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Global economy: upbeat Tankan as Fed meets

Wednesday, December 14, 2016 - 01:55

As the US Fed concludes a policy meeting almost certain to deliver a rate hike, new data points the way up for the global outlook. Japan's key Tankan survey brightens to a one-year high and inflation in the euro zone hints at a rebound. David Pollard reports.

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With a Fed hike all but certain at its latest meeting, the bigger question was over how upbeat the US central bank's outlook would be. Recent US data seemingly at odds with a slower global economy - though that sense may be changing. Inflation edging higher in Europe - even Japan's manufacturing at its most optimistic in a year, according to a key survey. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "The Tankan is actually rather encouraging this time around. What you can see is large Japanese companies in a position where order books look as if they're up, the outlook is looking positive and in fact more positive because the yen has weakened for a better position for them." On the inflation radar, there's at last a stronger pulse from France - its year on year rate, at 0.7 per cent, the highest in over two years. A positive for an ECB still fresh from tweaking its QE programme to carry through to the end of next year. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "Inflation is there. Where's that coming from? It's primarily going to be coming from the oil price ... Oil just goes into everything that we manufacture, so that underlying price rise will be seeping its way through." It was also Britain's turn to report. Unemployment still at just 4.8 per cent - basic pay rising at its strongest pace in over a year. If the number of people in work fell for the first time since Q2 of 2015. (SOUNDBITE) (English) HEAD OF CORPORATE DEVELOPMENT, 7IM, JUSTIN URQUHART STEWART, SAYING: "Those unemployment figures have been really rather good. The wage levels have also been rather good. But let's not be fooled - we are in a position where we are beginning to see areas of tightening." European eyes are on Italy, where a new prime minister faced a confidence vote - the country's fragile banking sector hanging in the balance. Treasury sources told Reuters the government is ready to pump public cash into the ailing Banca Monte dei Paschi. That seen as perhaps the only option left if private investors remain reluctant amid the ongoing political uncertainty.

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Global economy: upbeat Tankan as Fed meets

Wednesday, December 14, 2016 - 01:55