Market buzz: Bitcoin approaching $10K, US econ data 'unspectacular'

1500: Despite the recent more than havling in its price, Bitcoin is still out there (somewhere ... probably), with prices edging back towards the $10,000 mark. "Volatility and bitcoin go together hand-in-hand, so expect plenty more highs and lows over the coming weeks and months," writes Dennis de Jong at UFX. Despite Berkshire Hathaway's Charles Munger dubing it "noxious poison", de Jong believes that won't stop investors from plunging their money in. As an aside, CBoE's VIX down 4.93% at 18.31 [...] let's see what happens when it goes back up again, might get interesting [...]

1456: As for today's US final demand PPI for January, Barclays Research is dubbing it "solid".

1455: Some more detail here on industrial output Stateside, from Pantheon Macroeconomics's Ian Shepherdson: "Total production was depressed by a sharp 6.2% plunge in coal production, but this is hyper-volatile and the trend, as far as we can tell, is about flat. Oil output rose marginally, better than we expected. Overall, this report doesn't change our view that a decent, though unspectacular, recovery continues in the industrial economy."

1446: Trading has begun in bullish mode on Wall Street, with the Dow Jones up more than 200 points in early trade, up 0.83% to just over 25,100 after a raft of mixed macro data.

Industrial production for January showed a 0.1% monthly decline, missing the consensus forecast for 0.2%. But not a huge surprise, said Capital Economics, following the rapid growth at the end of last year. "Along with the weaker retail sales data released yesterday, however, it provides further evidence that economic growth may (yet again) disappoint in the first quarter."

Factory gate prices in the US rose more quickly than expected last month, driven by steep gains in energy costs, but economists said the underlying details were "solid" too.

Earlier, initial jobless claims rose as expected last week, according to data released by the Labor Department. The reading showed a 7,000 rise to 230,000 from the previous week's level, which was revised up by 2,000, in line with economists' expectations.

1349: South Africa's new leadership have plenty to do in order to improve the country's sovereign credit rating. Having in November said South Africa was facing many economic challenges, credit agency S&P Global today said the new leadership could bring confidence and faster implementation of key reforms already undertaken but solely based on current developments no rating changes are currently warranted.

New President Cyril Ramaphosa and his administration "will require time to design and implement measures to improve economic growth and stabilize public finances, given the structural and institutional challenges that South Africa faces," S&P said. "Economic growth remains low, impeding the path to fiscal consolidation. We think the government will attempt to introduce offsetting measures in an effort to improve budgetary outcomes, but these may not be sufficient to stabilize public finances in the near term."

London's FTSE 100 is still being led by rand-exposed companies, with Old Mutual topping the list with Mondi not far behind.

1335: Italy's election on 4 March has long been cited as one of the key political risks for Europe this year, with economists seeing a 'worst case scenario' of a coalition consisting of the anti-establishment Five Star Movement together with other radical parties and maybe even push for 'Italexit' from the EU.

This scenario looks unlikely, says Berenberg's Carsten Hesse, giving it a 5% probability and pointing to polls suggesting none of the parties of the centre-right/right-wing and the centre-left alliance will achieve a majority, with former PM Silvio Berlusconi seen as a likely kingmaker after the election. "We therefore expect that the next government will be formed of a grand coalition (70% probability), including parties of the centre-left and centre-right/right-wing. This should enable Italy to continue on its current path of modest economic growth and manageable fiscal deficits."

Hesse sees major risks as Italy reversing some of its recent labour market and pension reforms, a 10% chance of new elections and 5% likelihood that M5S will work with centrist parties. "Most of the parties are promising to reverse structural reforms and increase spending significantly. Some are even threatening a referendum on Italy’s membership of the euro – although since Le Pen’s defeat in the French elections, most politicians have toned down their anti-euro rhetoric."

But he sees little systemic risk: "We do not expect a euro exit by Italy, or a systemic crisis that could endanger the eurozone economy."

1213: The FTSE is feelying rather rand-y it seems, with the index being led higher by stocks exposed to the South African currency as it hits its highest levels since March 2015 after the departure of President Zuma.

Old Mutual, Anglo American and Mondi, which have listings on the London Stock Exchange and the Johannesburg Securities Exchange, were up as Cyril Ramaphosa is poised to be voted in as new President.

Analyst Neil Wilson at ETX Capital said investors were breathing a sigh of relief after nine years of scandal.

"Growth has stagnated badly under Zuma and there is hope that this will usher in a period of greater political stability and maybe some economic reforms that can get the drivers of growth going again.

"Ramaphosa is seen as good for business and will tackle corruption and mismanagement. Not that he won’t face challenges of course - there are deep economic and social problems and the ANC remains pretty divided. But whatever happens under the new president, I think markets and business assume it won’t be anything like as bad as Zuma."

1020: A purge of dividend stocks is behind the fall of RELX, whose shares have fallen to the £14 level last seen over a year ago.

"While there are clear worries about future growth in some divisions, it is also likely that RELX is being dumped along with other high dividend stocks, a notable feature of last night’s US session," said IG market analyst Chris Beauchamp, playing down RELX's results and news today that it will merge its UK and Dutch parent companies. "The rise in Treasury yields has diminished the star appeal of such firms, although whether the move merits the 20% wipeout in RELX shares is a matter for debate."

Ahead of the Wall Street open, IG expects the Dow to start at 25,124, up 230 points from last night’s close.

1014: The FTSE 100, DAX and CAC 40 have hit one week highs this morning. "Equities continue to be in recovery mode as traders are still cautiously optimistic," said market analyst David Madden at CMC Markets. "Investors are viewing the smaller swings on global stock markets as a sign that a lot of the fear dissipated, and are content to buy back into the market."

Looking at FX, continued weakness in the US dollar helped both the euro and the pound so far today. "The shock decline in US retail sales yesterday is still weighing on the US dollar," said Madden, noting that Spain's disappointing inflation figures had little impact on the single currency. The Spanish CPI rate dropped to 0.6% from 1.1%, "which is a worrying development as it suggests demand is weak".

0930: The South African rand is also holding on to its recent gains. The ZAR is up 0.8% on the dollar at $0.0860 and 0.2% on the pound to £0.0611 after Jacob Zuma resigned as president, having been recalled by his ANC party yesterday.

After gaining ground yesterday morning as police raided the residence of the Gupta family who are friends and business associates of Zuma, the President made a dramatic televised resignation speech that brought his nine years of rule to an end. ANC leader Cyril Ramaphosa is now likely to be elected as President today by parliament paving the way for a delayed ‘State of the Nation’ address. Ramaphosa is former anti-apartheid activist turned businessman and as "standard bearer for the moderate, reformist faction" of the ANC, according to the Guardian.

"The recent strength of the ZAR has been built around the expectation that a new era led by Ramaphosa will usher in economic reform in South Africa," said analysts at Rabobank. "However, given the backdrop of weak growth and with both the budget and the current account in deficit, there is a lot of work to be done."

0915: While the FTSE is up, the biggest mover on the blue chip index is Standard Life Aberdeen, which said it was making an impairment charge of around £40m after Lloyds Bank announced it was withdrawing funds controlled by its Scottish Widows investment arm.

On the mid-cap index, Indivior is the biggest faller after it swung to a loss in the fourth quarter and increased its legal provisions, but gave better guidance for 2018. Insurer Lancashire is also trading lower after saying it swung to a bigger-than-expected full-year loss as natural catastrophes took their toll.

0844: Thursday's London open report notes stocks on the front foot in early trade, taking their cue from a positive session on Wall Street, where investors shrugged off a rise in inflation, with miners lending support. At 0830 GMT, the FTSE 100 was up 0.3% to 7,234.86, while the pound was flat against the euro at 1.1242 and 0.3% firmer versus the dollar at 1.4043.

The year-on-year headline US consumer price index for January showed a 2.1% gain, unchanged from December and above economists' expectations for a fall to 1.9%.

Spreadex analyst Connor Campbell said: "Given that these gains are coming after the hawkish, and higher than forecast, inflation figures out of the UK and US, it appears that investors have become slightly more accepting of any impending increase in interest rates. Or, at the very least, they saw little in Tuesday’s and Wednesday’s data to speed up the schedules laid out by the Federal Reserve and Bank of England in the last few weeks."