Pound hits one-month lows as hopes for Brexit deal fall apart

Pound falls to one-month low against the euro on reports PM told German Chancellor Brexit deal is essentially impossible
Productivity slowdown fears after output per hour fell by 0.5pc in second quarteras UK economy contracted
FTSE falls slightly asEuropean shares slide ahead of US-China trade talks
Recruiters knocked as global economic fears prompt hiring slowdown
Hong Kong bourse scraps ?32bn bid for London Stock Exchange
Tories risk trashing their reputation for competence with Corbynesque spending spree, IFS warns
Wrap-up: Pound takes a plunge as deal hopes hit the rocks
Pound hits one-month lows as hopes for Brexit deal fall apart

Number 10 suggests the chances of a deal have vanished

Thats a wrap! The pound sunk to its lowest level in more than a month against the dollar and euro, after an apparent breakdown in Brexit talks.
In theory, there isnt that much reason for todays shift. The Prime Ministers hands are theoretically tied by the Benn Act, so unless the Government goes down an unprecedented (and illegal path), traders minds will be focused on the longer-term question: if a General Election comes, what is a better options out of Johnson, who is expected to run on a no-deal ticket, and Jeremy Corbyn?
With the go-caveat that there could be a deal looking like an increasingly long shot, analysts may well focus more strongly on this dichotomy in the coming weeks. It will be a test of nerves for the markets, however especially for currency traders.
As for stock markets, theyre already in a sad place, with even the stoic-looking FTSE shedding three-quarters of a percentage point amid chunky losses. Wall Street is looking very sour, so where it goes from here could depend a lot on what sounds come out of the China and the White House this evening.
Thats all from me today thanks for following along. Ill be back tomorrow morning with the latest news on business, markets and economics. Join me then!
Full report: IMF boss warns of debt timebomb
Heres an extract from Economics Editor Russell Lynchs full report on IMF headKristalina Georgievas comment earlier this afternoon:

Kristalina Georgievas first speech in Washington as managing director of the international lender of last resort blamed the tariff battle between the US and China for bringing global trade growth to a near standstill.
The IMF chief urged central banks to keep interest rateslow where appropriate to tackle the weakest growth in almost a decade, but she also voiced alarm over the potential side-effects of the stimulus.
Read more here:IMF boss warns over $19 trillion debt timebomb for worlds biggest economies
Round-up: Brussels calls for fiscal stimulus, Burberry faces ?100bn sales hit from Hong Kong disruption, Uber warns over tax hikes
Pound hits one-month lows as hopes for Brexit deal fall apart

Hong Kong police taking position as protesters gathered outside the Mongkok police station yesterday

With less than ten minutes left of trading, it looks like some fairly ugly losses will stick across Europe. Here are three more of the days top stories:
Brussels calls for fiscal action to avert EU recession as shocks mount:The European Commission has issued a stark warning to EU finance ministers, calling for concerted fiscal stimulus to head off a recession and avertaprotracted downturn before it is too late.
Burberry braced for ?100m sales blow from Hong Kong protests:Burberry is set to take a ?100m hit on sales in Hong Kong in the face of escalatingviolence between police and protestersin the region, analysts warn.
Uber warns that tax hikes could wreck its UK business:Uber has warned itsUK arm could be crippled by atax probe which might trigger a20pc VAT charge on all bookings.
Business Briefing Newsletter REFERRAL (Article)
Ireland reveals no-deal budget
Pound hits one-month lows as hopes for Brexit deal fall apart

Irish Finance Minister Paschal Donohoe

Heres a report on Irelands latest budget (unveiled earlier today), from my colleague Michael ODwyer:

Ireland has unveiled a 1.2bn (?1.1bn) package to keep businesses afloat in the event of a no-deal Brexit.
Finance minister Paschal Donohoe presented the plan, which would return the state's finances to deficit, as part of the country's annual budget announcement today.
This is a Budget without precedent... A budget that has been developed in the shadow of Brexit, Donohoe said.
This does not mean that no-deal is inevitable. But equally we stand ready if it does happen. It is a challenge Ireland has the measure of.
If implemented, the measures would see a swift return to fiscal deficit for Ireland, which only returned to surplus in 2018 after a decade-long battle to get the public finances under control following a state bailout of commercial banks during the financial crisis.
Economic Intelligence newsletter SUBSCRIBER (article)
Wall Street losses surpass Europe
US stock exchanges have dropped further in recent minutes, put them ahead of Europe overall at 1pc to 1.2pc down. In contract, Europes biggest losers Italy and Spain are both off about 1pc. The euro has slipped slightly, but the pound remains the standout currency though possibly for the wrong reasons.
New IMF chair: Slowdown could force government to co-ordinate fiscal actions
Pound hits one-month lows as hopes for Brexit deal fall apart

New International Monetary Fund Managing Director Kristalina Georgieva

Kristalina Georgieva, who has just taken over as the new Managing Directorat the International Monetary Fund, used her first major address as the organisations leader to sound the alarm over the global economy, and say governments may have to synchronise fiscal stimulus to avoid a global slowdown.
Speaking in Washington, Ms Georgieva said the global economy was in a synchronised slowdown, and said nations had to find a way to coordinate a response. She said:

This widespread deceleration means that growth this year will fall to its lowest rate since the beginning of the decade. Next week we will release our world economic outlook which will show downward revisions for 2019 and 2020.
IMF warns trade disputes could shave 0.8% off global GDP in 2020 or $700bn loss Michelle Fleury (@BizFleury) October 8, 2019
Profile | Kristalina Georgieva
Round-up: BHP talks up social value, EasyJet shares hit turbulence, Hong Kong ditches LSE bid
Pound hits one-month lows as hopes for Brexit deal fall apart

Workers from BHP Billiton's Escondida, the world's biggest copper mine, gather outside the company gates during a strike

Juan Ricardo/Reuters
Here are three of the days biggest business stories, including our latest on HKEXs aborted bid for LSE:
Mining giant BHP trumpets its social value to investors:BHP is talking up its social value in a bid to woo investors and reassure local communities that mining can be a force for good.
Survivor easyJet hits turbulence after failing to reap full benefits of British Airways strikes:EasyJet has failed to fully capitalise onturmoil facing its rivals, dashing hopes of a surge in profits.
Hong Kong walks away from ?32bn bid for London Stock Exchange:The Hong Kong stock exchangehas abandoned its plan to buy its London rivalafter failing to convincethe LSEs board and its major shareholders to back a shock ?32bn bid made last month.
City Intelligence newsletter (SUBSCRIBER) Article
Stock market bleed deepens at Wall Street joins the fray
Across global stock markets, the losses are only growing larger, as an apparent Brexit breakdown mixes with trade war nerves.
All of the USs major indices have shed more than a point, with the picture even worse across Europe. The FTSE 100 is outperforming at about 0.5pc down, but that has to be seen against the backdrop of a weakened pound.
Across Europe and the Americas, no major indices is in the green for the month so far: does this mean Red October has arrived?
Best of Money: Afternoon round-up
Pound hits one-month lows as hopes for Brexit deal fall apart

Greta Thunberg has forced the question of how we treat our planet into the spotlight

Heres a round up of the best coverage from Telegraph Money today:
Boris Johnson should scrap bizarre quirk that lumps higher earners with 60pc income tax, IFS says
What would Greta Thunberg do? Six things to know about investing ethically
The investment trusts that will pay you ?75k over the next decade on an initial sum of just ?100k
Investor newsletter REFERRAL (article)
Electrocomponents leads FTSE 250 risers after meeting expectations
Pound hits one-month lows as hopes for Brexit deal fall apart

Electronic components lie in a heap

Sascha Schuermann/Getty
The biggest riser on the FTSE 250 today is Electrocomponents, which is up about 3.2pc currently after saying it was growing and making market share gains in Europe, the Middle East and Africa despite wider uncertainty.
The electronics distributorsaidit anticipates its gross margin will fall year-on-yearby around 0.8 percentage points. It said a more modest year-on-year decline was expected in the second half.
Its chief executive, Lindsley Ruth, said:

Our relentless focus on customer service, digital leadership and sales force effectiveness has been key in driving market share gains even in these more uncertain markets. We continue to invest in strategic initiatives to position the Group to deliver sustained growth over the longer term.
Heres how the pound is moving compared to major peers today...
It is bright red across the board for sterling, despite some less-than-stellar performances for the euro and dollar.
Pound hits one-month lows as hopes for Brexit deal fall apart

Pound hits one-month low against the dollar
The pound just squeaked to a one-month low against the dollar, hitting $1.2205 as hope that a Brexit deal can be reached evaporate following reports of this mornings call between Prime Minister Boris Johnson and Angela Merkel. Sterling is now at a month low against the dollar and euro.
Full report: Recruiter shares stumble on global slowdown worries
Pound hits one-month lows as hopes for Brexit deal fall apart

Pagegroup and Robert Walters both warned profits will be hit by Brexit and protests in Hong Kong

Suzanne Plunkett/REUTERS
Completing a little run of full reports on this mornings market-moving events, heres my colleague Hannah Uttley on recruiters PageGroup and Robert Walters, both of which have seen their share price take a hit today. Hannah writes:

Pagegroup and Robert Walters said that firms are putting off hiring new workers due to Brexit turmoil and increasingly violentpro-democracy protests in Hong Kong.
The pairalso warned over trade tensions betweenChina and the US, which have made some overseas firms think twice before investing further in existing operations within the countries.
Read more here: Recruiters warn Brexit uncertainty and Hong Kong protests will hit profits
Economic Intelligence newsletter SUBSCRIBER (article)
US factory gate inflation falls
US producer price inflation has fallen to its lowest level-year on year since 2016. The measure, which track the price of outgoing goods at factory gates, indicatesmanufacturers are having to cut prices somewhat, indicating lowered demand. The dollar has weakened slightly in the wake of todays PPI numbers.
US #PPI falls to +1.4%, the lowest level since November 2016. jeroen blokland (@jsblokland) October 8, 2019
Full report: UK shakes up tariff plans in preparation for Brexit
Pound hits one-month lows as hopes for Brexit deal fall apart

Lorries are seen queuing up at the port of Dover

Heres more from Economics Editor Russell Lynch on those tariff plans (see 10:29am update):

Observers might be forgiven a sense of deja vu, as the DIT published its original schedule days before the March 29 Brexit date was postponed. Under current trading arrangements, around 80pc of goods by value come into the UK tariff-free. Todays tweaks follow six months of industry representations, although furious farmers are still in the firing line.
Read more here:No-deal tariffs shake-up as ministers gear up for do or die Brexit
Nissan picks China executive as new chief executive
Pound hits one-month lows as hopes for Brexit deal fall apart

Makoto Uchida is currently head of the car giants Chinese operations

Kyodo News
New from Japan: Nissan has selectedMakoto Uchida, the head of its China business, as its new chief executive filling the hole left byHiroto Saikawas exit last month.
MrUchida was selected because of his close understanding of the car giants oversees markets, sources told the Wall Street Journal.
The move comes after an international scandal that began when former Chairman Carlos Ghosn was arrested last year.
The new boss has a full in-tray: the Japanese car firm faces falling sales, a restructuring plan, and continued tensions in its alliance with Frances Renault.
Full report: UK economy nears productivity recession
Pound hits one-month lows as hopes for Brexit deal fall apart

The manufacturing sector suffered a sharp decline in productivity during the second quarter
My colleague Tom Rees has a full report on this mornings productivity figures. He writes:

Productivity contracted 0.5pc year-on-year in the second quarter as the economy stumbled, capping off 12 months of no growth in output per hour, the Office for National Statistics revealed.
The latest slump reflects the continuation of the UKs jobs miracle in the second quarter even as GDP slipped back. The productivity puzzle has plagued the economy since the financial crisis but has worsened in the last year as Brexit uncertaintyholds back business investment.
Read more here: Economy on brink of productivity recessionas factories lead fastest drop in five years
Pound hovers near one-month low against the dollar
The pound is hovering just above its lowest intraday level against the dollar in a month. Sterling has had a wild ride over the past two months, and appears to be today entrenching a drop that began in mid-September.
US stock futures sink on reports Washington could restrict capital flows to China
Futures trading on Wall Street (which indicates how the markets will open) has taken a sharp turn of the worse in recent minutes, as storm cloud gather over the upcoming US-China trade talks.
As of a few minutes ago, futures were indicating a chunky drop of over 200 points from the Dow Jones Industrial Average.
Ahead of the Chinese delegations arrival in Washington on Thursday, Bloomberg reports that the US government is considering levying restrictions on investment into China, including a focus on stopping US government pension funds from pushing money into the countrys businesses.
Garry White | Latest columns
Losses deepen across Europe as Brexit talks look set for collapse
The picture is only getting worse across Europe, with several of the continentsblue-chip bourses now surpassing losses of 1pc.
Pound hits one-month lows as hopes for Brexit deal fall apart

Bloomberg TV
Donald Tusk: Brexit not about some stupid blame game
Looks like I may have posted slightly too soon then: this tweet from European Council president Donald Tusk certainly looks like a gauntlet being thrown down.
.@BorisJohnson, whats at stake is not winning some stupid blame game. At stake is the future of Europe and the UK as well as the security and interests of our people. You dont want a deal, you dont want an extension, you dont want to revoke, quo vadis? Donald Tusk (@eucopresident) October 8, 2019
The pound has extended its its losses against the euro, and is just inches from a month low against the dollar.
Slew of negative remarks weighing on the pound with the rhetoric from both sides increasingly hostile. GBPUSD now back near its lowest level in a month around 1.2205 David Cheetham, CFA (@DavidCheetham3) October 8, 2019
The FTSE 100is still holding flat (remember, many London-listed companies dont have a large exposure to the UK itself, and actually benefit from the pound being weaker), while the mid-cap (and more Brexit-exposed) FTSE 250 is down about 0.75pc.
Berlin refuses to comment on Johnson call claims as Juncker spokesperson says EU position is unchanged
Berlin, according to reports, has declined to offer further detail on the phone call between Angela Merkel and Boris Johnson this morning, so it looks like we only have Number 10s side of the story to go on currently.
Berlin, government spokesperson: "I can confirm that Chancellor Merkel and British PM Johnson spoke on the phone this morning. As usual, we do not report such confidential conversations." Adam Parsons (@adamparsons) October 8, 2019
Meanwhile, the Democratic Unionist Party had labelled the idea of keeping Northern Ireland in the CustomsUnion (as was allegedly discussed) is beyond crazy:
? DUP (@duponline) October 8, 2019
For the EUs part, Mine Andreeva, a spokesperson for outgoing European Commission President Jean-Claude Juncker, has said the bloc wants a Brexit dealand has not changed its position.
Sterling suffers as no-deal showdown looms
The pound has extended its losses against the euro in recent minutes, although it appears to have found a resting place around 0.6pc down against the dollar. Markets.coms Neil Wilson says:

Sterling is under the cosh again as hopes of a deal between the UK and EU fade. The last flicker of hopewassnuffed outthis morningafter a call between the PM and chancellor Merkel of Germany left the process at an impasse.
The news across the wires is that Merkel said a deal will only workif NI stays in the customs union. No 10 said this demand is impossibleand that the EU is not engaging seriously.
Its become clear a deal cannot be done, with the wording from Number 10 thata deal is essentiallyimpossiblenot just now, but ever.Stalemate. We are now heading towards the Revoke versus No Deal showdown.
No deal Brexit | How will different industries react?
Bloomberg: Germany and London will be hit especially hard by Deutsche Bank cuts
Pound hits one-month lows as hopes for Brexit deal fall apart

A man leaves the Deutsche Bank building in central London with some belongings on July 8

Leon Neal/Getty
Deutsche Bank will make about half its 18,000 planned jobs cuts in Germany, while its London offices will be hit especially hard, reports Bloomberg, citing anonymous sources.
The German lender has not yet fully detailed where the axe will land as it undertakes major restructuring plans, but it looks like retail units in its home country will be bearing much of the brunt.
Reactions to Johnson/Merkel call mixed
Here are more responses to reports about the call between PM Boris Johnson and Chancellor Angela Merkel this morning. It looks like we might be waiting a bit longer for Germanys side of of the story.
Merkel call was indeed a disaster, as others have reported. But worse even than briefings Im told. She essentially instructed Johnson to tell NI to accept full alignment on customs and regulation. Ordering either side in NI to do stuff is usually a good idea Im told... 1/4 Tom McTague (@TomMcTague) October 8, 2019
The "no problem" attribution to Merkel is so implausible that it suggests taking the rest of this "readout" with a giant fistful of salt. Tom Nuttall (@tom_nuttall) October 8, 2019
Pound drops to lowest level in a month against the euro
Bad news for hopes of a Brexit deal, and some better-than expected figures from German have dragged thepound to a one-month low against the euro (it is at its lowest level against the dollar since last Tuesday).
That drop puts it near an overall fall against the currency for the year:
European share losses extend after Brexit talks stall
Europes stock exchanges have sunk deeper into the red following those reports of stalled Brexit talks, with all major bourses on the continent now off more than 0.5pc on the day.
In London, the FTSE 100 has returned to being flat, with a weaker sterling offering some support the indexs exporters.
Sky: Prepare for no-deal showdown
Sky News political editor Beth Rigby tweets:
So 30 min call btwn PM & Merkel confirms what No 10 was expecting: a deal on Johnson new terms overwhelmingly unlikely. Source says Merkel position means deal essentially impossible not just now but ever > So we pivot to a No Deal and legal showdown over Benn Act? Beth Rigby (@BethRigby) October 8, 2019
While Christopher Cook (formerly of the BBC and now part of Tortoise)says:
This has been the Irish position since January 2017. It was a feature of the Joint Report, the EU draft WA and the final WA. Chris Cook (@xtophercook) October 8, 2019
Follow updates from Westminster on our politics live blog...

Brexit latest news: Downing Street prepares for Brexit talks to collapse this week, as Number 10 source says party will fight election on no-deal platform
Javid: Recruitment process to replace Mark Carney at Bank of England is on track
Pound hits one-month lows as hopes for Brexit deal fall apart

Outgoing Bank of England governor Mark Carney

Simon Dawson/Bloomberg
Chancellor Sajid Javid has told MPs the process to appoint Mark Carneys replacement as Bank of England Governor is on track.
In a letter to the Treasurt Select Committee, Mr Javid wrote:

You asked for an update on this important recruitment process. It is on track. In terms of the appointment itself, we will make an announcement in due course, ahead of the start of the next Governors term on 1 February 2020.
I would like to assure you that the Committee will have the opportunity and time to scrutinise the successful candidate after the appointment has been made but before the individual has taken up the role.

Mr Carney has previously signalled he would be willing to remain in the role if the Government desired him to do so.
FSB says new Brexit tariff plans arent enough
Pound hits one-month lows as hopes for Brexit deal fall apart

HGVs queue at Dover port

Andrew Matthews/PA
TheFederation of Small Businesses has responded to adjusted post-Brexit tariff plans unveiled by the government this morning.
Adjustments have been madeto the charges onHGVs, bioethanol and clothing.
The Department for International Trade said the new tariffs were introduced in order to:
lower tariffs on HGVs entering the UK market, striking a better balance between the needs of British producers and the SMEs that make up the UK haulage industry, ensuring that crucial fleet replacement programmes that help to lower carbon emissions can continue
adjust tariffs on bioethanol to retain support for UK producers, as the supply of this fuel is important to critical national infrastructure
apply tariffs to additional clothing products to ensure the preferential access to the UK market currently available to developing countries (compared to other countries) is maintained
Mike Cherry, chairman of the FSB, said:

While these tariff adjustments will be good news for businesses in certain sectors particularly smaller firms in our vital haulage industry the cold hard fact remains that two thirds of small businesses that fear the impacts of no-deal feel they cannot prepare for this outcome.
The average cost of preparation to small exporters and importers of putting contingencies in place is ?3,000.
Fundamentally, small firms are crying out for two things at this point: a pro-business Brexit deal and financial assistance to help manage the costs of uncertainty. The urgent issuing of ?3,000export vouchersis a must.
Its also important to stress that these tariffs only apply to the 12 month period after a no-deal scenario. What small businesses really want with confidence currently suffering an unprecedentedlosing streak is a return to an environment where they can plan three, five and ten years in advance.
Business Briefing Newsletter REFERRAL (Article)
Kuenssberg: Feels like chance of Brexit deal this month just died
Heres more from the BBCs Laura Kuenssberg:
4. Feels like any chance of a deal this month just died Laura Kuenssberg (@bbclaurak) October 8, 2019
There may be reason to be sceptical of the claims, however. The Telegraphs James Crisp tweets:
This would be very significant. But it is very unMerkelesque to close down talks in this way w/ bald bold ultimatums. So not convinced this source telling whole truth tbh.

Thoughts @justinhuggler? James Crisp (@JamesCrisp6) October 8, 2019
BBC: Merkel tells Johnson Brexit deal overwhelmingly unlikely if Northern Ireland is not in Customs Union
The pound has dropped sharply following this tweet by BBC Politics Editor Laura Kuenssberg:
2. No 10 says PM stressed to Merkel UK believes they had put forward a reasonable new deal, but with no desire to engage on EU side + this demand on NI staying in Customs Union a deal is 'essentially impossible' Laura Kuenssberg (@bbclaurak) October 8, 2019
Sterling is about 0.6pc off against the dollar compared to yesterdays close.
Figures highlight UKs productivity puzzle
Pound hits one-month lows as hopes for Brexit deal fall apart

UK productivity fell at its fastest rate since 2014

Reflecting on those downbeat productivity figures, the ONSs statisticians write:

This sustained period of declining labour productivity represents a continuation of the UKs productivity puzzle, with productivity since the economic downturn in 2008 growing more slowly than during the long period prior to downturn.
Despite occasional periods of growth, this sustained general pattern of stagnation contrasts with patterns following previous UK economic downturns, when productivity initially fell, but subsequently recovered in a relatively sustained fashion whilst returning to the previous trend rate of growth.

A breakdown of which sectors contributed to the decline showsnon-manufacturing and construction couldnt offset a wider slip:
Pound hits one-month lows as hopes for Brexit deal fall apart

Productivity drop is worst in five years
Reuters Andy Bruce tweets:
UK Q2 productivity performance revised up slightly vs the flash reading...

...but still the biggest drop in annual terms in 5 years. ?

Poor ?? productivity record continues ? Andy Bruce (@BruceReuters) October 8, 2019
UK productivity slipped during quarter of contraction
Labour productivity in the UK (measured as output per hour) slipped by0.5pc compared to the same quarter last year, after two consecutivequarters of stagnation.
The Office for National Statisticssays:

Both services and manufacturing saw a fall in labour productivity growth of 0.8pc and 1.9pc respectively, compared with the same quarter in the previous year.
UK productivity (output per hour) fell -0.5%y/y in Q2. Professional services, manufacturing, transport services & financial services contributed most to the fall, though there was also a contribution from labour moving from more to less productive sectors ("allocation effect"). Rupert Seggins (@Rupert_Seggins) October 8, 2019
LSE: We remain committed to Refinitiv tie-up
London Stock Exchange Group has responded to HKEXs decision to pull its takeover bid confirming its intention to push ahead towards a tie-up with data giant Refinitiv, that would position the company as a major player in the financial data sector. LSE said:

LSEG remains committed to and continues to make good progress on its proposed acquisition of Refinitiv. Regulatory approval processes are underway and shareholder approval for the transaction is expected to be sought at an Extraordinary General Meeting in November 2019. The transaction remains on track to close in H2 2020.
China: Stay tuned for US tech blacklist response
A spokesperson for Chinas foreign ministry has told reporters to stay tuned for the countrys responseafter Donald Trumps administration placed eight Chinese tech giants on a blacklist.
AI startups and security firms were placed on the list, which was unveiled shortly ahead of trade talks between the two countries.
The impact of the US-China trade war on global GDP by 2021-2022
What will Red October means for stock markets?
Logo: The Think Tank
Are you ready for a tough Octobers trading?
The tenth month of the year is often to deadliest for financial markets, reportsTom Reesfor todays Think Tank. He writes:

Market volatility in October is on average 25pc higher than other months, according to Goldman Sachs, meaning sharp swings are more likely than usual.Furthermore, six of the top 10 biggest historicaldrops in US stocks have occurred this month, including the Wall Street Crash in 1929 and Black Monday in 1987.
Goldman analyst John Marshall argues that high October volatility is more than just a coincidence and in fact reflects that this month marks a critical period for investors and companies just before the end of the year.
Read more here:Could Red October torpedo your stocks again?
The Think Tank | Read more
EasyJet shares fall, analysts highlight lack of forward guidance
Shares in EasyJet have fallen about 5.5pc so far today, despite the company unveiling solid profit figures in aconfident-sounding update to the City this morning.
Bloomberg notes that the update was light on guidance for 2020, which appears to have left someanalysts feeling let down. Goodbody writes:
Combining with the companys decision not to hold a meeting or hosting a conference call, this could be seen a disappointing.
FT: Odey fund lost 12.7pc last month
Pound hits one-month lows as hopes for Brexit deal fall apart

Crispin Odeys fund is shorting several British firms

Crispin Odeys European hedge fund lost 12.7pc amid last months market turbulence as bets against the pound and financial firms came back to bite, the Financial Times reports.
The paper says:

Mr Odey, founder of London-based Odey Asset Management, lost 12.7 per cent in September in his European hedge fund, according to numbers sent to investors and reviewed by the Financial Times.
That left his fund down 18.1 per cent for the year. September proved a major challenge for hedge funds, many of which have been riding rising stock and bond markets this year.

The Brexit-backers losses were offset somewhat by the payoff from a bet against Metro Bank.
Read more here: FT:Crispin Odey hit in volatile September for hedge funds(?)
That make deal some damage to a popular conspiracy theory that has been doing the round on Twitter:
Brexit conspiracies and crackpot blogs are taking us all for mugs
Sterling weakens as euro strengthens
The pound has weakened slightly this morning, as the euro strengthens following better-than-expected industrial data from Germany.
Seasonally-adjusted German industrial production increased by 0.3pc month-on-month in August, against estimates of a flat figure.
That is one of the first glimmers of positive industry news to emerge from Europes largest economy in a while and investors have the added positive motivation that they know stimulus is coming from the European Central Bank.
#Germany's industrial production was up 0.3% in August, better than expected, but the YoY number at -4.0% remains pretty weak. jeroen blokland (@jsblokland) October 8, 2019
PageGroup plummets after profit warning
Pound hits one-month lows as hopes for Brexit deal fall apart

Recruitment slowed down in several of PageGroups key markets

Shares in PageGroup have dropped by around 15pc this morning, after it downgraded its profit expectations in the face of political and economic uncertainty.
The FTSE 250recruitment firm said slowing growth in the US and Germany, Brexit uncertainty and ongoing disruption in Hong Kong has reduced its growth during the third quarter, as companies delayed permanent hiring decisions. It said:

Given the heightened political and macro-economic challenges seen in the quarter, together with our limited forward visibility, we currently expect 2019 operating profit to be in the range of ?140m to ?150m

Its chief executive, Steve Ingham, said:

Looking ahead, the deterioration in trading conditions seen during Q3 across the majority of our regions is anticipated to continue.
LSE Group drops nearly 7pc after Hong Kong exchange pulls bid
The withdrawal of HKEXs interest in LSE has brought the latters shares down a peg, as hopes of a buyout fade. It fell nearly 7pc at the open, but has pared back those losses a little:
Read more here:Hong Kong bourse scraps $39bn bid for London Stock Exchange
EasyJet hails solid performance as rivals suffer from strikes
Pound hits one-month lows as hopes for Brexit deal fall apart

Easyjet planes at Geneva airport

EasyJet has said it expectsprofit before tax to land in the upper half of its estimates, after strike disruption placed pressure on industry rivals during the summer.
My colleague Michael ODwyer reports:

The budget airline boosted passenger numbers by 8.6pc to 96 million after increasing its capacity by 10.3pc to 105 million seats. However load factor the proportion of available seats sold will fall 1.4pcto 91.5pc for the full year, easyJet said.

EasyJeys chief executive Jonah Lundgren said:

As a result of our self-help initiatives and the increased demand due to disruption at British Airways and Ryanair, we anticipate achieving headline profit before tax for the full year 2019 of between ?420m and ?430m, in the upper half of our previous guidance range.
Read more here:Upbeat EasyJet enjoys profit boost as rivals are hit by strikes
Hong Kong/LSE: The numbers behind the failed deal
Pound hits one-month lows as hopes for Brexit deal fall apart

HKEX chief executive Charles Li

Anthony Kwan/Bloomberg
Hong Kong's stock exchange has been forced to scrap its ?32bn bid for the London Stock Exchange.
The proposed deal was met with scepticism by investorsand suspicion among politicians. Even if the deal's economics had been made to work, there would have been plenty of regulatory hurdles to jump, as we have explained previously onTelegraph Business.
Here are some of the key numbers behind the two companies:
HKEX v LSE - A tale of two stock exchanges
The failed bid may yet have a legacy in shaping the UKs approach to regulating foreign takeovers in the future. Our Mergers and Acquisitions reporterVinjeru Mkandawiretook a look previously at how the Hong Kong bid had sparked debate on the rules regarding foreign takeovers:
Hong Kongs bid for London Stock Exchange stirs debate on foreign buyers
Agenda: Hong Kong abandons bid for London Stock Exchange
Pound hits one-month lows as hopes for Brexit deal fall apart

The LSE has been the subject of frequent M&A interest over the past two decades

Chris J. Ratcliffe/Bloomberg
Good morning. The Hong Kong Stock Exchange has dropped its multibillion-dollar bid for the prized London Stock Exchange Group, which would have created a global markets titan. We'll be bringing you all the latest news on that story which broke overnight.
Elsewhere, official German data yesterday showed a drop in industrial orders in August but the newsfailed to shake European stocks, which pushed higher to close in positive territory. US stocks however fluctuated throughout the dayahead of a meeting between the US and China later this week.

5 things to start your day

1)The Conservatives risk trashing their reputation for sound financial managementafter experts warned that day-to-day spending is set to surge to levels promised by Jeremy Corbyns Labour party. Boris Johnsons new Government is now adrift without any effective fiscal anchor and will break its budget rules in its first full year, the Institute for Fiscal Studies said.
2)Could Red October torpedo your stocks again? While traders will be praying to escape unscathed, doomsayers (and admittedly some financial journalists) are rubbing their hands with glee. The previous years when October proved brutal stand long in the memory. 1929, 1987, 2008, 2018 - and now 2019?
3)Walmart plays nice: How retail giant is battling its image problem.The retail behemoth, which started life as Sam Waltons Five and Dime store in Bentonville, Arkansas in 1950, has not always enjoyed the best of reputations.
4)The Turkish lira slumped to its lowest level against the dollar in more than a month following Donald Trumps threats to totally destroy and obliterate Turkeys economy.The currency fell as much as 2.1pc to 5.8178 (81p)against the dollar yesterday, its lowest level since September 3.
....the captured ISIS fighters and families. The U.S. has done far more than anyone could have ever expected, including the capture of 100% of the ISIS Caliphate. It is time now for others in the region, some of great wealth, to protect their own territory. THE USA IS GREAT! Donald J. Trump (@realDonaldTrump) October 7, 2019
5)A Hong Kong raider targeting the London Stock Exchange may be forced to rack up massive debts as it scrambles to sweeten its ?32bn bid in the face of sceptical investors. Hong Kong Exchanges and Clearing has only won the backing of oneshareholder among the top 10since making its audacious offer for the London market (LSE) last month, sources said.

What happened overnight

Hong Kongs bourse on Tuesday dropped its unsolicited $39 billion bid for London Stock Exchange Group (LSE), conceding it hadnt won over LSE management for a move that could have transformed both global financial services businesses.
The surprise approach, made last month, had threatened to upend the LSE's own $27 billion plan to buy data and analytics company Refinitiv. The Hong Kong exchange had said the LSE would have to ditch the Refinitiv purchase for its offer to go ahead.
In a statement on Tuesday, Hong Kong Exchanges and Clearing Ltd (HKEX), said it still believed the combination of the two exchanges would be "strategically compelling".
In the markets, meanwhile, Asian shares inched up, with Chinese shares making modest gains after a week-long holiday, though investors remained cautious over US-China trade talks after President Donald Trump said a quick trade deal was unlikely.
Japan's Nikkei climbed 1pcwhile MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7pc, led by gains in tech shares in South Korea and Taiwan.
South Korea's Samsung Electronics rose 1.2pcafter its profit guidance. The semiconductor firm said its third-quarter operating profit likely fell 56pcon a downturn in global memory chip prices, but that was better than what analysts had anticipated.
Taiwan's stock index gained 0.7pcto hit five-month highs while Hong Kong shares extended gains after the terri
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