Right, time for a break after this morning’s double-dose of live blog action.
We’ll be back later if anything sensational occurs.....
The pound has dipped back below the $1.24 mark again.
This comes after the government told reporters that MPs won’t be asked to vote on the Brexit issue.
Reuters has the details:
The British government said on Monday that holding a second vote in parliament on the country’s exit from the European Union would not be acceptable, but that lawmakers would have a role to play in scrutinising the Brexit process.
“Parliament is of course going to debate and scrutinise that process as it goes on. That is absolutely necessary and the right thing to do,” a spokesman for Prime Minister Theresa May told reporters.
“But, having a second vote, or a vote to second-guess the will of the British people is not an acceptable way forward.”
The Observer reported yesterday that a cross-party alliance of MPs is pushing for a vote on the terms on which Britain leaves the EU. They argue there is no mandate for a ‘hard Brexit’, in which the UK leaves the single market.
Although the blue-chip FTSE 100 index has risen today, there are still some chunky losses among UK firms.
Nicholas Hyett, Equity Analyst, Hargreaves Lansdown, picks out the big losers:
“It’s not a pleasant day to be a UK domestic stock. The FTSE 100 and 250 top fallers lists are littered with the likes of Travis Perkins, down 2.5%, and Pets At Home, down 3.6%, as concerns about the impact of Brexit and sterling weakness continue to bite.
Banks too are having a tough morning as concerns over European, and particularly German, banks continue to rattle stock markets. RBS is the hardest faller of the FTSE 100 banks, down 1.8%. The lower sterling creeps, the more intimating those as yet unquantified, but dollar denominated, US Department of Justice fines become – reports out this morning suggesting the bank actively sought to bankrupt small businesses could mean there are yet more fines to come.
Continuing the by now familiar pattern, international earners are topping the FTSE 100, which is up 0.2% overall. Strong performances from precious metal miners Fresnillo, up 1.5%, and Randgold, up 1.2%, reflect a strengthening in their underlying commodities – hinting at nervousness in the market.”
Jobs site Indeed.com has reported a jump in Britons searching for vacancies overseas.
In the 100 days since the Eu referendum, the number of British workers looking for jobs in Ireland has risen by 20%. Australia, Canada and Germany are also popular areas:
Mariano Mamertino, Indeed’s EMEA Economist, says there was a surge of interest in working abroad immediately after the Brexit vote:
“Ireland in particular has been a big winner. Not only are high numbers of Britons searching for Irish jobs, but so too are jobseekers from elsewhere in the EU. The UK has long been a magnet for international talent, but Brexit uncertainty is leading many of them to consider Ireland instead.
“The UK economy has proved resilient in the first few months since the poll, with consumer confidence remaining high and the number of people in work barely changing. But a deterioration in the hiring appetite of employers - coupled with increasing talk of a Hard Brexit - and returning uncertainty over what that might mean, is now prompting many Britons who had been thinking of working overseas to job hunt in earnest.”
Hello again. The financial markets are in a subdued today, as US election fears add to Brexit uncertainty.
The pound has now struggled back over the $1.24 mark, as investors continue to fret about Britain leaving the single market.
FXTM VP of Market Research Jameel Ahmad says Round 2 of the Clinton vs Trump Presidential Debate is also worrying the City.
The financial markets appear to have commenced trading for the new week under a mixed cloud, as both the constant headlines over the EU referendum outcome and the end of week slide in the price of oil weigh on investor sentiment.
It is also possible that the reason for a mixed start to weekly trading could be due to investors being pre-occupied with Round 2 of the Clinton vs Trump Presidential Debate taking place overnight, where the Mexican Peso has once again strengthened significantly as the expectations of Donald Trump eventually winning the US election continue to decline.
The overall market reaction to Round 2 of the Presidential Debate is far less volatile to what we experienced at the end of Round 1, although this could be because the race to who could possibly win the US election was far closer at that time. Donald Trump appears to have now managed to alienate himself from his own political party, with the feeling in the air being that the comments released from a 2005 recording has gone some distance towards self-destructing his own presidential campaign.
Here’s a video clip of last night’s debate:
Nobel Prize awarded to Hart and Holmström
The Nobel Prize for Economics has been scooped by two US-based academics for their work on contract theory.
Oliver Hart (born in London) and Bengt Holmström (born in Helsinki) are recognised for examining how real-life contracts work, and the pitfalls they can create:
The Swedish Academy for Science say:
Through their initial contributions, Hart and Holmström launched contract theory as a fertile field of basic research. Over the last few decades, they have also explored many of its applications.
Their analysis of optimal contractual arrangements lays an intellectual foundation for designing policies and institutions in many areas, from bankruptcy legislation to political constitutions.
BREAKING 2016 Prize in Economic Sci. to Oliver Hart @Harvard & Bengt Holmström @MIT “for their contributions to contract theory” #NobelPrize pic.twitter.com/xosZ27WVee
— The Nobel Prize (@NobelPrize) October 10, 2016
The Nobel Prize for economics is being awarded now -- follow my other liveblog for all the action:
The eurozone has overcome the shock of the Brexit vote, according to new research.
Germany’s Sentix institute’s index of investor confidence has jumped to 8.5 this month, up from 5.6 in September.
That’s a stronger reading than expected, taking the index back to its levels before June’s referendum.
Euro Zone Sentix Investor Confidence (Oct) 8.5 versus 6.0 expected, previous 5.6
— Sigma Squawk (@SigmaSquawk) October 10, 2016
Eurozone investor confidence hits post-Brexit high – Sentix https://t.co/WkLhTS7GR3
— fastFT (@fastFT) October 10, 2016
Davide Serra, hedge fund manager at Algebris Investments, is still fuming about the government’s proposal to make UK firms list their foreign workers:
Dear @theresa_may @MayorofLondon Algebris Investments was ready to be rebranded Algebris Immigrants. Should we go ahead or not? Clarity pls
— Davide Serra (@davidealgebris) October 10, 2016
Analyst: Pound faces a 'perfect storm'.
There’s no respite for the pound this morning after Friday’s flash crash, says Kathleen Brooks, research director of City Index.
She fears that the talk of a ‘hard Brexit’ has spooked the market, and made the pound ‘toxic’.
That’s why speculators are betting against sterling, by taking up a record number of short positions (see earlier post).
And does Theresa May’s government care about the pound? Brooks thinks not....
The UK government don’t seem to mind a weak pound. We have had no official word from the government about the pound’s flash crash on Friday. For a country mired in debt a weak currency and the inflation that it will undoubtedly bring, can be a good thing. However, from a currency perspective this is a perfect storm.
At the start of this week it does not look like we will regain the $1.25 handle in GBP/USD any time soon, instead we could drift down towards $1.20 over the next few weeks before the market tries to “buy the low” in the pound. So bargain hunters may have to wait before making their move.
While the pound slides, Mexico’s peso is enjoying a strong start to the week.
The Peso has jumped by 1.6% against the US dollar, which is significant as Mexico’s currency has become a ‘proxy’ way of trading the US presidential election.
Traders believe that Donald Trump’s chances of becoming the next US president have diminished, after this happened:
Shares in German lender Deutsche Bank have fallen by 3% in early trading.
Investors are disappointed that the bank hasn’t finalised a fine with the DoJ for mis-selling mortgage-backed securities.
Germany’s Bild newspaper reported yesterday that CEO John Cryan wasn’t able to reach an agreement with the Justice Department during a meeting in Washington.
No DOJ deal....#DeutscheBank drops.
— Caroline Hyde (@CarolineHydeTV) October 10, 2016
Updated
Speculators take massive positions against sterling
This bodes badly for the pound....
FX speculators amass record bets against sterling, CFTC data show. And this is only to Tuesday, so doesn't capture "flash crash" fall <$1.20 pic.twitter.com/WAuYPFbNkF
— Jamie McGeever (@ReutersJamie) October 10, 2016
Updated
The FTSE 100 index has opened 20 points higher, at 7064 , around 50 points shy of its record close in April 2015.
The weaker pound is pushing up the share prices of companies who earn revenue in dollars (or other foreign currencies).
Mining companies such as Randgold, and silver-producer Fresnillo, are leading the risers, along with engineering group Rolls-Royce and defence firm BAE Systems.
Ouch. Trade-weighted sterling has just hit its lowest level since January 2009.
This measures the pound against a basket of currencies.
In another blow, half of Britain’s business leaders expect to cut investment and hiring over the coming year, as Brexit uncertainty chews away at confidence.
Here’s the story:
HSBC: Pound will keep falling
Sterling is likely to keep falling over the next year as the Brexit saga continues, says Dominic Bunning, senior FX strategist at HSBC.
He predicts the pound will drop to $1.20 by the end of 2016, and $1.10 by the end of 2017.
Bunning told Bloomberg TV this morning that investors are concerned with ‘structural issues’, such as Britain’s gaping current account deficit, rather than interest rates or growth prospects.
In theory, a weaker currency should address those structural issues and help the economy rebalance. But Bunning fears that the weak pound may not be transmitted to the real economy.
As he puts it:
It’s hard to see Britain’s goods exports picking up if we’re in dispute with our biggest trading partner.
Pound falls back through $1.20
Sterling is coming under fresh pressure this morning after UK business chiefs warned against crashing out of the single markets.
The pound has dropped by over half a cent to $1.237, back towards the levels hit on Friday in the aftermath of the infamous ‘flash crash’.
Sterling has also lost new ground against the euro, to €1.1075.
The selloff comes as the head of the CBI warns that quitting the EU could destroy Britain’s hopes of remaining an open economy.
Carolyn Fairbairn told The Times that:
“What we have heard over the last few days, if you add up the messages in total, are signs that the door is being closed, to an extent, on the open economy, that has helped fuel investment,” she said.
“It’s very clear from conversations we are having that the world is watching. International investors are watching. Companies here are watching. And they are reading a lot into the signals of this government about how committed they are to creating a strong economy.”
Fairbairn also blasted the government’s proposal to force UK firms to compile a little list of their foreign workers. That plan was ditched over the weekend, following heavy criticism.
More here:
The agenda: Eurogroup meeting, US election fallout...
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Coming up today.....
Greece’s bailout is in focus today, as Eurozone finance ministers gather in Luxembourg for a Eurogroup meeting.
They’ll assess Athens’ progress against its austerity targets, and consider whether to hand over €2.8bn in funding. This aid tranche has been on hold for a while, as the Greek government struggles to ‘tick the boxes’ set by its creditors.
The meeting could be overshadowed by reports that the International Monetary Fund is considering stepping back from the Greek bailout, and merely taking on an “advisory” role.
Meanwhile, the City won’t be able to take its mind off Brexit, and concerns that the UK is going to leave the single market. On the upside, at least we’ve not suffered another flash crash today...
The US presidential election race may also move the markets, after last night’s sometimes brutal clash between Hillary Clinton and Donald Trump.
If you missed it, here’s what happened....
A cornered Donald Trump prowled the presidential debate stage on Sunday, threatening to jail an opponent he called “the devil” in a last-ditch bid to staunch his hemorrhaging campaign hopes.
Swaying malevolently behind Hillary Clinton as she parried attacks on everything from her husband’s sex life to Wall Street and her foreign policy judgment, the intense Republican dominated the night but made little effort to seduce new voters.
Instead, he began the night by assembling a group of women in a press conference to revisit alleged sexual assaults by Bill Clinton, before confronting his opponent hardest on her private email server.
“OK Donald, I know you are into big diversion tonight,” shot back Clinton. “Anything to get away from your campaign and how Republicans are deserting you.”...
More here:
Also coming up.... the winner of the Nobel prize in economics will be announced today, sometime around 11.45am BST.
And at 9.30am, the latest Sentix survey of eurozone investor confidence is released.
Updated
