It’s a subdued open for US stocks, with all three major indexes starting the American trading session nearly flat:

• Dow Jones -0.04%
• S&P 500 -0.05%
• NASDAQ -0.05%

Little can be done about China’s slowing growth - it’s natural.

That’s the view of Stefan Legge, lecturer, economist and trade expert from Switzerland’s University of St. Gallen.

He says there’s no way a country like China should be expected keep up its previous rate of growth:

No country in history has achieved the track record of GDP growth that China has shown. According to data from the World Bank, China’s GDP has grown by more than 3.9% in every single year since 1977. Even the Southeast-Asian tiger countries did not achieve this.

Long run growth in GDP is driven by resource accumulation and mobilisation as well as by innovation.

Legge adds:

In China, due to population ageing the labor force is already on a shrinking trajectory and there is little that can be done about it. Capital accumulation (that is infrastructure or machinery) faces decreasing marginal returns: the first highways and railways generated more economic growth than current projects.

Finally, improvements in productivity through innovation is much harder and slower than through imitation. China has reached a middle-income status and most countries face slowing GDP growth at this point.

In sum, it is natural to expect China’s economy to grow at a slower rate in the coming years – even in the absence of a trade dispute with the United States. There is little insight in calling every new GDP growth figure ‘the lowest in thirty years’.

Once it’s on Twitter, it’s official.

Christine Lagarde has been formally appointed as the incoming head of the European Central Bank.

She even tweeted a photo with Mario Draghi himself to mark the occasion.

More from my colleague Phillip Inman on the UK construction data covering 2018 out today.

Worth noting the “astonishingly high” average weekly pay for workers recorded last year:

Construction-related employment in Great Britain increased by 2.8% in 2018 to reach its highest level on record, with the South East, London and the East of England contributing 41.1% of total employment.

And average weekly earnings increased to £635.66 per week in December 2018, well above the £496 weekly pay of the average worker and second only to the finance and business services sector.

This astonishingly high pay is stunning when the Labour productivity figures show that productivity, as measured by output per hour, fell by 4.8% in 2018 compared with the previous year.

The industry also contributes to the UK’s huge trade deficit, importing more construction materials and components than it exports to the extent that it reached £10.6bn in 2018, with imports being more than double the value of exports.

The US dollar is set for its worst week in almost 4 months against a basket of global currencies, after being hit by Brexit-related rallies of both the pound and euro.

Depending on the outcome of Saturday’s vote in Parliament, that steady decline could continue into next week.

Boris Johnson has penned an open letter to British business, praising not only his own deal but also the “inspiring” and “hard working” business community.

The Sun’s deputy political editor quips it’s a shift in tone from the PM:

Intercontinental Hotels Group is one of the worst performers on the FTSE 100 (down 2.8%) after the Holiday Inn-owner reported a 0.8% drop in Q3 revenue per room.

It blamed lower business bookings in China and the ongoing protests in Hong Kong for the drop.

And there’s a link to economic growth here, with the slowdown in global expansion impacting business travel worldwide.

Rival Hilton recently warned that revenue would be hit by lagging Chinese growth and the US-China trade war, while AccorHotels narrowed its full year profit guidance on similar concerns.

An interesting tweet from Capital Economics, highlighting the increased importance of China in global trade today, compared to the early 1990s:

The pound is now flat against the US dollar at $1.288 but its temporary lift this morning was chalked up to comments from Bank of England deputy governor Dave Ramsden.

In an interview with Bloomberg, Ramsden took a slightly more hawkish tone than some of his colleagues, saying that he still saw a case for gradually increasing interest rates...that is, if the UK manages a smooth exit from the EU:

The kind of guidance we’ve been giving - in the world of a deal it still applies.

Referring to the BoE’s long-standing guidance on rates, Ramsden added:

We’re not saying over what timeframe, but limited and gradual (rate increases) is a reasonable qualitative framing.

While some analysts are betting that China’s central bank, the PBOC, will be more willing to ease monetary policy on the back of weaker GDP, we’ve got some contrarians in the mix.

Case in point: Stephen Innes, AxiTrader’s Asia-Pacific market strategist. He says:

While the weaker China GDP suggests an economic pull to ease monetary policy to support the real economy... a 6 % GDP won’t necessarily add to the case for urgent stimulus, as the 6.0-6.5% range is with the government’s annual target, and so far China is facing limited risk in breaching this for the year.

If there’s one thing China’s massive army of retail equity investor like it’s the thought of easy money from the PBOC. Unfortunately for China stock market investors, the PBOC are not so willing at this stage.

Innes adds that, away from the stock markets, many traders appear less concerned about the Q3 GDP figures:

Currency and rates traders aren’t getting bent out of shape by backwards-looking data. Instead, they remain focused on what lies ahead, which is hopefully the US administration scrapping some of those tariffs which would be an unmitigated positive for global growth.

After hitting a five-month high against the US dollar on Thursday amid Brexit deal hopes, the pound is continuing to hover at $1.29.

Versus the euro, sterling is trading at €1.158.

But Naeem Aslam of Think Markets reckons the rise won’t last long (depending on the outcome of Parliament’s much-anticipated vote on Johnson’s withdrawal deal on Saturday, of course)

Sadly, traders aren’t going to get much pleasure to enjoy the Friday feeling or get any sleep over this weekend because of the chaotic Brexit situation.

We think this could be a chance to go short on Sterling. If the deal is rejected in Parliament, sterling is likely to fall off the cliff due to a no-deal Brexit threat.

On the flip slide—only if a miracle happens—the deal gets green light in parliament, the sterling-dollar is going to shoot above the 1.35 mark—something we said yesterday.

It’s been a pretty lacklustre start to the Friday session across European markets:

• FTSE 100 -0.15%
• CAC 40 -0.42%
• DAX +0.07%
• FTSE MIB +0.25%

Connor Campbell, a financial analyst at SpreadEx, said it’s an understandable reaction to the Chinese growth figures:

As the pound holds its breath ahead of ‘super Saturday’, the markets dealt with another disastrous – well, relative to the country’s usual performance – figure out of China.

Coming in at a worse than forecast 6.0%, China’s third quarter GDP reading saw growth at its lowest for nearly 3 decades... The country is clearly continuing to feel the trade war squeeze, putting all the more pressure on the so-far insubstantial – and uncertain, given the dispute over Hong Kong – ‘partial trade deal’ announced last weekend.

Over in Europe, carmakers are taking a hit after Renault cut its sales guidance and profitability forecasts.

Renault made the admission after yesterday’s close and markets are now getting a chance to react to the news, sending shares down -11% and making it the worst performer on the CAC 40.

The company said yesterday that sales were likely to drop between 3-4% this year, while its operating margin was set to come in at 5% compared to its previous target of 6%.

Carmakers have been struggling with falling demand in key markets like China, while straining to meet European emissions requirements and invest in new tech to producer cleaner car models.

It’s the latest challenge for Renault, which recently ousted its CEO Thierry Bollore as part of a leadership overhaul. The company has been trying to draw a line under a scandal linked to former boss Carlos Ghosn, who is alleged to have misused company funds.

The knock on effects of Renault’s sales warning has sent Fiat Chrysler shares down -2.4% and Daimler down nearly 2%.

Chinese stocks haven’t fared well in the wake of the GDP data, with the Shanghai Composite Index dropping by -1.2%

Elsewhere, Hong Kong’s Heng Seng fell -0.46%, while Japan’s Nikkei 225 rose +0.18%.