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London Stock Exchange in merger talks with Deutsche Börse - business live London Stock Exchange in merger talks with Deutsche Börse - business live
(35 minutes later)
3.16pm GMT
15:16
The Richmond manufacturing index has also disappointed, coming in at -4 compared to the 2 which analysts had been looking for.
However US existing home sales have beaten expectations, up 0.4% in January compared to a forecast fall of 2.5%.
Updated
at 3.19pm GMT
3.14pm GMT
15:14
USA Consumer Confidence announcement - Actual: 92.2, Expected: 97.0 pic.twitter.com/AggAe2BV5H
3.08pm GMT
15:08
US consumer confidence worse than forecast
US consumer confidence figures for February have come in much lower than expected, as the recent market volatility outweighs the benefits of cheaper oil.
The index fell from 97.8 in January - itself revised down from 98.1 - to 92.2. Analysts had been expecting a figure of 97.
This is the lowest level since July. Dennis de Jong, managing director at UFX.com, said
Despite relatively healthy numbers over recent months, onlookers will be concerned with the worrying dip in this month’s consumer confidence data.
It’s surprising that US shoppers have kept their wallets in their pockets for another month, especially considering that low gas prices continue to help them save.
While the slip may have a short-term negative affect on the US Dollar, if gas continues to stay low, it’s only a matter of time before US consumers get the spending bug again.
RT @Riccanomix Big miss on consumer confidence in February, probably due to market turmoil. (92.2 vs. 97.8 prior) pic.twitter.com/UFdVAT3neO
Updated
at 3.12pm GMT
2.58pm GMT
14:58
@LSEGplc + @DeutscheBoerse is Chicago's nightmare scenario: @LCH_Clearnet + @EurexGroup =creation of European intrestrate+OTC clearing giant
2.50pm GMT
14:50
Wall Street opens lower
Meanwhile US stock markets have opened lower, in line with the dips on European exchanges.
The Dow Jones Industrial Average is down 40 points or 0.2% after another fall in oil prices - West Texas Intermediate is around 2% lower after a report Iran’s oil minister called the proposed output freeze ridiculous. At the open the S&P 500 is 0.3% lower and Nasdaq down 0.4%, ahead of the latest US consumer confidence figures.
Back in Europe the FTSE 100 is currently down 22 points or 0.3%, but would be another 4 points or so lower if not for the 16% jump in the shares of the London Stock Exchange.
2.38pm GMT2.38pm GMT
14:3814:38
It was not always so friendly between the LSE and Deutsche Börse:It was not always so friendly between the LSE and Deutsche Börse:
Ah deja vu. And here's the note accidentally sent by LSE in 2000. Blame "german intransigence" if merger aborted. pic.twitter.com/lLq15hsWA7Ah deja vu. And here's the note accidentally sent by LSE in 2000. Blame "german intransigence" if merger aborted. pic.twitter.com/lLq15hsWA7
And here’s the BBC’s story from the time.And here’s the BBC’s story from the time.
2.31pm GMT2.31pm GMT
14:3114:31
Sean FarrellSean Farrell
Here’s our first take on the LSE-Deutsche Börse merger plan:Here’s our first take on the LSE-Deutsche Börse merger plan:
The London Stock Exchange is in talks to merge with Germany’s Deutsche Börse in a deal that would seal an alliance first discussed at the turn of the millennium.The London Stock Exchange is in talks to merge with Germany’s Deutsche Börse in a deal that would seal an alliance first discussed at the turn of the millennium.
The LSE confirmed on Tuesday it was in detailed discussions with its German rival about an all-share merger. Under the proposed structure, Deutsche Börse shareholders would own 54.4% of the combined company and LSE shareholders would hold 45.6%.The LSE confirmed on Tuesday it was in detailed discussions with its German rival about an all-share merger. Under the proposed structure, Deutsche Börse shareholders would own 54.4% of the combined company and LSE shareholders would hold 45.6%.
The UK exchange said: “The boards believe that the potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group.”The UK exchange said: “The boards believe that the potential merger would represent a compelling opportunity for both companies to strengthen each other in an industry-defining combination, creating a leading European-based global markets infrastructure group.”
The exchanges have considered combining forces before. They agreed to merge in 2000 before a rival bid for the LSE from Sweden’s OM Gruppen scuppered the deal, but was then rejected. The LSE then rejected a formal £1.3bn offer from Deutsche Börse in January 2005.The exchanges have considered combining forces before. They agreed to merge in 2000 before a rival bid for the LSE from Sweden’s OM Gruppen scuppered the deal, but was then rejected. The LSE then rejected a formal £1.3bn offer from Deutsche Börse in January 2005.
The full story is here:The full story is here:
Related: London Stock Exchange in merger talks with Deutsche BörseRelated: London Stock Exchange in merger talks with Deutsche Börse
2.22pm GMT2.22pm GMT
14:2214:22
David Cheetham of City trading firm XTB.com says a merger between the LSE and Deutsche Borse would create one of the world’s biggest financial trading platforms.David Cheetham of City trading firm XTB.com says a merger between the LSE and Deutsche Borse would create one of the world’s biggest financial trading platforms.
“Shares in London Stock Exchange Group have soared by over 17% in the past hour as news that they’re in talks with Deutsche Boerse have been confirmed. If the deal were to go ahead it would create a clear market leader for European and one of the largest exchanges in the world for trading and risk managing derivatives.“Shares in London Stock Exchange Group have soared by over 17% in the past hour as news that they’re in talks with Deutsche Boerse have been confirmed. If the deal were to go ahead it would create a clear market leader for European and one of the largest exchanges in the world for trading and risk managing derivatives.
The timing of this development appears coincidental as the possibility of a Brexit has become increased in recent days now that a referendum date has been set and Boris has joined the Out campaign.”The timing of this development appears coincidental as the possibility of a Brexit has become increased in recent days now that a referendum date has been set and Boris has joined the Out campaign.”
2.18pm GMT2.18pm GMT
14:1814:18
The news that Britain’s stock exchange could soon merge with its German rival has startled the City, especially given the upcoming EU vote.The news that Britain’s stock exchange could soon merge with its German rival has startled the City, especially given the upcoming EU vote.
Mike van Dulken, head of research at Accendo Markets, tweets:Mike van Dulken, head of research at Accendo Markets, tweets:
Interesting timing for #LSE #Deutsche Boerse merger talks given how close #Brexit referendum isInteresting timing for #LSE #Deutsche Boerse merger talks given how close #Brexit referendum is
1.56pm GMT1.56pm GMT
13:5613:56
LSE confirms merger talks!LSE confirms merger talks!
It’s official! The London Stock Exchange has just confirmed that it is talking to Deutsche Börse about a merger deal.It’s official! The London Stock Exchange has just confirmed that it is talking to Deutsche Börse about a merger deal.
It says:It says:
Further to the recent movement in LSE’s share price, the Board of LSE and the Management Board of Deutsche Börse confirm that they are in detailed discussions about a potential merger of equals of the two businesses.Further to the recent movement in LSE’s share price, the Board of LSE and the Management Board of Deutsche Börse confirm that they are in detailed discussions about a potential merger of equals of the two businesses.
This would create “a leading European-based global markets infrastructure group”, it claims, adding:This would create “a leading European-based global markets infrastructure group”, it claims, adding:
The combination of LSE and Deutsche Boerse’s complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis.The combination of LSE and Deutsche Boerse’s complementary growth strategies, products, services and geographic footprint would be expected to deliver an enhanced ability to provide a full service offering to customers on a global basis.
Under the plan, Deutsche Börse shareholders would hold 54.4% of the new company, while LSE shareholders would hold 45.6%.Under the plan, Deutsche Börse shareholders would hold 54.4% of the new company, while LSE shareholders would hold 45.6%.
The LSE’s shares are now up 17%, valuing the group at almost £9.5bn.The LSE’s shares are now up 17%, valuing the group at almost £9.5bn.
UpdatedUpdated
at 2.24pm GMTat 2.24pm GMT
1.41pm GMT
13:41
Deutsche Börse shares have also jumped, by around 3%, following the reports of merger talks with Britain’s LSE.
And Euronext, another stock market operator, has seen its shares rally by 4%. Investors may be anticipating a bidding war.
Here’s the Reuters story that sparked the move:
Deutsche Boerse, LSE in merger talks - sources (via @Reuters) pic.twitter.com/sbdCv3q1eN
1.21pm GMT
13:21
LSE shares soar on takeover talks report
BREAKING: Takeover speculation has just driven shares in the London Stock Exchange up by 9%, to the top of the FTSE 100 leaderboard.
It has been trigger by a Reuters report, that the LSE is in talks over a possible merger with German rival Deutsche Börse.
Nothing official yet, though.
More than a decade ago, the LSE rejected Deutsche Börse’s advances....
The timing of these talks is quite intriguing, given the uncertainty which the EU referendum is casting over the City....
1.07pm GMT
13:07
Analysts at Scotia Bank have predicted that the UK pound could slump to just $1.30 if the Out campaign win June’s vote.
That would be its lowest level in around 30 years, worse than the selloff after the 2008 financial crisis.
They have also suggested that consumer confidence would be badly hit, as economic growth slowed sharply..
Brexit vote would cut UK growth to zero this yr, £ to $1.30 & hit assets. But no bloodbath says Alan Clarke, Scotia pic.twitter.com/Fi5JJa7lkI
12.32pm GMT
12:32
The pound is down again....
Sterling is dropping back towards the seven year low it struck on Monday.
The pound has lost half a cent against the US dollar, dipping below the $1.41 mark. Yesterday, it weakened to $1.4057, before a late revival.
Mark Carney’s warning that investors are protecting themselves against future sterling weakness (details here) may have reminded traders that we face months of uncertainty.
Dominic Stewart, sales trader at ETX Capital, says:
Sterling has remained vulnerable after falling nearly 2% yesterday - its biggest one day drop in almost six years - amidst fears that Britain may leave the European Union.
12.14pm GMT
12:14
The Treasury Committee session is now over, and Mark Carney and colleagues have been released back into the wild.
But if you want more EU referendum action, check out our Politics Live blog.
Andy Sparrow is on deck, covering a speech from David Cameron right now:
Cameron: EU referendum is a ‘once in a generation’ decision - Politics live
Updated
at 12.15pm GMT
12.00pm GMT
12:00
Guardian readers have known for a while that the Bank of England was working on contingency plans for the EU referendum.
Back in May 2015, the Bank of England accidentally emailed us the details of Project Bookend, including how to deny it existed. #oops
Related: Secret Bank of England taskforce investigates financial fallout of Brexit
We wrote at the time that:
The email indicates that a small group of senior staff are to examine the effect of a Brexit under the authority of Sir Jon Cunliffe, who as deputy director for financial stability has responsibility for monitoring the risk of another market crash.
Cunliffe also sits on the board of the City regulator, the Prudential Regulatory Authority.
James Talbot, the head of the monetary assessment and strategy division, is involved in Project Bookend, drawing on his past work as an adviser on European economic policy.
Updated
at 12.19pm GMT
11.52am GMT
11:52
Carney: Brexit contingency planning is underway
The Bank of England is engaged in contingency planning for the EU referendum, Mark Carney tells the Treasury committee.
He also reveals that the Prudential Regulation Authority is keeping abreast of the contingency plans that UK banks are making ahead of the June 23 vote.
Further details will discussed on March 8, when the governor testifies to the committee specifically about the referendum.
[The PRA supervises Britain’s financial sector, to ensure they are “safe and sound”, so they will be keen to avoid any firms being caught out by the referendum].
Mark Carney says BofE has a done "contingency planning" in case there is a Brexit
Updated
at 11.53am GMT
11.48am GMT
11:48
Rachel Reeves MP asks Mark Carney whether he expects the recent falls in sterling to continue.
The governor reiterates that investors have been buying downside protection to protect themselves against falls against the pound, especially against the US dollar [rather than the euro, because it could also suffer if Britain leaves the EU].
Governor Carney concludes:
It is safe to say that an element of referendum premium has come into sterling.
Updated
at 12.10pm GMT
11.42am GMT
11:42
Rachel Reeves MP reminds Carney that the latest Inflation Report states that interest rates are likely to rise, not fall. How can he can so confident?
Mark Carney gives a rather dovish answer, says the Bank expects interest rates to rise, gradually, over the forecast horizon.
But of course, if risks increased and the global economy deteriorated, that would have implications.
So do you expect the next move to be up, not down?
Carney replies that the UK domestic economy is positive, but that must be balanced with disappointing signs from abroad. We must weigh the two up, and we’re not taking a policy decision today.
Fascinating. At TSC Rachel Reeves asks Carney whether he still thinks next move will be up rather than down. He stonewalls. Big shift... 1/2
11.38am GMT
11:38
Carney: No intention of imposing negative rates.
Mark Carney moves swiftly to crush speculation that the Bank of England could hit UK banks with negative interest rates.
We have absolutely no intention, no interest, in doing that [imposing negative rates].
He adds that mortgage rates in Switzerland have actually gone up, even though the Swiss central bank have imposed negative borrowing costs.
NEVER BELIEVE ANYTHING UNTIL IT IS OFFICIALLY DENIED! Jim Hacker https://t.co/RpNdCAUig5