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Dec 7, 2016

Bloomberg Markets - December 7, 2016: Five Things You Need to Know to Start Your Day
by Lorcan Roche Kelly
Get caught up on what's moving markets.
Surprises Are Everywhere
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Trump picks favorites, there are bank fines in Europe, and U.K. data disappoints. Here are some of the things people in markets are talking about today.

Managing the economy

President-elect Donald Trump continued show the power of his fully operational Twitter feed yesterday as one tweet brought an offer of talks from Boeing Co. on the cost of a plane order, while another saw shares in SoftBank Group Corp. rally to their highest level since August 2015. While there is disagreement over whether Trump's tactics will prove effective over the long term, and even if the investments he flags are possible, this Twitter feed seems likely to continue to be one of the most important in markets.

Bank fines

JPMorgan Chase & Co., HSBC Holdings Plc and Credit Agricole SA were fined a total of 485.5 million euros ($521 million) by European Union antitrust regulators for their part in rigging the Euribor benchmark interest rate. Elsewhere in European banking, Credit Suisse Group AG lowered profit targets and pledged another 1 billion francs ($1 billion) in cost cuts as a slump in some business sectors force Chief Executive Officer Tidjane Thiam to adjust his turnaround plan.

U.K. data miss, and misstated

U.K. manufacturing output unexpectedly fell 0.9 percent in October, well below expectations for a 0.2 percent rise. The pound dropped after the data was released to trade 0.7 percent lower at $1.2592 at 5:15 a.m. ET. There was one piece of good news for U.K. data watchers as the Office of National Statistics issued a press release correcting balance-of-payments data back to January 2015. The effect of the correction is to reduce the balance of payments deficit from 5.9 percent of GDP to 5.4 percent for the second quarter of 2016, with the ONS blaming an error in the 'erratics' category, which, as the name suggests, are a volatile component of the data.  Elsewhere, German Industrial Production fell short of expectations in October and Australia had its worst quarter for GDP in 8 years.

Markets rise

Overnight, the MSCI Asia Pacific Index
climbed 0.6 percent
, while Japan's Topix index added 0.9 percent to climb to the highest level since January as the yen weakened for the third-straight day. In Europe, the Stoxx 600 Index was 0.8 percent higher at
5:20 a.m. ET
 as optimism that the European Central Bank will extend its stimulus program at
tomorrow's meeting
continued to lift equities. S&P 500 futures were
0.1 percent higher

India holds, China fx reserves fall

In a surprise move, the Reserve Bank of India kept interest rates unchanged, with Governor Urjit Patel awaiting clarity on the impact of Prime Minister Narendra Modi’s clampdown on cash. In China, the PBOC said that foreign-exchange reserves had decreased the most since January as the slump in the yuan continue to pressure holdings.

What we've been reading 

This is what's caught our eye over the last 24 hours.