LONDON (Reuters) - After yesterday’s massive upgrade to growth prospects for the Dutch economy and the smaller but still significant one for the euro zone as a whole, now even France is reporting a fall in its stubbornly high unemployment.
Granted, the shift is only slight - 9.5 percent in the second quarter from 9.6 percent in the previous quarter - but it nonetheless builds on evidence earlier this month of the fastest rate of private sector jobs growth in six years. That creates a degree of momentum for Emmanuel Macron as he pursues his long-promised labour market reforms.
Britain's government has yet to react to a Sky report last night saying British officials now expect talks on the so-called "phase 2" part of Brexit - the UK's future ties with the EU - to be delayed until December, two months later than they had hoped.
Such a delay would certainly chime with public comments by EU officials suggesting that there has not been much progress on the first-phase issues, among them post-Brexit rights for EU citizens living in Britain. The wider point is that this underlines yet again that it is Brussels, not London, that is in charge of the clock on the negotiations.
Even as Donald Trump's presidency becomes ever-more chaotic, with the disbandment of two of his business advisory councils due to serial resignations and deepening splits within the Republican party over Trump's stance on weekend demonstrations by white nationalist and neo-Nazi groups in Charlottesville, world markets continue to stay focused on the incoming economic information and Fed leanings.
Despite all the domestic political ructions that further question any hope the President has of pushing through his long-delayed economic stimulus plans, the S&P500 ended slightly higher on Wednesday and the VIX volatility gauge ended back below 12 percent.
The renewed buoyancy of the stock market, after a forecast-beating Q2 earnings season and brief North Korea-related jolt last week, was helped by slippage in the dollar and Treasury yields as minutes of the latest Fed meeting showed serious disquiet within the policy-making committee about undershooting inflation.
Surprisingly weak housing data has knocked back speculation of a December Fed interest rate rise once again, with futures now showing less than a 50-50 chance of another rate hike by yearend.
While Treasuries have levelled off a bit overnight, the dollar index continues to decline this morning – with the added weight of NAFTA trade talks bringing US trade policy back on to the agenda.
Asia bourses were mixed earlier, with gains in Shanghai and Seoul offset by losses in Japan’s Nikkei and HK’s Hang Seng. European stocks are set to break their 3-day winning streak, with futures trading slightly lower. The focus today will be once again on earnings, with health firms Hikma and Straumann among those reporting.
The major economic data of the day ahead will be UK retail sales and US industrial production.
Editing by Matthew Mpoke Bigg