DailyFX European Market Wrap: FTSE Gains Continue; German GDP Climbed in Q4
The FTSE 100 is gaining despite a number of firms falling after going ex-dividend including Easyjet, Rio Tinto and HSBC. Shares on the continent are mixed. Meanwhile Germany overtakes the UK as the fasting growing G7 economy, Barclays full-year profits almost treble and Glencore soars as miners enjoy higher commodity prices.
The German economy quadrupled its growth rate in the last three months of 2016. GDP grew 0.4 percent in the fourth quarter with domestic spending the main driver of growth, contributing 0.8 percentage points. Higher state spending, rising private consumption and construction more than offset a drag from net foreign trade but this was down to a large increase for imports and not weakness in exports. Exports grew by 1.8% on the quarter while imports surged by 3.1%.
British bank Barclays nearly trebled its pre-tax profit in 2016, reaching 3.2 billion pounds from 1.1 billion pounds a year before. The bank also reduced conduct charges -- mainly customer compensation for the mis-selling of payment protection insurance-- from £4.4 billion in 2015 to £1.4 billion last year. This was down to a surge in investment banking revenues and falling litigation costs.
Mining giant Glencore has reported annual profit rising 48 percent on higher commodity prices and strong trading results. This is the best report since 2008 and the miner also said it may now consider paying a special dividend this year. Debt levels have been cut in half thanks from a year ago thanks to asset sales, cost cuts and the recent rebound in metal prices. Meanwhile Centrica among the biggest fallers following its latest results despite its British Gas domestic business enjoying profits of 11%.
Looking ahead to Friday there's France's consumer confidence, and for UK data we're watching mortgage approvals. Canada's inflation data along with the budget will be published and the US Michigan consumer confidence, new home sales and Baker Hughes oil rig count. On the corporate front, there's the last of the big four British banks reporting this week – with government owned RBS, International Airlines Group, Standard Chartered, Standard Life, William Hill and Pearson.
--- Written by Katie Pilbeam, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.