FTSE opens lower on Chinese export data
Fiona Cincotta January 14, 2019 9:44 AM
Asian stocks closed lower and European gauges started the week on the back foot following Chinese data showing a 4.4% decline in the country’s exports in December.
Asian stocks closed lower and European gauges started the week on the back foot following Chinese data showing a 4.4% decline in the country’s exports in December. But a closer look at last year’s numbers shows that the market may have overreacted when reading this as a sign of a deeper trend. China’s December exports are still the third strongest for 2018, they have been steadily increasing since February last year. For the next two months investors should be cautious of how they interpret China’s exports as traditionally these tend to slow down in January and then really plunge in February when the country grinds to a halt for a week during Chinese New Year.
Pound in decline as Brexit vote nears
Brexit temperature is ratcheting up as the Tuesday deadline for the vote on the Prime Minister’s Brexit proposal nears. The currency market doesn’t seem very convinced that the PM will succeed in pushing her deal through, even though she is due to make a last ditch attempt at persuading MPs in a speech Monday afternoon. The pound has lost 0.11% against the dollar and around 0.18% against the common currency in early trade.
Despite sterling’s Brexit woes the dollar proved not much of an opponent, being sold off after the Federal Reserve indicated last week that it may abandon plans to raise rates this year, or if it doesn’t, to proceed at a much slower pace than initially planned. The Japanese yen benefited from all the turmoil, attracting some safe haven buying, further helped by news of China’s declining exports and gained almost 0.4% against the greenback.
Rio Tinto slips after force majeure
Rio Tinto shares slipped early pulling down several others FTSE listed miners after the company declared force majeure on some of its iron-ore contracts because of a fire at its Australian port. The fire was extinguished quickly enough not to affect production in the long term but nevertheless, given Rio Tinto’s position as one of the world’s top iron ore exporters, the news was met with a slight selloff.
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