headline numbers for US manufacturing, and this was borne out by yesterday's disappointing ISM report.

3.09pm BST

Another piece of ammunition for those beginning to believe the US Federal Reserve may not hike interest rates this month after all.

US factory orders in July came in lower than expected, up 0.4%. This was lower than the forecast 0.9% and well below the 2.2% gain recorded in July.

2.47pm BST

The rise on Wall Street has put some life into other markets, which are now showing some reasonable gains after a volatile day so far:

2.36pm BST

After three days of decline, US shares have recovered some ground in early trading.

The Dow Jones Industrial Average is up more than 200 points in the first few minutes, while the S&P 500 is up more than 1%.

2.22pm BST

The ADP jobs survey may have perked up markets for the moment - on the basis perhaps that it was weaker than expected therefore the US Federal Reserve may not raise rates this month after all. But it gives little real guidance for Friday's non-farm payroll numbers, according to ING Bank's Rob Carnell. He said:

With the ADP survey the only remotely accurate US non-farm payrolls directional indicator, the latest release might suggest that there is unlikely to be any significant deviation of Friday's payrolls from the 215,000 figure printed last month. The ADP employment total rose by 190,000, up from a downward revised 177,000 in July (previously 185,000). That said, a 13,000 monthly difference looks insignificant relative to the noise in this series, and a more reasonable description of the figures would be to say that there is no strong directional steer from the ADP this month.

One interpretation of this would be that the August payrolls figures will be close to the 215,000 result in July. But that would be to ignore the scope for occasional but sizeable divergences in these two series. A better interpretation would be that anything is still possible from Friday's labour report figures, and scope for market surprises in both directions remains, though the probability of this coming from the payrolls figure looks smaller at this stage.

There are, however, other parts of the report that might still inject some market volatility. The household employment survey in July was quite weak (+101,000), so we could be looking at some catch up in the region of +300,000 this month. So long as this isn't totally swallowed up in a surge in the labour force, which was also soft in July (+69,000), and with some helpful rounding, we might see more than a 0.1 percentage point fall in the unemployment rate, taking it down to 5.1% (consensus is for a fall from 5.3% to 5.2%).

Finally, there is the hourly wages data. We have been looking in vain for a pick up here for longer than we care to remember, and anecdotes of rising wages seem to be failing to translate into higher official numbers. But the recent Conference Board labour data gave cause for some renewed optimism on the wages front, and if this is borne out, then there is just possibly some scope for wages to send a quite confusing message against the back of a non-descript payrolls number.

2.11pm BST

After the roller coaster rides of recent days, the financial markets are slightly more sedate today, despite fresh losses in Asia overnight.

2.02pm BST

Financial markets may not be able to ignore Greece for long.

The latest poll shows that Syriza's lead has been eroded away, leaving Alexis Tsipras's party just narrowly ahead of New Democracy. The election, on September 20, is looking too close to call:

I"II1/4IIfIIIIIfI Alco - IIIII^3II 2015: III 0,4% I II^1IIIII IIIITMI-I - II" http://t.co/jeXb0vtAJq pic.twitter.com/Fd9t2mjH6C

1.28pm BST

Here's some context for today's US jobs data, showing that firms are hiring fewer people than a year ago.

US jobs growth over the last 12 months, according to ADP survey. http://t.co/Ux4a6r01nq pic.twitter.com/3rA40w5acy

1.21pm BST

American companies created slightly fewer jobs than expected in August, adding to the collection of disappointing data this week.

#Fed still fancies a Sep hike? https://t.co/3BUGkV32zA

1.13pm BST

Here's another reason to fret about the global economy: Brazil's industrial output just shrank, and by much more than expected.

Brazilian industrial output fell by 1.5% month-on-month in July, compared to forecasts of a 0.1% decline.

Complete and utter rout. The worst of a sorry state for global manufacturing data. https://t.co/lkXvXtFbSV

12.59pm BST

Beijing could use the four-day closure of the stock market to devise new measures to calm the situation, argues Lukman Otunuga of FXTM.

The Shanghai Composite Index will be closed on Thursday and Friday due to the World War II 70th anniversary commemorations, which will provide the market with some breathing space after receiving continual punishment over the past couple of weeks.

The closure might be used as a period where policymakers in China get together and discuss policy measures that could be taken to stabilize the China markets.

12.50pm BST

Wondering what's really going on in China, beyond the daily turmoil on the stock market? Then check out the latest blogpost from City veteran George Magnus, who's been tracking the country rather longer than most.

As the second half of 2015 unfolds, we should expect the services sector to weaken, largely as the drag from the financial sector (following the stock market plunge) permeates the economy. This could take around 0.5% off GDP growth. The contraction in heavy industry, including metals, chemicals, cement, and power generation, may already have tipped some provinces in the north-east and west of China into a 'recession', defined as growth below 4-5%.

Manufacturing investment will remain weak not least as a consequence of persistent excess capacity, deflation and debt in the industrial part of the economy.

There is little question that he and his senior colleagues understand they have to implement deep and meaningful economic reforms to unlock new sources of economic growth and productivity.

The risk, as they know even better, is a loss of control. And they fear this more than anything. President Xi's anti-corruption campaign is weeding out high profile Party misfits, but simultaneously stifling growth and initiative. It is also making an example of so called 'tigers' - top Party officials - but it is impossible to go after all the 'flies' - lower level officials, whose misdemeanours (or worse) have a real effect on peoples' lives. Think only of the recent appalling chemicals explosion in Tianjn, where 11 local government and port officials have been accused of negligence and a beach of regulations, so far....

Repeat after me: China isn't collapsing; but sit'n is serious; and politics of reform are faltering My latest blog http://t.co/i9mgEGhZR1

12.19pm BST

The International Monetary Fund is trying to help China reform its economy and avoid disorder, managing director Christine Lagarde told reporters in Jakarta today.

"We are certainly talking to the Chinese authorities about their transition to a more market-determined economy, to an internationalization of their currency.

It's a very significant transition, one that hopefully can be managed in an orderly fashion."

11.56am BST

11.51am BST

Investors can take solace that the Chinese stock markets are now closed until next week, so Beijing can conduct its World War 2 victory parade.

China's markets to shut for 113 hours this weekend *Global sigh of relief* http://t.co/aA65MOze3x pic.twitter.com/58zjZkMQJM

"The government has made it clear that it will not support the stock market anymore - the recent market intervention was focussed on removing the stock markets as an issue during the grand political spectacle planned for the WWII commemoration on Thursday.

Once this event passes, there will be no short-term incentive to support the stock markets and we could see the SHCOMP testing its low of 2850 seen last week. This would be a further 10% decline in the index, and possibly even worse than 'Black Monday."

11.28am BST

Lower oil prices, and cheaper commodities, means eurozone producers received less for their wares in July.

Producer prices dropped by 0.1% month-on-month in July, and were 2.1% lower than a year ago.

Euro area industrial producer prices -0.1% in Jul 15 over Jun 15, -2.1% over Jul 14 #Eurostat http://t.co/wdit05lbpg pic.twitter.com/N6mrvceN9s

In many ways the ECB might have hoped for a summer lull to allow its QE program to grow and progress. If it had known the economic growth position alone then it might have been happy right now. However it has been in the past the keenest of the major central banks to hit its annual inflation target.

I still recall the previous President Jean-Claude Trichet boasting about an average annual consumer inflation rate of 1.97%. In those terms the current one of 0.2% and no great expectations of much of a rise anytime soon is rather eloquent.

The ECB is beginning to face a QE dilemma https://t.co/1SEUBcfHy7

11.12am BST

The Saudi stock market has fallen over 2% in early trading, as it feels the knock-on impact of the 2% drop in the oil price today.

Traders are calculating that there could be more of an oil glut than expected, given the weakness of the Chinese economy and yesterday's weaker factory data.

11.00am BST

Emerging markets are suffering from market volatility today.

MSCI's emerging market index, which tracks shares across the region, has fallen by 0.4% today. That takes it close to its lowest level since 2009, having shed 2% yesterday.

Russian assets took a knock from oil's sharp price reversal,with shares down half a percent and the rouble extending Tuesday's 3.8% fall, its biggest one-day loss in three months.

The currency fell 0.9% to the dollar.

"The Chinese problems are not yet solved and the U.S. Fed rate hike is still in the pipe, so we don't expect any meaningful and sustainable rally in emerging markets in the short term."

10.26am BST

Wall Street may manage a small rally when trading begins in four hours time, having fallen by almost 3% yesterday.

* Dow futures and S&P futures up more than 0.45 pct; NASDAQ futures up more than 0.5 pct - RTRS

10.08am BST

After that early attempt at a rally, Europe's stock markets are now falling back as a new dose of gloom sweeps trading floors.

9.43am BST

Growth across Britain's building firms picked up, a little, last month, according to a new healthcheck of the sector which bucks the gloomy trend today.

The UK construction PMI rose to 57.3 in August, from 57.1 in July, driven by the fastest rise in commercial work since March.

9.09am BST

Back in London, shares in two retailers have been hit this morning.

Halfords tumbled almost 8% after reporting an 11% slide in bicycle sales in the last eight weeks, in an unscheduled trading statement.

Related: Asos shares tumble after co-founder Nick Robertson quits

9.06am BST

Michael Hewson of CMC Markets also reckons that Chinese authorities stepped in to push the Shanghai market back up from its lows:

While we have seen a late recovery in Asia, that's largely been as a result of some late state intervention in Chinese markets to help keep a floor under stocks, with the help of the Chinese equivalent of the plunge protection team.

8.56am BST

Beijing's preparation ahead of Thursday's military parade go beyond just propping up the stock market, incidentally.

Officials have even been training monkeys to destroy birds nests, to avoid one being sucked into an engine as China's military jets fly over Tiananmen Square tomorrow.

Related: China's army drafts in troop of monkeys to keep skies clear for victory parade

8.40am BST

Despite a valiant last-ditch attempt by Chinese officials, the Shanghai stock market has just closed down 0.2%.

The 'National Team' has been busying itself in the stock markets, scaring off any bearish sentiment.

The Shanghai Composite (SHCOMP) initially opened down 4.4%, but optimism over the coming two-day holiday and general patriotic sentiment seemed to spur the markets upward.

Not even close: Shanghai -0.2% at 3,160. #threelossesinarow Worst. Military. Parade. Ever.

8.20am BST

As predicted, European stock markets are pushing higher at the start of trading.

The FTSE 100 is up 50 points, or 0.8%, a small recovery after Tuesday's 3% tumble. The other European equities indices are also a little higher.

After US GDP was revised up last week and China data disappointed yesterday along with Canadian GDP, we had Aussie GDP miss overnight suggesting knock-on from China slowdown and commodities price declines.

This adds to the muddy picture over global growth and thus monetary policy direction, notably on the other side of the pond.

8.15am BST

The oil price is coming under fresh pressure this morning too, in another sign that investors fear lower demand for energy.

8.00am BST

Markets have already received one piece of bad news today - Australia's economy has faltered.

Q2 GDP Australia 0.2% Cyprus 0.5% Lithuania 0.6% UK 0.7% Greece, Slovakia, Estonia 0.8% Czech, Poland 0.9% Spain, Sweden 1.0% Latvia 1.2%

Related: Jitters as Australian economy grows by just 0.2% in June quarter

7.37am BST

Good morning.

Europe #stocks ready for small rebound...futures signal gains after worldwide sell-off yesterday. Asia trading remains lower & volatile

The message from manufacturing PMI day across many of the world's key economies is that, despite the extended period of liquidity support, the sector is displaying less traction than hoped as demand falters in several regions.

Those central bankers anxious to normalise policy were not expecting such news; nor were equity investors.