Closing summary

That’s all for today. Here’s a quick round-up.

The US economy has begun 2021 with solid growth. GDP rose by 1.6% in the first quarter of the year, an annualised rate of 6.4%, lifted by government and consumer spending, and business investment.

Economists predicted that the US would continue growing robustly this year.

As Paul Ashcroft of Capital Economics put it:

Buoyed by the two rounds of stimulus cheques sent out in the first three months of the year, first-quarter GDP growth accelerated to 6.4% annualised, driven by a massive 10.7% surge in consumption.

That left the level of GDP less than 1% off its pre-pandemic peak. It will recapture that level in the second quarter and, with the pace of growth we expect, any remaining output gap should be eliminated before the end of this year.

Shares on Wall Street hit a fresh record in early trading, with the US Federal Reserve’s pledge to maintain its stimulus spending also supporting stocks. Facebook hit a record peak too, after strong earnings last night.

Strong demand has helped to push the copper price to a ten-year high too, trading over $10,000 per tonne.

In the UK, new data showed that household wealth hit a record high in the pandemic, due to rising house prices, pensions, and saving during the lockdown.

There are also signs that the UK economy is strengthening as lockdown restrictions ease; the numbers of workers on furlough fell, and online job adverts hit their highest since the pandemic.

Eurozone firms and consumers are also more optimistic this month, as vaccine rollouts offer a way out of the pandemic. ING said the sharp increase in confidence shows that the eurozone Covid-19 recession is over.

But, unemployment in Germany rose unexpectedly in April, suggesting that its current lockdown is hurting the economy.

The UK airline industry has also been vocal, with Heathrow urging the government to make sure Border Force can handle the summer rush....

.... and easyJet pushing for people to be allowed to visit Europe without needing to quarantine on their return.

While former prime minister Gordon Brown is leading a whirlwind six-week campaign to persuade the UK-hosted G7 summit to fund a $60bn two-year vaccine and healthcare support package for poor countries, to help them through the pandemic.

Here’s the rest of today’s stories:

Goodnight. GW

Some late travel news... the High Court has told Ryanair that it has to compensate passengers whose flights were cancelled due to 2018 pilot strikes.

Which? has the details:

Ryanair argued that the strikes were an ‘extraordinary circumstance’ and therefore out of its control. This was despite the fact that the official adjudication scheme, AviationADR, ruled that strikes by its own employees were its responsibility and it had to pay

Ryanair simply left the adjudication scheme and, in December 2018, the CAA announced enforcement action against the airline.

It said passengers were due compensation of up to €400, depending on the length of the flight. Today (29 April) the High Court agreed...

“Ryanair refused to pay compensation to passengers affected by industrial action by pilots in 2018...Ryanair could not claim delayed/cancelled flights were ‘extraordinary circumstances’. High Court has today agreed with our interpretation” @UK_CAA

— Chris Choi (@Chrisitv) April 29, 2021

UK household wealth rises to record level during Covid crisis

UK household wealth has hit a record high during the pandemic, partly driven by rising house prices, defined contribution pensions schemes and saving during the pandemic

Figures released earlier today by the ONS show that the household sector’s net worth grew by 9.1%, or nearly £1 trillion, to £11.4 trillion between 2019 and 2020.

This is due to increases in ‘land’, ‘insurance and pension schemes’ and ‘currencies and deposits’, it says.

A rise in the value of land in 2020 increased growth of the household sector’s net worth by 3.8 percentage points, and was the result of an 8.1% increase in UK average house prices. The reduction in stamp duty rates are likely to be a main factor driving increases in house prices.

Increases in the value of ‘insurance, pension and standardised guarantee schemes’ contributed to a further growth of 3.3 percentage points in the sector’s net worth and was the result of an increase in the value of defined benefit pension schemes, that rose mainly because of a fall in gilt yields in 2020.

‘Currencies and deposits’ contributed 1.8 percentage points of the sector’s growth, which is likely to have been driven by a significant increase in the household savings ratio, which is at its highest level since 1962.

UK household net worth

Overall, the UK recorded a net worth of £10.5 trillion in 2020, an average of £158,000 per person, with government wealth falling due to higher borrowing.

The UK’s net worth increased by 4.4% or £400bn in 2020; this was the strongest growth since 2016 and above the compound annual growth rate of 4.2% between 2009 and 2020.

UK net worth
UK net worth Photograph: ONS

This puts the issue of inter-generational inequality firmly under the microscope again, as older people tend to be the ones owning the land and those pension pots.

The FT says:

Ashley Seager, co-founder of the Intergenerational Foundation, a campaign group promoting the interests of younger and future generations, said the figures demonstrated two issues that were being placed on younger people.

“The first comprises the housing wealth transfer from younger borrowers to older homeowners. The second is the mountain of government debt, which has ballooned thanks to Covid-19, that will be passed on to younger generations to bear along with lower standards of living, more precarious employment and far lower pensions in old age,” he said.

Here’s a neat chart putting the US recovery in historic context:

The $1.8 trillion stimulus package has contributed to a quick economic rebound compared to the long slog after the financial crisis. It’s a lesson for the next U.S. government in crisis: Go big or go home. @GinaChon explains on Capital Calls. https://t.co/NcIeGYHAJR pic.twitter.com/ois6HQB5iG

— ReutersBreakingviews (@Breakingviews) April 29, 2021

Back in New York, the early rally has somewhat fizzled out.

The S&P 500 index is now up just 0.1%, or 4 points, at 4,188, while the Nasdaq has dipped into the red.

Online auction house eBay are the top faller on the S&P 500, down 11%.

CNBC blames ‘light’ guidance from eBay last night, which is detracting from better-than-expected revenues and profits last quarter:

EBay said Wednesday afternoon that it expects 91 cents to 96 cents in adjusted earnings per share and revenue of $2.98 billion to $3.03 billion in the second quarter. Analysts polled by Refinitiv had expected 98 cents per share and $2.98 billion in revenue.

Several investors were spooked by the lighter-than-expected outlook and either downgraded the stock or lowered their price targets.

Shares in Ford have fallen almost 10% too, after it warned yesterday that semiconductor shortages will hit its production this quarter.

The Detroit News has the details:

Ford Motor Co. booked a $3.3 billion profit in the first quarter, but warned that it could lose as much as half of its planned vehicle production for the second quarter amid a worsening global semiconductor shortage — a prospect one analyst called “jaw dropping.”

The Dearborn automaker generated $36.2 billion in revenue and delivered a profit margin of 9%. Executives attributed the results to efforts to mitigate the impact of the chip shortage, a refreshed vehicle portfolio in the midst of being rolled out, and longer-term changes aimed at improving the fundamentals of the business.

But Facebook are still up 6% after smashing forecasts last night, while brewing group Molson Coors have jumped 7% to the top of the S&P 500 risers after reporting a surprise profit for the last quarter, despite lockdown restrictions hurting sales in pubs and bars.

European stock markets also ended the day lower, despite the surge in economic and consumer confidence reported this morning.

Germany’s market underperformed, with the Frankfurt’s DAX ended the day down 0.9%.

European stock market close, 29 April 2021
European stock market close, 29 April 2021 Photograph: Refinitiv

Sophie Griffiths, market analyst at OANDA, says the surprise 9,000 rise in German unemployment this month disappointed investors:

The Dax is a noticeable laggard in Europe following disappointing labour market data.

While the unemployment rate holds at 6%, the unemployment change unexpectedly increased by 9k. The data comes hot on the heels of weaker German GFK consumer confidence numbers and points to the Eurozone’s largest economy struggling amid its third Covid wave.

WPP refuses to pay Sorrell's share awards over alleged leaks

Blimey. WPP, the world’s biggest advertising company, is withholding share incentive awards from former CEO Sir Martin Sorrell.

In its annual report, released this afternoon WPP alleges that its former chief had leaked confidential client information to the media during his time at the company.

As a result, awards granted under its long-term executive performance share plan (EPSP) will lapse.

WPP says its Compensation Committee had determined that...

...the 2016 and 2017 EPSP Awards granted to Sir Martin Sorrell, the former Group Chief Executive, will lapse as a result of Sir Martin Sorrell’s disclosure of confidential information belonging to WPP and certain of its clients to the media during his tenure as a WPP director.

Sorrell build WPP into the world’s biggest ad group, but left WPP in 2018 amid allegations of personal misconduct, which he has always denied.

Sorrell, who is now building a new marketing company, S4 Capital, says the matter is now with his lawyers.

Reuters reports:

“Just another case of peanut envy,” Sorrell told Reuters. “It’s a bit rich that they’re accusing me of leaks, given their own over the last three years.”

“They’ve had to go back several years to try and find an excuse to deny me what’s mine. I’ve left it to my lawyers to deal with,” Sorrell said.

Full statement from Sir Martin here: pic.twitter.com/MwdauIJ6Hb

— Ben Woods (@Ben_Woods01) April 29, 2021

WPP has denied founder and former boss Martin Sorrell share awards because they allege he leaked confidential information to the press.

His response is quite something: pic.twitter.com/p7gELbdZj8

— Thomas Seal (@TW_Seal) April 29, 2021

FTSE 100 close

After a late slide, the UK’s blue-chip stock index has ended the day roughly where it began.

The FTSE 100 couldn’t hold the 7,000 point mark, and has closed 2 points lower at 6961 points.

Banks bookended the Footsie, with Standard Chartered the top riser (+5.6%), after beating expectations with a 59% jump in profits, and NatWest dropping 3.3% despite nearly doubling its earnings.

Across the market, consumer non-cyclicals (such as Unilever), financials and tech stocks gained ground, while energy, industrials and utilities dipped.

The FTSE 100’s top risers and fallers, April 29 2021

McDonald's sales growth breaches 2019 levels as pandemic curbs ease

Fast food chain McDonald’s has beaten Wall Street estimates, after returning to pre-pandemic sales levels.

Global like-for-like sales grew 7.% in the quarter, overtaking 2019 levels, and well ahead of forecasts of 4.7% growth.

Comparable sales in the US surged by 13.6%, as vaccine rollouts and stimulus checks encouraged Americans to eat out again, encouraging McDonalds to lift its sales outlook for this year.

KO: "For the quarter, global comp sales increased 7.5%, with growth across all segments. And, comps were up significantly in March as we started to lap the impact of COVID-19." $MCD pic.twitter.com/FDvNwayh6F

— McDonald's Corporation (@McDonaldsCorp) April 29, 2021

Chicken products were a key driver, reports CNBC:

Chicken-focused menu items, like the Spicy Chicken McNuggets and Crispy Chicken Sandwich, helped fuel sales this quarter.

“We’re two months past the initial launch of late February, and we still feel really good about the volume and unit movement that we’re seeing,” Erlinger said about the new chicken sandwich.

Next quarter’s U.S. same-store sales are also expected to outpace 2019 levels, in line with the first-quarter performance.

This past quarter, we saw the power of our system at work as our global comp sales & revenues surpassed pre-pandemic levels. Check out McDonald's Q1 2021 earnings. https://t.co/hRVGfPdz9R pic.twitter.com/Q0bT82DacB

— McDonald's Corporation (@McDonaldsCorp) April 29, 2021

Back in the UK, the boss of NatWest has said the bank would move its headquarters from Edinburgh to London if Scotland voted for independence.

Alison Rose said an independent Scotland would be too small to support the banking group, formerly known as Royal Bank of Scotland, which has been based in the Scottish capital since it was founded 294 years ago.

Rose said the state-owned lender was “neutral” on the issue of Scottish independence because it was for the people to decide. However, she added:

“In the event that there was independence for Scotland our balance sheet would be too big for an independent Scottish economy, and so we would move our registered headquarters, in the event of independence, to London.”

Copper hits $10,000 per tonne for first time since 2011

The copper smelter at Mopani Mines in Mufulira, Zambia.
The copper smelter at Mopani Mines in Mufulira, Zambia. Photograph: Per-Anders Pettersson/Getty Images

Copper has hit its highest level in a decade, amid growing worries that supply can’t keep pace with robust demand.

Copper, seen as a key indicator of economic demand, has hit the $10,000/tonne mark for the first time since February 2011.

According to Bloomberg:

Prices rose as much as 1.3% to $10,008 a ton on the London Metal Exchange. Prices hit a record $10,190 in February 2011.

Copper topped $10,000 a metric ton for the first time since 2011 https://t.co/kVrXMP2L0v

— Bloomberg (@business) April 29, 2021

Copper has been lifted by rising demand as economies reopen from the pandemic, and also pushed up by the weakening US dollar (as commodities are typically priced in dollars).

The move to green energy is also creating a scramble for copper, as the metal is an important part of wind turbines, solar farms and electric cars.

Also, protests in Chile - a top copper producer - over the government’s Covid-19 relief policies have raised fears that supplies could be disrupted.

The Financial Times has more details:

Copper, the world’s most important industrial metal, has traded above $10,000 for the first time in a decade as the rebound from the coronavirus pandemic unleashes a surge of demand from China and the developed world that could not be matched by supply.

After a wobble in March due to concerns about fresh lockdowns in Europe and a strengthening US dollar, copper has resumed the powerful rally that started a year ago when it sank to $4,300 a tonne.

The price has climbed 11 per cent since the start of the month and is now closing in on the record high of $10,190 set during a commodity boom in 2011. It reached $10,008 on Thursday.

“With reflation signals on fire, copper could test all-time highs,” said Bart Melek, head of commodity strategy at TD Securities.

Copper hits 10-year high above $10,000 a tonne https://t.co/QuAX4DJJ6K

— Financial Times (@FT) April 29, 2021

#Copper topped $10,000 a ton for the first time since 2011. Rally fueled by stimulus measures, zero interest rates & green transformation. Push toward cleaner energy sources seen boosting consumption of copper, used in everything from EV to solar power. https://t.co/CW12gbAedj pic.twitter.com/Gzs4iffAgi

— Holger Zschaepitz (@Schuldensuehner) April 29, 2021

Wall Street hits record high as Facebook surges

In New York, the S&P 500 index and the tech-focused Nasdaq have both hit record highs at the start of trading.

Optimism about the US recovery has been boosted by today’s GDP report, showing strong growth in Q1.

There’s also relief that the US Federal Reserve played down suggestions it could slow, or taper, its bond-buying stimulus programme soon, after leaving interest rates at record lows last night.

Last night’s very strong results from Facebook and Apple are also pushing the market higher.

Facebook shares have jumped over 7% to a new record high around $330, having smashed forecasts with a 48% jump in revenues in Q1, to $26.1bn.

FACEBOOK SHARES HIT RECORD HIGH$FB

— Breaking Market News (@breakingmkts) April 29, 2021

Apple’s shares have gained almost 1%, after smashing sales forecasts last night.

Its revenues jumped by 54% year-on-year as consumers bought more iPhones and laptops, and demand in China surged.

(I rounded up some analyst reaction here earlier.)

In early trading:

  • Dow Jones industrial average: up 142 points or 0.4% at 33,962
  • S&P 500: up 30 points or 0.7% at 4,213.9 points
  • Nasdaq Composite: up 118 points or 0.85% at 14,169

S&P 500 opens at a record after blowout earnings from Facebook and Apple https://t.co/t1OLjZcF8h

— CNBC (@CNBC) April 29, 2021

Updated

US jobless claims at pandemic low

The number of American’s filing new unemployment claims remains at its lowest level since the pandemic.

Around 553,000 initial claims for jobless support were filed last week, down from an (upwardly revised) 566,000 in the previous seven days.

That’s the lowest since the first wave of the pandemic a year ago, although still much higher than before Covid-19 (when initial claims were in the low 200,000s).

Also, around 122,000 people filed new claims for support under the Pandemic Assistance Program (for self-employed people and gig economy workers, who don’t qualify for initial claims).

UI Claims: week ending 4/24:
initial claims (697m reg + PUA)

reg state: actual 575k
seasonally adj reg 553k
4-wk avg (SA): 612k
yr-ago 4-wk avg: 4.668m

PUA 122k

insured unempl wk ending 4/17
act.: 3.791 m
S.A.: 3.660 m https://t.co/O8YMIoXCUf 1/4 pic.twitter.com/xgth6wRmDI

— Chad Stone (@ChadCBPP) April 29, 2021

🇺🇸Encouraging trend continues: initial claims for #unemployment fell to #Covid19 low in w-e Apr 24

Regular claims
🟢553k (SA): -13k
🟢575k (NSA): -9k

PUA (NSA)
🟢122k: -12k

Still high 697k new weekly jobless benefits claimants, but very solid ⬇️trend: under 1mn since mid-Mar pic.twitter.com/n1FSBsdWdj

— Gregory Daco (@GregDaco) April 29, 2021

Further progress!! Both regular initial claims (nsa) and PUA initial claims fell, marking the fourth straight week of decline for total initial claims (nsa). Clear downward movement is great news. pic.twitter.com/HUnsOvgXtH

— AnnElizabeth Konkel (@AE_Konkel) April 29, 2021

Full story: US economy soars 6.4% in Q1 as stimulus and vaccinations help recovery

The US economy took off in the first quarter soaring 6.4% as rising vaccinations, a massive round of government stimulus and a steady recovery in the jobs market helped reverse some of the impact of the coronavirus pandemic.

The annualized rate, released by the Commerce Department on Thursday, suggests the US economy is firmly on the road to recovery. In normal times US gross domestic product (GDP) – the broadest measure of the economy – grows at about 2-2.5% a year but the pandemic triggered wild swings as the country went into lockdown and businesses shuttered.

A year ago US unemployment hit a post World War II high of 14.8%, it has since fallen to 6%. The economy suffered its worst quarterly retraction in history last year, shrinking 32.9% on an annualized basis. It grew at 4.3% in the last three months of 2020 after recording a remarkable annual growth rate of 33.4% in the previous three months.

“The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the Covid-19 pandemic,” the commerce department said.

Here’s the full story:

US GDP: Snap reaction

Economists, analysts and investors are broadly welcoming the acceleration in US growth in January-March.

Joseph Brusuelas, chief economist at consultancy firm RSM US, says the US has made a ‘robust start’ to 2021.

US Q1'21 GDP Major Takeaway: Robust start to 2021 growth picture. Inside the report one gets the sense that shift to service demand in the middle of the year & accumulation to support the resurrections in domestic demand will turbocharge Q2'21 growth. We expect 10.7% growth in Q2

— Joseph Brusuelas (@joebrusuelas) April 29, 2021

Greg Daco of Oxford Economics says the economy is showing ‘strong momentum’.

🚨US economy started 2021 with strong momentum🚀

🇺🇸Real #GDP:
🟢+6.4% in Q1 (annualized)
🟢+1.6% (simple terms)

🟡Annual trend: +0.4% y/y
🟡Shortfall relative to pre-#COVID19: -0.9%

Outlook for 2021:
🟢+7.2% average
🟢+7.4% Q4/Q4

via @OxfordEconomics pic.twitter.com/9twUztZxvV

— Gregory Daco (@GregDaco) April 29, 2021

Odeta Kushi of real estate firm First American predicts a surge in economic activity & hiring this year.

Economic recovery picks up. GDP is now less than 1% below its pre-pandemic peak. Looking ahead, there will likely be a surge in economic activity & hiring. There may be more than $2 trillion in excess savings built up during the pandemic that can satisfy pent up demand. pic.twitter.com/WWhf7SMrGV

— Odeta Kushi (@odetakushi) April 29, 2021

Economist Dean Baker points out that the trade deficit widened during the quarter:

#GDP trade deficit expanded as imports rose 5.7 percent, while exports edged down 1.1 percent. This will be a major release valve for any inflationary pressures the economy develops this year

— Dean Baker (@DeanBaker13) April 29, 2021

Consumer spending jumped at an annualised rate of 10.7% in the first quarter of 2021, a time in which Americans received stimulus checks to help them through the pandemic.

Spending on durable goods (such as cars, books, computers and furniture) surged by an annual rate of 41% (or just over 10% during the quarter).

Business investment was also strong, growing at a annual pace of 9.9%.

But, net trade dragged on growth. While imports jumped 5.7% in the quarter, exports were down by 1.1%.

US Q1'21 GDP: Outlays on goods up 23.6%, durables 41.4%, non durables 14.4% & services 4.6%. Gross private domestic investment declined by 5%. 4.8% decline in structures. Intellectual property investment up 10.1%, equipment up 16.7%. Residential investment up 10.8% pic.twitter.com/I9UP2uLx1I

— Joseph Brusuelas (@joebrusuelas) April 29, 2021

ECONOMY WATCH: US economy grew robust 6.4% in the first quarter, GDP shows. Vaccines, stimulus & more hiring do the trick. Consumer spending jumps 10.7%. Biz investment also up 10%. Second-quarter GDP expected to be even stronger. One caveat: inflation rises at 3.5% annual pace

— MarketWatch Economy (@MKTWeconomics) April 29, 2021

US GDP: Economy grew at annualised 6.4% in Q1.

Boom! The US economic recovery accelerated in the first three months of 2021.

US GDP rose at an annualised rate of 6.4% in January-March, up from annualised growth of 4.3% in October-December.

That’s the equivalent of quarterly growth of 1.6%.

It shows that the economy was lifted by stimulus spending during the quarter, and by the rapid Covid-19 vaccination program that has helped the economy to reopen.

U.S. economic output rose 1.6% in the first quarter (a 6.4% annual rate), propelled by vaccines, reopenings and stimulus $$$.https://t.co/Ie4K2YfXHq

— Ben Casselman (@bencasselman) April 29, 2021

The Bureau of Economic Analysis says personal spending, government spending and business investment all lifted growth:

The increase in real GDP in the first quarter reflected increases in personal consumption expenditures (PCE), nonresidential fixed investment, federal government spending, residential fixed investment, and state and local government spending that were partly offset by decreases in private inventory investment and exports.

Imports, which are a subtraction in the calculation of GDP, increased.

Reaction to follow...

Updated

Inflation in Germany has risen again this month.

Germany’s annual consumer price inflation rate jumped to 2.1% (on a harmonised basis) in April, up from 2.0% in March.

That’s further above the European Central Bank’s target of keeping inflation close to but below 2%.

Germany CPI (Apr) comes in at 2.1%, exp: 2%, prev: 2%

— Michael Hewson 🇬🇧 (@mhewson_CMC) April 29, 2021

On an unharmonised basis, German CPI inflation rose to 2%.

Bad news for the ECB and the Eurozone economy. Germany inflation rate rises to 2.0% YoY in April from previous 1.7% and more than expected 1.9%. Inflation jumped also in Spain to 2.2%, much more than expected 1.3%. @graemewearden

— BP PRIME UK (@bpprimeuk) April 29, 2021

Rising energy costs are one factor, given the recovery in crude oil prices.

Good Morning from #Germany, where inflationary pressure keeps rising. German import prices rose by 6.9% YoY, the highest rate since Apr2011, vs 6.0% expected, mainly due to energy prices, which significantly exceeded experts' expectations. pic.twitter.com/IYKA9LfapI

— Holger Zschaepitz (@Schuldensuehner) April 29, 2021

Updated

Victoria Harbour in Hong Kong, China .
Victoria Harbour in Hong Kong, China . Photograph: Tyrone Siu/Reuters

Hong Kong is the most expensive city in the world to rent a luxury apartment, followed by New York, Singapore, London and Sydney, according to the estate agent Knight Frank.

Its latest research shows a budget of $10,000 a month would rent less than 1,500 square feet in Hong Kong; $2,250 square feet in New York, and between 2,500 and 3,000 square feet in the other cities.

Of the eight cities tracked by Knight Frank, Dubai and Madrid offer the most space – 4,800 and 5,000 square feet respectively.

Earlier this year, a house on Hong Kong’s The Peak rented for HK$1.35m ($174,000) a month, which equates to more than $2m a year.

Rents in prime central London and Manhattan both fell 14% in February compared with a year earlier. But the tide is turning; the rate of rental declines is slowing and new lease signings are recovering in both markets with landlords offering large discounts.

Knight Frank’s head of prime central London lettings, David Mumby, said:

“As soon as the passenger numbers return via the main transport hubs, we will see fairly a rapid correction of the recent rent reductions.

“Stock will return to the short-term Airbnb rental market and with a normalisation of office occupancy, the undersupply of prime property will drive rents upwards. We are already seeing this starting to materialise in certain areas for the very best properties and it’s only a matter of time before this feeds through to the wider market.”

Here’s economics editor Larry Elliott on the drop in workers on furlough this month:

Workers are starting to come off furlough as a surge in spending by UK consumers allows businesses to start reopening after their long winter shutdown, according to the latest official snapshot of the economy.

In its weekly digest of the latest indicators of activity, the Office for National Statistics (ONS) reported that the proportion of the workforce on furlough of all businesses dropped from 17% to 13% during April.

The ONS said 83% of businesses were now trading, a rise of six percentage points since late March, when tighter lockdown restrictions were in force.

Reopening of non-essential stores prompted a surge in spending on what the ONS describes as delayable goods – items such as clothing and furniture. Card payments for this category of expenditure rose by 21 percentage points for a second successive week in the seven days ending 21 April and stand at 110% of their pre-pandemic level.

And here’s the full story:

ING: Eurozone's Covid-19 recession is over

Economic sentiment in the eurozone went through the roof this month, says Peter Vanden Houte of ING.

He writes:

The European Commission’s economic sentiment indicator soared in April, with the services sector now also in expansion mode. We can now declare the Covid-19 recession over. Inflation expectations also continue to increase.

Vanden Houte also confirms that today’s data is much stronger than expected, with gains across the board:

The European Commission’s economic sentiment indicator surged to 110.3 points in April from 100.9 in March, dwarfing the consensus forecast of 102.2.

In two months’ time sentiment has gained 16.9 points, now firmly standing above its long-term average. Amongst the bigger member states, all countries saw higher sentiment figures, with the Netherlands gaining 10.7 points, Spain 9.1, France 8.5, Germany 5.7 and Italy 5.3.

Eurozone sentiment has improved so much, @PVandenHoute says we can now declare the Covid-19 recession overhttps://t.co/0AJppF0PwC

— ING Economics (@ING_Economics) April 29, 2021

European economic and consumer confidence surge

In another boost, economic optimism across Europe has surged to its highest levels in over two years, amid hopes that the economy will recover from the pandemic.

The EC’s latest Economic Sentiment Indicator (ESI) jumped sharply this month, lifted by hopes of an economic recovery among both consumers and businesses.

The EC’s gauge of eurozone confidence jumped to 110.3 points for April, up from 100.9 in March. Across the wider EU, the confidence index hit 109.7 up from 99.9.

This is “markedly above its long-term average and pre-pandemic level for the first time since the outbreak of COVID-19 on the continent”, says the EC.

As this chart shows, it’s the highest reading since 2018, as confidence rebounds from its slump during the first lockdown.

Eurozone economic confidence
Eurozone economic confidence Photograph: EC

Industry confidence increased for the fifth month in a row to a new all-time high, with companies more upbeat about production expectations, their order books, and their stocks of finished products.

Consumer confidence also rose sharply this month, rising over its long-term average for the first time since March last year.

The EC says:

Households’ expectations improved both in respect of the general economic situation in their country and their personal sphere, as measured by their future financial situation and their intentions to make major purchases.

Consumers’ views on their past financial situation, by contrast, showed no signs of a recovery from the COVID-19 induced slide, improving only marginally on the month.

Eurozone economic confidence +9.4pts in April to a strong 110.3 (v mkt exp of 102.2) with gains in consumer and business confidence.
Suggests optimism re vaccines and reopening and a strong growth rebound ahead.
(Bloomberg chart) pic.twitter.com/hE3slwxb8U

— Shane Oliver (@ShaneOliverAMP) April 29, 2021

UK furloughed workers fall as job vacancies rise

The number of UK workers on furlough has fallen, in a sign that the economy is picking up as the lockdown eases.

New figures from the Office for National Statistics show that the proportion of the workforce of all UK businesses on furlough fell to 13% in the two weeks to April 18th, down from 17% in the previous fortnight.

This fall comes as non-essential shops, pubs, restaurants and leisure sites reopened this month - with restrictions - and as firms prepare for further easing.

In England, the lockdown was eased on Monday April 12, while Wales lifted restrictions on non-essential shops.

UK furlough data

The ONS also reports a rise in vacancies being advertised online, to the highest level since the start of the pandemic.

The volume of UK online job adverts was at 103% of its average February 2020 level on 23 April 2021; this is an increase of 4 percentage points from the previous week and the first time it has exceeded its February 2020 average level since 6 March 2020.

The largest week-on-week increases were in “domestic help” and “construction and trades”, though both increases can (the ONS says) be “partially attributed to an increase in adverts from a single company”.

Adverts for jobs in “catering and hospitality” and “wholesale and retail” also rose sharply - another sign that the reopening is feeding through to the jobs market.

“Catering and hospitality” vacancies by 16 percentage points, to 82% of its average February 2020 level, which is the highest proportion since 12 March 2020.

Job opportunities at “Wholesale and retail” rose by 8 percentage points to 88% of its February average 2020.

ONS figure for online job vacancies

The ONS also found that more firms have restarted operations this month, or are planning too.

Around 9% of currently trading UK businesses had started trading within the last two weeks after a pause in trading.

This means that 83% of businesses are now trading, up from 77%, with a further 4% of businesses intend to restart in the next two weeks.

Additionally, Bank of England spending data shows that spending on ‘delayable goods’ such as clothing and furnishings surged last week, and is now 10% above its February 2020 average.

Updated

Apple and Facebook to push Wall Street higher

Wall Street is also on track to open higher, after Apple and Facebook both beat expectations last night with some really sparkling results.

⚠️BREAKING:

*S&P 500, NASDAQ FUTURES JUMP TO RECORD HIGHS AFTER APPLE, FACEBOOK BEAT ESTIMATES $DIA $SPY $QQQ $IWM $VIX $AAPL $FB pic.twitter.com/EFrnWQmCUl

— Investing.com (@Investingcom) April 29, 2021

Both companies underlines the growing dominance of Big Tech, by continuing to grow revenues dramatically in the pandemic, even as focus turns to the recovery.

Shares in Apple are up 2.7% in premarket trading, while Facebook are 7% higher.

Michael Hewson of CMC Markets explains:

The earnings bonanza continued last night with Facebook blasting through expectations, its Q1 revenue rising 48% to $26.2bn, while net income rose to $9.5bn or $3.30c a share. The increases were driven by a 12% increase in ads sold, as well as a 30% increase in average prices per ad. The company said it expects Q2 revenue to be just as good before a slowdown in the second half.

Expectations around an Apple earnings announcement is always high, and last night was no different. A year ago, Apple revenues were $58.3bn for Q2, while this year expectations were for a number of around $77bn, with the new 5G iPhone expected to drive sales.

As appears to be the norm these days Apple blew through expectations with record Q2 revenues of $89.58bn, driven by iPhones, $47.9bn, iPad, $7.81bn, services, $16.9bn, Mac, $9.1bn and wearables of $7.84bn.

Neil Wilson of Markets.com says Apple posted ‘another stunning quarter’, beating expectations with soaring sales and a fresh round of share buybacks.

The company raised the dividend by 7% to $0.22 per share and announced a $90 billion in share buybacks. Apple revenues grew more than 50% year-on-year, with total sales of $89.58bn vs around $77bn expected. EPS came in at $1.40 vs $1.00 expected. At all levels we can see Apple outperforming even the most bullish expectations.

The core iPhone business saw sales up 65% to $47.94 billion vs. $41.43 billion estimated. This was stunning – the iPhone remains the golden goose and way in which consumers become part of the Apple ecosystem. Services – a higher margin business that includes things like the Cloud, App Store, Apple Music – grew revenues by 26.7%. Revenues in China rose 87% - albeit this was in comparison to a quarter last year in which China was most affected by the pandemic. Shares rose 2% in the after-hours market. A really exceptional quarter – it’s not a surprise that it exceeded quite a low bar, but noteworthy just by how much.

FTSE 100 back over 7,000 points

In the City, strong earnings figures have driven the FTSE 100 index has back over the 7,000 point mark, towards the pandemic high seen earlier in April.

The blue-chip index is up 52 points at 7015, a rise of 0.75% today.

#ftse monthly levels and channel (4h chart) pic.twitter.com/8UepXDIWRu

— UK Stocks (@UKStocks) April 29, 2021

Standard Chartered are the top riser, up 7%, after reporting strong results this morning. Its pre-tax profits jumped 59% to $1.4bn in Q1, up from $886m a year ago (underlying profits rose 18%).

CEO Bill Winters said the bank was benefitting from the economic recovery from the pandemic:

“Our first quarter performance was strong. Economic recovery advanced in many of our markets leading to improved transaction volumes and profitability.

This was particularly the case in our Financial Markets and in Wealth Management, which had its best ever quarter.

Medical device maker Smith & Nephew have jumped 5.7%, after reporting an 11% rise in revenues in the last quarter.

It explains:

  • Orthopaedics revenue up 1.6% underlying, with strong growth in Hip Implants and Trauma & Extremities offset by anticipated weaker performance in Knee Implants
  • Sports Medicine & ENT revenue up 10.4% underlying, driven by the return of elective surgeries in an outpatient setting
  • Advanced Wound Management revenue up 9.3% underlying, benefitting from improved commercial execution

Other risers include HSBC (+3.3%) , which reported an 80% jump in profits earlier this week....

...and Unilever (+3%), up 3% after reporting solid sales this morning.

My colleague Jasper Jolly explains:

The owner of brands ranging from Ben & Jerry’s to Marmite reported on Thursday that sales increased by 5.7% in the first quarter compared with 2020 once the effects of currency moves and changes to its collection of brands were stripped out.

Overall turnover fell by 0.9%, but currency moves accounted for a decline of 8%.

Unilever emerged from 2020 mostly unscathed as its vast portfolio of products, which also includes Domestos bleach and Dove soap, allowed it to ride through the turbulence of the coronavirus pandemic. It briefly became the FTSE 100’s most valuable company during 2020.

BT are also in the risers, up 2.7%, on the prospect of selling a stake in BT Sport.

But NatWest are the top faller, down 3.5% this morning despite beating profit forecasts and saying there were ‘reasons for optimism’.

Updated

German unemployment rises

German unemployment rose unexpectedly in April, as the pandemic continued to weigh on its recovery.

Companies also put more staff on shorter working hours via Germany’s subsidized job protection schemes, signaling that demand was being hit by pandemic restrictions.

The Labour Office said the number of people out of work increased by 9,000 on a seasonally adjusted basis to 2.76 million; economists had expected a 10,000 decline.

🇩🇪 Germany, Unemployment Change (Apr) announced.

🔴 Forecast: -10

🔴 Actual: 9K#eurusd #ger30 #dax pic.twitter.com/uyiSECsCES

— GANNMarkets (@GannMarkets) April 29, 2021

Germany Unemployment Change at 9K https://t.co/SnKnEyrGsg pic.twitter.com/GSTfCWVAZC

— Trading Economics (@tEconomics) April 29, 2021

The seasonally adjusted unemployment rate was unchanged at 6.0%.

The Federal Employment Agency explains:

Compared to April last year, the number of unemployed has increased by 127,000. The unemployment rate recorded a year-on-year increase of 0.2 percentage points.

However, April 2020 was already massively affected by the Corona crisis. The consequences of this amount to an increase of around 500,000 unemployed or 1.1 percentage points in the unemployment rate.

The number of employees put on short-time work schemes increased to 3.27 million in February from 2.9 million in January.

This Kurzarbeit programme is designed to limit job losses when a company’s demand falls, and helped to cushion the impact of Covid-19 (as with the UK’s more recent furlough scheme).

Germany recently tightened its restrictions on places with high infections, including curfews, limits on customers in shops, leisure center closures and restrictions on household contacts under a “nationwide emergency brake”.

Labour Office head Detlef Scheele said:

“The ongoing restrictions in many areas are slowing down the recovery, but are not leading to any new burdens overall.”

March 2021: #employment slightly up on the previous month. https://t.co/qPPsOw3EQn

— Destatis news (@destatis_news) April 29, 2021

The Covid-19 pandemic continues to hit Spain’s economy.

New data this morning shows that the number of employed people in Spain fell by 137,500 people in the first quarter of 2021, compared to the previous quarter, as more jobs were lost.

That took the employment total to 19,206,800.

The unemployment rate fell unexpectedly, though, to 15.98% from 16.13%.

However, that’s not the good news it first appears -- more people have simply dropped out of the labour market (so they’re not classed as economically active).

Spain Unemployment Rate at 15.98% https://t.co/Ap66Xh9wpp pic.twitter.com/7vDkUgLzBT

— Trading Economics (@tEconomics) April 29, 2021

Reuters explains:

After a year of COVID-19 many have simply stopped looking for work, while hundreds of thousands more are being supported by Spain’s ERTE furlough scheme and are not reflected in the figures.

Overall, the number of unemployed grew by 341,000 from the first quarter of 2020 to the first quarter of 2021, while almost half a million jobs have been destroyed, highlighting the impact of the pandemic.

Sweden grew 1.1% in Q1 despite Covid third wave

Sweden’s economy grew much faster than expected in the first quarter, despite the latest wave of Covid-19 infections.

Swedish GDP rose by 1.1% in the January-March quarter, beating forecasts of 0.5% growth.

Sweden’s Statistics Office says the economy grew strongly in March, with GDP up 2.1% during the month.

Melker Loberg, economist at Statistics Sweden, says:

“One year after the outbreak of the pandemic in Sweden, GDP is now almost back at the same level as before the downturn last spring.

Swedish GDP Indicator Q1 Report – SCBhttps://t.co/ofnG58Avpf pic.twitter.com/67m8xV6J89

— LiveSquawk (@LiveSquawk) April 29, 2021

Sweden initially resisted imposing restrictions, but introduced new lockdown rules in January as cases surged, which restricted the number of people allowed in shops, businesses and public places such as theatres and swimming pools.

It has now delayed lifting some of those rules, after recording the highest new infections per person in Europe earlier this month.

BT Sport sale: What the analysts say

Selling a stake in BT Sport would signal that the telecoms firm has confidence in its core consumer offer, says analysts at investment bank Jefferies.

Jefferies argues that any proceeds received from selling a stake in BT Sport would be an upside to market estimations of BT’s fair value.

Although it was an effective tool in retaining customers and stabilising the consumer retail business, the direct BT Sport customer base is “in sharp decline”, they say in a note to clients.

And as BT accelerates its high-speed Fibre To The Premises (FTTP) rollout, it has a better product to win customers with. Plus, BT Sport is no longer exclusive as BT and Sky now share their sports channels.

To sum up, Jefferies says:

BT Sport carries zero value in our BT SOP. Tenuous estimation of revenue streams and indirect benefits has been required to justify rights cost.

Sport’s value as a retention tool was diluted by Sky switching to less aggressive broadband strategy. Stepping back from sport signals BT’s confidence in its core consumer offer, focused on FTTP.

AJ Bell investment director Russ Mould says BT customers would appreciate more investment in their broadband, rather than in football rights:

“Bidding for sports rights is an expensive and unpredictable business – securing them can be a big pull for subscribers and advertisers but it involves a big outlay and there is always a risk a rival could gazump you at the last moment – a trick BT itself has pulled in the past.

“Plus at the moment the world of sports and sports rights is in a flux thanks to the pandemic – it’s a very different world from the one in which BT launched as a challenger to Sky nearly a decade ago.

“By selling a bit of the business, and reducing the amount it spends on sport, BT could generate funds to help meet the massive bill it faces for investing in broadband infrastructure.

“After all, most customers would take a more reliable internet service over slightly cheaper access to watching the footy.”

NatWest sees 'reasons for optimism' as profits nearly double

A NatWest bank in Manchester.
A NatWest bank in Manchester. Photograph: Phil Noble/Reuters

In the banking world, NatWest CEO Alison Rose struck a cautiously optimistic tone this morning after announcing profits had nearly doubled in the first quarter.

Rose said government support was helping to prevent customers defaulting on loans, with the vaccine rollout lifting confidence that Covid-19 restrictions will be relaxed.

Defaults remain low as a result of the UK Government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.

But, Rose also pointed to “continuing uncertainty for our economy and for many of our customers as a result of COVID-19.”.

Here’s the full story, by my colleague Kalyeena Makortoff:

The bank said there were now “reasons for optimism” thanks to the success of the UK’s vaccine rollout, meaning it could reduce the pile of cash reserved to cushion the blow of potential customers defaults, particularly among business borrowers, by around £102m.

The move surprised analysts, who had expected NatWest, which put aside £3.2bn to cover bad debts in 2020, to increase its reserves by £251m.

The release, alongside cost cuts and a jump in mortgage lending, helped lift pretax profits by 82% to £946m over the three months to March. That compares with £519m a year earlier, when profits were halved due to a larger-than-expected £800m Covid loan loss provision. The bank easily beat average City forecasts that anticipated profits of £536m for the first quarter.

Shell posts £2.3bn Q1 profit as fossil fuel demand returns

Royal Dutch Shell has reported a better than expected profit of $3.2bn (£2.3bn) for the first quarter of this year, eight times more than the final quarter of 2020, as global demand for fossil fuels returns.

The Anglo-Dutch company said rising oil and gas market prices helped its quarterly adjusted earnings rise sharply from $393m at the end of last year, and climb well above its $2.9bn profit for the first quarter last year.

The result was better than equity analysts and investors had expected after Shell warned that the winter storm that battered Texas earlier this year would take a $200m toll on the company after impacting its refinery operations.

The result draws a line under one of Shell’s most challenging years in its history, in which the company reported record losses and was forced to cut its FTSE-leading dividend for the first time since the second world war in response to the Covid-19 crisis.

Telecoms and tech analyst James Robinson of GSMA Intelligence says BT could end up selling a stake in its sport business, divesting the whole BT Sport operation, or forming a joint venture.

Alternatively, the talks may not lead to a deal, he points out:

.@BTGroup in "early discussions" with "a number of select strategic partners" (e.g. Amazon, Dazn, Disney and some PE firms) over its BT Sport business - could result in divestment, sale of a stake, JV or nothing at all https://t.co/27dCSA4FAV

— James Robinson (@JRobinson271) April 29, 2021

BT confirms talks over BT Sport stake

The BT Sport television studio ahead of the English Premier League football match between Crystal Palace and Liverpool last December
The BT Sport television studio ahead of the English Premier League football match between Crystal Palace and Liverpool last December Photograph: Justin Setterfield/AFP/Getty Images

UK telecoms group BT has confirmed that it is talks with a number of ‘strategic partners’ over the possible sale of a stake in its BT Sport operation.

In a statement to the City, it says:

Further to media reports, BT can confirm that early discussions are being held with a number of select strategic partners, to explore ways to generate investment, strengthen our sports business, and help take it to the next stage in its growth.

The discussions are confidential and may or may not lead to an outcome.

Last night, the Daily Telegraph reported that BT was in talks with several companies, including Amazon, Disney, sport streaming company DAZN, and an unnamed British broadcaster, to sell a stake in its television arm.

BT has invested heavily in Sport, particularly under former CEO Gavin Patterson, including swooping on the rights to the Champions League back in 2013 as it battled with Sky.

It also shows Premier League games, the Women’s Super League, the Bundesliga, Australian Football League, Premiership Rugby, baseball, basketball, UFC, boxing, WWE wrestling...

But with the pandemic having created turmoil in sport, current CEO Philip Jansen is focusing on expanding BT’s high-speed fibre broadband network instead.

As the Telegraph explained:

The telecoms operator has appointed the investment bank Lazard to explore a partial sale of BT Sport as it focuses on upgrading Britain’s broadband network.

Cracking exclusive by @cg_williams and Ben Woods on possible part sale of BT Sport. Seems to suggest shift in focus under BT boss Philip Jensen. https://t.co/wIlOzbBJSM

— Graham Hiscott (@Grahamhiscott) April 29, 2021

Updated

Heathrow has also repeated its criticism of the Civil Aviation Authority (CAA) for rejecting its bid to raise charges by £2.6bn to recoup its Covid losses.

On Tuesday, the CAA allowed Heathrow to raise its landing charges by £300m, but vetoed the larger request, saying it was “disproportionate”.

The airport says smaller settlement “is inadequate” when compared with expected losses of around £3bn, and repeats its claim that it will “undermines investor confidence” in the UK.

However, the £300m rise angered airlines, who warned it will push up fares for passengers.

My colleague Nils Pratley dismissed Heathrow’s ‘whining’ earlier this week:

For starters, Heathrow’s expected losses of £3bn during the pandemic need to be put in context. The airport has been able to raise debt at low interest rates throughout. Bond market investors can see that Heathrow, even without a third runway, remains a very safe lending proposition under all plausible regulatory conditions.

Heathrow’s petulant reaction may have been provoked by the CAA’s hint that, if funding becomes a problem, the shareholders, led by the Spanish infrastructure group Ferrovial and Qatar’s sovereign wealth fund, could try injecting fresh equity. “Any risks to … actual financing are a matter for its shareholders, not for consumers to resolve,” said the regulator.

Quite right, too. Airlines’ shareholders have dug deep via rights issues but Heathrow’s investors, who have enjoyed £4bn of dividends in recent years, have yet to inject fresh equity. In a financial quarrel in which neither side looks pretty, any sympathy lies with the airlines: even allowing Heathrow to claw back £300m through higher charges could be viewed as generous.

Why would restarting foreign holidays help UK exporters, as Heathrow claims?

Well, under normal times, a lot of the cargo actually travels on passenger jets, rather than on freight-only flights. That option shrank once the pandemic hit passenger travel.

It says:

Heathrow is the UK’s biggest port, but 95% of cargo is carried in the hold of passenger planes.

Unused slots have allowed more dedicated freighter operations and higher rates for cargo have allowed airlines to keep operating some routes with low passenger load factors. However, despite our collective efforts, cargo volumes were down 5.0% in the first three months of 2021 compared to the same period last year. This shows the importance of restarting long haul passenger travel to reinstate the UK’s supply chain and export routes.

Heathrow: Covid-19 has devastated aviation sector

Heathrow CEO John Holland-Kaye says the airport’s losses show the economic damage caused by the pandemic.

Restarting international travel from 17th May (the earliest date under the government’s plan) will kickstart the recovery, Holland-Kaye argues:

These results show how COVID has devastated the aviation sector and British trade. Restarting international travel from May 17th will help to kickstart the economic recovery, allowing exporters to get their goods to market, as well as reuniting families who have been separated for over a year. Heathrow is gearing up for the recovery.

By acting early to cut costs and protect cash, we have put ourselves in a strong financial position to weather the storm and are ready to welcome back passengers, while keeping them safe. This would not be possible without the energy and commitment of my colleagues across Heathrow and I am very proud of what they have achieved.

Heathrow financial results, Q1 2021

The reintroduction of travel is expected to be based on a “traffic light” system, under which riskier people returning from ‘amber’ countries would have to self-isolate at home, while those entering the UK from ‘red’ countries would face a 10-day period of hotel quarantine.

Arrivals from ‘green’ countries would need to take PCR tests before returning to the UK, and after arrival.

This would allow people to take foreign trips again. But some experts have warned this system is too simplistic, and could allow new variants into the country.

Introduction: Heathrow's Covid-19 losses near £2.4bn

Passengers walk past a sign in the arrivals area at Heathrow Airport in London.
Passengers walk past a sign in the arrivals area at Heathrow Airport in London. Photograph: Matt Dunham/AP

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Heathrow has fallen deeper into the red as the Covid-19 pandemic continues to hit the travel sector.

UK’s largest airport has also slashed its forecast for passenger numbers, warning that uncertainty over government policy risks jeopardising a recovery in international travel this year.

Heathrow reported an adjusted loss of £329m for the first quarter of the year, down from a £41m loss a year ago, in the early stages of the crisis.

This takes Heathrow’s total losses since the start of the pandemic to nearly £2.4bn, after over a year of disruption caused by lockdowns and travel restrictions.

Heathrow reports that only 1.7 million passengers travelled through the airport in January-March, a drop of 91% compared to Q1 2019. Cargo volumes are also weaker, around 23% lower than two years ago.

Heathrow has also cut its forecast for passenger numbers this year -- in a worst-case scenario, it might only handle 13 million customers. That’s over 80% less than in 2019.

It blames ‘continuing uncertainty’ over how the goverment will allow travel to resume this summer.

It says:

While underlying demand for travel remains strong, continuing uncertainty over Government policy means we have reduced our passenger forecast for the year to a range between 13 and 36 million, compared to 81 million in 2019.

As vaccinations are rolled-out and COVID levels fall, restarting travel to markets like the US will be critical to the UK’s economic recovery and we will be prepared to scale-up our operations as demand returns.

Foreign holidays are currently banned, but those restrictions could lift on 17th May under the government’s timetable to ease the lockdown

Yesterday, transport secretary Grant Shapps said international travellers will be asked to demonstrate their Covid vaccination and testing status using the NHS smartphone app.... but he didn’t say when people would be able to start travelling abroad to popular holiday destinations such as Spain.

Shapps told Times Radio:

“Spain specifically, I’m afraid I just don’t have the answer to that because the joint biosecurity centre will need to come up with their assessment and we can’t do that until a bit nearer the time,”

Heathrow also warned the government to ensure that arrivals at the border are processed quickly:

Border Force’s ability to provide an acceptable service for arriving passengers remains primary concern surrounding the restart and Ministers will need to ensure every desk is staffed to avoid unacceptable queues.

Heathrow Airport plunges to $459 million loss in first quarter - https://t.co/1iKRQ0Cc8t

— Investing.com Stocks (@InvestingStockz) April 29, 2021

There’s also a flurry of corporate news this morning, with NatWest bank returning to profit, energy giant Royal Dutch Shell growing its earnings, and betting giant Flutter posting a 33% jump in revenues last quarter due to the surge in online gambling

Unilever has also beaten forecasts, with underlying sales up 5.7% in the last quarter, thanks to demand from home cooks and a recovery in China (more on all that shortly).

Also coming up today

The US dollar is weaker, and stock markets are pushing higher, after America’s central bank left interest rates near zero last night, and said it was too early to shrink its stimulus support package.

The Federal Reserve did acknowledged that the US economy has picked up, but insisted the recovery was uneven and far from complete...and pushed back on suggestions it could slow its asset purchase programme soon.

Morning all!

- The FOMC left policy unchanged and Fed Chair Powell pushed back on early tapering expectations

— Newsquawk (@Newsquawk) April 29, 2021

Powell pointed to rising optimism among Americans, as they look to a post-pandemic world.

“It has a tremendous amount to do with vaccination and re-opening of the economy — that’s really what has been moving markets a lot in the last few months.”

He also said that while some asset valuations seem “frothy,” he doesn’t see risks to the financial system.

“The overall financial stability picture is mixed, but on balance it’s manageable.

So with the dollar dipping, precious metal prices are higher, and commodities are continuing their strong rally.

Precious Metals update:#Gold 1785 +0.17%#Silver 2636 +0.64%#Platinum 1226 +0.39%#XAUUSD #Commodities

— IGSquawk (@IGSquawk) April 29, 2021

LME update:#Aluminium 2421 +0.82%#Copper 9962 +0.7%#Nickel 17465 +0.26%#Lead 2101 +0.19%#Zinc 2937 +0.15%#Metals #Commodities

— IGSquawk (@IGSquawk) April 29, 2021

European markets are set for a higher open too.

European Opening Calls:#FTSE 6975 +0.16%#DAX 15323 +0.20%#CAC 6322 +0.23%#AEX 713 +0.15%#MIB 24512 +0.21%#IBEX 8822 +0.25%#OMX 2244 +0.23%#STOXX 4022 +0.18%#IGOpeningCall

— IGSquawk (@IGSquawk) April 29, 2021

It’s a busy docket for economic news today, led by the first estimate of US economic growth for the first quarter of 2021.

Economists predict a sttrong quarter, with US GDP tipped to rise by an annualised rate of 6.1%, up from 4.3% in Q4, lifted by stimulus packages, and the reopening of the economy.

The agenda

  • 8am BST: Spanish unemployment rate for Q1 2021
  • 8.30am BST: Swedish GDP for Q1 2021
  • 8.55am BST: German unemployment data for April
  • 10am BST: Eurozone economic and business confidence report for April
  • 1pm BST: German inflation report for April
  • 1.30pm BST: US GDP report for Q1 2021
  • 1.30pm BST: US weekly jobless report

Updated

Contributors

Graeme Wearden

The GuardianTramp

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