Britain’s friends over the channel are threatening to block the rescue of British Steel.

The French government aren’t happy about China’s Jingy Group buying British Steel - which owns a factory making steel tracks for France’s railways.

Not a great advert for entante cordials after Brexit (due in 8 hours...)

Brexit uncertainty may has hurt UK productivity and investment, and held back growth, but it hasn’t harmed David Cameron’s bank balance....

Coronavirus fears have hit Wall Street again.

The Dow Jones industrial average has fallen by 264 points, or 0.9%, to 28,595 points.

Energy firms Exxon Mobile and Chevron are leading the fallers. The oil price has been hit by forecasts of lower growth due to the epidemic which reached the UK today .

The S&P 500 has lost 0.5%, and the tech-focused Nasdaq is 0.4% lower.

Brad Bechtel of Jefferies reckons the market reaction is overdone:

The steady drumbeat of negative headlines combined with government reactions to the spread of the virus is still roiling markets a bit and it’s hard for markets to find that stability. It still feels like there is a lot of cash on the sidelines looking to buy the dip it’sjust a matter of timing it appropriately. The idea that this virus is nowhere near as deadly as the common flu in the US was sort of helping calm the situation and yet we still are seeing reactions in the market on every new person infected or passing away.

Understand the fear around the spread of the virus but the market reaction is a bit strange to me still. The reactions of governments has been extreme and will be costly, that is important for markets, but to shake the mighty S&P in the face of such powerful earnings from US companies is a bit of a head scratcher.

Newsflash: Airline manufacturer Airbus has ben hit with fines totalling €3.592 to cover a series of bribery cases.

France’s financial prosecutor has just announced the penalties, which include more than €2bn to settle corruption charges in France.

The planemaker has been investigated by French and British authorities for suspected corruption over jet sales dating back over a decade. It has also faced U.S. investigations over suspected violations of export controls.

Back in the City, investment services platform Hargeaves Lansdown are the biggest FTSE 100 faller, down almost 7%.

HL reported that its net new business declined 9% year-on-year in the last quarter. That’s partly due to the scandal around Neil Woodford’s funds, which HL had promoted as “best buy” options.

“Best avoid” would have been better advice, given the huge losses which investors face.

HL’s CEO, Chris Hill, says it has been a tough few months:

The external market was challenging in the second half of 2019, with political uncertainty, a General Election in the UK, Brexit and world trade tariffs all raising concerns. As we have seen in previous unpredictable periods, client confidence and retail investment flows were affected.

The Investment Association reported weak retail fund flows throughout and the suspension of the two Woodford funds also contributed to the general unease.

Paul Mumford, fund manager at Cavendish Asset Management, suggests 2020 will also be bumpy for Hargeaves Lansdown:

What price Neil Woodword? Well so far the problems haven’t revealed themselves. The loss of new business must be a worry, especially if it’s linked to a loss of trust as a result of the company’s role in the Woodford scandal. Unfortunately the post-mortem of that debacle has only just begun. With the Woodford fund distribution guidelines announced recently, they’re back under the microscope.

“For Hargreaves you’d expect to see at least a fine from the FCA, and perhaps even a class action lawsuit from shareholders. How that will affect their business remains to be seen. It could be a very long year ahead for the company.”

Capital Economics are also gloomy -- predicting that 2020 will be a weaker year than hoped.

“The fourth-quarter GDP and January consumer prices data published today support our view that Eurozone growth and inflation will be weaker this year than most expect.

This underlies our forecast that the European Central Bank will eventually be forced to loosen policy further, perhaps in the second half of the year.”

The eurozone growth slump is partly due to Donald Trump trade wars, says Barret Kupelian, senior economist at PwC.

This disappointing performance was not entirely unexpected, given that the Eurozone has been one of the economies most impacted by international trade disputes.

While we don’t have a full national breakdown of the headline growth rate, some statistical agencies released estimates of the national GDP growth rate. In France, the economy shrunk by 0.1% quarter-on-quarter. However, without the inventory effect French GDP would have grown by 0.3% quarter on quarter. The Italian economy contracted in the last quarter of 2019, meaning that it didn’t grow at all last year. But in contrast, Spain continued to grow in the fourth quarter, translating to an annual GDP growth figure of 2%.

We don’t yet know how the UK fared in the last quarter; the most recent figures show 0.1% growth in September-November.

But Kupelian points out that the eurozone has actually outperformed the UK since the Brexit vote -- as Britain “missed out on the synchronised upswing in economic activity in 2016/17.”

Josie Dent, Senior Economist at the CEBR, points out that France and Italy are now half-way into recession following their contractions last quarter.

The eurozone economy scraped through with positive growth of just 0.1% at the end of 2019. Major economies, including France and Italy recorded contractions in Q4, and politicians in these countries will be anxious for GDP growth to return, as further contractions in Q1 would put the countries in a technical recession.

However, a glimmer of home comes from the pick-up in inflation, which suggests that demand for goods and services could have risen at the start of 2020.”

In another blow to households, inflation across the eurozone has picked up.

Consumer prices rose by 1.4% year-on-year in December, up from 1.3%, due to rising food, alcohol and tobacco prices.

Some snap reaction to the eurozone slowdown:

City news: Aston Martin has been rescued in a £500m deal, partly funded by billionaire Lawrence Stroll.

As part of the deal, the luxury carmaker will enter Formula One (where Stroll’s son Lance currently wizzes about).

Aston Martin is also tapping up its long-suffering shareholders through a rights issue, letting them buy new stock at £4 -- compared to the £19 they paid when it floated in 2018. Hopefully Aston Martin’s new F1 cars will do a little better.

While Europe’s economies stumble, the British pound is enjoying a little rally as the Brexit hour approaches.

Sterling is up around 0.3% this morning, hitting €1.192 against the euro for the first time since mid-December.

The pound is benefitting from yesterday’s Bank of England decision to leave interest rates on hold, dashing expectations of a cut.

Traders are also looking ahead to the UK’s trade negotiations. Prime minister Boris Johnson is expected to indicate on Monday that he will push for a basic trade deal based on that between the EU and Canada. Such a deal could be easier to agree by the end of the transition period in December.

But Downing Street has been warned that another crucial deal, with America, will be tricky.Kim Darroch, the outgoing British ambassador to Washington, has told the Guardian that Donald Trump will demand higher NHS drugs prices -- and questioned whether the UK can really negotiate with the US and EU at the same time....

https://www.theguardian.com/politics/2020/jan/31/trump-will-put-us-interests-first-in-trade-talks-says-kim-darroch-ambassador

Asia-Pacific stock markets have suffered fresh losses today, as traders continue to be gripped by coronavirus fears.

South Korea’s KOSPI index continued to bear the brunt, down another 1.3% -- having lost around 2.8% on both Wednesday and Thursday following the Lunar new year.

With China’s markets still shut, Hong Kong lost another 0.5%.

Japan, though, rallied 0.5% - but still posted its worst weak in six months.

It may not be all bad news for France.

Derek Halpenny of MUFG suggests growth could pick up this quarter, if firms restock after running down their inventories at the end of 2019:

France confirmed this morning that the economy contracted in Q4 – real GDP fell 0.1% Q/Q, well below the consensus +0.2%. The good news however is that the downside surprise reflected an inventory liquidation – excluding inventories real GDP would have expanded by 0.3% Q/Q. So we may see that growth come back in Q1.

Better news: Spain’s economy has grown by 0.5% in the last quarter of 2019

That’s up from 0.4% in Q3, partly making up for France’s decline.

Today’s weak French GDP report is a blow to Emmanuel Macron, says Bloomberg:

Gross domestic product in the region’s second-largest economy fell 0.1% in the fourth quarter amid a decline in exports and a huge drag from inventories. All of the economists surveyed by Bloomberg had predicted growth. Without the inventory effect, growth would have been about 0.3%, according to Bloomberg Economics.

Still, the contraction is a sting for Macron, who’s already facing mass protests and strikes against his pension reforms, and which have disrupted household spending. His government has repeatedly pointed to France’s relative strength in Europe as a sign his reforms of taxes and labor laws are working.

European economists are disappointed to see that France’s economy has contracted.

UBS’s Filip Lipev says the GDP data is worst than expected, due to weak domestic demand....and a bad start to the day.

Ludovic Subran, chief economist at Allianz, blames the anti-government strikes that have gripped Paris for many months: