Both the FTSE and, to a lesser extent, the pound shook off an upsetting morning for UK data.
Everywhere you looked it was bad news. Manufacturing and industrial production dropped 0.7% and 0.5% respectively; preliminary business investment slumped 1.4%; and the construction output plunged 2.8% against the 0.2% increase forecast.
With figures like that it was hardly a surprise the UK posted a pair of godawful GDP readings. For the fourth quarter the economy grew by just 0.2%, worse than the 0.3% estimated and a third of the growth managed in Q3. As for the latest monthly figure, that came in at an alarming -0.4%, making the previously forecast 0.0% stagnation look positively appealing.
Yet, if you glanced at the UK markets, you’d think nothing was amiss. The pound dipped 0.1% against the dollar, unchanged from the open, but actually added 0.1% against the euro. The FTSE, meanwhile, barely blinked at those figures, maintaining a half a percent increase that pushed the index back above 7110.
The eurozone indices were just as buoyant, even if their gains have to be put in the context of last week’s horror show. The DAX reclaimed 0.8% as it tried to climb past 11000, while the CAC managed to clamour back across 5000 with a 0.9% rise.
Not yet quite as excited as its European peers, the Dow Jones is nevertheless set to open in the green, the futures pointing to a 0.2% increase after the bell. The Dow’s overall performance this week is likely going to be dependent on what comes out of the US-China trade talks in Beijing, given Donald Trump’s less than promising comments last week, and the impending ceasefire deadline at the start of March.
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