Before I go, another quick comment on the US GDP numbers.
James Knightley, chief international economist at ING, notes that GDP growth outperformed thanks to inventory building and falling imports. He explains:
Both the fourth quarter US GDP report and the December durable goods numbers are strong at the headline level, but look a little closer and evidence of a deteriorating growth story is plain to see
Looking to first quarter GDP data, the momentum in the numbers isn’t looking great. We’ve had six consecutive MoM falls in residential construction, three consecutive drops in industrial production, the big falls in retail sales in November and December already mentioned and now we find both the manufacturing and non-manufacturing ISM indices are in contraction territory.
We need to see a turn quickly in something to prevent first quarter GDP turning negative. But the Conference Board’s measure of CEO confidence is now at the lowest level since the Global Financial Crisis, which suggests that the risk is corporate America will turn increasingly defensive, implying a greater focus on costs rather than motivation to expand businesses.
Closing summary
The former chief economist of the Bank of England has warned there is “more pain to come” for households and the wider economy as mortgage rate increases hit people’s bank accounts and weigh on spending.
Andy Haldane, who is now chief executive of the Royal Society of Arts, said it was painful to see the effects of rising interest rates since he left the Bank of England and its rate-setting monetary policy committee in June 2021.
The UK’s political instability – a “ministerial merry-go-round” in Haldane’s terms – has meant that government policy has not been followed through, and there is still a lack of a “medium-term plan for growth in this country”, he added.
More than 300 jobs at Asda are at risk and 4,300 staff will receive a pay cut after the supermarket announced a swathe of changes to night shifts, Post Office outlets and pharmacies to cut costs.
The supermarket chain said 211 night shift manager roles were going and a further 4,137 staff would lose out on premiums of at least £2.52 an hour for working nights as it switched the restocking of packaged groceries and frozen food to daytimes and evenings.
In addition, Asda planned to close seven of its 254 in-store pharmacies, putting 62 jobs at risk, including 14 pharmacists.
The US economy grew faster than expected at the end of last year, suggesting a soft landing despite the interest rate hikes, according to some economists – although others say the underlying growth is weaker and still forecast a “mild recession” in the first half of this year. GDP rose at an annualised rate of 2.9% between October and December, faster than the 2.6% forecast by economists, a slight slowdown from 3.2% growth in the third quarter.
European stock markets are pushing higher as upbeat quarterly results from TSB owner Sabadell, STMicroelectronics and Nokia helped ease recession worries. Wall Street is also up after the GDP data, with weekly jobless claims and durable goods orders for December also better than expected.
Our other main stories today:
Many thanks for reading. Back tomorrow morning, bright and early. Bye!! – JK
Morrisons sales and profits fall
Morrisons has revealed its sales and profits fell last year as shoppers became “increasingly pessimistic” amid the rising cost of living and political uncertainty.
The retailer, which lost its spot at the UK’s fourth largest supermarket to Aldi last year, said underlying profits fell 15% to £828m in the year to 30 October as sales at established stores slid 4.2%.
After one-off costs and interest payments the company made a £33m loss, narrowing from a £121m in the previous 39 weeks, the only figure available.
David Potts, the chief executive of Morrisons, said the amount of goods sold by the supermarket had slid back as prices had risen and “across the UK consumers were becoming increasingly pessimistic as they battled with things through the covid pandemic, political uncertainty, cost of living price rises and interest rates.”
“It has clearly been a tough time when consumers have been making hard choices,” he said.
While Morrisons’ sales figures are disappointing in comparison to its bigger rivals Tesco, Sainsbury’s and Aldi, Potts said that a £7bn debt-fuelled takeover by US private equity firm Clayton Dubilier & Rice in 2021 had not hindered the retailer.
He said last year was “one of transition” but added “We are combining well with CD&R to be more effective.”
HMRC boss tells MPs ‘innocent errors’ are not penalised amid Zahawi tax row
Interesting comments from the head of HMRC re tax affairs (NB the deadline for self assessment tax returns is next Tuesday).
The head of HM Revenue and Customs has told MPs there are “no penalties for innocent errors” in relation to tax affairs, raising further questions about the circumstances that led to the Conservative party chair, Nadhim Zahawi, being fined by the tax office.
HMRC’s chief executive, Jim Harra, said his department did not penalise taxpayers who were deemed to have taken “reasonable care”.
“There are no penalties for innocent errors in your tax affairs,” he told the public accounts committee on Thursday. “If you take reasonable care, but nevertheless make a mistake, whilst you will be liable for the tax, and for interest … you would not be liable for a penalty.
“But if your error was as a result of carelessness, then legislation says that a penalty could apply in those circumstances.”
Hunter then turns to durable goods orders:
Elsewhere, the bigger-than-expected 5.6% [month-on-month] jump in durable goods orders in December was almost entirely due to a bumper month for bookings at Boeing, with notoriously volatile non-defence aircraft orders up 115.5% m/m. Excluding transport, orders fell by 0.1% month on month (m/m).
Worse, non-defence capital goods orders (ex. aircraft) fell by 0.2% m/m last month, while shipments in the same category declined by 0.4% m/m. Alongside the already-reported falls in production of business equipment, that’s another signal that higher interest rates are increasingly weighing on business investment.
The advance economic indicators showed that the good trade deficit widened to $90.3bn in December, from $82.9bn. Exports fell by 1.6% m/m, with imports rebounding by 1.9% m/m. After adjusting for price changes, real good exports appear to have increased by 1.0%, with real imports up 1.4%. Nevertheless, this adds to the evidence that, despite the resilience of GDP growth in the fourth quarter, the economy was losing considerable momentum going into the first quarter of this year.
Updated
Andrew Hunter, senior US economist at Capital Economics, says the underlying pace of growth was much weaker:
The 2.9% annualised rise in fourth-quarter GDP was a little stronger than we had expected, but the mix of growth was discouraging, and the monthly data suggest the economy lost momentum as the fourth quarter went on. We still expect the lagged impact of the surge in interest rates to push the economy into a mild recession in the first half of this year.
Headline growth beat our 1.9% estimate mainly thanks to another positive contribution from net trade – with the surge in exports in the third quarter being only partly reversed with a 1.3% fall in the fourth, despite drags from softer global demand and the stronger dollar. The 1.5%pt boost to growth from inventory building was also stronger than we had anticipated.
But the rest of the report was a disappointment, with final sales to private domestic purchasers edging up by only 0.2% annualised, after a muted 1.1% rise in the third quarter. Consumption growth slowed slightly to 2.1%, from 2.3%. Moreover, that growth reflects strong gains at the start of the quarter, with the retail sales data suggesting that real consumption fell slightly over the final two months of last year. That suggests higher rates were starting to take a bigger toll, and sets the stage for weaker growth in the first quarter of this year.
The 6.7% slump in fixed investment was also worse than we had anticipated, with residential investment plunging at a 26.7% annualised pace, and business investment rising by a muted 0.7%. Despite the drop back in mortgage rates, further weakness in residential investment lies in store, and we also think the 3.7% fall in business equipment investment has further to run.
Richard Flynn, managing director at Charles Schwab UK, says the GDP figures suggest that the Federal Reserve has succeeded in engineering a soft landing for the economy, despite interest rate hikes needed to bring inflation down.
Today’s figures exceed expectations for growth in the fourth quarter. For almost a year, the Federal Reserve has been trying to achieve a soft landing by raising short-term interest rates just-enough to bring down inflation without causing a recession. It’s clear the economy remains relatively strong in the face of the Fed’s efforts, suggesting they’re succeeding.
However, investors may fear that today’s figures are somewhat deceiving as other recent data has pointed towards a recession. Whilst Fed officials have signalled they plan to “hike and hold” rates at high levels to ensure inflation recedes, the market seems doubtful. In fact, investors are already pricing in cuts to the federal funds rate target in the second half of 2023. This mismatch in expectations may drive volatility in the months ahead.
Updated
US economy grows 2.9%, faster than expected
The US economy grew at an annualised rate of 2.9% between October and December, faster than the 2.6% forecast by economists. This comes after 3.2% growth in the third quarter.
Other data was also better than expected. There were 186,000 claims for unemployment benefits last week, the lowest number since April 2022, versus expectations of 205,000.
BREAKING! US #GDP grew 2.9% annualized in Q4 2022, slightly faster than expected.
— jeroen blokland (@jsblokland) January 26, 2023
Personal Consumption +2.1%, slightly less than expected. pic.twitter.com/UO7r3icFQC
US Data - better all around
— Kathy Lien (@kathylienfx) January 26, 2023
✅US GDP 2.9% vs. 2.6% estimate
✅Jobless claims 186K vs. 205K estimate
⚡ Lowest since April 2022 ⚡
✅Durable Goods +5.6% vs. -2.5% estaimate
Updated
UK retail sales slump to continue in February – CBI
A slump in retail sales this month is expected to continue in February as shops battle rising costs and squeezed household incomes, according to a leading business survey.
The CBI’s distributive trades survey, which covers retail and wholesale businesses, registered a sharp fall in sales in January and found respondents were concerned about a repeat next month.
The number of shops reporting a rise in sales was outnumbered by those reporting a fal to leave a balance of -23 in January, from +11 in December, the CBI said.
Car sellers hit by a slump in demand for both new and used cars reported an even lower balance of -34.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said:
The survey suggests that households have started the year in belt-tightening mode, as worries about job losses, higher mortgage rates and another jump in energy prices in April dominate their spending decisions.
He said the drop in sales was disappointing, “given the potential for a partial recovery in January after a combination of snow and strikes across both the rail and postal sectors weighed temporarily on spending in December”.
He added that a surplus of stock coming out of the Christmas trading period was also troubling the sector and would limit the ability of shops to make up for lost sales with higher prices.
The net balance of retailers reporting that stocks were more than adequate to meet demand increased to +23 in January, from +16 in December, and now exceeds its +18 average in the 2010s.
This suggests that retailers will slow the pace of price rises significantly, not just because producer prices are now barely rising, but also because they want to get rid of excess inventory.
Tombs echoed many retail analysts who believe a squeeze on sales and margins will make 2023 “a tough year for most retailers”.
Martin Sartorius, che CBI’s principal economist, said the downturn in consumer spending was likely to last all year, which meant it was important for the government to address the structural problems holding back retailers.
Reforming business rates and the Apprenticeship Levy would unlock much-needed investment and help the UK avoid getting stuck in a rut on growth.
NatWest to shut 23 branches, adding to bank branch closures
NatWest is to shut 23 branches across the country, adding to a raft of closures across the industry so far this month.
The 21 sites in England and two in Wales will close in the first half of this year. The bank said the closures were due to more customers moving to “mobile and online banking”.
It comes a week after Lloyds Banking Group said it would close 40 Halifax and Lloyds sites in England and Wales. Lloyds said the number of customers visiting the branches it plans to close had dropped by 60% on average over the last five years.
The latest announcement from NatWest means 87 branches have been slated for closure by high street banks so far this year.
A NatWest spokesperson said:
As with many industries, most of our customers are shifting to mobile and online banking, because it’s faster and easier for people to manage their financial lives.
We understand and recognise that digital solutions aren’t right for everyone or every situation, and that when we close branches we have to make sure that no one is left behind. We take our responsibility seriously to support the people who face challenges in moving online, so we are investing to provide them with support and alternatives that work for them.
Changing customer habits caused by the rise of online banking has prompted banks to rethink their high street presence, with a slew of closures last year. In November, HSBC announced it would shut 114 branches in the UK, more than a quarter of its network.
Royal Mail restarts some international deliveries following cyber-attack
Royal Mail has resumed some international deliveries following a damaging cyber-attack on its business, and revealed that recent strikes by postal workers cost it £200m and pushed it into a hefty operating loss.
The company said it has restarted overseas tracked and signed-for services to all destinations for customers buying online after the attack by a Russia-linked ransomware gang named Lockbit.
We’ve resumed International Tracked & Signed and International Signed services to all destinations for customers buying postage online. This includes parcel, large letter, and letter formats of these services
— Royal Mail (@RoyalMail) January 26, 2023
For more info and the latest updates visit: https://t.co/KXWMFQsPdt
The group’s owner, International Distributions Services, said Royal Mail’s operating losses rose to £295m in the first nine months of its year so far, as the company was hit hard by 18 days of strikes, including walkouts in the run-up to Christmas.
Its outlook for the full year (a loss of £350m to £450m) is based on no further days of strike action in its fourth quarter and on the Communication Workers Union (CWU) accepting its “best and final” pay offer, it said. Royal Mail bosses are back in talks with the union in an attempt to resolve a long and bitter dispute, but the CWU launched its third ballot for industrial action this week.
In its trading update, the group reported further pressures in the embattled Royal Mail business, as revenue fell 16.7% in its third quarter to 31 December, with letters down 7.5% and parcels down 23.6%.
It also said the number of voluntary redundancies needed under plans to axe 10,000 roles by August will be “significantly” lower than the 5,000 o 6,000 it initially expected because of staff turnover and cuts to variable full-time staffing.
• Royal Mail contacted the Guardian after publication with the following statement: “Following the recent cyber incident, we have been temporarily unable to despatch export mail parcels to overseas destinations. We have temporarily asked customers not to submit any new export parcels into the Royal Mail network until further notice.
“We have been working on new despatch processes and we have started moving export parcels that are already in the Royal Mail network.
“Our initial focus is on clearing export parcels that have already been processed and are waiting to be despatched. We continue to make good progress. We have recently resumed International Tracked & Signed as well as International Signed services to all destinations for business account customers and customers buying postage online.
“We would like to sincerely apologise to impacted customers for any disruption this incident may be causing. We understand how frustrating this situation is for our customers, and we would like to reassure them that our teams are working around the clock to fully resolve this situation.”
Updated
Asda announces changes to night shifts with 300 job cuts
Asda has announced sweeping changes to people working nights and the closure of in-store pharmacies, which will affect more than 4,000 workers and could result in about 300 job losses.
The supermarket plans to move overnight restocking shifts at 184 supermarkets to the daytime, putting 211 night shift manager roles at risk.
It said the changes will also affect 4,137 night workers who are paid by the hour, as their shifts will be moved to daytime and they will lose their night shift pay premium of at least £2.52 per hour.
It also announced a 25% cut to the opening hours of 23 in-store Post Office shops, and will shut seven in-store pharmacies, which employ 14 pharmacists and 48 other workers.
Updated
Toyota boss to step down after 14 years
Akio Toyoda is to step down after 14 years at the helm of Toyota as the world’s largest carmaker battles to keep its leading position amid a global shift to electric vehicles.
Toyoda, 66, is the grandson of the Japanese company’s founder and has led it as president (similar to CEO) since 2009. He becomes chairman on 1 April, and will be replaced on that date by Koji Sato, 53, Toyota’s chief branding officer and head of the Lexus luxury car division, who has been with Toyota for 30 years.
The carmaker has been slow to move to electric vehicles. Toyoda said Sato’s mission would be to transform Toyota into a “mobility company” without giving further details.
Sato said Toyoda had offered him the CEO job at the end of last year when both were in Thailand for an event to celebrate Toyota’s 60th anniversary of operations there. “Can you be the CEO?” Sato said Toyoda asked him.
Updated
Drinks giant Diageo, which makes Johnnie Walker whisky, Smirnoff vodka and Guinness, is the biggest faller on the FTSE 100 this morning, down 5.8%, despite better-than-expected results.
Since the pandemic, drinks makers like Diageo have benefited from people buying more expensive alcohol to drink at home.
Diageo’s sales rose 9.4% to £9.4bn in the second half of 2022 thanks to a tequila boom and price rises, but slowing sales growth in North America spooked investors. Don Julio sales jumped 20% in the US and Casamigos was up 27%. However, overall organic sales growth in the US was just 3% in the six months, about half of what analysts had been expecting.
AJ Bell investment director Russ Mould has looked at the moves in UK markets:
The FTSE 100 continued to edge higher this morning ahead of US GDP figures out later on.
Asian markets were continuing to make ground as they returned after the Lunar New Year break as optimism over China’s reopening continues to build despite surging Covid cases.
Booze is supposed to be pretty recession resistant but Diageo sparked some concern from investors, despite an otherwise solid set of first-half results, by reporting slowing growth in its key North American market.
Wizz Air was punished for adopting a more cautious tone than its competitors on the outlook for the holidays market, helping to bring some sobriety to a share price which had doubled in just three months.
Updated
European shares are trading higher, boosted by optimism following upbeat quarterly results from companies such as the chipmaker STMicroelectronics, Spanish bank Sabadell, which owns TSB, the Finnish telecoms group Nokia.
This eased worries that the eurozone could slide into recession, along with China’s reopening of its economy.
UK’s FTSE 100 index up 14 points, or 0.2%, at 7,760
Germany’s Dax up 31 points, or 0.2%, at 15,112
France’s CAC up 53 points, or 0.8%, at 7,097
Italy’s FTSE Mib up 200 points, or 0.8%, at 26,077
Updated
TSB hails successful turnaround as bonuses rise
Executives at TSB have declared a successful turnaround of the business, after reporting record profits that allowed the UK bank to pay a dividend to its Spanish owners for the first time since the takeover in 2015.
The high street lender, which suffered a catastrophic IT meltdown in 2018, reported a 16.5% rise in annual profits to £182.5m for 2022, thanks in part to rising interest rates which resulted in higher returns from loans and mortgages.
It comes despite the FCA hitting TSB with much-delayed £48m fine over a botched IT migration that left millions of banking customers locked out of their accounts for weeks in 2018. TSB said it would pay Sabadell, which bought TSB from Lloyds for £1.7bn in 2015, a £50m dividend as a result of its strong performance, helping quash ongoing speculation over a potential sale of the business.
Chief executive Robin Bulloch told journalists today:
Sabadell have been crystal clear they have no plans to sell TSB and in fact I think they are looking at the results we’re delivering with great pride…but they’ve been unequivocal around this position which is that they see TSB as an integral part of Sabadell.
Executives also confirmed that bonuses had also risen, with most staff receiving payouts worth 11.8% of their salaries, compared to 10.2% last year. However, the CEO warned that while they were yet to see signs of significant financial distress from its customers, the bank was steeling itself for further economy turmoil, which could result in a 10% fall in house prices this year compared to 2022.
*Correction: The bonus payouts for TSB staff were not 6.5% vs 4% last year, as previously stated. Those figures were in regard to pay increases for most staff. The correct bonus figures have been included above.
Updated
M&S chair calls post-Brexit plans 'baffling' and 'overbearing'
The chairman of Marks & Spencer has become the latest business leader to criticise the government’s economic policy, as he described its plans for post-Brexit trade as “baffling” and “overbearing”.
Archie Norman, a former Tory MP, said the plans for solving the Northern Irish Protocol stand-off would push prices higher and give EU companies a competitive advantage over their UK counterparts. His comments on planned labelling changes for retailers came in a letter to the foreign secretary, excerpts of which have been seen by the Daily Telegraph.
Last week, the billionaire businessman Sir James Dyson accused the government of a “short-sighted” and “stupid” economic approach while the director general of the confederation of British Industry questioned the lack of a “strategy”.
Norman said:
The overbearing costs of a labelling regime would raise prices and reduce choice for consumers, further disadvantage UK farmers and suppliers and impact UK retailers competitiveness in other international markets.
The simple fact is retailers already operate in real-time digital information – day or night, at the click of a button, we can locate our products be that in a depot, in transit or in a store.
In a digital era, when one tap of a mobile can check-in a customer at store and locate their order in under 60 seconds, it’s baffling that the government and EU have rewound four decades to discuss an expensive ‘solution’ involving stickers and labelling.
Using different product labelling could in theory ease the need for customs checks at the border but the M&S chairman argues in his letter that it would lead to increased costs for producers and in turn higher prices for customers.
A costly labelling solution will mean customers will be hit by reduced ranges, higher prices – at a time of huge inflation and when the economy in Northern Ireland is already disadvantaged – and a worsening of availability.
This proposal adds cost, labour and complexity at a time when the supply base really does not need it and is struggling to stay on its feet to the specific advantage of EU producers.
Updated
National Grid asks coal plants to warm up in case they are needed
The National Grid has asked coal factories to warm up in case they are needed today, amid continued cold weather across the UK.
Two coal units at Drax in Yorkshire and one at West Burton in Nottinghamshire were asked to fire up just before midnight yesterday. The West Burton unit was stood down at 5:13am, but the Drax units have continued to heat up, according to notifications sent to the industry.
National Grid has been active in balancing the UK’s energy supplies in recent days as it copes with colder, less windy weather which pushes up energy use and causes power generation from wind to drop.
It was the third time in the last week that the National Grid’s Electricity Supply Operator (ESO) has asked coal plants to warm up in case they are needed.
National Grid has also been running its demand flexibility service for the first time this month outside of trials. The service pays households with smart meters for energy reductions, helping to reduce peak demand which means it has less need to draw on more polluting energy sources when energy use rises in the evenings. Some businesses were already paid to reduce energy use.
Updated
Donald Trump allowed back on Facebook and Instagram
The former US president Donald Trump will be allowed back on Facebook and Instagram, as the company behind the social media platforms, Meta, said it would end the two-year suspension of his accounts. His Twitter ban has already been lifted by the firm’s new owner Elon Musk.
The suspension will end “in the coming weeks”, Meta said.
Meta’s president of global affairs, Nick Clegg (a former UK deputy prime minister), said a review had found that Trump no longer poses a serious risk to public safety. Clegg said the public “should be able to hear what their politicians are saying”.
Trump’s accounts were suspended when he, then US president, encouraged his supporters in January 2021, via his social media accounts, to storm the US Capitol building and disrupt the presidential election certification process, after Joe Biden won the election.
In response to Meta’s decision, Trump posted on his own social media company, Truth Social, yesterday, saying that Facebook had “lost Billions” after banning “your favorite President, me”. He wrote: “Such a thing should never again happen to a sitting President, or anybody else who is not deserving of retribution!”
News of Meta’s decision has been met with fury and indignation among civil rights and online safety advocates.
Updated
Haldane explained why the UK economy has fared worse than others:
We’ve seen many businesses teetering who have been able to just make it through Covid and the cost of living but are vulnerable to any shock that might come along.
Think of it as a weakened societal immune system, that we’ve run down our defences and that makes us particularly vulnerable nasty coming along.
It seems that recent shocks that we’ve had, which have been global, from Covid to the cost of living, but the UK always seem to cop disproportionately for the after-effects in terms of hits to income and lives and that is down to us not having invested sufficiently in our systems whether that’s health or education or charities.
Introduction: Former Bank of England chief economist warns of 'more pain to come' in rising mortgage costs and falling real wages
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Andy Haldane, the Bank of England’s former chief economist, now chief executive of the Royal Society of Arts and a government adviser on levelling up, has predicted real wages would fall again this year as higher mortgage costs continue to bite. He also warned that the recent political chaos was contributing to the UK’s poor economic performance. But he also said that with inflation having peaked, central banks could raise rates more slowly, and saw “flickers of life in the economy”.
Speaking on BBC radio 4’s Today programme, Haldane argued that the UK economy was less resilient to economic crises because of underinvestment and poor coordination between the public, private and charity sectors.
The terrible double whammy of first Covid and then the cost of living crisis has and is causing huge amounts of financial stress for many businesses, many households and of course many charities.
We’ve had a lost decade and a half in terms of pay rises in inflation-adjusted terms. Last year we saw real pay fall and we’ll most likely see the same happen again and that is putting acute financial stress and indeed mental stress on a great many households, that’s one consequence of the absence of growth, or certainly anaemic growth that we’ve seen.
Asked whether the political instability had contributed to the UK’s poor economic performance recently, he said:
When you do have a ministerial merry-go-round, that increases the probability of measures not being followed through and of programmes that are working not being scaled up. We are still a little short of having that medium term plan for growth in this country that we could then adhere to whichever government and whichever minister is in place.
Asked whether he had any regrets, as the Bank of England has hiked interest rates at the same time as when the massive energy price hikes and inflation have come through:
It is painful and I fear there is more pain to come as those mortgage rate rises from last year begin to hit people’s bank accounts over the course of this year. I would have preferred the Bank and other central banks to have started their rate rises a bit sooner. That would have helped a bit in nipping inflation in the bud and would have meant that we wouldn’t have had those rapid rate rises at the same time as the economy was hitting the buffers. But overall this global shock was always going to bring a significant degree of pain including through higher rates.
I’m hoping that with headline inflation now having peaked there is a decent chance that central banks will go a bit slower over the course of this year and won’t become too much of a brake on the recovery and the early signs on that was some flickers of life in the economy.
The Bank of Canada said yesterday it would pause after its eighth interest rate rise, to 4.5%, and there are some expectations that the US Federal Reserve could do the same.
The focus in markets today is the US GDP data for the fourth quarter, which are expected to show a slowdown in economic growth to 2.6% from 3.2% in the previous quarter.
Asian shares hit a fresh seven-month high, as MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.9% to its fifth day of gains, after falling back again. However, trading was thin with Australia shut for a holiday and some parts of Asia, including China, still celebrating Lunar New Year. European markets are expected to open higher ahead of US GDP.
The Agenda
9am GMT: Italy business and consumer confidence for January
11am GMT: UK CBI Retail sales survey for January
1.30pm GMT: US fourth-quarter GDP (forecast: 2.6%, previous: 3.2%)
1.30pm GMT: US durable goods orders for December
1.30pm GMT: US weekly jobless claims
Updated
