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| Pound hits five-week high as no-deal Brexit fears ebb - business live | Pound hits five-week high as no-deal Brexit fears ebb - business live |
| (32 minutes later) | |
| Time for a recap | |
| The pound has surged to a five-week high, as investors grab onto hope that a no-deal Brexit can be avoided.Sterling hit $1.235 for the first time since late July, as MPs pressed on with efforts to block a No Deal. | |
| City investors predicted the pound would keep rallying if the UK was given another Brexit extension, hitting $1.30 or even $1.35 | |
| Germany’s economy has hit fresh problems, with factory orders tumbling in July. Economists say the data show Europe’s largest economy is still struggling. | |
| Stock markets around the world have jumped, after America and China agreed to hold fresh trade talks next month. Investors, though, advise caution. | |
| US and China agree to reopen trade talks in October | |
| Stocks are surging today, and are getting close to all-time highs again https://t.co/o1YmnqdSGX pic.twitter.com/Iq3wj83eZO | |
| Andrew Gwynne MP has summed up Boris Johnson’s week -- with a list of events that have generally pushed the pound higher. | |
| Quite a week for Boris Johnson Tuesday• Loses Majority• Loses Commons Vote• Loses further 23 MPsWednesday • Loses temper• Loses several Commons Votes• Loses temper again• Loses GE vote• Loses temper againThursday• Loses brother, Minister and MP | |
| Ouch! Growth across America’s service sector companies has slowed to a three-year low. | Ouch! Growth across America’s service sector companies has slowed to a three-year low. |
| Data firm Markit says there was “a loss of momentum across the U.S service sector” last month,” with new orders slowing and demand from overseas falling. | Data firm Markit says there was “a loss of momentum across the U.S service sector” last month,” with new orders slowing and demand from overseas falling. |
| This dragged its services PMI down to 50.7, showing the slowest expansion in business activity since March 2016. | This dragged its services PMI down to 50.7, showing the slowest expansion in business activity since March 2016. |
| US Markit Services PMI Aug F: 50.7 (est 50.9, prev 50.9) - Composite PMI Aug F: 50.7 (prev 50.9) | US Markit Services PMI Aug F: 50.7 (est 50.9, prev 50.9) - Composite PMI Aug F: 50.7 (prev 50.9) |
| Chris Williamson, Chief Business Economist at IHS Markit, has the slump in US factories is now spreading across the economy. | Chris Williamson, Chief Business Economist at IHS Markit, has the slump in US factories is now spreading across the economy. |
| “US businesses reported one of the toughest months since the global financial crisis in August, with growth of output, order books and hiring all slowing amid steep falls in both export and business confidence. | “US businesses reported one of the toughest months since the global financial crisis in August, with growth of output, order books and hiring all slowing amid steep falls in both export and business confidence. |
| “Only on two occasions since the global financial crisis have the US PMI surveys recorded a weaker monthly expansion, and these were months in which business was hit by the government shutdown and bad weather in 2013 and 2016 respectively. This time, trade wars and falling exports appear to be the main drivers of weakness, exacerbating fears of a broader economic slowdown both at home and globally. | “Only on two occasions since the global financial crisis have the US PMI surveys recorded a weaker monthly expansion, and these were months in which business was hit by the government shutdown and bad weather in 2013 and 2016 respectively. This time, trade wars and falling exports appear to be the main drivers of weakness, exacerbating fears of a broader economic slowdown both at home and globally. |
| #Pound roars back to life as #BorisJohnson loses control of #Brexit; #GBPUSD rebounds from 3yr low to move above $1.23; House of Commons showdown keeps investors on high alert; PM set to address nation https://t.co/J8W8Fxv7TO#FMcy #Sterling pic.twitter.com/nKu4YXM153 | #Pound roars back to life as #BorisJohnson loses control of #Brexit; #GBPUSD rebounds from 3yr low to move above $1.23; House of Commons showdown keeps investors on high alert; PM set to address nation https://t.co/J8W8Fxv7TO#FMcy #Sterling pic.twitter.com/nKu4YXM153 |
| Sterling bouncing back like a yo-yo as JoJo dumping BoJo all but means no go on No Deal Brexit. P.S. Only way PM can leave the EU by 31 October is to get a Theresa May-like deal. Surely No 10’s best strategy now to get on with it... pic.twitter.com/OTuBQviIHs | Sterling bouncing back like a yo-yo as JoJo dumping BoJo all but means no go on No Deal Brexit. P.S. Only way PM can leave the EU by 31 October is to get a Theresa May-like deal. Surely No 10’s best strategy now to get on with it... pic.twitter.com/OTuBQviIHs |
| The strength of the pound has dragged down the London stock market today. | The strength of the pound has dragged down the London stock market today. |
| The FTSE 100 has lost 50 points, or 0.7%, to 7261. A stronger sterling hits the value of multinational companies with large earnings in foreign currencies. | The FTSE 100 has lost 50 points, or 0.7%, to 7261. A stronger sterling hits the value of multinational companies with large earnings in foreign currencies. |
| This chart from IG shows how the pound is likely to rally if a no-deal Brexit is averted, pushing the Footsie lower. | This chart from IG shows how the pound is likely to rally if a no-deal Brexit is averted, pushing the Footsie lower. |
| Rabobank analyst Jane Foley says the pound acting like a “tidy barometer” for the odds of a no-deal Brexit. | Rabobank analyst Jane Foley says the pound acting like a “tidy barometer” for the odds of a no-deal Brexit. |
| She told AFP: | She told AFP: |
| “Just as fears of a no-deal Brexit pushed the pound below $1.20 earlier this week, expectations that MPs will succeed in delaying Brexit beyond October 31 have resulting in a relief rally back to $1.23. | “Just as fears of a no-deal Brexit pushed the pound below $1.20 earlier this week, expectations that MPs will succeed in delaying Brexit beyond October 31 have resulting in a relief rally back to $1.23. |
| “The pound is clearly not out of the woods with political uncertainty still at very elevated levels - but the risk of a disorderly Brexit next month at least looks set to be pushed off the table.” | “The pound is clearly not out of the woods with political uncertainty still at very elevated levels - but the risk of a disorderly Brexit next month at least looks set to be pushed off the table.” |
| Just in: America’s companies created more jobs than expected last month - a good sign for the global economy. | Just in: America’s companies created more jobs than expected last month - a good sign for the global economy. |
| The private sector payroll rose by 195,000 last month, stronger than the 140,000 which Wall Street expected. | The private sector payroll rose by 195,000 last month, stronger than the 140,000 which Wall Street expected. |
| That suggests US companies aren’t being dragged down by issues such as the trade war. | That suggests US companies aren’t being dragged down by issues such as the trade war. |
| ADP in August came in hot at 195,000 well over the 149,000 expectation and July's 156,000. The 3-month moving average in July was 95,000. It is now 151,000. Bodes well for Friday's NFP | ADP in August came in hot at 195,000 well over the 149,000 expectation and July's 156,000. The 3-month moving average in July was 95,000. It is now 151,000. Bodes well for Friday's NFP |
| Sterling’s travails isn’t doing much for the Conservative Party’s reputation for economic competence. | Sterling’s travails isn’t doing much for the Conservative Party’s reputation for economic competence. |
| John Gapper of the FT speculates that a Tory win at the next election could trigger a sterling crisis (as it would allow them to drive through a no-deal Brexit). | John Gapper of the FT speculates that a Tory win at the next election could trigger a sterling crisis (as it would allow them to drive through a no-deal Brexit). |
| One unusual prospect for the next general election -- the pound plunges if the Conservatives win a safe majority | One unusual prospect for the next general election -- the pound plunges if the Conservatives win a safe majority |
| Bad news for Boris Johnson is good news for the pound; Sterling jumps above $1.23 on Thursday, notching up more than 3 per cent as investors become more convinced that a no-deal Brexit might be averted. | Bad news for Boris Johnson is good news for the pound; Sterling jumps above $1.23 on Thursday, notching up more than 3 per cent as investors become more convinced that a no-deal Brexit might be averted. |
| Some City experts are warning that the pound’s recovery may not last. | Some City experts are warning that the pound’s recovery may not last. |
| Dutch bank ING says: | Dutch bank ING says: |
| “A UK election now looks inevitable - the only question now is ‘when’. However, the chances of a ‘no deal’ Brexit on 31 October appear to have receded, but there are still ways it could happen, and given the outcome of an election looks deeply uncertain, despite the Conservatives’ lead in the polls, the rebound in sterling is unlikely to have legs.” | “A UK election now looks inevitable - the only question now is ‘when’. However, the chances of a ‘no deal’ Brexit on 31 October appear to have receded, but there are still ways it could happen, and given the outcome of an election looks deeply uncertain, despite the Conservatives’ lead in the polls, the rebound in sterling is unlikely to have legs.” |
| John Hardy of Saxo Bank also warns that No Deal is still a significant possibility, depending how an election played out. | John Hardy of Saxo Bank also warns that No Deal is still a significant possibility, depending how an election played out. |
| Sterling continued its strong recovery into today as the immediate threat of a No Deal Brexit has been removed by the latest parliamentary maneuvers, as parliament will likely get its delay to avoid an October 31 No Deal (key question: what will the EU terms be for that delay?) and Boris Johnson’s attempt to call for snap elections in mid-October was defeated. | Sterling continued its strong recovery into today as the immediate threat of a No Deal Brexit has been removed by the latest parliamentary maneuvers, as parliament will likely get its delay to avoid an October 31 No Deal (key question: what will the EU terms be for that delay?) and Boris Johnson’s attempt to call for snap elections in mid-October was defeated. |
| There are still too many scenarios from here to signal the all clear – an election scenario that serves as a referendum on Brexit still presents the risk of an eventual No Deal. | There are still too many scenarios from here to signal the all clear – an election scenario that serves as a referendum on Brexit still presents the risk of an eventual No Deal. |
| The #sterling comeback has steepened as the market discounts the risk of immediate #Brexit chaos risk, even if the enthusiasm may eventually prove misplaced. Read more: https://t.co/P5cHBBYP6X by @johnjhardy #SaxoStrats #FX pic.twitter.com/4IZedcKFIs | The #sterling comeback has steepened as the market discounts the risk of immediate #Brexit chaos risk, even if the enthusiasm may eventually prove misplaced. Read more: https://t.co/P5cHBBYP6X by @johnjhardy #SaxoStrats #FX pic.twitter.com/4IZedcKFIs |