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U.K. GDP beats expectations, China doubles down on free trade, and the global stock rally continues. Here are some of the things people in markets are talking about today.
The British economy grew by 0.6 percent in the fourth quarter of 2016, more than economists had been expecting. The growth was driven entirely by services, with zero support from construction and production, in a continuation of the recent trend of a lopsided expansion. The pound eased earlier gains to trade 0.2 percent higher at $1.2630 following the data release.
Writing in Bloomberg Businessweek, Li Keqiang, Premier of the People's Republic of China, said that economic openness serves everyone better. He said the country is opening more sectors of the economy and that China stands resolute with the WTO and multilateral free-trade agreements. His piece does not mention President Trump and the U.S. withdrawal from the TPP. The People's Bank of China, meanwhile, has ordered lenders to strictly control new loans in the first quarter as it tries to control excess leverage on the system.
President Donald Trump's plan to construct a wall on the southern border is damaging relations between neighbors as Mexico's president considers canceling next week's visit to Washington. Trump is also planning 'extreme vetting' of visa applications and a temporary ban on virtually all refugee admissions into the U.S. as early as today. Trump's plans for a border tax are getting pushback from importers who are unable to source their product in the U.S.
Overnight, the MSCI Asia Pacific Index rose 1 percent, while Japan's Topix index added 1.5 percent as shares in the region followed the U.S. lead. In Europe, the Stoxx 600 Index was 0.5 percent higher at 5:37 a.m. ET, with banks the best performers. S&P 500 futures climbed 0.1 percent as the rally that finally pushed the Dow past 20,000 seems set to continue.
The yield on the 10-year U.S. Treasury climbed back above 2.5 percent in yesterday's session and was at 2.543 percent as of 5:40 a.m ET this morning. Japan's 10-year yield climbed to the highest this year after the country's central bank decided to skip short-term bond purchases on Wednesday. In Europe, French bonds fell, with the yield on the 10-year note rising above 1 percent for the first time in over a year, while German and Italian bonds also sold off.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Does Dow 20,000 mean it's time to get out?
- Dutch regulator accidentally posts Soros's short positions.
- The pound risks becoming irrelevant as Brexit dims reserve status.
- The world's biggest wealth fund trades as little as possible.
- A top forecaster says the Fed will hike rates every quarter in 2018.
- On the eve of Lunar New Year, China's bond investors are hurting.
- A Macau casino has a problem with a lucky punter.