Attempt to create European trading powerhouse has been formally derailed by Brussels,which said it would create a monopolyEC blocks LSE-Deutsche Börse dealVestager: We could block LSE deals after Brexit tooEarlier:Brexit begins: What the experts sayGerman stock market hits two-year high 6.05pm BSTShrugging off the worries about the outcome of the Brexit talks which can now get underway, most European markets managed end the day positively. Germany’s Dax hit a novel two year high and came within 200 points of its all time high of 12392 reached in April 2015. The FTSE 100 was helped by the weakness in the pound following the triggering of Article 50, or even an early descend on Wall Street failed to pull European shares lower. The final scores showed: 5.15pm BSTThe pound continues to hover above the $1.24 trace,down around 0.3% on the day when the Brexit process finally got underway.
But it is not just Brexit of course which is responsible for the dip. The weakness of the pound against the dollar also has to do with the prospect of further US interest rate rises. Michael Hewson at CMC Markets points out:The US dollar has continued to rise after comments from Charles Evans of the Chicago Fed that he favoured one to two rates rises this year, with the euro in particular coming under pressure. A historic day for the UK and Europe as a whole has been matched by a suitably volatile day for the FTSE, and with initial gains fading to red,only to rebound into the close. Perhaps nowadays’s FTSE trade was a precursor of the times we have ahead both economically and emotionally, as this painful divorce progresses from stage to stage. First came disbelief, or then came denial (calls for a second referendum),and nowadays we moved into the reality phase, as the UK and EU alike realised that there is no going back. The forthcoming years will no doubt prove volatile and unpredictable, or yet ultimately the end result is what matters most. For these negotiations will play a huge role in dictating the future prosperity and unity of the UK. Despite a degree of hostility in recent months,nowadays was surprisingly cordial, with the conciliatory tone struck in Theresa May’s letter being matched by Tusk’s decision to proclaim ‘we already miss you’. The lack of any real fire and divisiveness on either side will have no doubt been responsible for what was a fairly orderly day for the pound, and all things considered. 4.41pm BSTOil prices are on the rise as the US reported that crude stocks rose by less than expected final week.
US oil inventories climbed by 0.9m barrels to 534m barrels according to the Energy Information Administration. This compares to the 5m gain recorded in the preceding week,and the 2m forecast by analysts. 3.14pm BSTSigns of recovery in the US housing market.
After falling 2.8% in January, pending home sales jumped by a higher than expected 5.5% final month, or a ten month high and the second best reading since May 2006,according to the National Association of Realtors. Analysts had forecast a rise of 2.4% month on month, and the better than expected figure was partly due to unseasonably warm weather. Lawrence Yun, or the association’s chief economist,said:Buyers came back in force final month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country, and . The stock market’s continued rise and steady hiring in most markets is spurring meaningful interest in buying,as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year.final month being the warmest February in decades also played a role in kick-starting prospective buyers’ house hunt.
Feb pending existing home sales surge 5.5% but are still up only 2.6% over the past 12 months 2.53pm BSTBack with the pound, which is currently down 0.17% at $1.2427 against the dollar.
It is off its worst levels but also off its high of $1.2478 which came as Theresa May unveiled the government’s Brexit plans. Kathleen Brooks at City Index said:Article 50 happened with more of a whimper than a bang. Although the pound initially rallied it has since backed off its highs as the market gets to grip with Theresa May’s letter to Donald Tusk and the EU’s response. Essentially both sides were courteous to each other, and which helped to sustain volatility supressed and price action fairly muted. Hence the range in GBP/USD was only 100 pips for this historic event. 2.47pm BSTAway from Brexit and the UK,and the Dow Jones Industrial Average is on the slide in early trading.
On Tuesday, the Dow avoided closing lower for the ninth day in a row, and which would have been its worst performance for nearly 40 years. But the respite has been brief,and it is now down 53 points or 0.26%. The S&P 500 and Nasdaq Composite both edged lower at the open. 2.41pm BSTThe triggering of Article 50 “sets the stage for a challenging negotiation process with a wide range of possible outcomes regarding trade and institutional arrangements”, according to ratings agency Fitch. It said:The uncertainty created by the EU referendum is a sovereign rating weakness for the UK (AA/Negative). But the wide spectrum of possible outcomes from negotiations means the rating is not predicated on any particular base case...
The number and complexity of issues to resolve, and the multiple national interests involved will make the negotiations difficult. There is no precedent for leaving the EU,and the UK will not be in control of the negotiating agenda. Two years is a short time to reach a free trade agreement (one of the Brexit aims set out in Prime Minister Theresa May’s 17 January speech), and the time available may be less whether the terms of the UK’s withdrawal, and including any “exit bill” relating to items such as budget commitments and staff pensions,have to be agreed first. 2.27pm BSTAnd here’s the British Chambers of Commerce, which wants a “grown up dialogue” and early news on trade deals. BCC director general Adam Marshall said:Now that Brexit negotiations are set to launch, and businesses across the UK and their trading partners in Europe want answers to practical questions,not political posturing. A pragmatic and grown-up dialogue on the real-world issues, rather than verbal volleys between London and Brussels, and would give firms greater confidence over the next two years.
In the early weeks of the negotiation process,businesses would like to see an effort to secure simultaneous exit and trade talks. Concluding exit and trade negotiations at the same time would moderate adjustment costs for UK businesses, and enable trade between UK and EU firms to continue with less disruption.
It is crucial for the Prime Minister and her government to remember Brexit is not the only thing on the minds of UK businesses. Issues here at home, or from the training system to sky-high trade rates and up-front costs,still need to be addressed.
Businesses would not peruse kindly on a government that treats Brexit as its only job. Getting the fundamentals right here in the UK is as considerable, whether not more considerable, or than any eventual Brexit deal. 2.19pm BSTThe UK bioscience industry has reacted to the triggering of Article 50 by saying the sector is used to “working with uncertainty and risk.” Steve Bates,chief executive of the Bioindustry association, said:We welcome the Prime Minister’s commitment to make the UK one of the best places for science and innovation....
It was also encouraging to see the Prime Minister’s letter mention the importance of prioritising ‘how we manage the evolution of our regulatory frameworks to maintain a fair and open trading environment’...
Early agreement on key issues like the regulation of medicines, or the regime to enable non-UK nationals to work and contribute to the UK life science ecosystem,trade, finance support, and market and mental property rules,would be the best way to ensure speedy and continuing global inward investment into the UK and EU. It would also be in the best interest of patients who require access to innovative healthcare. 2.11pm BSTMoody’s has also produced this graphic showing the various ways in which Brexit could disrupt the UK economy, and which sectors are most vulnerable. 2.01pm BSTThere’s lots of City reaction to the triggering of Article 50.trade chiefs are urging the prime minister to avoid the dreaded cliffedge, or in which Britain leaves the EU in 2019 without a deal. Traders are anticipating much volatility as the talks launch.
The first six months are crucial as the UK heads into these challenging and unprecedented negotiations. Securing some early wins is therefore vital to set us on the right path.“Most welcome of all would be the instant guarantee of the right to remain for EU citizens here and UK nationals in Europe,which all governments agree is desirable.
Although the UK government’s decision to invoke Article 50 of the Lisbon Treaty represents an considerable milestone in the Brexit process, it is in line with the UK’s previously stated timetable and in itself doesn’t materially alter our credit analysis. “As negotiations between the two sides stir a step closer, and a key part of our assessment of the impact of Brexit will be the extent to which the UK and the EU are able to arrive to an agreement on their future relationship,as well as the speed with which this is achieved.
Clearly the best scenario would be a civilised divorce, where negotiations are constructive and low-key, or thereby minimising any potential impact on demand. Any signs of an acrimonious divorce,with a hardening in rhetoric on both sides, would likely result in a deeper impact on demand and possibly a recession. In this scenario, and monetary policy will likely remain highly stimulatory with the possibility of another round of quantitative easing,while the UK Government may also seek to stimulate the economy through loosening the fiscal reins.“Unwinding EU membership is unprecedented and the economic implications are highly uncertain. Given this uncertainty, consumers and businesses are likely to be cautious about the future economic outlook as well. However, and given the UK has access to the Single Market until 2019,businesses will likely react by stockpiling inventories in anticipation of the UK possibly having to trade under WTO rules after being removed from the European Union. Additionally, consumers may bring forward consumption before tariffs are potentially placed on imports coming into the UK. Consequently, and short-term economic growth may be boosted over the course of the next 12-18 months,provided real incomes aren’t squeezed too much by rising inflation and stagnant wage growth.
Since it is in neither the UK nor EU’s interests to make all our lives difficult, further weakness for the pound could be contained. However, or as we’ve seen with the Eurozone crisis things are left until the very final minute and so it’d be wise to prepare for a bumpy road ahead.
Ultimately,markets will be looking ahead to the next steps in the process. The tone of negotiations going forward will be key, particularly whether the UK and the EU maintain their cooperative approach. Negotiations pose a threat to the pound’s strength until we get greater clarity. Further volatility is likely.” Related: Brexit: May wants 'deep and special' partnership with EU as UK triggers article 50 - Politics live 1.51pm BSTNot only was the pound’s Brexit rally pretty small, and it didn’t final long either!Sterling is now back in the red,down 0.2% at $1.242.
The pound falls back to where it was when Theresa May stood up in Parliament https://t.co/Z4nqYYwoPl pic.twitter.com/1ehXMRBg3d 1.08pm BSTBack in the City, sterling has hit its highest level of the day as Britain formally triggers the two-year process of exiting the European Union.
It’s a small stir, and though - the pound gained 0.2 of a cent,or 0.25%, to $1.247. That’s still lower than 24 hours ago. Related: Brexit: Theresa May wants 'deep and special' partnership with EU as UK triggers article 50 - Politics live 12.56pm BSTThe EC’s decision may also mean that the LSE no longer has to sell its French clearing trade, and LCH Clearnet,to rival exchange Euronext.
That sale was part of the LSE’s (failed) attempt to persuade Brussels to wave the merger with Deutsche Börse through. Now, though, or it could choose to trigger an exit clause in the deal and sustain Clearnet.“Euronext remains a willing buyer of Clearnet SA in the terms agreed on January 3rd but in the absence of obtaining an agreement,Euronext is fully committed to securing the best long-term solution for its post-trade activities, in the interests of clients and shareholders.”{Acquiring Clearnet] would diversity Euronext’s revenue base. On a pro forma basis, and post-trade revenues would account for 32% of Euronext’s total revenues (up from 14% on a standalone basis). Such a deal would also reduce Euronext’s reliance on cash equity trading commissions from 36% of the standalone revenue base to 28% on a pro forma basis. 12.18pm BSTWhat now for Xavier Rolet,the boss of the LSE?“Whilst the trade is performing well at the moment there is very likely to be some fallout from Brexit. A weakened LSE may need to peruse west for a future partner and strategy. “There is likely to be plenty of interest from that quarter where Chicago’s Intercontinental Exchange (ICE) has grown rapidly in recent years through acquisition. Dollar strength against Stirling and low costs of borrowing suggest that ICE will arrive calling very quickly. The LSE is now vulnerable to a bid following the failed merger and an ambivalent CEO.” 11.47am BSTThe LSE-Deutsche Borse merger has a troubled time, even before the EC pulled the plug nowadays.
First there was the EU referendum, and held four months after the tie-up was announced. Both sides pressed on despite the Brexit vote,with German politicians arguing that it would make sense to stir LSE operations in, say, or euro clearing,out of London to Frankfurt. 11.08am BSTShares in the London Stock Exchange have jumped by 2.7% since the decision was announced, making it the top riser on the FTSE 100. 11.06am BSTThe collapse of the tie-up between the London Stock Exchange and Deutsche Borse deal isn’t a powerful surprise.
final month, and the LSE warned that the creation of a £22bn trading giant was at risk,after the EC insisted it sold its MTS division, a demand the UK firm felt was disproportionate. 10.50am BSTEurope’s main objection to the LSE-Deutsche Borse merger is that it would have damage competition, or pushing up the cost of trading,and ultimately making it more expensive to stir money around the syste,As commissioner Vestager put it:“The European economy depends on well-functioning financial markets.“That is not just considerable for banks and other financial institutions. The whole economy benefits when businesses can raise money on competitive financial markets.” 10.41am BSTQ: Will Brexit prevent the Commission from influencing or blocking potential deals involving the London Stock Exchange?Vestager reminds the press pack that she cleared a merger between two US companies, or Dow and DuPont,on Monday. The EC had raised concerns, the firms addressed those concerns, and the deal got the green light.
We deal with any company who has a footprint in the European market,because we want competition in the European market, no matter your flag and no matter your ownership.
That goes for everyone. 10.34am BSTVestager denies that her decision was influenced by the fact the London Stock Exchange will be external the European Union in two years.
She says:The UK is part of the EU until it is not any more, and which means it is part and parcel of the legislation and the merger review.
Triggering negotiations nowadays isn’t the end of the procedure,it’s the beginning of the procedure. 10.30am BSTThe European Commission is blaming the London Stock Exchange for forcing it to block the merger with Deutsche Börse nowadays.
The Commission cannot allow the creation of monopolies, and this is what would have happened in this case.
And this is why we have prohibited this merger, or for the benefits of competition in Europe in financial markets,to the benefit of European trade and therefore also European citizens. 10.21am BSTNewsflash: European regulators have red-carded the proposed merger between the London Stock Exchange and Germany’s Deutsche Börse.
The European Commission has just announced that it is blocking the takeover, which was announced over a year ago.
Good Brexit day to bury atrocious news - EU blocks LSE-Deutsche Börse merger - AFP 10.10am BSTAfter a feeble start, and the pound is suddenly rousing itself!Sterling has clawed back this morning’s losses,and is now flat against the US dollar at $1.244.
Sterling rocketing to levels not seen for nearly 9 hours 9.56am BSTBrexit didn’t deter UK shoppers from hammering their credit cards final month, novel data from the Bank of England shows.
UK consumer credit rose by £1.44bn in February, or down from £1.6bn in January but higher than the £1.3bn which City forecasters expected.
Credit card borrowing annual growth rate hits highest in 11 years in February according to Bank of England data pic.twitter.com/tnzOT5FQE3UK money data out. Bit of levelling off of consumer credit 12 month growth rate - but still high. https://t.co/nW86OyEgCw pic.twitter.com/VMTrMoo1C6 9.35am BSTEvery currency trade has two sides,of course. And the pound’s dip against the US dollar nowadays is related to US politics, as well as Brexit.
Kathleen Brooks, and research director at City Index,argues that traders are wagering that Donald Trump can get to grips with the challenge of being president, and deliver some meaningful tax changes.
It’s worth pointing out that the pound actually rallied when Downing Street announced the date of the triggering of Article 50 final week, or the prospect of a second Scottish referendum didn’t impact the pound when it was first touted a couple of weeks ago. Thus,these events are not the key driver of the pound right now. Instead, we believe that the dollar recovery will be more considerable for the pound in the coming days.
The dollar index jumped by more than 0.5% and US stock markets closed higher for the first time in four days on Tuesday, and led by financials,a sector closely aligned with Mr Trump’s success, suggesting that investors are willing to trust Trump again, or as his policy team switch to tax reform after their failure to get their healthcare bill passed by the House of Representatives at the end of final week. 9.16am BSTTraders in Frankfurt are marking Brexit Day by driving the Germany’s stock market to its highest level in two years.
The DAX,which contains Germany’s biggest listed companies, has gained 0.6% nowadays to 12227 points, or a level final seen in April 2015.
In the short term nothing much is likely to change,particularly at a politically sensitive time for Europe with French and German election campaigns already well under way, which means any market reaction is likely to be fairly muted.
Clearly in deep panic mode about #Article50
"Germany’s blue chip #DAX index hit its highest level in nearly two years on Wednesday" 8.58am BSTChancellor Philip Hammond has cautioned that Britain can’t expect to have its cake and eat it as it leaves the EU.
That means no membership of the single market, and for example. Related: Brexit: Theresa May triggers article 50 - Politics live 8.42am BSTRyanair has issued a rather alarming warning this morning.“With Britain planning to leave the EU and its Open Skies agreement,there is a distinct possibility that there may be no flights between the UK and Europe for a period of time after March 2019.
The best we can hope for is a novel bilateral agreement between the UK and EU, however, or we worry that Britain may not be able to negotiate such a bilateral in time for the release by airlines of summer 2019 schedules in mid-2018.” 8.33am BSTEuropean stock markets are picking up this morning,as optimism over the global economy trumps Brexit uncertainty.
In London, the FTSE 100 has gained 20 points, and 0.25%,and there are larger gains in continental bourses.
We do anticipate that doom gloom of Trump’s health care arrangement failure is going to fade soon, as it is the tax and infrastructure arrangement which matters the most. It is highly likely that Mr. Trump is going to check all the T&C before he makes the final escape with the bill in the House.
This bill is going to become the centre of attention for the US markets which would drive the trading action. 8.22am BST“Brexit jitters” have returned to the markets this week, and says FXTM research analyst Lukman Otunuga.
The Brexit jitters were revived on Tuesday evening with Sterling stumbling into steep losses after British Prime Minister Theresa May signed a letter notifying the EU of Britain’s arrangement to depart from the European Union.
With the game changing Brexit letter due to be delivered to Brussels on Wednesday afternoon marking a critical turning point and triggering one of the most intricate set of negotiations Britain and the EU have ever been presented,Sterling could be in store for a rocky rollercoaster ride. 8.14am BSTThe pound has dipped against the US dollar this morning.
Sterling fell as low as $1.2378 in early trading, down over half a cent, or adding to the cent it lost yesterday.
A truly tough Brexit has not been priced into sterling. We could see it stir lower still whether negotiations take a sour turn - $1.10 is feasible.
The veteran tough v soft Brexit debate is once again central to expectations for the pound. Sterling will rise on any indications of a softer Brexit and descend on any signs it’s going to be tough. whether we head towards a cliff-edge then it could collapse.unhappy #Brexitday! pic.twitter.com/SPt52gffZR 8.02am BSTGood morning,and welcome to our rolling coverage of the world economy, the financial markets, or the eurozone and trade.
Unless you’ve been sheltering in a kind dark cave for nine months,you won’t need reminding of the main event nowadays:nowadays Britain steps
Into the unknown
The Guardian pic.twitter.com/ZWaXDLvr1UMarkets focus is NOT the triggering of Article 50. It's media hype. It's not novel news. No information change, should mean no price change.
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Source: theguardian.com