January 24, 2018, by Lorcan Roche Kelly
This is fine
Treasury Secretary Steven Mnuchin said the weak greenback is “obviously”good for U.S. trade, spurring the Bloomberg Dollar Index to tumble to a fresh three-year low. Commerce Secretary Wilbur Ross in Davos hinted that more trade measures are in the offing following the imposition of import tariffs on solar panels and washing machines. President Donald Trump is due to address the gathering in Switzerland on Friday.
IHS Markit’s January Composite Purchasing Managers’ Index for the euro area rose to a higher-than-expected 58.6, up from 58.1 in December. The bullish outlook for producers could fuel inflation, with German manufacturers raising prices at one of the fastest paces on record, a development European Central Bank President Mario Draghi may welcome ahead of tomorrow’s monetary policy decision.
Robust labor market
The U.K. economy continues to defy Brexit fears, with data this morning showing that unemployment remained at 4.3 percent in the three months through November, with the number of people in work rising 102,000 to a record high. The pound traded above $1.41 after the release, which also showed wage growth of 2.4 percent. Brexit Secretary David Davis expressed support for a two-year transition period following an agreement on the terms of the country’s exit from the European Union, saying that Britain would remain close to the EU regulatory regime after it had left the bloc.
Overnight, Japan’s Topix index closed 0.5 percent lower amid continued dollar weakness. In Europe, the Stoxx 600 Index was 0.1 percent higher at 5:40 a.m. Eastern Time, with French utility Suez SA falling as much as 19 percent after reporting disappointing results. S&P 500 futures rose 0.2 percent, the 10-year Treasury yield was at 2.634 percent and gold climbed to the highest since September.