Stocks Slip as Chinese Exports Miss Expectations

European stock markets mostly down, after an equally lackluster session in Asia. The FTSE 100 managed to hang on to marginal gains of 0.6% amid a weaker pound, but is also down from early highs. The DAX is little changed on the day, as the DAX consolidates above 13300. Disappointing earnings reports from banks, including Credit Agricole  added to pressure on the banking sector, as Catalonia’s crisis continues to weigh on Spanish banks. Airlines meanwhile were hit by the recent rise in oil prices as oil futures are trading around the USD 57 per barrel mark. Asian markets also mostly closed with slight losses, with investors eying tax reform developments in the U.S. and markets take a breather after the recent run higher.

Chinese October Exports Missed Expectations

China’s October exports missed expectations, increasing 6.9% year over year while imports beat forecasts, growing 17.2%. The change left China with a trade surplus of $38.17 billion for the month. Analysts had expected October shipments from the world’s largest exporter to have risen 7.2% slower than 8.1% in September. Imports had been expected to rise 16.0% sliding from an 18.7% gain seen in September. Expectations had been for the Chinese trade surplus to have widened to $39.5 billion in October from September’s $28.61 billion.

BoE survey finds wages are picking up in the UK due to “intensified” and “above normal” recruitment difficulties in a range of activities, alongside continued modest employment growth. The latest BoE agents survey showed that pay growth was expected to be somewhat higher in 2018 than this year, although there was also an abatement in non‑labor input cost inflation. The survey helps shine a light on the BoE’s rate hike last week, although only two more quarter-point hikes are envisaged through to 2020. The report also found growth in activity to be remaining broadly stable. Manufacturing output growth continued to rise, with export supply chains supported by the past fall in sterling and some signs of increased domestic sourcing. But construction output growth had eased. Services turnover growth remained moderate, according to the report. Investment intentions pointed to continued modest growth, at a similar rate to that seen over the past twelve months.

U.S. consumer credit climbed $20.8 billion in September, stronger than expected, following the unrevised $13.1 billion increase in August. Non-revolving credit remained the driver, rising $14.4 billion after the prior $7.6 billion gain which was revised from $7.3 billion. Revolving credit was up $6.4 billion from $5.5 billion previously which was revised form $5.8 billion. For Q3, credit was up $51.8 billion following the $43.2 billion Q2 gain which was revised from $42.5 billion.