Closing summary: The calm before the storms
There are four days until the UK leaves the EU, unless something else comes up. Of course, we’ve been here before – as evidenced by Jaguar Land Rover’s factory shutdown, planned when 29 March was still the date of Brexit.
Behind the scenes, Labour and the Conservatives have been in contact about a possible Brexit compromise, while Prime Minister Theresa May is preparing for meetings with European leaders about gaining a short extension to the Article 50 negotiation period.
In the City, all eyes are on Debenhams and Mike Ashley, ahead of a deadline of 5pm for his attempt to agree a £150m rescue deal in exchange for the role of chief executive of the department store chain.
Oil prices remain near the five-month highs hit earlier in the day. Brent crude futures hit a high of $70.86 per barrel, with instability in Libya raising the prospect of further supply constraints at the same time that Opec, the cartel of oil-producing nations, has made cuts to production.
The fighting in Libya is nearing the capital of the United Nations-backed government in Tripoli. Khalifa Haftar, a 75-year-old warlord, has seized control of oilfields. You can read here for an explainer of the situation in Libya.
Thank you for reading today, and please do come back tomorrow for more coverage of business, economics and the markets. JJ
The deadline is getting closer for Debenhams, and a nervous wait for any investors holding out hope that their shares are still worth something.
The department store chain has until 5pm to decide if it will accept a £150m rescue deal offered by the Sports Direct boss or give control of the company to its lenders.
US stock markets fall at the Wall Street opening bell, with Boeing’s travails weighing particularly on the Dow Jones industrial average.
The Dow lost 0.48% at the open, a 127-point fall.
The Nasdaq fell by 0.17%, or 14 points; the S&P 500 fell by 0.16%, ending a seven-day winning streak.
Sterling has lost a bit more ground against the euro in afternoon trading.
The pound fell below €1.1580, representing a 0.3% fall, as Prime Minister Theresa May prepared to meet France’s Emmanuel Macron and Germany’s Angela Merkel to argue for a short extension of the Brexit deadline.
Against the US dollar the poount was down by 0.1%, at $1.3054.
A judge has discharged a jury in a trial against four ex-Barclays executives.
You can read some more detail on the trial (10:39am) here:
Shares in Boeing are suffering ahead of the opening bell on Wall Street, after the US aircraft manufacturer said it will cut production of its 737 plane.
Boeing said on Friday that it would make 20% fewer 737s following two deadly crashes in which malfunctioning safety features may have played a part, according to investigators.
Premarket trading on Monday indicated that the company’s share price has fallen by about 4.8%.
Boeing’s 737 Max jets have been grounded around the world following the crash of jets owned by Ethiopian Airlines and Lion Air. In both crashes the pilots are thought to have attempted unsuccessfully to override safety features.
Labour is hinting that there could be movement on Brexit talks today.
Shadow Brexit secretary Sir Keir Starmer said the “ball is in the government’s court” on a possible compromise.
That comes after Conservative party hardliners Mark Francois and Andrew Bridgen, among the most strident voices in favour of leaving the EU without a deal, wrote letters to the chair of the party’s backbench committee calling for a vote of no confidence in Prime Minister Theresa May.
Follow all of the latest political developments here:
Futures are pointing to a lower open for the main US stock market indices, following the tepid start to the week from European shares.
S&P 500 and Nasdaq 100 index futures point to a 0.1% fall at the Wall Street opening bell, while the Dow Jones Industrial Average is set to fall by 0.2%.
It’s mostly quiet on the markets front halfway through the trading day in London.
Shares in housebuilder Redrow are the biggest riser on the FTSE 350, up by 7% after it confirmed the previously announced return of £111m to shareholders via a share issue and buyback. Pharma company Indivior rose by 5% after it announced new data on an opioid addiction treatment.
On the FTSE 100 the biggest mover was hospital provider NMC Health, which fell by 3.8%, followed by takeaway ordering platform Just East, down by 2.5%.
Gold miner Fresnillo and grocery logistics firm Ocado were the only FTSE 100 companies who had gained more than 1% at the time of writing.
New laws proposed to tackle social media companies streaming child abuse, extremism, terrorist attacks and cyberbullying have been welcomed by senior police and children’s charities.
Launched on Monday, the Online Harms white paper outlines what the government says are tough new laws for internet companies and the ability to enforce them, write Sandra Laville and Alex Hern.
Social media companies will have a mandatory “duty of care”, requiring firms to “take reasonable steps to keep their users safe and tackle illegal and harmful activity on their services”, the government said.
You can find more detail and reaction here:
London’s ultra-low emission zone came into force when Big Ben tolled midnight last night, meaning that drivers of more polluting vehicles in the centre of the capital will have to pay £12.50 a day.
The charge, brought in on top of the separate congestion charge by mayor Sadiq Khan to combat air pollution, rises to £100 for buses, coaches and lorries. It will apply to traffic within the red ring in the map below.
However, more Britons outside the capital may have to get used to the limits. Areas inside the north and south circular are set to be covered from 2021, while Birmingham and Leeds have said they will introduce clean air zones in 2020, and Manchester plans to follow suit.
Health campaigners have stepped up calls for other cities to introduce the plans, writes the Guardian’s Sarah Boseley.
Lower sales and a premature Brexit shutdown at Jaguar Land Rover, the UK’s biggest carmaker (albeit one owned by India’s Tata Motors).
JLR’s four main UK manufacturing sites – at Castle Bromwich, Solihull and Wolverhampton in the West Midlands, and Halewood in Merseyside – which employ 18,500 people, are closed from Monday until Friday.
The production shutdown at Britain’s biggest carmaker is in addition to its usual Easter closure, which runs from next week until 23 April. The extension was agreed with staff in January to prepare for potential Brexit disruption, when the UK’s scheduled departure date from the EU was 29 March.
There’s more detail from the Guardian’s Julia Kollewe here:
Brexit-watchers are not the only people waiting for white smoke today: Debenhams shareholders will find out by 5pm whether retail impresario Mike Ashley has any hope of securing a takeover.
If a deal with Ashley’s Sports Direct is not agreed it is likely that Debenhams’ creditors will tonight put the group into “pre-pack administration”, which would wipe out the value of Sports Direct’s stake of nearly 30% in the department store.
Over the weekend Debenhams issued four conditions Ashley would have to agree to if he wanted to extend the deadline and give more time for a deal.
Sports Direct agreed to underwrite a £150m rescue rights issue if Debenhams agreed to make him chief executive ahead of the 8 April. Sports Direct also said this morning that it wants Debenhams’ lenders to write off £148m in debts.
Ashley, it is fair to say, did not take Debenhams’ conditions on the rescue deal well.
“For the avoidance of doubt, it is Sports Direct’s contention that the board of Debenhams and its advisors have undertaken a sustained programme of falsehoods and denials. The fact that they can so openly lie in their recollection of joint meetings with Sports Direct is beyond the pale,” the company said.
Will we get some movement on Brexit today? Possibly, as talks between Labour and the Conservatives continue.
Foreign secretary Jeremy Hunt this morning hinted that the government would be open to a customs union compromsie, saying there would be no point having talks with Labour if the government was constrained by “big red lines”.
Asked if accepting a customs union would be the price for a deal with Labour, he said:
Well, we don’t have a majority in parliament, and so we have to look to other parties to seek agreement that will allow us to get Brexit over the line in parliament as the law requires. You can’t go into any of those discussions with big red lines because otherwise there’s no point in having them, but we are very clear about the type of Brexit that we want. That’s in our manifesto, and we’ve made that clear.
Prime Minister Theresa May is “leaving no stone unturned to try and resolve Brexit”, he added.
You can follow all of the day’s political twists and turns with the Guardian’s Andrew Sparrow here:
May is currently enjoying/enduring her 1,000th day as prime minister, although given her vow to resign soon she may quite not be popping the champagne corks.
If she stays put for another few months, she could outrun up to three more of her predecessors. pic.twitter.com/egB7zzwUH7
— Ian Jones (@ian_a_jones) April 8, 2019
London judge dismisses jury in landmark Barclays Qatar case
A London jury has been dismissed in a landmark fraud trial of four former Barclays executives accused of paying Qatar undisclosed fees to help rescue the bank at the height of the credit crisis in 2008.
Judge Robert Jay told the jury at Southwark Crown Court on Monday he was required to discharge them.
Halfway through the trading morning in London in a truly momentous week for the future of the British economy, and currency markets...
... are barely moving. Sterling is down by 0.05% against the euro at €1.1612. Against the US dollar it is much the same story: a pound will buy you $1.3048.
The FTSE 100 is down by 0.2%, while the mid-cap FTSE 250 is faring slightly less, down by 0.27%.
Oil prices are still holding up, however. Futures for West Texas Intermediate crude, the North American benchmark, are up by 0.5% today at $63.38 per barrel. The North Sea benchmark, Brent crude, is also up by 0.5%, at $70.69 per barrel.
The activist investor targeting a board seat at Barclays has written another letter to shareholders in an attempt to gain support.
Edward Bramson, the founder of Sherborne Investors, is trying to force Barclays to move capital away from its underperforming investment banking division to more profitable activities.
The bank has so far stood firm behind its investment bank, which services large corporations and investors, but last month Barclays chief executive Jes Staley took personal control of the division, forcing out previous boss Tim Throsby.
“In view of Barclays’ most recent announcements of sudden management realignments and departures, we believe that Mr. Bramson’s experience and temperament would be a strongly stabilising influence on the board,” the letter from Sherborne to Barclays shareholders said.
Bramson is not the only investor questioning the outlook for Barclays: the investor played by Steve Carell in The Big Short has bet that shares in the bank will fall.
Eurozone investor confidence has improved thanks to positive signs from China, according to the widely followed survey by Sentix.
The headline Sentix measure rose to -0.3 points for April, the highest since November, after a reading of -2.2 points in the previous month.
Manfred Hübner, managing director at Sentix, said:
Economic observers are currently focusing their attention strongly on China. The signs in China are increasingly pointing to an upswing. Should there be an additional settlement in the trade dispute with the USA, the second economically robust region of the world economy, the European economy could also see a turnaround.
However, the European economy remains “fragile”, he added. The Eurozone economy is losing momentum, but the rate of the decline is slowing.
And he gave Britons a welcome reminder that not everything revolves around Brexit, with the trade dispute between China and Donald Trump’s White House the major driver for investors in the next few months.
Saudi Arabia’s oil minister, Khalid al-Falih, this morning suggested that further production cuts may not be necessary, given the increase in prices.
At a conference on Monday Al-Falih said the oil market was “moving towards balance”.
Falih said he did not “think we need to” when asked if the kingdom was prepared to make additional cuts to support the oil market.
Al-Falih also said that demand for the first international bond from Saudi’s state-owned oil company, Aramco, had hit $30bn.
Aramco, which is thought by many to be the world’s largest company, is raising cash ahead of a delayed initial public offering.
Let’s take another look at the oil market, with Brent crude prices at their highest point of the year so far.
Futures prices have risen from just over $50 per barrel before Christmas to almost $71 on Monday.
The higher prices have come thanks to multiple factors weighing on supply, including cuts in production from Opec (the Organization of the Petroleum Exporting Countries) and stronger US jobs data than had been expected. On top of that, the deteriorating Libyan situation has added more impetus for higher prices.
While not quite at the top table of the world’s oil producers, Libya is still a large supplier, meaning that its civil war is closely watched in oil markets. Libya was the 20th largest petroleum producer in 2018, at more than a million barrels per day, according to the US Energy Information Adminstration.
Over the weekend eastern Libyan military commander Khalifa Haftar mounted an assault on Tripoli, the capital, and the United Nations-backed government there. You can read more detail on the battle here:
Centrica is leading the FTSE 100 after reports of a potential buyer for its UK nuclear power reactors.
Shares rose by 0.6% after the Telegraph reported that Greencoat Capital is in talks to launch a fund to target a £4bn sell-off of a minority stake in seven reactors from EDF Energy and Centrica.
Other risers include miners Antofagasta and Fresnillo, but shares overall have fallen by 0.3% on London’s main index. Private hospitals firm NMC Health is the biggest faller, down by 3.5%.
Carlos Ghosn’s final exit from Nissan, the Japanese carmaker which he was widely credited with reviving, has been completed, with his removal from the board.
Nissan shareholders voted to remove Ghosn at an extraordinary general meeting at a Tokyo hotel, the latest development in a scandal which began with his arrest in November on charges of underreporting his income to regulators.
Ghosn’s troubles have broadened in recent weeks. Renault, the French carmaker whose alliance with Nissan Ghosn led, reported him to French authorities and Japanese prosecutors then rearrested him. He remains in detention in Tokyo.
Nissan CEO Hiroto Saikawa opened the meeting with a speech outlining the allegations against his former mentor, accusing him of misusing funds and seeking to conceal his compensation.
He and other executives bowed deeply before the thousands of shareholders at the meeting as it opened.
You can read more here:
German trade data disappoints
Exports and imports from Germany both fell more than expected in February, according to trade data published today, adding to signs of economic weakness in Europe’s largest economy.
Exports decreased by 1.3% in February, Germany’s Federal Statistical Office reported, lower than the 0.5% fall predicted by economists. Imports fell by 1.6%, after rising by 1.4% the month before.
Carsten Brzeski, chief economist at ING Germany, said it is clear that the German economy is “still struggling”.
The export sector had been on a rollercoaster ride through all of 2018, with problems in emerging markets, trade tensions between the US and China, US protectionism, a possible cooling of the Chinese economy and increasing fears of a hard Brexit. There simply seem to be too many crises in global trade for the German export sector to defy all of them at the same time.
However, he added that the outlook may be more positive if geopolitics take a turn for the better.
Recent real-time indicators suggest a rebound in global trade since the start of the year and relief in the trade tensions between the US and China should also benefit German exports.
The FTSE 100 has started the day with barely a murmur.
London’s blue-chip index is down by 0.05%.
Europe’s other main stock markets have fallen. Germany’s Dax fell by 0.25% after relatively weak trade data. Spain’s Ibex fell by 0.2%, but France’s Cac 40 was flat at the open.
Introduction: Oil prices hit highest this year
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The start of 2019 was marked by fears that a long-expected slowdown in the global economy would finally come around, weighing on oil demand. However, supply constraints have sustained prices, with futures for the Brent crude benchmark back above $70 per barrel at the start of the week.
Futures prices rose by 0.5% to a high of $70.78 early on Monday as traders priced in lower output from Libya, where fighting in the long-running civil war has escalated, threatening the United Nations-backed government in Tripoli.
The Libyan instability coincided with relatively strong US jobs data on Friday, supply cuts from Opec, the oil-producing nations’ cartel, and sanctions on Iran and Venezuela.
James McCormick, global head of desk strategy at Natwest Markets, pointed out that Brent crude futures moved above the 200-day moving average at the end of last week, a signal of bullish sentiment. He said:
The upside risks in crude oil prices [...] are being realised.
Sterling markets were fairly stable in early trading, but don’t count on it remaining that way. The UK is scheduled to leave the EU on 11pm on Friday unless something else comes up – a fact that will undoubtedly drive the news week. Take a look at this shaky-cam video from the prime minister for a sign of just how strange the current political situation is.
Let me explain what's happening with Brexit.pic.twitter.com/gjGkvFk8fT
— Theresa May (@theresa_may) April 7, 2019
With just a hint of understatement, Guy Stear and Klaus Baader, analysts at Société Générale, said:
This week is likely to be overshadowed by events relating to Brexit. Another short extension has been requested by the UK, but the EU may prefer a longer delay while setting strict conditions and requiring participation in the EU parliament elections.
The agenda
- 1:45pm BST: Speech by the European Central Bank’s Andrea Enria
- 3pm BST: US factory orders – February
Updated
