Latest news with #GeorgeLagarias
International Business Times
3 days ago
- Business
- International Business Times
Asian Markets Hold Steady Amid Global Bond Jitters and US-EU Trade Hopes
Asian stock markets showed little movement on Wednesday, as investors remained cautious despite positive signs emerging in global trade talks and ahead of tech giant Nvidia's earnings. This follows a mixed session in Asia last week, where Hong Kong's Hang Seng ticked slightly higher, but Chinese blue chips slipped as concerns about the stock market weighed on risk-taking. The focus is now shifting to tax signals from major economies and what they might mean for markets in Asia. MSCI's broadest index of Asia-Pacific shares outside Japan barely budged, while Japan's Nikkei eased 0.04% after three straight days of gains. China's CSI300 slumped 0.1%, and Hong Kong's Hang Seng weakened 0.6%, pointing to rising anxiety over overseas bond yields and lingering trade tensions. Market observers in Asia are looking for signals from the U.S. and Europe for clues about what comes next. Comments from U.S. President Donald Trump soothed nerves. He commended the European Union for being willing to sit down for talks, and he stepped back from an earlier threat to slap a 50% tariff on imports from the EU. Analysts say that this muted stance is providing some relief for investors, even if the uncertainty is still ahead. George Lagarias, chief economist of auditing and advisory firm Forvis Mazars, said an agreement may be reached between the U.S. and EU because the two trading partners have vast trade in goods. European markets benefited from a similar burst of optimism. Germany's DAX added 0.3% to its record, led by defense shares. Britain's FTSE and France's CAC 40 rose 0.2 percent. The broader STOXX 600 rose 0.1 percent, as market climbing has been consistent across Europe. U.S. investors are waiting for Nvidia's earnings report. Nvidia, one of the "Magnificent 7" tech firms, may set the tone for tech stocks more broadly. Analysts are upbeat about the performance, forecasting that revenue will have surged more than 66% to $43.28 billion. Should those expectations be met, it could touch off a market rally. Yet there are fears over global debt that are darkening the outlook. Yields on bonds rose again, and Japan's 40-year bonds met tepid demand. That lifted the yield 9 basis points to 3.375%. U.S. long-dated bonds also saw some action, with 30-year yields rising to almost 4.98% and 10-year yields rising to 4.47%. Rising bond yields have raised fresh concerns about the financial health of major economies like the U.S., Japan, and the U.K. Market confidence has also taken a hit after Moody's lowered its outlook on U.S. credit. At the same time, debates continue over new tax laws. "We're seeing whether the U.S. can solve its budget problems by borrowing more than any country ever has," said Lagarias. He warned that if borrowing goes too far, it could have lasting effects on global markets. The dollar was stable in currency markets, following a 0.6% increase earlier. The euro was unchanged, at $1.1329. The Reserve Bank of New Zealand cut its rates 25 basis points, driving the kiwi dollar 0.3% higher to $0.5969.
Yahoo
11-04-2025
- Business
- Yahoo
Gold prices soar to fresh high amid Trump tariff turmoil
The pound rose against the dollar (GBPUSD=X) on Friday morning, up 0.6% at $1.3044, as data showed that the UK economy grew by more than expected in February. The UK's gross domestic product (GDP) grew by 0.5% in February, according to the Office for National Statistics (ONS), which was above the 0.1% increase forecast by economists polled by Reuters. That compared to no growth in January, which had been revised up from a previous estimate of a 0.1% contraction. "On the face of it, an unexpected GDP jump is great news for the UK economy. In February, the UK had one of its best months in terms of both production and services," said George Lagarias, chief economist at Forvis Mazars. "However, one has to consider the following: A) Strong growth could delay the second rate cut by the Bank of England, which is expected in May. B) The data continues to reflect a pre-global tariff regime," he said. "While welcome, it tells very little about how the UK economy will fair in an era of sharply increasing global macroeconomic and financial volatility. That is not to say we expect growth to plunge headlong, even if global growth slows." Read more: UK economy grew by 0.5% in February Lagarias said that some Forvis Mazars clients had indicated that they would be willing to bring work from the US to the UK to avoid tariffs and uncertainty. "We are entering a period where the data may jump around, reflecting rising risks, but also new opportunities for the British economy," he said. Strength in the pound was also helped by a weaker greenback, with the dollar index ( which measures the US currency against a basket of six currencies, down 0.8% at 100.06 at the time of writing. This was lowest point for the dollar index since September, as investors grappled with continued uncertainty over US president Donald Trump's tariff policies. Meanwhile, the pound was down 0.7% against the euro (GBPEUR=X), trading at €1.1498. Gold prices rallied on Friday, notching fresh highs, as investors flocked to the safe haven asset amid tariff uncertainty. Gold futures (GC=F) jumped 1.4% to $3,223.30 per ounce at the time of writing, while the spot price rose 0.9% to $3,205.47 an ounce. Trump's announcement on Wednesday of a 90-day pause on many higher tariffs offered some relief for markets, though the 10% baseline levy announced last week was kept in place. In addition, Trump said he would raise the tariff rate on China to 125%, which came after Beijing announced an 84% import tax for US goods, up from 34%. Read more: FTSE 100 LIVE: Stocks higher as China's Xi calls on EU for support against 'bullying' On Thursday, the White House then clarified that total tariffs on China would be 145%, as this included a pre-existing 20% levy on companies which produce fentanyl. China's finance ministry then said on Friday it would impose 125% tariffs on US goods from Saturday. US stocks fell sharply on Thursday following the news, with the S&P 500 (^GSPC) closing the session 3.5% in the red, retreating after the US market saw one of its best days on record on Wednesday. The escalation in trade tensions between the US and China, leading to heightened volatility in stock markets, has seen investors flock to gold. In addition to concerns that tariffs will drive inflation higher, there are fears that a trade war will tip the global economy into recession. Gold is considered to offer a store of value when inflation rises and the dollar falls, as the precious is typically traded in the US currency. "One of the repercussions of the White House moves has been to bring the validity of US haven destinations such as the dollar and Treasury bonds into question, both of which have suffered," said Richard Hunter, head of markets at Interactive Investor. "Instead, investment flows have been heading towards currencies such as the Swiss franc and the yen, as well as gold which continues to test new highs and has risen by 21% this year alone." Oil prices rose on Friday morning, but still remain at their lowest point since 2021, with concerns that the impact of tariffs on the global economy could weigh on fuel demand. Brent crude futures rose 0.5% to $63.67 a barrel, while US West Texas Intermediate (WTI) crude were up 0.6% to $60.41 a barrel. Stocks: Create your watchlist and portfolio Derren Nathan, head of equity research at Hargreaves Lansdown, said: "It's a challenging time for oil producers. Those with robust trading functions are likely to be seeing some benefit from the volatility. "Firms with strong balance sheets and competitive production costs are those with the best chance of being able to stick to their investment commitments and maintain shareholder payouts through the cycle," he said. "For the wider economy if prices remain depressed it may take the edge off inflationary pressures." In broader market movements, the FTSE 100 (^FTSE) fell 0.3% to 7,889 points on Friday morning. For more details, check our live coverage here. Read more: What should investors do after Trump's tariff U-turn? How to boost your house deposit with a Lifetime ISA | Future Focus What Trump's tariff turmoil means for your pensions
Yahoo
17-02-2025
- Business
- Yahoo
Are you worried about 'stagflation'? Have your say
As pessimism about the UK's economic outlook has grown, some experts have suggested that "stagflation" is taking hold. This refers to a combination of sluggish economic growth and stubborn inflation. Bank of England governor Andrew Bailey warned on Monday that stronger-than-expected economic growth data last week didn't change the UK's broader situation. 'We've had the GDP numbers slightly stronger than we thought it would be, but I don't think it changes the general story we have got, which is the economy has been quite static since late spring last year," he reportedly said in an interview. Figures released by the Office for National Statistics (ONS) last week showed the UK economy grew by 0.1% in the fourth quarter of last year, narrowly avoiding a technical recession — defined as two consecutive three-month periods of declining gross domestic product (GDP). George Lagarias, chief economist at professional services firm Forvis Mazars, said at the time that even with UK economic surprising to the upside, this wasn't reason to "pop the champagne just yet. The spectre of stagflation is very much alive." Read more: UK narrowly avoids recession as economy grows 0.1% "The upside came mainly from the service sector, and in particular professional services," he said. "However, the more forward-looking January PMI [purchasing managers' index] data on British services suggest that orders remain soft, corporate risk aversion high and employment conditions are deteriorating." Meanwhile, Joe Nellis, economic adviser at accountancy and advisory MHA, said that while there were still reasons to worry about the UK's economic situation, "stagflation" fears were unfounded. "This comparison is overly pessimistic," he said. "Our current economic malaise — and it is a malaise — is a world away from the stagflation of the 1970s." He explained that at the height of stagflation in 1974 and 1975, the UK economy contracted by 2.5% and 1.5% each year respectively. "While the Bank of England lowering its growth forecast to 0.75% is indicative of a slowing economy and offers a disappointing outlook, it is hardly comparable," he said. In terms of inflation, Nellis pointed out that in the years 1973 to 1979, the annual inflation rate did not drop below 8.3% and was often more than 10%. By comparison, since inflation fell below 3% in April 2024, the rate has not risen above 2.6%. "The economic landscape is uninspiring, but it's important to remember the full extent of the economic distress that dogged the 1970s before evoking fears of stagflation," he said. Do you think "stagflation" is taking hold in the UK economy? Vote in our poll below. Yahoo UK's poll of the week lets you vote and indicate your strength of feeling on one of the week's hot topics. After the poll closes, we'll publish and analyse the results each Friday, giving readers the chance to see how polarising a topic has become and if their view chimes with other Yahoo UK readers.
