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Pound hits seven-month high; trade deal hopes lift markets – business M&G suspends property fund amid Brexit uncertainty and retail crisis - business live
(32 minutes later)
Rolling coverage of the latest economic and financial newsRolling coverage of the latest economic and financial news
NEWSFLASH: One of Britain’s biggest fund managers has just suspended dealing in its multi-billion property fund.
M&G has blamed Brexit for the temporary move, saying political uncertainty has made it hard to sell property assets to meet redemption requests from investors in its Property Portfolio.
The crisis on the high street -- with many retailers shutting stores -- is another factor.
In a letter to investors, M&G says:
What does it mean?
The Property Portfolio holds 91 commercial properties across the UK, and manages assets of £2.54 billion.
Funds of its type take money from investors, invest it in commercial property assets, and pay returns from rental payments and capital appreciation.
As M&G points out, those properties are hard to sell quickly (unless you accept a firesale price). So if too many investors want to withdraw their money at the same time, the fund can struggle to meet those redemptions.
Back on trade.... Donald Trump has told reporters in London that talks with China are going “very well”.
During a press event with German chancellor Angela Merkel, Trump said:
That’s a more upbeat assessment than yesterday, when the president hinted that he might not sign off a deal for another year.
This is likely to reassure markets; a cynic might question whether Trump is keen to reverse yesterday’s selloff with some good publicity.
But the BIG headlines are on Trump calling Justin Trudeau “two-faced” after video emerged showing Canada’s PM laughing about Trump with Boris Johnson, Emmanuel Macron,Mark Rutte and Princess Anne.
Boom! Sterling has now hit its highest level against the euro since May 2017.Boom! Sterling has now hit its highest level against the euro since May 2017.
General election speculation has driven the pound up to €1.182 against the single currency, a 31-month high.General election speculation has driven the pound up to €1.182 against the single currency, a 31-month high.
Traders are increasingly betting on a Conservative victory next week. The pound is also benefitting from the fact that this morning’s service sector data was less bad than feared (but really not good!).Traders are increasingly betting on a Conservative victory next week. The pound is also benefitting from the fact that this morning’s service sector data was less bad than feared (but really not good!).
We should remember, though, that one pound was worth €1.30 before the Brexit referendum....We should remember, though, that one pound was worth €1.30 before the Brexit referendum....
Ian Strafford-Taylor, CEO of currency and payments firm Equals, suggests the pound is still vulnerable to political drama:Ian Strafford-Taylor, CEO of currency and payments firm Equals, suggests the pound is still vulnerable to political drama:
Newsflash: Rather fewer jobs were created at American companies last month than expected, a new report shows.Newsflash: Rather fewer jobs were created at American companies last month than expected, a new report shows.
The ADP payroll, which measures US employment, has risen by 67,000 in November, much weaker than the 140,000 which Wall Street expected.The ADP payroll, which measures US employment, has risen by 67,000 in November, much weaker than the 140,000 which Wall Street expected.
October’s payroll has been revised lower too, to 121,000 from 125,000.October’s payroll has been revised lower too, to 121,000 from 125,000.
This might be a sign that the US economy is losing momentum; we’ll get a better picture on Friday, when the broader Non-Farm Payroll survey of US labor is released.This might be a sign that the US economy is losing momentum; we’ll get a better picture on Friday, when the broader Non-Farm Payroll survey of US labor is released.
Sterling is continuing to climb, and is now up a whole cent today at $1.309.Sterling is continuing to climb, and is now up a whole cent today at $1.309.
That’s a new seven-month high against the US dollar, the strongest position since May 7th.That’s a new seven-month high against the US dollar, the strongest position since May 7th.
Aviation News: Budget airline Ryanair is planning to close two bases, due to the ongoing delays to Boeing’s 737 MAX jet.Aviation News: Budget airline Ryanair is planning to close two bases, due to the ongoing delays to Boeing’s 737 MAX jet.
Ryanair says it now expects to only receive 10 737 MAX aircraft in time for next summer, not the 20 previously expected. That means it will carry a million fewer passengers -- 156m, not 157m -- and force it to shutter operations at Nuremberg and Stockholm Skavsta.Ryanair says it now expects to only receive 10 737 MAX aircraft in time for next summer, not the 20 previously expected. That means it will carry a million fewer passengers -- 156m, not 157m -- and force it to shutter operations at Nuremberg and Stockholm Skavsta.
Boeing is still trying to get the 737 Max recertified, following the two fatal crashes blamed on a flawed anti-stall mechanism.Boeing is still trying to get the 737 Max recertified, following the two fatal crashes blamed on a flawed anti-stall mechanism.
John Goldie, FX Dealer at Argentex Group, predicts the pound could rise to at least $1.33 if Johnson wins a majority next week.John Goldie, FX Dealer at Argentex Group, predicts the pound could rise to at least $1.33 if Johnson wins a majority next week.
But victory isn’t assured, so sterling could yet slide back to $1.25, Goldie suggests.But victory isn’t assured, so sterling could yet slide back to $1.25, Goldie suggests.
Here’s a clip of Rosenthal picking out the crossbar when it was rather easier to score....Here’s a clip of Rosenthal picking out the crossbar when it was rather easier to score....
Pollsters, such as YouGov, have been giving the Conservatives a solid lead in the polls for months.Pollsters, such as YouGov, have been giving the Conservatives a solid lead in the polls for months.
But Boris Johnson has suggested that the race is ‘very tight’. That could just be a message designed to get the vote out next Thursday...But Boris Johnson has suggested that the race is ‘very tight’. That could just be a message designed to get the vote out next Thursday...
...or it could reflect memories of 2017, when Theresa May lost her majority despite beginning her election campaign with a big lead....or it could reflect memories of 2017, when Theresa May lost her majority despite beginning her election campaign with a big lead.
Wall Street is expected to recover yesterday’s slump too, thanks to Bloomberg’s report that a US-China trade deal could still happen soon.Wall Street is expected to recover yesterday’s slump too, thanks to Bloomberg’s report that a US-China trade deal could still happen soon.
Sterling is also climbing against the euro, hitting a near-nine month high of €1.1786.Sterling is also climbing against the euro, hitting a near-nine month high of €1.1786.
That’s because Boris Johnson appears to be on track for victory in next week’s election, says Dean Turner, economist at UBS Wealth Management.That’s because Boris Johnson appears to be on track for victory in next week’s election, says Dean Turner, economist at UBS Wealth Management.
But with a week’s campaigning to go, nothing is certain. Turner writes:But with a week’s campaigning to go, nothing is certain. Turner writes:
The pound has hit its highest level in seven months, as City traders show increased confidence that Boris Johnson will win next week’s general election.The pound has hit its highest level in seven months, as City traders show increased confidence that Boris Johnson will win next week’s general election.
Sterling has jumped to $1.3039, up nearly half a cent, to levels not seen since May 2019.Sterling has jumped to $1.3039, up nearly half a cent, to levels not seen since May 2019.
Traders appear to be reacting to the latest Sky News/YouGov poll, which gave the Conservatives a nine-point lead ahead of Thursday’s general election.Traders appear to be reacting to the latest Sky News/YouGov poll, which gave the Conservatives a nine-point lead ahead of Thursday’s general election.
The poll puts the Tories on 42%, Labour on 33%, the Liberal Democrats are on 12%, and Brexit Party is on 4%, up two points.The poll puts the Tories on 42%, Labour on 33%, the Liberal Democrats are on 12%, and Brexit Party is on 4%, up two points.
The City fears another hung parliament, which could mean more deadlock and possible a disorderly Brexit. So this polling is pushing the pound up.The City fears another hung parliament, which could mean more deadlock and possible a disorderly Brexit. So this polling is pushing the pound up.
Rupert Thompson, Head of Research at Kingswood, says investor confidence in a Conservative victory has grown.Rupert Thompson, Head of Research at Kingswood, says investor confidence in a Conservative victory has grown.
But even at todays levels, the pound is still some 13% weaker than before the Brexit vote three years ago.But even at todays levels, the pound is still some 13% weaker than before the Brexit vote three years ago.
Thompson explains:Thompson explains:
In a surprise twist, European stock markets are all rallying.... as hopes of a US-China trade deal grow again.In a surprise twist, European stock markets are all rallying.... as hopes of a US-China trade deal grow again.
Every index is up, with France, Italy andGermany rallying by over 1%, after unnamed sources claimed that Donald Trump had painted a too-gloomy picture of negotiations yesterday.Every index is up, with France, Italy andGermany rallying by over 1%, after unnamed sources claimed that Donald Trump had painted a too-gloomy picture of negotiations yesterday.
According to these insiders, a deal could still be reached this month.According to these insiders, a deal could still be reached this month.
Bloomberg has the details:Bloomberg has the details:
Andy Bruce of Reuters shows how UK service sector growth has fizzled out this year:Andy Bruce of Reuters shows how UK service sector growth has fizzled out this year:
If today’s PMIs are accurate, they suggest the UK could be sliding back to the brink of recession.If today’s PMIs are accurate, they suggest the UK could be sliding back to the brink of recession.
Howard Archer of EY Item Club is revising down his hopes for growth in the fourth quarter of 2019, having seen November’s gloomy PMIs.Howard Archer of EY Item Club is revising down his hopes for growth in the fourth quarter of 2019, having seen November’s gloomy PMIs.
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, blames Brexit for the drop in UK service sector activity last month.Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, blames Brexit for the drop in UK service sector activity last month.
Here’s his take on November’s PMIs:Here’s his take on November’s PMIs:
Tim Moore, economics associate director at IHS Markit, says the UK economy is “staggering” through the final quarter of the year, with output falling at services companies and factories.Tim Moore, economics associate director at IHS Markit, says the UK economy is “staggering” through the final quarter of the year, with output falling at services companies and factories.