Eurozone investor confidence has improved thanks to positive signs from China, according to the widely followed survey by Sentix.
The headline Sentix measure rose to -0.3 points for April, the highest since November, after a reading of -2.2 points in the previous month.
Manfred Hübner, managing director at Sentix, said:
Economic observers are currently focusing their attention strongly on China. The signs in China are increasingly pointing to an upswing. Should there be an additional settlement in the trade dispute with the USA, the second economically robust region of the world economy, the European economy could also see a turnaround.
However, the European economy remains “fragile”, he added. The Eurozone economy is losing momentum, but the rate of the decline is slowing.
And he gave Britons a welcome reminder that not everything revolves around Brexit, with the trade dispute between China and Donald Trump’s White House the major driver for investors in the next few months.
Saudi Arabia’s oil minister, Khalid al-Falih, this morning suggested that further production cuts may not be necessary, given the increase in prices.
At a conference on Monday Al-Falih said the oil market was “moving towards balance”.
Falih said he did not “think we need to” when asked if the kingdom was prepared to make additional cuts to support the oil market.
Al-Falih also said that demand for the first international bond from Saudi’s state-owned oil company, Aramco, had hit $30bn.
Aramco, which is thought by many to be the world’s largest company, is raising cash ahead of a delayed initial public offering.
Let’s take another look at the oil market, with Brent crude prices at their highest point of the year so far.
Futures prices have risen from just over $50 per barrel before Christmas to almost $71 on Monday.
The higher prices have come thanks to multiple factors weighing on supply, including cuts in production from Opec (the Organization of the Petroleum Exporting Countries) and stronger US jobs data than had been expected. On top of that, the deteriorating Libyan situation has added more impetus for higher prices.
While not quite at the top table of the world’s oil producers, Libya is still a large supplier, meaning that its civil war is closely watched in oil markets. Libya was the 20th largest petroleum producer in 2018, at more than a million barrels per day, according to the US Energy Information Adminstration.
Over the weekend eastern Libyan military commander Khalifa Haftar mounted an assault on Tripoli, the capital, and the United Nations-backed government there. You can read more detail on the battle here:
Centrica is leading the FTSE 100 after reports of a potential buyer for its UK nuclear power reactors.
Shares rose by 0.6% after the Telegraph reported that Greencoat Capital is in talks to launch a fund to target a £4bn sell-off of a minority stake in seven reactors from EDF Energy and Centrica.
Other risers include miners Antofagasta and Fresnillo, but shares overall have fallen by 0.3% on London’s main index. Private hospitals firm NMC Health is the biggest faller, down by 3.5%.
Carlos Ghosn’s final exit from Nissan, the Japanese carmaker which he was widely credited with reviving, has been completed, with his removal from the board.
Nissan shareholders voted to remove Ghosn at an extraordinary general meeting at a Tokyo hotel, the latest development in a scandal which began with his arrest in November on charges of underreporting his income to regulators.
Ghosn’s troubles have broadened in recent weeks. Renault, the French carmaker whose alliance with Nissan Ghosn led, reported him to French authorities and Japanese prosecutors then rearrested him. He remains in detention in Tokyo.
Nissan CEO Hiroto Saikawa opened the meeting with a speech outlining the allegations against his former mentor, accusing him of misusing funds and seeking to conceal his compensation.
He and other executives bowed deeply before the thousands of shareholders at the meeting as it opened.
You can read more here:
German trade data disappoints
Exports and imports from Germany both fell more than expected in February, according to trade data published today, adding to signs of economic weakness in Europe’s largest economy.
Exports decreased by 1.3% in February, Germany’s Federal Statistical Office reported, lower than the 0.5% fall predicted by economists. Imports fell by 1.6%, after rising by 1.4% the month before.
Carsten Brzeski, chief economist at ING Germany, said it is clear that the German economy is “still struggling”.
The export sector had been on a rollercoaster ride through all of 2018, with problems in emerging markets, trade tensions between the US and China, US protectionism, a possible cooling of the Chinese economy and increasing fears of a hard Brexit. There simply seem to be too many crises in global trade for the German export sector to defy all of them at the same time.
However, he added that the outlook may be more positive if geopolitics take a turn for the better.
Recent real-time indicators suggest a rebound in global trade since the start of the year and relief in the trade tensions between the US and China should also benefit German exports.
The FTSE 100 has started the day with barely a murmur.
London’s blue-chip index is down by 0.05%.
Europe’s other main stock markets have fallen. Germany’s Dax fell by 0.25% after relatively weak trade data. Spain’s Ibex fell by 0.2%, but France’s Cac 40 was flat at the open.
Introduction: Oil prices hit highest this year
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The start of 2019 was marked by fears that a long-expected slowdown in the global economy would finally come around, weighing on oil demand. However, supply constraints have sustained prices, with futures for the Brent crude benchmark back above $70 per barrel at the start of the week.
Futures prices rose by 0.5% to a high of $70.78 early on Monday as traders priced in lower output from Libya, where fighting in the long-running civil war has escalated, threatening the United Nations-backed government in Tripoli.
The Libyan instability coincided with relatively strong US jobs data on Friday, supply cuts from Opec, the oil-producing nations’ cartel, and sanctions on Iran and Venezuela.
James McCormick, global head of desk strategy at Natwest Markets, pointed out that Brent crude futures moved above the 200-day moving average at the end of last week, a signal of bullish sentiment. He said:
The upside risks in crude oil prices […] are being realised.
Sterling markets were fairly stable in early trading, but don’t count on it remaining that way. The UK is scheduled to leave the EU on 11pm on Friday unless something else comes up – a fact that will undoubtedly drive the news week. Take a look at this shaky-cam video from the prime minister for a sign of just how strange the current political situation is.
With just a hint of understatement, Guy Stear and Klaus Baader, analysts at Société Générale, said:
This week is likely to be overshadowed by events relating to Brexit. Another short extension has been requested by the UK, but the EU may prefer a longer delay while setting strict conditions and requiring participation in the EU parliament elections.
- 1:45pm BST: Speech by the European Central Bank’s Andrea Enria
- 3pm BST: US factory orders – February