Reuters Insider - UK Day Ahead: Consumer confidence, public sector finances

IBEX Technologies

21/12/2015 15:35

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 Source:             Thomson Reuters                                   
                                                                       
 Description:        Tuesday brings the latest reading on UK public    
                     sector finances and consumer morale. Another weak 
                     number for consumer confidence may suggest the UK 
                     economic recovery is cooling further.             
 
 
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Transcript (May be auto-generated)

                 Good afternoon. We're in the final week to Christmas and things are quieting 
down here in the UK. Key data points that may move markets Tuesday include 
latest readings on public sector finances and consumer confidence. British 
consumer morale sank to its lowest level in six months back in November - 
according to GfK. If we get another weak number for consumer confidence 
tomorrow, it may suggest the UK economic recovery is cooling further. In terms 
of UK stocks, we're down around 7% since the beginning of this year. 

The FTSEurofirst 300 up 4% while world stocks are down around 4%. Earlier we 
spoke to Jeremy Batstone-Carr and began by asking him what he thought was behind
the overall stock market weakness. I think actually, it's been a very awful year
for the stock market, the dollar has strengthen, commodity prices have 
collapsed, that's been the key story. Essentially, US investors have repatriated
their money which has resulted in a sort of perception that everything is unwell
out there. And in the real economy, of course, which matters as far as the stock
market is concerned, I don't think 2015 has been defined by any progress 
whatsoever; Japan's economy still in a mess, the Eurozone banks aren't solved, 
the British economy remains incredibly fragile and based entirely on foreigners 
and foreign capital and US economy is massively indebted. There is no fiscal 
policy, there is no monetary policy that address any of that. Let's take a look 
at how markets stand as we head into the close. The FTSE is up almost 1% while 
the FTSEurofirst 300 is not doing as well, weighed down by an inconclusive 
election result in Spain. The ruling party there failed to gain a majority in 
the general election. 

Support for Prime Minister Mariano Rajoy's governing Partido Popular slumped 
because voters were upset about austerity, high unemployment and corruption. 
Neither Rajoy's conservatives nor left-wing parties won a clear mandate to 
govern. Talks to form a coalition government could to take weeks. Spain's IBEX 
is down almost 2%. In corporate news, Brazil's Vale and BHP Billiton are about 
to have their assets frozen by the authorities over the dam disaster in Brazil. 
A judge in Brazil on Friday froze the Brazillian assets of BHP and Vale after 
ruling their Samarco mine joint venture was not able to pay for damages 
following the dam collapse. The tragedy left 16 people dead, hundreds homeless 
and polluted a nearby river. Vale said on Sunday it would appeal the court 
decision, labeling the ruling declaring the two mining companies responsible for
the disaster as "inappropriate." Earlier we spoke to World First Chief economist
Jeremy Cook and asked him how big a blow is this asset freeze for the miners 
involved? Any asset freeze is going to be a blow for a company but they still 
seem very reticent to really get their hands dirty in what's happened within 
Brazil. It's a natural hit to investors and natural hit to the company as well 
and obviously, the terrible scenes that we've seen in Brazil as a result of that
dam bursting. This is going to be a protracted legal battle which benefits no 
one unfortunately. That's it for now. I'm Angeline Ong and this is Reuters