Yahoo Finance What to Watch: China hopes boost markets, Deutsche Bank subpoena, UK wages, Lufthansa's woes
Here are the top business, market and economic stories you should be watching today in the UK, Europe and abroad:
China hopes boost European markets
European markets opened in positive territory on Tuesday, following reassuring data around the health of China’s economy.
Britain’s FTSE (^FTSE), Germany’s DAX (^GDAXI), and France’s CAC (^FCHI) all traded up by nearly 1% in early trading, as miners and financials led the charge. Earlier today, data showed that new home prices in China grew slightly faster in March, rekindling hopes that China’s stimulus measures were working.
This is pretty acute considering a worrying start to the year.
However, all eyes will be on Chinese first quarter GDP growth published tomorrow.
“Arguably, the most important piece of data to be released this week is China’s first-quarter GDP growth on Wednesday,” said Sam Buckingham, investment analyst at Thomas Miller Investment in a statement to Yahoo Finance UK.
“Economic growth has been on a steadily decelerating trend over the past seven years as the world’s second largest economy transitions from a manufacturing-led economy to a services-led one. It is expected to drop a further gear, down from the annualised rate of 6.6% in the fourth-quarter of last year, to 6.3%.
“China has implemented a huge amount of stimulus into the economy more recently to deal with the impact of trade wars and a general synchronised slowdown. We are starting to see the positive signs of this stimulus showing up in some of the country’s soft data series. If the hard data, such as GDP growth, doesn’t follow this same path and in fact undershoots expectations, we would expect volatility (i.e. fear) to increase in financial markets.”
Deutsche Bank shares up amid subpoena
Shares in Germany’s massive lender Deutsche Bank (DBK.F) were up over 1.3% in morning trading despite two US House of Representatives committees issuing subpoenas to multiple financial institutions, including Deutsche Bank, for information on president Donald Trump’s finances
“The potential use of the U.S. financial system for illicit purposes is a very serious concern. The Financial Services Committee is exploring these matters, including as they may involve the president and his associates, as thoroughly as possible,” the committee’s chair, Maxine Waters, said in a statement.
READ MORE: U.S. House panels issue subpoenas to Deutsche Bank, others in Trump probe
Wages rise at the fastest rate in a decade
UK markets were boosted by another set of positive data.
According to the Office for National Statistics (ONS) wages rose at the fastest rate in a decade — the biggest leap in average pay in the three months to February since the UK was hit by the financial crisis in mid-2008.
Figures released by the ONS also show employment has soared to its joint highest level since records began at 76.1% of the working-age population. The official unemployment rate has dipped to 3.9%, the lowest since the mid-1970s.
READ MORE: Wages are rising at the fastest rate in a decade despite Brexit uncertainty
Lufthansa woes adds to ill-health of aviation
Shares in Lufthansa (LHA.F) were choppy in early trading, after Germany’s biggest airline reported a significant loss of £290.4m (€336m) over the past quarter.
Lufthansa said fuel costs had been creeping up and the sector was struggling with overcapacity in Europe. It reported an operating profit of £45m (€52m) for the same quarter in 2018, when it had enjoyed a bumper period after Air Berlin was declared insolvent.
The firm said fuel costs were up €202m in the past quarter. But revenues fell 5.2% across the group’s airlines, which include SWISS and Austrian Airlines.
READ MORE: Lufthansa’s £290m loss shows Europe’s airlines are in trouble
Meanwhile, in other news:
