European markets wobbled yesterday while better-than-expected third-quarter US economic growth brought a measure of cheer to Wall Street ahead of a raft of data and policy decision in the week ahead.
Frankfurt, London and Paris diverged slightly with investors waiting on next week’s vital central bank interest rate decisions, while in Asia, Hong Kong and Shanghai had ended just down and Tokyo marginally ahead.
London had risen on Thursday on news that the British economy grew 0.5% in the three months after the nation’s shock June referendum in favour of exiting the European Union.
At the close, London was 0.1% up at 6,996.26 points as investors bedded down before next week’s hectic schedule of monetary policy decisions from many of the world’s top central banks – and headline-grabbing data releases.
With the US jobs report for October up next week Capital Economics suggested that “the focus will return to the Fed and the timing of the next rate hike.”
While judging a change as early as next week unlikely, “a strong employment report yesterday could be decisive in setting the scene for a hike in rates at the Fed’s December meeting,” Capital Economics judged.
Three hours into trading on Wall Street, the Dow Jones index was up 0.3% helped by news that US third-quarter economic growth accelerated to a 2.9% annual rate, its best showing in two years, topping analyst forecasts of 2.5% on an exports jump and strong consumer spending.
However, the S&P 500 and the tech-heavy Nasdaq both dipped slightly amid disappointing earnings from Amazon, which took its share price down 5.1%. In the eurozone, meanwhile, Frankfurt ended 0.2% down at 10,696.19 points but Paris added 0.3% – its overall gain for the week – at 4,548.58 points on a clutch of good company results.
Daniel Larrouturou, director general of fund manager Diamant Bleu Gestion dubbed the US Q3 growth advance as “sizeable – although difficult to interpret potentially reinforcing the determination of the Fed to raise rates by year end.”
Kicking off next week will be the eurozone’s third-quarter GDP on Monday.
Both the Bank of Japan and the Reserve Bank of Australia will deliver their latest interest rate calls Tuesday, followed by the US Federal Reserve on Wednesday and the Bank of England on Thursday.
On the London exchange yesterday, Royal Bank of Scotland, which limited its day loss to 1.2%, was among chief losers after revealing it sank into the red in the third quarter on litigation and restructuring costs.
British Airways owner IAG was the top gainer, adding 5% after third-quarter operating profit beat expectations.

Related Story