Bank Of France Sees Sustained Growth In Q4

The French economy likely retained its growth momentum in the fourth quarter, latest projection from the Bank of France indicated on Monday.

Gross domestic product is set to grow 0.4 percent in the fourth quarter of this year, the Bank of France projected in its latest monthly business survey report. This is the first estimate by the bank.

The pace of growth accelerated to 0.4 percent in the third quarter from 0.2 percent in the second quarter, largely underpinned by domestic demand and exports.

The survey also showed that the manufacturing business confidence index eased to 103 in October from 104 in September. Morale in the services sector was unchanged, while confidence improved in the construction sector.

Manufacturers expect industrial activity to increase somewhat more rapidly in November, the survey said. Service sector expansion is expected to remain at the same pace, while construction growth is forecast to slow.

Italy’s economy dips as Germany supports European growth

Growth in Germany, Europe’s largest economy, looks set to support the outlook for the euro area even as Italy dices with stagnation, according to the latest data.

Economists said it pointed to quarterly economic growth of about 0.3pc in the fourth

quarter of this year, up from 0.2pc in the second quarter.

October’s headline composite output index for the euro area was revised upwards from an initial estimate of 52.7 to 53.1 as Germany’s Composite PMI was revised up significantly from the first estimate of 52.7 to 53.4.

“The national breakdown added to the evidence that Italy’s economy is struggling. In fact, on the face of it, Italy’s Composite PMI suggests that after stagnating in the third quarter, the economy contracted in October,” said Jack Allen, senior European Economist at Capital Economics.

Italy is mired in a budget dispute with the European Union over its spending plans and its populist government has said it will not stand down, saying that the third-largest euro area economy needs a budget to boost growth after austerity.

The Purchasing Manager Index data released yesterday provided a more upbeat assessment for Europe than a survey by German research institute IFO for the euro area which dropped to its lowest level since mid-2016 and fell to 6.6 points for the outlook for the final quarter of this year from 19.6 points in the third quarter.

“The euro area’s economy is moving into rough waters,” the research body said in its report, citing plunging expectations in Italy and Spain.

The world economy has now left behind an era of synchronized growth with the prospect of a full-blown trade war between the United States and China weighing on sentiment. With the US midterm elections threatening to overturn Republican control of the House of Representatives, there is also the risk of a return to government shutdowns which could dampen business and consumer sentiment in the world’s largest economy.

Australia’s Westpac FY18 Profit Edges Up

Westpac Banking Corp. (WBC.AX, WBK) reported Monday that its fiscal year 2018 net profit grew 1 percent from last year to A$8.095 billion. Earnings per ordinary share were 237.5 cents, down from 238 cents a year ago.

Cash earnings were A$8.065 billion, compared to A$8.062 billion a year ago. Cash earnings per share were 236.2 cents, down 1%.

Core earnings were A$12.37 billion, down 1 percent from A$12.45 billion a year ago.

Net operating income grew 2 percent to A$21.95 billion. Net interest income grew 4 percent to A$16.34 billion from last year’s A$15.70 billion. Non-interest income dropped 4 percent.

Net interest margin was 2.13%, up from 2.06% last year.

Further, the Westpac Board has determined an unchanged, final, fully franked dividend of 94 cents per share to be paid on 20 December 2018. Total dividends for 2018 were 188 cents per share representing a payout ratio of 80% of cash earnings.

Looking ahead, the company said the outlook for the Australian economy remains positive, although there are likely to be economic headwinds in 2019, with GDP growth expected to moderate to around 2.7%. The company expects that consumers are likely to be more cautious in the face of flat wages growth and a soft housing market, while uncertainty ahead of a Federal election and a less favourable international backdrop are likely to weigh on business investment decisions.

Westpac Group CEO Brian Hartzer said, “We have lifted our productivity target for next year to $400 million as we continue to simplify our products, digitise our business, and modernise our platforms.”