Economy

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$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

(Reuters) -Futures linked to U.S. stock indexes dipped on Friday, as investors exercised caution in anticipation of a crucial monthly jobs report that could influence the Federal Reserve’s upcoming interest-rate decision.U.S. job growth likely surged in November after being severely constrained by hurricanes and strikes, but economists believe this might not signal a material shift in easing labor market conditions, which should allow the Fed to cut interest rates again this month.”Recent Fed speakers have taken pains to leave all options open in December and the decision remains too close to call,” said Max McKechnie, global market strategist at J.P.Morgan Asset Management.”However, if we do get strong payrolls data today, revisions to the Fed’s anticipated path for interest rates next year are all but guaranteed.”Data at 8:30 a.m. is expected to show nonfarm payrolls likely increased by 200,000 jobs last month, while the unemployment rate is expected to climb to 4.2%, according to a Reuters survey of economists.Traders currently see a near 68% chance the Fed will cut interest rates by 25 basis points when it meets later this month, according to CME’s FedWatch Tool.A preliminary reading of December U.S. consumer sentiment calculated by the University of Michigan is also due for release shortly after markets open on Friday.Four Fed officials including San Francisco President Mary Daly and Governor Michelle Bowman are scheduled to make public appearances throughout the day, on the eve of a media blackout that kicks in on Saturday in the run-up to the central bank’s Dec. 17-18 policy meeting. U.S. stocks closed lower in the last session, with UnitedHealth (NYSE:UNH) down sharply and technology shares giving up some gains after a steady increase through the week. Despite Thursday’s pullback, the S&P 500 and the Nasdaq were on track for their third consecutive weekly gains, while the blue-chip Dow was set for minor losses. The three indexes are hovering near record highs as a relentless rally in heavyweight tech stocks – a bid to cash in on the euphoria around artificial intelligence – has led to robust gains throughout this year.U.S. President-elect Donald Trump’s win in the Nov. 5 election has been another recent tailwind for stocks. Analysts expect his tax cut policies and looser regulations could support corporate performance.At 06:58 a.m., Dow E-minis were down 32 points, or 0.07%, S&P 500 E-minis were down 6 points, or 0.10% and Nasdaq 100 E-minis were down 11 points, or 0.05%.Among early premarket movers, Ulta Beauty (NASDAQ:ULTA) advanced 11.9% after the cosmetics retailer raised its annual profit forecast, signaling a revival in demand for perfumes and makeup during the holiday shopping season. Lululemon Athletica (NASDAQ:LULU) added 9.1% after the sportswear maker increased its full-year forecasts, betting on resilient demand for its athletic wear in the U.S. during the holiday shopping season as well as continued strength in its international business. Hewlett Packard Enterprise (NYSE:HPE) gained 1.2% after the maker of AI servers beat Wall Street expectations for fourth-quarter revenue and profit on Thursday. More

The loss of access to the comments by Gao Shanwen, chief economist at state-owned SDIC Securities, come ahead of a meeting of Chinese leaders this month to set the economic agenda for 2025, including growth targets.China’s economy has struggled for momentum this year largely due to a prolonged property crisis, high local-government debt and sluggish consumption, prompting various measures by Beijing to stimulate the economy.Gao said on Tuesday that China’s youth are dragging down consumption due to high unemployment, while spending among older people has plateaued since the COVID-19 pandemic.”The younger a province’s population, the slower the consumption growth,” he said at an invitation-only investor conference, according to a transcript of his speech.He spoke of China’s “dispirited youth” and its “disenchanted middle-aged” and also estimated that China’s GDP growth may have been overstated by 10 percentage points between 2021 and 2023.Gao’s speech was shared online and went viral on social media, but access was later blocked. Local online news reports that had carried his comments were also not accessible.Attempts to follow Gao’s blog on WeChat, or reach him there, were blocked by the platform with a notice that the account had violated rules.Telephone calls to Gao went unanswered. Reuters has sought comment from Tencent Holdings (OTC:TCEHY), which runs WeChat.China’s ruling Communist Party exerts a high degree of control over domestic media and social media platforms in the name of safeguarding social stability and preventing the spread of rumours and fake news. Reports and public discussions on what the party considers as sensitive and potentially disruptive to social order are also routinely removed from the internet, including views critical of the economy and any veiled criticism of policymakers.ONLINE CAMPAIGNIn a similar case, access to a video social media account of Fu Peng, the chief economist at Northeast Securities, was blocked after comments he made in September at a conference.Fu said weaker consumption stems from falling property prices, leaving some middle-class homeowners with negative equity, according to media reports. Such losses, given real estate’s dominance in household wealth, cannot be offset by other income sources, he said.He questioned if an increase in middle class consumption in the past decade had been driven more by the wealth effect of higher property prices than rising incomes.”If it was driven by rising incomes, say, salaries increasing from 10,000 yuan to 20,000 yuan, and then doubling to 40,000 yuan – there would be no issue.”If the consumption upgrade of the past decade was based on the wealth effect created by rising real estate prices, then that is a very dangerous signal.”When Reuters checked Fu’s account on Friday, a notice said access had been blocked. Reuters has asked Tencent for comment but could not find contact details for Fu.In October, the Cyberspace Administration of China – the country’s cyberspace regulator – said it had launched a special campaign to better regulate online news and information and would “rectify” any illegal conduct, following increased scrutiny over independent content creators online including commentaries.The administration did not immediately respond to a request for comment.Ahead of this month’s annual economic work conference, state newspaper People’s Daily said that China is not wedded to achieving specific GDP growth rates.A pace of less than 5% for the economy is acceptable as there is no need for the “worship of speed”, it said on Wednesday.Reuters reported last month that government advisers were recommending that Beijing should maintain an economic growth target of around 5.0% for next year. More

Per capita productivity was unchanged compared to the same quarter a year earlier while it expanded by 0.5% based on hours worked, or at about half the rate of overall economic growth, Eurostat said. Productivity growth has been especially weak since the pandemic and a large gap has opened between Europe and the U.S., driven by a host of factors that could persist. Europe is struggling with an excessive reliance on expensive, imported energy, inefficient labour markets, fragmented regulation and reliance on exports in a period of deglobalisation. The euro zone’s economy expanded by 0.4% on the quarter, unchanged from a previous estimate, while employment was up 0.2%, also in line with a preliminary figure. But there is little to suggest a sustainable recovery with industry still in recession, exports weak, investments muted and households continuing to keep consumption down and opting to save their cash instead. Still, there appears to be a modest improvement in productivity, which reached its lowest level a year ago and has now turned positive, at least based on hours worked.A key issue for the ECB is that poor productivity growth puts upward pressure on prices and makes it harder for the European Central Bank to steer price growth back to its 2% target. More

Investors pumped a robust $21.8 billion into global equity funds during the week, the biggest amount since Nov. 13, LSEG Lipper data showed.U.S. equity funds led with net inflows of $8.85 billion, while European and Asian equity funds also saw substantial inflows, receiving $5.92 billion and $4.58 billion respectively.”The underlying strength of the U.S. economy and further interest rate cuts should provide additional momentum,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.Despite economic hurdles in the euro zone, the European Central Bank is expected to make its fourth rate cut of 2024 this month due to slowing inflation, with continued easing expected through June 2025, fostering a favorable environment for reasonably valued European stocks, he said. By sector, financials and industrials attracted a noticeable $813 million and $573 million, respectively. The healthcare and technology sectors, meanwhile, witnessed outflows totaling a net $790 million and $620 million, respectively.Global bond funds were popular for the 50th successive week with net investments worth $10.82 billion during the week.High yield, dollar denominated medium-term and loan participation funds stood out as these funds drew $1.69 billion, $1.43 billion and $880 million, respectively in inflows.Global money market funds, meanwhile, saw a net $169.4 billion worth of purchases, the largest for a week since early April 2020.Among commodities, gold and precious metal funds lost a marginal $65 million in outflows following two weekly inflows in a row. Energy funds, meanwhile, gained $78 million worth of inflows.Data covering 29,635 emerging market funds showed that weekly outflows for equity funds eased to a four week low of $834 million during the week. In parallel, bond funds saw their first weekly inflow in seven weeks, to the tune of $872 million on a net basis. More

TOKYO/LONDON (Reuters) -Major currencies remained on edge on Friday as markets awaited U.S. job data and digested a politically turbulent week, with French President Emmanuel Macron saying he would appoint a new prime minister in the coming days. In the spotlight will be the U.S. non-farm payrolls report for November, due later in the day, as investors look to second-guess the pace of future Federal Reserve rate cuts. “It’s almost as if we haven’t had a real update on the health of the state of the U.S. labour market for two months, given all the anomalies there had been in the October report,” said Fiona Cincotta, senior market analyst at City Index. U.S. job growth slowed sharply in October, skewed by disruptions from hurricanes and strikes by aerospace factory and dock workers. The dollar index, which measures the greenback against six other currencies, was up 0.07% at 105.79 on Friday after slipping towards a three-week low in the previous session.Facing political turmoil on its own turf, the euro traded down at $1.0582 after rebounding on Thursday as French bonds stabilised.Despite a volatile week, the euro was on track to post a second weekly gain versus the dollar, while it tracked weekly losses against both the Swiss franc and the pound. In France, Macron met allies and parliament leaders on Thursday as he sought to swiftly appoint a new prime minister to replace Michel Barnier, who resigned a day after opposition lawmakers voted to oust his government.For now, the European Central Bank is not expected to react to heightened political instability in Europe when it meets next week, with traders and economists fairly certain it will trim rates by 25 basis points on Dec. 12.U.S. JOBS REPORT IN FOCUSU.S. non-farm payrolls are expected to have increased by 200,000 last month, according to a Reuters survey, after rising by only 12,000 in October, the lowest since December 2020. The unemployment rate was forecast to rise to 4.2%.Markets now see about a 72% chance that the Federal Reserve will deliver a 25-basis-point rate cut when it convenes on Dec. 17-18, up from 66.5% a week ago, CME’s FedWatch tool showed.City Index’s Cincotta said this week’s indicators, including private payrolls, jobless claims and services sector activity, pointed to on-target payrolls. “If we see an on-target non-farm payroll report, then I think that will support confirmation that the Federal Reserve will be cutting interest rates in the December meeting.” A stronger report could instead turn the attention to next week’s U.S. inflation data, Cincotta added. The dollar also briefly spiked against South Korea’s won after local media reported the nation’s main opposition Democratic Party saying lawmakers were on standby after receiving reports of another martial law declaration.The won weakened, leaving the dollar up 0.42% at 1419.27.The political upheaval has kept Korean markets on tenterhooks even as authorities pledged to provide “unlimited liquidity” to stabilise conditions. Elsewhere, China’s yuan was little changed against the dollar but headed for its 10th straight weekly loss amid concerns that new tariffs threatened by U.S. President-elect Donald Trump will heighten strains on the struggling Chinese economy, and whether Beijing will ease its grip on the currency to support exports.The offshore yuan traded about flat at 7.2632.In cryptocurrencies, bitcoin took a breather after catapulting above $100,000 for the first time a day earlier.It briefly slid to a one-week low and was last down 0.82% at $98,170, well off Thursday’s peak of $103,649.Trump said on Thursday he was appointing former PayPal (NASDAQ:PYPL) Chief Operating Officer David Sacks as his artificial intelligence and cryptocurrency czar.The dollar was up 0.32% against the yen at 150.55 as traders pondered the likelihood of a December rate hike in Japan.The Australian dollar fetched $0.64285, down 0.37%, and New Zealand’s kiwi slid 0.52% to trade at $0.5854 . More