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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) | |
| Rabobank analyst Jane Foley says the pound acting like a “tidy barometer” for the odds of a no-deal Brexit. | |
| 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. | |
| “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. | |
| 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. | |
| 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 |
| The pound is the best-performing major currency against the US dollar this week, the eagle-eyed Financial Times points out | The pound is the best-performing major currency against the US dollar this week, the eagle-eyed Financial Times points out |
| The FT says: | The FT says: |
| Sterling rose above $1.23 on Thursday, notching up more than 3 per cent of gains against the dollar from the start of the week as investors cheered repeated blows to Boris Johnson’s attempts to push through a no-deal Brexit. | Sterling rose above $1.23 on Thursday, notching up more than 3 per cent of gains against the dollar from the start of the week as investors cheered repeated blows to Boris Johnson’s attempts to push through a no-deal Brexit. |
| The pound hit a day’s high at $1.2332 in European trading hours after Conservative MP and brother of the UK prime minister Jo Johnson quit his party, in the wake of Wednesday night’s vote in parliament that aims to thwart the prime minister’s promise to leave the EU on October 31 “do or die”. | The pound hit a day’s high at $1.2332 in European trading hours after Conservative MP and brother of the UK prime minister Jo Johnson quit his party, in the wake of Wednesday night’s vote in parliament that aims to thwart the prime minister’s promise to leave the EU on October 31 “do or die”. |
| The gains have made the pound the best performing major currency against the US dollar over the past two days. The currency’s bounce comes after a negative start to the week when the risks of the UK leaving the EU with no deal rose as high as 40 per cent, based on prices in the options market. | The gains have made the pound the best performing major currency against the US dollar over the past two days. The currency’s bounce comes after a negative start to the week when the risks of the UK leaving the EU with no deal rose as high as 40 per cent, based on prices in the options market. |
| British pound zips higher as Boris Johnson faces repeated blows. Great chart from FT this morning. https://t.co/arCaDWbULe via @FinancialTimes pic.twitter.com/iRw3NtxduG | British pound zips higher as Boris Johnson faces repeated blows. Great chart from FT this morning. https://t.co/arCaDWbULe via @FinancialTimes pic.twitter.com/iRw3NtxduG |
| UBS Wealth Management predict sterling could surge back to $1.30 if Brexit is delayed beyond October. | UBS Wealth Management predict sterling could surge back to $1.30 if Brexit is delayed beyond October. |
| Their chief economist, Dean Turner, told clients that the ‘Benn bill’ blocking a no-deal Brexit is likely to be approved soon. saying: | Their chief economist, Dean Turner, told clients that the ‘Benn bill’ blocking a no-deal Brexit is likely to be approved soon. saying: |
| Sterling has been buffeted by the frenetic pace of events in Parliament over the last couple of days. Removing the immediate threat of a no-deal Brexit has helped the pound recover some of its recent weakness. | Sterling has been buffeted by the frenetic pace of events in Parliament over the last couple of days. Removing the immediate threat of a no-deal Brexit has helped the pound recover some of its recent weakness. |
| If, as we expect, Brexit is delayed until January 2020 and an election is held after October, we would expect this recovery to continue. | If, as we expect, Brexit is delayed until January 2020 and an election is held after October, we would expect this recovery to continue. |
| A Brexit delay would push the pound over $1.30, he suspects, a level last seen in May. | A Brexit delay would push the pound over $1.30, he suspects, a level last seen in May. |
| And if Britain left the EU with a deal, the pound could strengthen to $1.35, which would be a 16-month high. | And if Britain left the EU with a deal, the pound could strengthen to $1.35, which would be a 16-month high. |
| UBS also expects an election soon, even though the Labour Party refused to trigger one last night. | UBS also expects an election soon, even though the Labour Party refused to trigger one last night. |
| Turner says: | Turner says: |
| We have long been of the view that the UK faces an election at some point before the final decision on Brexit is made. We stick to this view now. | We have long been of the view that the UK faces an election at some point before the final decision on Brexit is made. We stick to this view now. |
| When the election does come, it is only then that will we have greater clarity on how the Brexit saga will end. | When the election does come, it is only then that will we have greater clarity on how the Brexit saga will end. |
| Sterling has been moving inversely to Boris Johnson’s authority this week. | Sterling has been moving inversely to Boris Johnson’s authority this week. |
| It fell on Monday as government sources revealed the PM was planning an election on October 14, hitting a three-year low below $1.20 on Tuesday morning. | It fell on Monday as government sources revealed the PM was planning an election on October 14, hitting a three-year low below $1.20 on Tuesday morning. |
| But it then began to recover sharply, as the government dramatically lost its majority on Tuesday afternoon (when Phillip Lee joined the Liberal Democrats). It kept rallying as MPs voted to debate legislation to block No Deal. | But it then began to recover sharply, as the government dramatically lost its majority on Tuesday afternoon (when Phillip Lee joined the Liberal Democrats). It kept rallying as MPs voted to debate legislation to block No Deal. |
| Sterling picked up the pace on Wednesday as MPs backed this bill, and failed to give Johnson the two-thirds majority needed for a snap election. | Sterling picked up the pace on Wednesday as MPs backed this bill, and failed to give Johnson the two-thirds majority needed for a snap election. |
| This morning has seen fresh gains, as pressure continues to mount on the government. | This morning has seen fresh gains, as pressure continues to mount on the government. |
| The pound has also rallied against the euro, to a one-month high. | The pound has also rallied against the euro, to a one-month high. |
| Sterling is trading at €1.117, its highest level since 26 July (a few days after Boris Johnson won the Conservative leadership battle) | Sterling is trading at €1.117, its highest level since 26 July (a few days after Boris Johnson won the Conservative leadership battle) |
| Some City investors are confident that Brexit will delayed until next year. | Some City investors are confident that Brexit will delayed until next year. |
| Bloomberg reports: | Bloomberg reports: |
| The pound is rallying after Parliament tore up U.K. Prime Minister Boris Johnson’s Brexit strategy and denied his request for a snap election, tempering fears of further political turmoil, reports Bloomberg. | The pound is rallying after Parliament tore up U.K. Prime Minister Boris Johnson’s Brexit strategy and denied his request for a snap election, tempering fears of further political turmoil, reports Bloomberg. |
| “My expectation is Brexit is delayed until Jan. 31 with an election after the initial deadline and before the end of January,” said Neil Jones, head of currency sales for financial institutions at Mizuho Bank Ltd. | “My expectation is Brexit is delayed until Jan. 31 with an election after the initial deadline and before the end of January,” said Neil Jones, head of currency sales for financial institutions at Mizuho Bank Ltd. |
| “A delay for both Brexit and a general election will continue to send the pound higher.” | “A delay for both Brexit and a general election will continue to send the pound higher.” |
| Pound is looking jo-vial: https://t.co/NG8NhjV0AE via @markets pic.twitter.com/NCDlFx8KoV | Pound is looking jo-vial: https://t.co/NG8NhjV0AE via @markets pic.twitter.com/NCDlFx8KoV |
| As @BorisJohnson’s brother @JoJohnsonUK announces his resignation, pound hits highest level since July. Now up above $1.23 vs US dollar pic.twitter.com/WLZdKnb63T | As @BorisJohnson’s brother @JoJohnsonUK announces his resignation, pound hits highest level since July. Now up above $1.23 vs US dollar pic.twitter.com/WLZdKnb63T |
| The pound hit its highest level in five weeks after Boris Johnson’s own brother announced he is stepping down as a minister and an MP. | The pound hit its highest level in five weeks after Boris Johnson’s own brother announced he is stepping down as a minister and an MP. |
| In a jaw-dropping tweet, Jo Johnson says he has been wrestling with the tension between family loyalty and the national interest! | In a jaw-dropping tweet, Jo Johnson says he has been wrestling with the tension between family loyalty and the national interest! |
| It’s been an honour to represent Orpington for 9 years & to serve as a minister under three PMs. In recent weeks I’ve been torn between family loyalty and the national interest - it’s an unresolvable tension & time for others to take on my roles as MP & Minister. #overandout | It’s been an honour to represent Orpington for 9 years & to serve as a minister under three PMs. In recent weeks I’ve been torn between family loyalty and the national interest - it’s an unresolvable tension & time for others to take on my roles as MP & Minister. #overandout |
| Andy Sparrow’s Politics Live blog has all the action on another astonishing day: | Andy Sparrow’s Politics Live blog has all the action on another astonishing day: |
| Brexit: Jo Johnson, brother of Boris Johnson, to stand down – live news | Brexit: Jo Johnson, brother of Boris Johnson, to stand down – live news |
| The pound is moving inversely to Boris Johnson’s grip on power. | The pound is moving inversely to Boris Johnson’s grip on power. |
| The weaker his government looks, the strong sterling becomes. | The weaker his government looks, the strong sterling becomes. |
| Fiona Cincotta of City Index says: | Fiona Cincotta of City Index says: |
| It is all about politics in the markets at the moment. As the Boris Johnson government has progressively lost control of the situation, so sterling has rallied. | It is all about politics in the markets at the moment. As the Boris Johnson government has progressively lost control of the situation, so sterling has rallied. |
| It now looks more likely that a coalition of rebel Conservative MPs and opposition parties will take a no deal Brexit off the table with legislation, which was what the market was hoping for. | It now looks more likely that a coalition of rebel Conservative MPs and opposition parties will take a no deal Brexit off the table with legislation, which was what the market was hoping for. |
| Sterling has now surged by 2% since the start of trading on Wednesday, Reuters reports. | Sterling has now surged by 2% since the start of trading on Wednesday, Reuters reports. |
| That’s its best two-day performance in 10 months! | That’s its best two-day performance in 10 months! |
| Update: The pound has just hit $1.2318, its highest level against the US dollar in five weeks. | Update: The pound has just hit $1.2318, its highest level against the US dollar in five weeks. |