Finally, here’s our news story on the US growth figures:

US economic growth slowed at the end of 2018, falling well below the Trump administration’s projections and closing a strong year on a more worrying note.

The commerce department said on Thursday that the US expanded at an annual rate of 2.2% in the last three months of the year, down from an initial estimate of 2.6% and below the 3.4% growth achieved in the previous three months.

The figure is well below the 5% growth rate that Donald Trump recently forecast and comes as evidence is mounting of a slowdown in other major markets including the eurozone and China.

Analysts have forecast that the situation is likely to worsen following a slew of weak economic indicators, including figures from the European commission showing eurozone economic confidence slumped last month to its lowest level since 2016.

Earlier this month the US Federal Reserve indicated that the slowing US and global economy meant it was unlikely to raise interest rates until next year at the earliest.

Goodnight! GW

Trouble’s brewing at Royal Bank of Scotland, over CEO Ross McEwan’s pension -- which looks a lot more lucrative than the package available to less senior staff.

Traders are bracing for the pound to become more volatile....

Here’s our news story about British businesses losing what little patience they’ve got left with our political masters:

The pound is continuing to lose ground tonight, now down one and a half cents at $1.3044.

Traders have noticed a big political row kicking off in Westminster, over the government’s plan to only vote on the Brexit withdrawal agreement, not the political declaration laying out the post-Brexit strategy.

Labour are opposing the move, which appears designed to ensure Britain can leave the EU on 22 May. The DUP - whose support would be crucial for Theresa May - are also not swayed.

Jeremy Thomson-Cook, Chief Economist and Head of Currency Strategy at WorldFirst, says investors are struggling to value the pound in the current mess:

“How can a currency accurately price the risk of both a no-deal and a revocation of Article 50? It is not the job of the pound to be optimistic and hence, following the DUP’s announcement last night that they cannot back the deal as it stands, GBP strength continues to slip away.

“Whether the next step in the Brexit soap opera is a General Election, a Tory leadership challenge, a customs union, a long extension or all of them together, GBP is stuck waiting for a sign, full in the knowledge that there is almost no room for error.

We could end tomorrow with a deal or we could end it in No Man’s Land, ready for indicative votes and confidence motions.

“March 29th was meant to be the day we leave the EU but will likely be the day where we realise just how few options we have.

Here’s Andrew Hunter of Capital Economics on the downgrade to US growth last quarter:

The downward revision to Q4 GDP – which is now estimated to have expanded by 2.2% annualised rather than 2.6% – was mainly driven by weaker gains in consumption and business investment, underlining that domestic demand lost some momentum at the end of last year. We expect the personal income and spending data due on Friday to show that the economic slowdown continued into 2019, with a rebound in real spending in January unlikely to prevent consumption growth from slowing further over the first quarter as a whole.

Newsflash: German lightbulb maker Osram has issued a profits warning, adding to concerns that the global economy is slowing.

The Munich-based firm blamed the slowdown in the auto industry, which has hit demand for its car bulbs, adding:

“This has led to significant inventory build ups, particularly in China. In addition, business development is facing an ongoing impact by the general economic slowdown.”

Shares in Osram have slumped by 10% in late trading, with carmakers’ shares also weakening.

Back at the BCC’s annual conference, Legal & General CEO Nigel Wilson has declared he’s ready for Brexit.... whatever form it takes.

Wilson says;

“We invest for the long term, Brexit is a noise on that very long journey. It’s not throwing us off course in any way whatsoever.”

“We’ve stressed everything so don’t worry. The one thing we’ve learnt from the financial crisis is how to stress things.”

But he’s not so confident about some other companies, particularly smaller firms...

“A lot of other people have had to work on their no-deal plans. Hopefully they’ll never come around. But you feel very sad for business that haven’t got the scale to prepare for it.”

In better news, the number of Americans filing new claims for unemployment benefit fell last week, by 5,000.

Market analyst Fiona Cincotta of City Index says this is helping markets to recover:

The mood was positive across the board on Thursday with global shares climbing higher. A rebound in treasury yields, progress in US – Sino trade talks and better than forecast jobless claims have boosted sentiment, increasing demand for riskier assets. However a downward revision to US economic growth is keeping gains capped.

US jobless claims fell to their lowest level in 2 months last week. This offered traders some reassurances as to the health of the US labour market after February’s surprisingly weak jobs report. The news lifted spirits grabbing attention away from disappointing US GDP data.

Andy Bruce of Reuters makes a good point about today’s consumer confidence stats --- Britons are gloomier, but it’s not hit spending.

Stock markets in Europe and America are shaking off today’s weak economic news, with some investors pinning their hopes on a breakthrough in the US-China trade talks.

Mike Loewengart, vice president for investment strategy at E-Trade Financial Corp, says traders should heed today’s downgraded US growth report:

He says (via Marketwatch):

“Global growth is stagnating both at home and abroad, and this kind of GDP read may flash as a warning signal to market watchers that there is more turbulence ahead,”

“Some may see this as a data point confirming their worries that we are headed to the end of the business cycle, especially after the inverted yield curve news last week.”

“That said, there are a fair amount of positive indicators out there—strong jobs numbers, an uptick in wages, and a solid earnings season—to pump some confidence back into the market.”

Another slowdown signal: fewer Americans bought houses last month.

The National Association of Realtors reports that homebuyers signed 1% fewer contracts to buy existing homes in February compared with January. On an annual basis, these pending home sales have fallen by almost 5%.

As you can see, there was a surge in pending home sales in January - but the longer-term trend looks weak.

Lawrence Yun, chief economist for the Realtors, says:

“In January, pending contracts were up close to 5 percent, so this month’s 1 percent drop is not a significant concern.

As a whole, these numbers indicate that a cyclical low in sales is in the past, but activity is not matching the frenzied pace of last spring.”

Financial analyst Paul Sommerville thinks America’s economy is underperforming, given the boost from Donald Trump’s tax cuts:

This financial analysts also fears the US economy is slowing:

Today’s GDP report further muddies the water about whether Donald Trump achieved his target of 3% growth last year, or not.

The Commerce Department estimates that GDP rose by 2.9% in 2018, just shy of Trump’s 3% target.

However, it also reckons GDP was 3% higher in Q4 than in Q4 2017 -- which the president could chalk up as a win.

Either way, if the economy does keep slowing, Trump will take some blame.

The New York Times says:

Economic data suggests that slowdown is already underway in the first quarter. Manufacturing is losing some of its steam from last year’s rapid growth, and job creation is also moderating.

Chief executives of some of the nation’s biggest companies see investment, hiring and sales growth all slowing this year. Three-quarters of business economists say they are more worried about growth undershooting their forecasts than overshooting it, and half have revised those forecasts downward for this year.

Here’s some instant reaction to the US GDP report.

Marketwatch’s Jeffry Bartash highlights why growth has been revised lower:

Guy LeBas of Janney Capital Management argues we shouldn’t panic about it:

Ranko Berich, head of market analysis at Monex Europe, argues that president Erdoğan should stop attacking international investors, and start reassuring them.

He writes:

The Central Bank’s efforts to dry up short term liquidity may have indeed made it impossible for speculators to short the lira. However, the lira’s real issue isn’t a surplus of speculative short sellers - it’s a chronic deficit of faith in the currency among investors and locals, and the events of the past week have made things worse, not better.

The central bank’s liquidity freeze, combined with a poorly explained fall in already low FX reserves over the past month and a fresh round of low-rate rhetoric from Erdogan this morning, are the exact opposite of what would reassure investors. This morning’s promises from CBRT governor Murat Cetinkaya that reserves rose in recent days and will continue to do so are encouraging, but what markets really need is an assurance that monetary policy will be set for the purposes of the real economy.

Robin Bew doesn’t agree that the UK could soon resemble an emerging market..... but he still fears economic pain ahead.

BCC chief Adam Marshall adds that MPs should pick on of three options to end the Brexit uncertainty:

• They could choose to vote for the withdrawal agreement negotiated by the government over the past two years
• They could seek a longer extension to the Article 50 process, tied to a concrete purpose and endpoint
• Or they could choose to revoke Article 50 and commit to membership of the European Union for the immediate future.

Newsflash: Goldman Sachs has been fined £34.3m by Britain’s City watchdog, for failing to report financial transactions properly for a decade.

The Financial Conduct Authority says Goldman didn’t provide complete, accurate and timely information related to over 213 million transactions, between 2007 and 2017.

Mark Steward, FCA Executive Director of Enforcement and Market Oversight, says this blunder made it harder for regulators to spot financial crime:

‘The failings in this case demonstrate a failure over an extended period to manage and test controls that are vitally important to the integrity of our markets. These were serious and prolonged failures. We expect all firms will take this opportunity to ensure they can fully detail their activity and are regularly checking their systems so any problems are detected and remedied promptly, unlike in this case.’

Accurate and complete transaction reporting helps underwrite market integrity and supervise firms and markets. In particular, transaction reports help the FCA identify potential instances of market abuse and combat financial crime.

Currency expert Marc-André Fongern of MAF Global Forex flags up that Turkey goes to the polls in local elections this Sunday.

With the country in recession, President Erdoğan will want to avoid more financial angst before Turks head to the polls (although this rather backfired yesterday, when the main stock index fell almost 6%).

Turkey appears to be relaxing the currency squeeze that spooked the markets yesterday.

The overnight lira swap rate is now down to 50%, indicating that Turkish banks are providing lira to the markets again.

Perhaps Wednesday’s stock market tumble has persuaded the authorities that withholding lira from overseas speculators (and everyone else) was counterproductive, as it triggered a fire sale of shares and bonds.

Last night, asset manager Will Slaughter wrote a handy twitter thread to explain Turkey’s clampdown on overseas banks borrowing lira:

(ST = short term; TRY = Turkish lira assets)

(EMFX = emerging market foreign exchange)

Reuters is reporting that the cost of borrowing Turkish lira for international banks has fallen this morning, but remains steep.

The London lira overnight swap rate, which hit 1,200% on Wednesday, has now fallen to 180%. That still makes it very expensive to borrow lira to settle trades, of course.

Jim Reid of Deutsche Bank says sentiment against the Turkish lira “continues to be weak”.

The market turmoil comes before local elections on Sunday, with the government likely hoping to maintain FX stability ahead of the votes.

Australian and New Zealand government bond yields have both hit a record low today, on expectations of interest rate cuts.

That comes after New Zealand’s central bank surprised the markets by saying it may cut borrowing costs to fresh record lows soon (not start raising them, as expected).

That weakened the New Zealand dollar against other currencies.... putting pressure on other central banks to retaliate.

Reuters explains:

That is one reason markets are wagering the Reserve Bank of Australia will also be forced to cut rates, simply to stop its currency from appreciating. Policy easing then becomes a self-fulfilling cycle across the world.

The continued dovish shift by G7 central banks, ongoing support by the Chinese authorities, and the move by the RBNZ will keep pressure on the RBA to also move in the same direction, however reluctantly,” said Su-Lin Ong, head of Australian and New Zealand strategy at RBC Capital Markets.

“It is, essentially, a global policy cycle.”

Concerns over the global economy helped to push shares down in Asia today.

Japan’s Nikkei lost 1.6% and China’s SSE Composite Index shed 0.9%.

Konstantinos Anthis, head of research at ADSS, suggests investors are flummoxed, with some choosing to keep on the sidelines:

Global markets remain in a state of uncertainty as investors are trying to decide whether they should go on a risk-on or risk-off mode.

The dollar has seen mixed price action over the past 24 hours with 10-year yields dropped to fresh lows, and commodity dollars driving lower while yen gained. Equities were mixed, gold retreated deeper and oil dropped below $60 again.

The conundrum facing traders is whether to sell because the economy is slowing, or buy because central bankers might speed it up again.

Anthis explains:

The combination of easier monetary conditions and bearish market data makes it hard for traders to make up their minds on whether they should grow more risk prone or averse.