Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It may be a Friday but the corporate world is having a final splurge of results before the weekend.
Leading the way is Royal Bank of Scotland, which says it is back in profit after ten years. The taxpayer controlled bank has made a full year operating profit before tax of £2.2bn and an attributable profit of £75m. And chief executive Ross McEwan seems pretty pleased about it:
RBS 2017 results have now been released. Read the details here: https://t.co/LMDVfEIAXW pic.twitter.com/ThJCFpSAgq
February 23, 2018
It admits it still has a range of significant risks, including litigation with one major issue outstanding with the US Department of Justice. Further significant charges may be recognised in the coming quarters, it said.
And of course it is still being investigated over the treatment of small businesses by its GRG division, with a scathing report into the scandal published earlier this week.
Other companies reporting today include British Airways owner International Airlines Group, William Hill and educational specialist Pearson.
Elsewhere European markets are expected to edge higher at the open after a bounce on Wall Street. Here are the opening calls from IG:
But after last week’s recovery, the last few trading days have been a bit more uncertain. Michael Hewson, chief market analyst at CMC Markets UK, said:
That we haven’t seen any sort of follow through from last week’s gains should be a bit of a worry and probably speaks to a wider concern that the current down move in stocks may not be quite over.
Investors appear to be wrestling on the horns of a dilemma in the wake of this weeks Fed minutes which suggested that the prospect of four Fed rate rises this year might not be outside the realms of possibility, despite FOMC member and St. Louis Fed President James Bullard’s warnings about being too aggressive on the hiking cycle yesterday.
Will the prospect of rising interest rates and more importantly a move beyond the 3% level and the 2013 highs on the US 10 year mark a shift in sentiment, as concerns that rising wages and prices, may start to eat into company profit margins, and prompt a more critical eye on which companies can absorb higher costs and those that can’t.
Yesterday’s decline in US yields from a four year high of 2.95% may help explain why US markets were able to rally yesterday, and pull the US dollar lower, but the inability of US stocks to close anywhere near the highs of the day only serves to highlight the lack of conviction buyers in the market, as well as some significant indecision, quite a contrast to the complacency of January.
Elsewhere new figures from Germany show the economy grew by 2.9% year on year in the fourth quarter, as expected.
We also get January’s eurozone inflation figures and a speech from the Bank of England’s Sir David Ramsden.
Noon GMT: Bank of England’s Sir David Ramsden speech