Markets hit record highs as Trump claims US-China trade deal is very close - business live
Donald Trump tweets that a trade deal with China is very close, as Christine Lagarde chairs her first ECB monetary policy meeting
- Wall Street hits fresh record highs
- Latest: Trump claims BIG DEAL is close
- Markets rally on hopes of Phase One deal with China
- Bloomberg: There's a deal in principle
Earlier:
9.56pm GMT
A late newsflash: Donald Trump has reportedly signed off the Phase One trade deal with China.
Details haven't been released yet, but Bloomberg says this "deal in principle" means the next tranche of tariffs won't be imposed on Sunday.
Trump signed off on a so-called phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of U.S. tariffs on about $160 billion of consumer goods from the Asian nation https://t.co/DmylbmB4nR
9.18pm GMT
That's probably all from our markets coverage today.
Stay tuned to our website in case of more developments -- and the latest on the UK General Election of course!
9.12pm GMT
Ding ding!
The Wall Street closing bell has rung, ending a session driven by trade war optimism.
Markets went into a frenzy overnight: it's been reported a deal between the US and China has been achieved. Feeling cynical about that one?
You're not alone. But nevertheless, markets are reacting, and that's seen Wall Street stocks touch new record highs.
8.49pm GMT
Reuters has heard that the White House is close to an announcement about a "deal in principle" with China.
One source told them:
"The written agreement is still being formulated, but they have reached an agreement in principle."
MORE: U.S. negotiators have offered to reduce tariffs on about $375 billion in Chinese goods by 50% across the board and suspend tariffs on $160 billion in goods scheduled to go into effect on Sunday - Reuters
8.10pm GMT
Bloomberg News is reporting that US officials have reached a "deal in principle" with Beijing on a preliminary trade deal.
It now needs the green light from Donald Trump.
U.S. negotiators have reached the terms of a phase-one trade deal with China that now awaits President Donald Trump's approval, according to people briefed on the plans, Bloomberg News reports.
Trade advisers are set to meet with the president at 2:30 p.m. to discuss the agreement. An announcement could come as soon as this afternoon, the people said. A White House spokesperson declined to comment.
8.08pm GMT
If you're just tuning in, here's Reuters latest dispatch on the global markets:
MSCI's global stock index hit a record high on Thursday and the U.S. dollar index gained after President Donald Trump said the United States was "very close" to reaching a trade deal with China.
The comment, days before new U.S. tariffs on Chinese imports were to be imposed, also sent U.S. Treasury yields higher. Wall Street's main indexes had pared gains by late afternoon trading after initially spiking higher after the comments....
7.42pm GMT
People used to be encouraged not to tweet in ALL-CAPS. But Trump's decision to promise that a BIG DEAL was VERY close has made Wall Street believe that it's finally happening....
"Trump's tweet was different this time because he used CAPS" https://t.co/fobkzl6UEj pic.twitter.com/T10KOX3oBi
7.40pm GMT
Equity markets popping as reports coming out that the US has reached a deal in principle with China. now awaiting Trump signoff.
US Update:#DOW 28163 +0.91%#SPX 3169 +0.88%#NASDAQ 8458 +0.70%#RUSSELL 1648 +1.09%#FANG 2917 +0.53%
7.36pm GMT
The US stock market is also holding its highs, on hopes of a trade war resolution.
The Dow is up 242 points, or 0.8%, at 28,142, and on track for a record close.
BREAKING: Facebook extends losses after Dow Jones reports that the federal govt. is weighing an injunction against the social media company on antitrust grounds which could bar it from further integrating its apps https://t.co/bedXLmhqki pic.twitter.com/3xkWwnknmI
6.34pm GMT
All the European markets closed higher, which should keep global stocks at today's record high.
An early Christmas present was gifted to markets as investors aggressively piled into risk assets after Trump tweeted a "big deal" with China was "very close", once again controlling the narrative of one of the most corrosive trade wars in history
That is, despite China pushing back on the idea and standing by previous statements that only when tariffs are fully rolled back will a phase one deal be finalised.
5.13pm GMT
Britain's FTSE 100 index has ended General Election Day with some solid gains, amidst plenty of nervousness.
The blue-chip index closed 57 points higher at 7,273, a gain of 0.8%.
4.14pm GMT
Donald Trump has a remarkable ability to move markets with a single tweet.
Today's missive may be a hint that the tariffs due to kick in on Sunday will be postponed.
Markets in Europe initially got off to a fairly positive start, however they found the early gains difficult to hold onto as uncertainties over the latest US, China trade discussions kept investors cautious.
This caution lasted until just after the US open when President Trump tweeted that a "BIG DEAL" with China was getting very close. This of course had the wholly intended effect of juicing the markets higher, sending the FTSE100 to one week highs, and markets across Europe higher in general.
3.20pm GMT
All three US stock indices are at record levels, thanks to Donald Trump's optimistic tweet about the trade war with China.
BREAKING: Dow, S&P 500 and Nasdaq hit new all-time highs after Dow Jones reports that U.S. negotiators are offering to cancel new China tariffs set to kick in on Dec. 15 https://t.co/WvbJZO3XoO pic.twitter.com/6MR4N1r8LL
3.19pm GMT
America's Dow Jones industrial average has hit a record high too.
The Wall Street index has surged by 1%, or 287 points, to 28,198 for the first time ever.
3.18pm GMT
Boom! Global stock markets have just hit a new all-time high.
That's according to MSCI, whose all-country world index tracks listed companies around the globe.
MSCI ALL-COUNTRY WORLD EQUITIES INDEX HITS ALL-TIME HIGH, TOPPING JAN 2018 RECORD
3.16pm GMT
The Wall Street Journal is reporting that the US have offered to cut existing tariffs with China, to get a deal over the line....
US negotiators have offered to cut existing tariff rates with China in addition to suspending those set to take effect Dec 15 as part of the trade truce talks https://t.co/vnF34EwIQJ
3.15pm GMT
Trump has thoroughly stolen Christine Lagarde's thunder.
Investors have put the ECB president's debut out of their mind, and return to thinking about the trade war.
3.07pm GMT
Newsflash: US president Donald Trump has reignited hopes of a breakthrough in the trade war with China.
He's just tweeted that a "BIG DEAL" is "VERY" close, with both sides keen to close the gap.
Getting VERY close to a BIG DEAL with China. They want it, and so do we!
3.01pm GMT
Ferdinando Giugliano of Bloomberg says Lagarde will do the job her way:
Lagarde: "It takes many to dance the economic ballet that delivers price stability and economic growth".
"I am neither a hawk, nor a dove, but a owl with a little bit of wisdom".
In case you were wondering, she really has her own style compared to Draghi...
It will be tricky to do a review and assessment of the past measures without commenting on them...#ECB
First conclusion from the #ECB presser: it will take ECB watchers some time to identify whether Lagarde talks on her own behalf or on behalf of a majority of the ECB Governing Council.
If Christine Lagarde sees herself as an owl, you have to hope there are no mice on the ECB's Governing Council.
She gave a slightly more upbeat assessment of the growth and inflation outlook; sounded slightly more cautious about the negative consequences of negative rates; stepped up the lobbying of governments to loosen fiscal policy; and gave a sneak-peak of the topics the ECB strategic review will cover."
"This was a press conference of two halves. For the first 15 minutes Christine Lagarde appeared to be reading a script that might have been left on her desk by her predecessor.
"The assembled press pack dutifully played monetary policy bingo, merrily ticking off parallels with Mario Draghi's utterances in previous months.
2.52pm GMT
Christine Lagarde is going to make her mark, slowly but firmly, at the European Central Bank.
The key message from the new president's first governing council is that she will fully review the ECB's work, giving more weight to the climate emergency and economic inequality.
2.36pm GMT
Final question: has the ECB considered changing the limits of its Asset Purchase Programme (the bond-buying stimulus programme)?
No, says Christine Lagarde, we didn't talk about changing this today [there have been concerns that the ECB could eventually run out of certain assets to buy]
Happy holidays, Merry Christmas, and whatever you celebrate I hope you are happy, and make those around you happy.
2.28pm GMT
Q: Greece has been achieving a primary budget surplus, as demanded by its bailout, so when will its debt be included in the ECB's stimulus programme?
Christine Lagarde says she is "really delighted" with Greece's recovery, and the progress made in recent years.
It's very impressive, on both growth and the primary surplus, which I had my view on....
2.24pm GMT
Christine Lagarde is planning to accelerate the ECB's task force studying digital currencies.
With stablecoins becoming more important (such as Facebook's Libra) we'd "better be ahead of the curve", she says.
There is clearly a demand out there that we have to respond to.
2.20pm GMT
Onto geopolitics....and Christine Lagarde says the "downside risks" from issues such as the trade war and Brexit are diminishing.
She won't guess when China and the US will reach their long-touted Phase One trade deal, but the noises are encouraging.
If you compare with a few months back it's heading in a better direction.
That is another piece of uncertainty that is loosening, and will give a better view of the environment we are participating in.
2.16pm GMT
Not a dove or a hawk. An owl. To Lagarde's credit (and shamelessly mentioning my own work from late 2014-early 2015) dove and hawk don't work anymore. I'm OK with "owl;" so how far can an owl turn its head? Is it 270 degrees? #ECB
2.16pm GMT
"Once and for all, I'm not a dove and I'm not a hawk," says ECB President Christine Lagarde. She says her intention is to be an owl, associated with a "little bit of wisdom".
2.15pm GMT
Lagarde is refuses to be pigeon-holed over monetary policy, when asked about how she'd handle disagreements at the ECB.
I am neither a dove not a hawk, she tells the press conference in Frankfurt.
My ambition is to be an owl.....associated with a little bit of wisdom
#Lagarde quote of the day. "I'm neither a hawk nor a dove... My ambition is to be an owl." pic.twitter.com/JpGYz7ebYy
2.10pm GMT
Perhaps Christine Lagarde was well aware of the guessing game about Mario Draghi's tie? She's wearing a very smart scarf, in euro-blue, for her first press conference.
2.08pm GMT
Christine Lagarde says that central bank independence should be respected and valued.
But monetary policy is only one part of the picture; fiscal policy, and structural reforms, are also important.
It takes many to dance the economic ballet that would deliver on price stability and growth.
It takes many to dance the economic ballet #ECB
Good to see some flourishes creeping in Christine. She must be relaxing after that edgy start
2.04pm GMT
The FT presses Christine Lagarde on monetary policy.
Q: Will your review examine whether there is a 'reversal rate'?
I don't think Japanification is on the cards at all.
1.57pm GMT
Q: Is it sensible to launch a strategic review at a time when the ECB isn't meeting its inflation targets?
There is never a good time, Lagarde hits back -- if you wait until all the targets are hit then people will say 'why bother?'
1.54pm GMT
Onto questions.
Q: Your new inflation forecasts show inflation will only be 1.6% in 2022 - is that acceptable?
1.52pm GMT
Lagarde then talks about her new strategic review of the European Central Bank.
There's no big news yet -- the framework is still being drawn up, as Lagarde is keen to get all the stakeholders involved.
1.50pm GMT
Christine Lagarde ends her statement, and then takes the assembled journalists to task.
She urges the press pack not to over-interpret her words, not to second-guess what she means, and not to cross-reference her to previous ECB presidents.
Nice from Christine Lagarde. She makes the correct point that each @ecb president does it their own way.
It's our job to get used to her, not her job to pretend to be Draghi, Trichet or Duisenberg
"Don't second-guess; don't cross-reference. I'm going to be myself, and therefore probably different." ECB President Christine Lagarde at her first rate decision briefing.
1.46pm GMT
In another dip into Mario Draghi's greatest hits, Christine Lagarde is now urging eurozone politicians do to more to help the eurozone economy to grow.
She says:
In order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer-term growth potential, supporting aggregate demand at the current juncture and reducing vulnerabilities....
Governments with fiscal space should be ready to act in an effective and timely manner. In countries where public debt is high, governments need to pursue prudent policies and meet structural balance targets.
1.44pm GMT
The ECB has also raised its inflation forecast for 2020, but lowered it for 2021.
Here are the new targets:
1.42pm GMT
The ECB has revised down its growth forecast for 2020, citing global factors such as weak trade growth.
It also expects no pick-up in growth in 2022 compared to 2021.
1.37pm GMT
The governing council stands ready to adjust all its instruments, as appropriate, to ensure inflation returns towards the ECB's target, Lagarde says firmly.
That's a line straight out of Mario Draghi's playbook.
1.35pm GMT
Christine Lagarde begins by confirming that the ECB voted to leave interest rates on hold today, at their current record lows.
She's running through the ECB's statement, outlining how the Bank has restarted its stimulus programme by buying a20bn of bonds per month.
1.32pm GMT
Christine Lagarde has arrived for her first press conference as head of the European Central Bank.
She'll discuss today's decision to leave interest rates on hold, reveal the ECB's new economic forecasts, and give an update on the eurozone economy.
Watch the ECB press conference live: President Christine Lagarde explains today's monetary policy decisions https://t.co/tebP8vMG2R
1.23pm GMT
During Mario Draghi's tenure, there was a regular guessing game about what tie he'd wear for his press conference.
The underlying theory was that he'd pick out particular colours on big days. Credit Agricole even analysed several years of Draghi appearances... but didn't find any significant link, alas.
Grey.#lagardejacketguesses https://t.co/dVKvVcV5lt
Lagarde in leather, Varoufakis in Burberry and still can't spell name of Dutch FM.
HT @tomgara @Kiffmeister pic.twitter.com/7BBpT7P2DD
1.09pm GMT
Aaron Anderson, senior vice president of research at Fisher Investments reckons Lagarde won't immediately shake up the ECB.
"Significant changes to the monetary policies Mario Draghi put in place earlier this year are unlikely in the near-term.
Christine Lagarde is very accomplished and well respected, but doesn't yet have the central banking clout to change policy unless the economic environment changes materially. She is also very skilled politically and knows she needs to establish herself and get the Governing Council fully behind her before contemplating changes."
1.06pm GMT
There's nothing in today's policy statement to move the euro.....
#Euro almost unch as #ECB decision doesn't surprise. Now waiting for Lagarde presser. pic.twitter.com/TACqPqjR3J
Surprise, surprise, no changes from the ECB. #Lagarde
12.53pm GMT
The European Central Bank has also confirmed that it has restarted its stimulus programme, in an attempt to push inflation up.
It is buying a20bn of assets each month with newly-created money, and expects to keep running it "for as long as necessary". The programme will end "shortly before" interest rates are raised, it adds.
12.51pm GMT
The presidency may have changed, but the message from Frankfurt is the same: Eurozone interest rates will stay at record lows for some time.
The ECB says:
The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
12.50pm GMT
The European Central Bank has left all three policy rates at record lows.
Its headline borrowing rate remains at zero, an all-time low. Good news for borrowers, but not for savers.
12.46pm GMT
NEWSFLASH: Christine Lagarde has begun her tenure at the European Central Bank by leaving interest rates at their current record low.
More to follow....
12.30pm GMT
Election day jitters seem to be weighing on the pound now.
After a bright start, sterling has dipped back from this morning's 8-month high. It's now down a third of a cent at $1.316.
12.00pm GMT
Today's ECB governing council meeting could be a more consensual affair than normal.
Mario Draghi's tenure saw some epic tussles, given the opposition to his stimulus plans from some central bank governors (eg Jens Weidmann of Germany).
Let's bear in mind Lagarde who is a lawyer by trade will have to rely heavily on ECB council members to form the Eurozone central bank's future policy.
As numerous ECB speakers have expressed their concerns on the prolonged use of negative rates of late, markets will watch communication on the matter carefully in order to find clues whether a consensus arose from discussions, potentially implying a break away from Draghi's 'do whatever it takes' stance in the foreseeable future
11.25am GMT
The ECB governing council's meeting should be drawing to a close soon, with today's decisions due to be announced in an hour and 20 minutes.
Neil Mackinnon, global macro strategist at VTB Capital, suspects that hawkish members will prevent Christine Lagarde from easing monetary policy:
"Today's ECB policy meeting is the last of the year and the first for ECB President Christine Lagarde. A split in the ECB Governing Council, with hawks expressing concerns about the side-effects of negative interest rates, as well as the expansion in the ECB's balance sheet, presents a challenge for Lagarde.
The markets think her hands are tied and the markets are giving only a 30% probability to a rate cut prior to September 2020. Compared with the Fed's balance sheet expansion, it is understandable why a growing number of currency strategists are looking for a stronger euro and weaker dollar in 2020."
11.10am GMT
Eurozone factory output has fallen again, reminding Christine Lagarde that policymakers must do more to help the Euro economy.
Industrial production across the eurozone shrank by 0.5% in October, Eurostat reports. On an annual basis, production was 2.2% lower than in October 2018.
In the euro area in October 2019, compared with October 2018, production of both intermediate goods and capital goods fell by 3.6% and energy by 2.5%, while production of durable consumer goods rose by 0.9% and nondurable consumer goods by 2.7%.
Euro area #IndustrialProduction -0.5% in October over September, -2.2% over October 2018 https://t.co/CVTW9q4NtI pic.twitter.com/o1sBW1NjdC
10.37am GMT
Stocks are rising in London this morning, pushing the FTSE 100 to its highest level in over a week.
The blue-chip index has gained 48 points at one stage to 7,262 points, the highest since 3rd December. Financial stocks, energy firms, industrials and telecoms companies all gained ground.
Investors seem calm on the eve of the UK General Election with the FTSE 100 up modestly and sterling steady, having recovered from a sell-off early yesterday on signs the polls were tightening....
All eyes will likely be on an exit poll at 10pm tonight which should offer some guide to the ultimate outcome."
10.06am GMT
The pound hit a new eight-month high against the dollar this morning, before slipping back.
It touched $1.3228 for the first time since late March. That's 10 cents higher than in mid-October, just before Boris Johnson managed to renegotiate the UK Brexit deal.
Related: General election 2019: nation faces 'historic' choice - polling day live news
9.56am GMT
With Britain heading to the polling stations today, City traders are trying to protect themselves from losses when the exit polls are released tonight.
Sterling volatility has soared overnight, hitting its highest level since the Brexit vote in 2016. That means that investors are expecting the pound to move sharply once the result of the election becomes clear.
The premium for pound puts over calls over the next week jumped to its highest since September 2016 at nearly 6%. That means more investors are wanting downside protection by buying the right to sell the pound over the next week.
Related: Election opinion polls tracker: gap between Labour and Tories narrows with result in balance
9.39am GMT
The ECB have got their Christmas tree decorated, outside the Frankfurt HQ:
It's Christine #Lagarde's first #ECB meeting today, all eyes are on her and her style to lead the ECB. The Xmas tree at least looks last year;) #ECB #Draghi a@SquawkBoxEuropea(C) pic.twitter.com/lRBSoCL0jI
9.25am GMT
Boom! Over in Riyadh, oil giant Aramco has become the first listed company to be valued at two trillion dollars.
8.55am GMT
Christine Lagarde could help the 'green finance' movement today, by signalling that the ECB will do more to fight the climate emergency.
Environmental activists are demanding action -- on Lagarde's first day, they marched outside the ECB's headquarters with a banner that read "if the Earth was a bank you'd have rescued it".
Into the breach, the political, social and economic zeitgeist appears to have presented green bonds an opportunity to play a meaningful role in policy.
Whether it's the US Democrats' left wing pushing a Green New Deal, or President Lagarde orienting the ECB towards a role in combatting global warming, green bonds represent an attractive fiscal option, particularly in the eurozone.
8.43am GMT
Christine Lagarde will also release the ECB's latest economic forecasts today.
They are likely to predict slow growth and weak inflation, meaning no pressure to change policy today.
Staff forecasts for GDP growth, headline inflation and core inflation are likely to be stable for the first time since the exit from the APP was announced in mid-2018. The Council will likely remain cautious and view the balance of risks as still tilted to the downside. The accommodative policy stance will remain appropriate.
However, Lagarde is likely to oversee one immediate change. That is, they expect the willingness to use "all instruments" to be conditioned on an assessment of the possible side effects of policy.
8.26am GMT
Christine Lagarde could use today's press conference to push eurozone governments to boost spending, to fight a future of weak growth and ever-low interest rates.
Kyle Rodda of IG says:
Monetary policy is losing its efficacy, and central bankers know that's the case. Fiscal authorities, saddled by the decades of debt governments accumulated in the late 20 the century, have laid back since the US financial crisis, handing the reins of economic policy over to central bankers. Now, just like governments before them, central bankers are realizing the limitations of their policy tools, and want sovereigns to step back in to drive western economies back to "normal" economic conditions.
It'll only be one moment in time for now, however President Lagarde's speech could well define that will become the new normal for macroeconomic policy across the globe.
8.04am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The challenges that warrant the ECB's current policy stance have not disappeared . The euro area economy faces some near-term risks, mainly related to external factors, and inflation remains persistently below the ECB's objective.
I therefore agree with the view of the Governing Council that a highly accommodative policy stance is warranted for a prolonged period of time in order to bring inflation back to "below but close to 2%".
In my experience as Finance Minister, I have witnessed the difficulties in coordinating fiscal policies, which are inherently focused on national issues and not the euro area perspective. That is why I am convinced that we need both effective and simplified rules and a meaningful euro area fiscal instrument as a complement.
In other words, we need to further institutionalise cooperation rather than trust it will emerge in crisis times.
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