By Lorcan Roche Kelly
Germany’s economy eked out 0.1% growth in the third quarter, narrowly averting recession against expectations. Growth for the euro area was just 0.2%, as the manufacturing slump in the region’s largest economy takes its toll. There were also signs of weakness in the latest figures from China: Industrial output and retail sales expanded less than forecast and fixed-asset investment dropped to the lowest since at least 1998. Economists are warning that China’s economy may slow further, with the risk of job cuts likely to hit consumer spending. Everything continues to come down to a trade deal, progress on which does not seem to be going well at the moment.
The first day of public hearings in Washington brought to light some new details of the Trump administration’s dealings with Ukraine. Republicans have sprung to the president’s defense, calling the testimony hearsay and pointing out that none of the witnesses have first-hand knowledge of the critical calls between Donald Trump and Ukraine’s leader. U.S. ambassador to the country Marie Yovanovitch is scheduled to give testimony tomorrow, with eight more witnesses on the calendar for next week.
Confusion on Twitter compounded tensions in Hong Kong when China’s state-owned Global Times used the social feed to warn of a curfew by the city’s government this weekend and then deleted the message. The unrest is continuing to hurt the economy, with more and more cancelled events darkening the outlook. Concerns are also increasing about capital flight from the regional hub, as Hong Kong’s money markets signal fears of vanishing liquidity.
Disappointing data from China and Hong Kong’s troubles weighed on the region’s markets with the MSCI Asia Pacific Index slipping 0.5% overnight and the Hang Seng Index closing 0.9% lower. Things are quieter in Europe where the Stoxx 600 Index was down 0.1% by 5:45 a.m. Eastern Time in a session where automakers again came under pressure. S&P 500 futures pointed to little change at the open, the 10-year Treasury yield was at 1.85% and gold climbed.
At 8:30 a.m. producer price inflation data for October and the weekly jobless claims number are published. Fed Chairman Jerome Powell is in Congress for a second day of testimony. There are no fewer than eight regional Fed presidents speaking today, so keep an eye out for any hints at policy changes. Even Bank of Canada Governor Stephen Poloz makes an appearance later in San Francisco. Walmart Inc., Nvidia Corp. and Viacom Inc. report earnings. Today is also the deadline for 13F filings.