Financial news

Pound leaps on report that EU may offer backstop concession to break Brexit deadlock — live updates

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Via Yahoo Finance

The pound has leapt in the last couple of minutes, after a report in The Times that the EU is preparing to offer a mechanism for the Northern Irish assembly to unilaterally after a set number of years.

Traders have been raising their bets that the Government will seek an Brexit extension , as hopes of a deal splutter and the October 31 deadline nears.

Just Eat is leading risers on the FTSE 100 today, after Takeaway.com, the Dutch peer it is set to merge with, posted an 87pc rise in orders and said it expects the two food-delivery companies to have completed their tie-up by the end of the year.

Takeaway.com said it had processed 41.6m orders in the third quarter of the year. It is preparing for a shareholder meeting in December, which may be when it presents the plans for a tie-up formally to investors.

RBC analyst Sherri Malek said the Takeaway.com results were “slightly light”, but said the company’s route to profitability was clear.

Shares in GVC Holdings, owner on betting shop Ladbrokes, are up about 3.5pc currently after it said it will make more profit than expected this year despite an ongoing slump in its shops. My colleague Michael O’Dwyer reports:

Like-for-like sales fell 18pc in the three months to September, which the company blamed on a cut in the maximum stake at fixed odds betting machines in April from £100 to £2. 

However, the industry has also been hit by the decline of the high street and the rise of online and app-based betting. GVC confirmed it still expects to close 900 shops in the next two years. It has shut 41 since the beginning of July. 

Sales from betting machines fell by more than a third against the same period last year but the decline in UK store performance was less severe than the company had feared. 

8:43AM

READ ALSO  Sterling slips from five-month highs as Brexit drama goes on

HKEX Chair: Not ruling out revisiting LSE takeover bid

The Hong Kong stock exchange made a bid for the London Stock Exchange Credit: Bobby Yip/REUTERS

The chair of Hong Kong Exchanges and Clearing, Laura Cha, has said the group isn’t ruling out taking another tilt at the London Stock Exchange in the future, after it pulled a £32bn bid for the rival bourse operator.

Speaking at an event in Singapore, Ms Cha said she was disappointed the previous deal didn’t go through, but said HKEX didn’t want to go hostile.

Our latest reporting says London Stock Exchange investors are attempting to kick start a bidding war for the London bourse following HKEX’s withdrawal. 

Top LSE shareholders are pushing other global exchanges, including the US Intercontinental Exchange (ICE), to mount a last-ditch bid for the company which could scupper its own plans for a £22bn takeover of data business Refinitiv, my colleague Harriet Russell writes.

Chief City Commentator Ben Marlow has given his verdict on the takeover escapade:

This tale of woe will be remembered as one of the more bizarre episodes that the Square Mile has seen in a long time. Poorly timed, badly executed, and facing insurmountable obstacles, the approach seemed doomed from the outset.

8:27AM

European stock markets grab mild gains

European markets have opened narrowly in the green after some difficult trading yesterday, where negative sentiment was driven by the apparent Brexit talks breakdown, and nerves ahead of trade talks between the US and China (due to begin tomorrow).

Credit: Bloomberg TV

Sterling has regained some ground tomorrow, after falling sharply after Downing Street briefed journalists that a phone conversation between Angela Merkel and Boris Johnson had ended at an impasse. 

8:07AM

American stocks sink: what happened on Wall Street?

The White House has said it will refuse to cooperate with an impeachment inquiry Credit: BRENDAN SMIALOWSKI/AFP

US stocks had a painful session yesterday, with a slump in the closing minutes of trading leaving the Nasdaq down 1.7pc, and the benchmark S&P 500 not far behind at -1.6.

What’s going on on Wall Street? The main thing to go by appears to be the US-China trade war, with Washington slowly ramping up measures against the Asian economic superpower.

In its latest move, the White House has placed sanctions on Chinese officials connected to the mass incarceration, forced movement and surveillance of China’s Uighur Muslim group. It comes after more Chinese firms were added to the US’s trade blacklist, and follows reports that Washington was looking at ways of restricting cash flows to China.

Separately, the heat is still very much on Donald Trump, as Congressional Democrats begin impeachment proceedings against the President. The White House has said it will not comply with requests for interviews and testimony, putting the country on course for a constitutional crisis. Here’s more:

7:18AM

Agenda: Brexit deal “essentially impossible”

Good morning. The pound sunk to its lowest level in more than a month against the dollar and euro yesterday, after an apparent breakdown in Brexit talks.

The currency fell below $1.22 during the session, sharply sinking after No 10 sources said Angela Merkel, the German chancellor had described the prospect of a deal without Northern Ireland remaining in the Customs Union as “overwhelmingly unlikely”.

Reports from the BBC and Sky said Boris Johnson, the Prime Minister, claimed the demand meant a deal was “essentially impossible”.

5 things to start your day

1) The next Metro Bank chairman: who might replace flamboyant founder Vernon Hill? Few bosses in the UK banking sector are as eccentric as American billionaire Vernon Hill, the Metro Bank founder who has compared opening a bank account in London to “having your teeth drilled” and initially made a fortune running Burger King franchises.

2) Europeans have followed Brits and fallen in love with online shopping: While Britain has led the way in its adoption of e-commerce, with online purchases as a share of total retail sales above 15pc and well on their way to 20pc by 2021 according to Euromonitor, Europe is now also fast becoming a market of online shopping devotees.

3) A Chinese CCTV firm with over one million cameras in Britain has been blacklisted by US President Donald Trump for allegedly spying on persecuted Muslim minorities.

4) In July, Boeing announced it expects to pay airlines $4.9bn in coming years to cover cancelled 737 Max flights. The model has been grounded for months after two fatal crashes. Now pilots are suing the aircraft manufacturer for $100m (£82m) for allegedly “deliberately misleading” them about the scandal-hit 737 Max aircraft. The case could spark a wave of lawsuits around the world. 

5) The US Federal Reserve has confirmed its openness to further rate cuts while adding it will begin expanding its balance sheet in response to recent unexpected funding issues. Chairman Jerome Powell appeared to confirm market expectations of a 25 basis-point cut at its October meeting on Tuesday night, stating the Fed will “act as appropriate to support continued growth, a strong job market, and inflation moving back to our symmetric 2pc objective”.

What happened overnight

Asian stocks fell the most in a week on Wednesday as the United States and China’s broadening dispute over trade and foreign policy showed little sign of coming to an end, weighing on global economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.44pc. Chinese shares fell 0.47pc after briefly touching a five-week low. Australian shares were down 0.76pc.

The US Treasury yield curve steepened in Asia after US Federal Reserve Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases to address a recent spike in money markets rates.

US stock futures rose 0.22pc in Asia, but sentiment was weak after the S&P 500 ended 1.56% lower on Tuesday in response to the US visa restrictions.

Japan’s Nikkei slid 0.7pc, its biggest decline in a week. Hong Kong shares are down 0.66c, nearing a four-week low due to persistent worries about often violent protest against China’s rule of the former British colony.

Coming up today

Trading update: GVC

Economics: Mortgages (US)

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