Rising Brexit deal expectations send pound and bank shares soaring

Brexit latest: Michel Barnier gets green light for 'tunnel' negotiations
UK-focused shares leap as investors price in increased expectations of a deal
Pound continues to gain ground as Brexit talks gain momentum
Ryan Bourne:How can we reach political agreement when economists can't decide on the facts?
Market wrap
Well that was a busy (and positive) day for the markets in Europe and Wall Street is still looking very good.
The FTSE closed with some huge gains from housebuilders and banks, which were all boosted by hopes of a Brexit deal.
Brent oil seemed to also joinin on the surge too.
Before we close for the weekend, the latest news just broken is that the Fed is to buy Treasuries into next year.
It said it will buy $60bn of short-term government debt each month, until at least the second quarter of 2020.
You can read the full statement from the Fed here
That's all from us, we'll see you bright and earlyon Monday!
Stocks soar on US-China trade hopes
David Madden of CMC Markets sums up today's markets...

"Equity markets in Europe have been lifted on the back of the hopes surrounding the US-China trade talks as well as Brexit discussions. Later today, President Trump will meet with Chinas Vice Premier, Liu He, and dealers are optimistic as Trump tweeted that good things are happening at the trade talks. Dealers have been taking their cues from the US president, so hopes are running high.
"In a nice change of pace, we heard positive mood music yesterday from the meeting between Prime Minister Johnson, and Irelands Leo Varadkar. The politicians said there is a pathway for an agreement being struck, but both sides have been guarded when it comes to the finer details. Nonetheless, dealers are hopeful of progress being made, which explains the drive higher in UK banks in addition to home builders.
"The optimism surrounding Brexit has given British banks a boost as UK government bond yields have ticked up. Banks lending margins usually improve in an environment of higher bond yields, hence whyRBS, Lloyds, Barclays and HSBCare higher today. The fear of a disorderly Brexit has been hanging over the property sector. In light of the upbeat sentiment, traders are snapping upBovis Homes, Persimmon, Taylor Wimpey, in addition to Berkeley Homes."
Rangers chairman Dave King 'cold-shouldered' by City watchdog
Rising Brexit deal expectations send pound and bank shares soaring

Rangers chairman Dave King has been handed a so-called 'City Asbo' for breaking takeover rules when he swooped on the Scottish football club in 2015.
The Takeover Panel found that he had committed an offence of utmost gravity by working with a group called the Three Bearsto seize control of the top flight team.
He will be cold-shouldered for four years - a rarely used sanction that blackballs him from the financial community, barring him from working with others on further takeovers.
Read Oliver Gill's full report here
UK banks and house-builders still on a high
Well, there's less than an hour to go until European stock's close.
Let's take a quick look how those biggest risers are doing now...
RBS is up more than 12pc, as is Lloyds Banking Group.
Housebuilder Persimmon is currently 11.44pc ahead, Taylor Wimpey is 10.86pc higher and Barratt Developments up 10.67pc.
Markets Hub - Royal Bank of Scotland Group
Wait for it... there's more!
Trump has said that when the deal is fully negotiated with China, that hesign it myself with no approvalby Congress...
One of the great things about the China Deal is the fact that, for various reasons, we do not have to go through the very long and politically complex Congressional Approval Process. When the deal is fully negotiated, I sign it myself on behalf of our Country. Fast and Clean! Donald J. Trump (@realDonaldTrump) October 11, 2019
Apple share's touch all time high
Rising Brexit deal expectations send pound and bank shares soaring

Apple shares over the last 5 years
Apple shares, which have significant exposure to the Chinese market, jumped 3pc after Donald Trump's tweet.
Wall Street joins the surge as Trump tweets of "good things happening"
Shares are rallying in New Yorkfollowingstrong gains in European and Asian markets.
Both the Dow Jones and the S&P 500 are1.45pc higher at 26,880.47 and 2,980.69, respectively.
The tech-heavy Nasdaq is 1.66pc up at 8,083.37.
US and China officials are holding a second day of talks in Washington and the first day of negotiationsstirred optimism.
Trump's latest tweet seems to have increased optimism too. He said that "good things are happening at China trade talk meeting."
The president added: "Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen!"
Good things are happening at China Trade Talk Meeting. Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice Premier today. All would like to see something significant happen! Donald J. Trump (@realDonaldTrump) October 11, 2019
Nissan's new CEO and COO 'brings clarity'
Motoki Yanase, a vice president atMoodys, Japan, says that the car maker's new appointees "brings clarity to Nissans governance arrangements".

"In addition, both Mr Uchida, the new CEO, and Mr Gupta, the new COO, have long-standing relationships with Renault, which would be helpful in maintaining Nissans alliance with Renault and Mitsubishi Motor, and promoting synergies between the three companies.
"Such cooperation is increasingly critical in the competitive global automotive market, which is undergoing changes related to autonomous driving, electrification and ridesharing, with increasing requirement for R&D and capital spending.
Renault boss ousted in 'coup' as car maker seeks to rebuild ties with Nissan
Rising Brexit deal expectations send pound and bank shares soaring

Ousted Renault boss Thierry Bollore hit out at his removal
Renault's chief executive claimshe wasthe victim of a "coup" after beingsacked by the car maker's board.
Thierry Bolloredenounced his oustingin a newspaper interview prior to being officially toldof the decision on Friday.
French car giant Renault has appointed chief financial officerClotilde Delbos to the top jobon an interim basis, as it looks to make a fresh start and rebuild relations with its Japanese partner Nissan.
Mr Bollore had only held the job since January, when he was parachuted in to steer Renault following the arrest of former boss Carlos Ghosn in Japanon charges of taking millions of pounds of secret pay.
BP shares in the red after it takes $3bn hit from asset sales
Rising Brexit deal expectations send pound and bank shares soaring

BP disclosed charges of up to $3bn from asset sales
Oil giant BP is 1.6pc lower at493.95pafter it admitted it took a $3bn hit from asset sales and warnedof storm disruption.
My colleagueVinjeru Mkandawirewrites:

BPwill take a hit of up to $3bn (?2.4bn) from asset sales and warned that a storm in the Gulf of Mexicodented its production in the middle of this year.
It comes as BP, which last weekannounced the departure of chief executive Bob Dudley, looks to sell off non-essential assets worth around $10bn by the end of this year - one year ahead of schedule.
The companysold its entire Alaska businessto Houston-based Hilcorp Energyfor $5.6bnthis year.
It has also signed a deal to divest some of its legacy gas assets from its US Lower 48 business, which recently rebranded to BPX Energy.

Read the full article here
US opening calls
We've got less than 10 minutes until the opening bell in New York.
Looks like it could be a positive finish to the week all round...
US Opening Calls:#DOW 26796 +1.09%#SPX 2971 +1.08%#NASDAQ 7836 +1.19%#RUSSELL 1506 +1.43%#FANG 2610 +1.62%#IGOpeningCall IGSquawk (@IGSquawk) October 11, 2019
Sterling gains strength
Despite it trading higher today the FTSE 100 seems to be weighed down slightly by the pound'sstrength amidoptimism of a securing aBrexit deal.
Michael Brown of Caxton says:

Sterling continues to strengthen across the board, gaining ground as markets price in the increased probability of a Brexit deal as a result of UK-EU discussions entering the tunnel a period of intense, confidential negotiations aimed at finalising a deal.
Looking ahead, the less that is heard from the negotiations, the better the outlook for the pound."
Pound takes another leg higher as Tusk sees promising signs on #Brexit. Optimism that deal could be reached has been increasing following meeting betw BoJo, and Irish PM Varadkar on Thur, after which the two said they could see pathway to Brexit deal. Holger Zschaepitz (@Schuldensuehner) October 11, 2019
Good afternoon
Hello everyone, LaToya Harding here, I'll be taking you through the rest of the afternoon and keeping you posted with all the latest breaking news.
The FTSE 100 is currently 0.75pc higher at 7,240.67 while the FTSE 250 has soared more than 3pc ahead at 19,814.22.
European stocks are similarly in positive territory, with the CAC and the DAX up 1.2pc and 2.07pc respectively.
Markets Hub I FTSE 250
Hopes of a deal 'reduce likelihood' of a Corbyn government
Whether or not caution is warranted, there is little disagreement among analysts that thepound's end of week surge is remarkable.
It may be that the prospect of dodging a no-deal exit is not the only thing buoying markets though. A deal could also reduce the chances Jeremy Corbyn reaching No. 10, according to Seema Shah of Principal Global Investors:

The pounds jump versus both the euro and the dollar is propelled by twin jets firstly, the prospect of an end to Brexit limbo and secondly, the fact that a deal reduces the likelihood of a Corbyn-led government at the next election, together with the spectre of nationalisation and aggressive corporate tax hikes.
Rising Brexit deal expectations send pound and bank shares soaring

Further gains are possible, Shah said but there is a limit to what investors can hope for:

Sunnier prospects, if sustained, could see sterling pushing even higher within the coming weeks - although a return to the pre-referendum $1.50 remains unlikely. After all, the endless negotiations and haze of uncertainty of the past three years has taken its toll on the UK economy.
Furthermore, the UK will still likely endure some economic pain on leaving the EU, even with a deal. Investors should be mindful of over-exuberance in the months ahead, especially while the new deal remains in negotiation stage.

And some more from Neil Wilson at

The rally over the last two days has been astonishing - up four big figures in less than two sessions, it's on course for one of its best two-day rallies in about 25 years.
Now that negotiations are in the tunnel phase we should anticipate a lot less news flow but there will be just as much speculation as ever - watch for how the Lab and Lib Dem, ERG and DUP sound on the state of things - ultimately MPs have to back it.
Brexit negotiations - a note of caution
Markets have responded positively to news that the EU is preparing for negotiations with UK officials. But some are sounding a note of caution.
The Telegraph'sEurope Editor Peter Foster warns those hoping for a deal not to icethe champagne just yet:
Right. Before we ice the champers, am hearing notes of caution.

So definitely a 'negotiation'...but at this point somewhat exploratory.

Understand @SteveBarclay didn't bring hard details to meet with @MichelBarnier today. /1 Peter Foster (@pmdfoster) October 11, 2019
Neil Wilson, analystat, also urged a little scepticism:

"[The prospect of closed-door negotiations]does not, however, mean a final deal will be presented, nor that MPs will back the deal that may be presented to them in due course. There are yet some considerable barriers to clear before we can say that a deal is going to be done.
Theresa May's team didn't have it easy in the tunnel, but it did lead to a deal on paper that could be voted on. And at least it does suggest we've come a fair distance in the last few days - something that did not appear possible."
Prospect of detailed negotiations sends sterling to three-month high
Sterling just keeps on rising...
The EU looks set to give the green light for in-depth negotiations on the detail of a possible Brexit deal.
The move would see UK and EU negotiators enter into intensive confidential negotiations, in a process known as "entering the tunnel".
The reports have led currency traders to strengthen their bets on the pound, which reached its highest level since the beginning of July. The pound rose as high as $1.2671 and 1.1462.
Biggest two-day rally for sterling since Brexit referendum
Biggest two day rally on GBP since June 2016 - approaching 1.26 handle#GBP +0.92% against other currencies#GBPUSD 1.25884 +1.17%#EURGBP 0.87632 -0.93%#GBPAUD 1.85242 +0.68%#GBPJPY 136.296 +1.47%#GBPCAD 1.67135 +1.1%#GBPCHF 1.25647 +1.31%#GBPEUR 1.14114 +0.94% IGSquawk (@IGSquawk) October 11, 2019
The pound almost hit $1.26 a few minutes ago and is now on its biggest two-day tear in over three years.
Pound rises again after 'constructive' UK-EU talks
Stephen Barclay's meeting with the EU's chief negotiator Michel Barnier has ended. Irish broadcaster RTE is reporting that the talks were "constructive".
The Commission was in contact with Ireland and President Tusk, continuous contacts in order to be "on the same page." We are working towards a deal, if there is a will there is a way Tony Connelly (@tconnellyRTE) October 11, 2019
The pound has now jumped to more than $1.25 against the dollar and 1.138 against the European single currency.
Markets Hub - US Dollar
Banks and builders lift off on hopes of a Brexit deal
Turning back to the FTSE, UK-focused companies have risen sharply this morning.
Shares in Royal Bank of Scotland andLloyds banking group are both up more than 8pc.
Investors in British housebuilders are also sitting on big paper gains.
The following FTSE 100 builders have all made major in-roads today:
Barratt Developments: +8pc
Persimmon: +7.7pc
Taylor Wimpey: +6.8pc
Berkeley: +6.8pc
EXCLUSIVE: Coventry Building Society boss to retire
Rising Brexit deal expectations send pound and bank shares soaring

Robert Convery / Alamy
Breaking news from our Banking Editor Lucy Burton. The boss of Coventry Building Society is set to step down. Here are the details:

Sources have toldThe Telegraphthat Mark Parsons, the chief executive of Coventry Building Society and one of the best paid buildingsociety bosses in Britain with a ?863,000 salary, is retiring after five years in the role. It is not clear who will be replacing him. The company could announce his exit as soon as today, sources said.

Parsons has led the building society since 2014, having previously worked in Barclays' retail and business banking divisions for eight years. Earlier in his career, he spent time atAbbey National and PwC. He remains a board member of industry body UK Finance.
Renault axes boss in bid to cut Carlos Ghosn links
Rising Brexit deal expectations send pound and bank shares soaring

Thierry Bollore was Carlos Ghosn's second-in-command.

Renault has ousted chief executive Thierry Bollore just days after partner Nissan selecteda new boss as the two car manufacturers try to move past the fallout from Carlos Ghosn's arrest over allegations of financial misconduct, which he has denied.
Bollore, who served as Ghosns second-in-command before taking the helm in January, will leave immediately.
Long-time boss Ghosn led the Renault-Nissan alliance for years but the partnership unravelled following his arrest last year. The saga lifted the lid on severe tensions in the relationship and shortcomings in corporate governance.
Renaults board has named financeboss Clotilde Delbos as interim chief executive.
Rollercoaster ride for the pound as Tusk speaks
Rising Brexit deal expectations send pound and bank shares soaring

Petros Karadjias/AP
Sterling has had a rollercoaster ride in the past 30 minutes.
President of the European Council Donald Tusk sent currency traders scrambling when he said that the "time is practically up" for Britain to reach a Brexit deal.
Sterling had been at 3-week high but sank to just above $1.24 just minutes after eclipsing the $1.25 barrier. The pound recovered as Tusk continued speaking.
The chances of a no-deal outcome were considered to have reduced after he spoke of"promising signals" from Irish prime minister Leo Varadkar that a deal was possible.
Here is what Tusk said on Brexit:
President Tusk's remarks today on #Brexit, ahead of next week's #EUCO

Full statement text:
Video: EU Arauzo (@EU_Arauzo) October 11, 2019
Thomas Cook's demise is competitors' gain
Travel company Dart Group, the owner ofJet2, has boosted its profit outlook this morning, saying the the collapse of Thomas Cook has led to a surge in customer interest.
Markets Hub - Dart Group PLC
Shares jumped more than 15pc in morning trading. Fellow travel companiesTui and On The Beach also saw gains of 6pc and 3pc, respectively, as investors bet on other travel companies benefiting from the collapse of Britain's oldest travel company.
Pound at highest in over two weeks
The pound has jumped to within a whisker of $1.25 in the past few minutes as its rally continues.
Brexit Secretary Stephen Barclay is in Brussels this morning, where he had a working breakfast with the EU's chief negotiator Michel Barnier in search of a breakthrough on the current Brexit impasse.
Pound rallies on Brexit deal optimism
The pound rallied strongly yesterday, delivering its best performance in seven months as traders priced in rising expectations of a transition deal being struck between the UK and the EU.
Rising Brexit deal expectations send pound and bank shares soaring

Talks between Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar lasted almost three hours. They went well enough that the Taoiseach felt a deal was possible by the end of October.

But Michael Hewson at CMC markets is among those urging caution:

"Given weve been here so many times before this optimism needs to be tempered by the fact that any deal would have to be approved not only by the EU, but by MPs here as well, and MPs track record on agreeing on anything in recent months hasnt been particularly great.
With this in mind this optimism could well be short-lived with any progress likely to be as elusive as the pot of gold at the end of the rainbow.

You can keep up with the latest developments on Brexit on our separate live blog here:
BREXIT LATEST: Michel Barnier meets with Stephen Barclay amid renewed hopes for Brexit breakthrough
Morning round-up
Rising Brexit deal expectations send pound and bank shares soaring

Telegraph Businessis littered with exclusives this morning. Here are two more.
First,Business Secretary Andrea Leadsom is preparedto seekfurther assurances on the foreign takeover of defence firm Cobhamafter its sale was blasted by the former head of MI6.
You can read what the Business Secretary told our reporterJames Cookhere:
Leadsom prepared to seek new national security pledge on Cobham takeover
If you need to get up to speed on the proposed deal, take a look at this timeline of the bid:
Cobham takeover timeline
Second, a shadow was cast over the rescue deal for Thomas Cook's travel stores last night as it emerged that almost a tenth of the 555 shops bought by Hays Travel are within 100 metres of its existing estate.
You can read the story here:
Mass closure fears for former Thomas Cook stores near shops owned by buyer Hays
Hays Travel boss John Hays started the business at the back of his mother's childrenswear shop in 1980. Now it has 745 branches, including the Thomas Cook shops.
Hays told The Telegraphlast night that between 50 and 100 of the 555 stores had already reopened yesterday, the first day after the deal was announced.
Hays faces an uphill battle to make a success of the plan in the face of a struggling high street and fierce online competition. But there are important differences between it and the collapsed Thomas Cook, not least that it does not have to prop up an ailing airline.
I've taken a look at the challenges facing the deal and the reasons for Hays' optimism here:
Work starts now for Hays Travel to save future of Thomas Cook stores
And here is a look at some of the key numbers behind the acquisition and the industry:
Agents of change - Thomas Cook, Hays Travel
Markets rising but pound holds back FTSE big-hitters
Time to check in on the stock markets...
The FTSE 100 hasslippedaftersignals of a possible compromise on a Brexit deal sparked a the surge in the pound yesterday evening.The blue-chip index is down 0.5pc this morning.
Markets Hub I FTSE 100
The more domestically-focused FTSE 250 is up, however. Themid-cap index is less exposed to currency fluctuations.
In Europe, the main indices are all trading between 0.2 and 0.8pc higher.
For more details, use the tool at the top of this blog to follow UK and global equity markets as well as currency movements.
US economy: Who decides the facts?
Rising Brexit deal expectations send pound and bank shares soaring

US negotiators are busy trying to find common ground with Chinese officials but they're harder pressed than ever to do the same with their domestic opponents.
Ryan Bournewrites for that whatever our disagreements its comforting to believe that certain realities are beyond reasonable dispute. But in the present fraught political and economic discourse, that is no longer the case, he says - even among economists:

"...even basic facts about the economy in the US are today wrangled over. Republicans and Democrats there dont just disagree about the wisdom of certain policy ideas or whether observed trends in certain metrics are worrisome."

Read Ryan's column:
How can we reach political agreement when economists can't decide on the facts?
Trump teases China over trade talks
Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House. Donald J. Trump (@realDonaldTrump) October 10, 2019
US and Chinese negotiation teams are set to continue discussions today after a seemingly positive start to two days of meetins in Washington yesterday.
USPresident Donald Trump said "we had a very, very good negotiation with China". A White House official said the talks had gone "probably better than expected".
But Trump couldn't resist teasing his Chinese counterparts via his favourite social media platform:

"Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House."
BREAK: Oil price jumps on reports of oil tanker 'missile strike'
Two missiles struck the Iran-owned Sinopa oil tanker setting it ablaze off the Saudi port of Jeddah, Iranian state TV reported this morning.
"Two missiles hit the Iran-owned ship near the Jeddah port city of Saudi Arabia," local media said, quoting the National Iranian Oil Company.
The oil price has jumped 1.3pc. We will bring you more news as the story develops.
Markets Hub I Brent Spot
Exclusive:Hargreaves Lansdown clashes with pro-Brexit founder
Rising Brexit deal expectations send pound and bank shares soaring

Hargreaves Lansdown has clashed with itseponymous founder and largest shareholder Peter Hargreaves over how the company handles its political donations.
The FTSE 100 company postponed a routine vote on political donations at its annual meeting yesterday following "shareholder feedback".
My colleagueHarriet Russellhas more:

Sources familiar with the fund investment platform toldThe Telegraphthat Mr Hargreaves, a staunch Brexiteer, believes the company he founded should be able to holdstronger political convictions. Executives at Hargreaves Lansdown favour a more neutral approach.
Hargreaves pulledthe vote from the AGM schedule at the start of the meeting citing"shareholder feedback", before later statingit was "consulting with shareholders in relation to this resolution."

Read Harriet's full report:
Hargreaves Lansdown clashes with pro-Brexit founder over political donations
Markets Hub - Hargreaves Lansdown PLC
City watchdog slaps broker with ?15m fine for misconduct by brokers
Rising Brexit deal expectations send pound and bank shares soaring

Chris Helgren/REUTERS
The City watchdog has this morning fined brokerTullett Prebon ?15.4m for improper trading and for not being open and co-operative with investigators.
Tullett Prebon, now part of FTSE 250 firm TP Icap,had"ineffective controls around broker conduct", the Financial Conduct Authority (FCA) found.
The company carried out "wash trades" - transactions with no legitimate commercial purpose - to generate "unwarranted and unusually high amounts of brokerage for the firm", the FCA said.
Read the full report here:
City watchdog slaps TP Icap with ?15m fine for misconduct by brokers
Agenda: Sterling and markets jump on Brexit and trade talks
Good morning.Sterling rose from just over $1.22 to $1.24 during two hours of intense trading yesterday, climbing 1.4pcas Prime Minister Boris Johnson and his Irish counterpartLeo Varadkartried to reach a compromise over the term of Britains exit from the EU.
At one point sterling was on track for its best day in more than three years before a slight pullback late in the day.

5 things to start your day

1)HMVs rescueris taking a punt on the revival of vinyl and the British high street with a new mega-store in Birmingham.Canadian music mogul Doug Putman is today opening the Vault, a 25,000 sq ft site in the city centre which it claims will be one of Europe's biggest entertainment shops.
2)The three chilling charts keeping central bankers up at night.Who would be a central bankerin the post-financial crisis world? After single-handedly dragging the economy out of one mess, rate-setters around the globe have thethankless task of battlingnew threats, ranging from credit bubbles to deflation.
3)Business Secretary Andrea Leadsom is preparedto seekfurther assurances on the foreign takeover of defence firm Cobham after its sale was blasted by the former head of MI6. Mrs Leadsom saidthat she has already demanded guarantees from the contractor's US buyer Advent that jobs and factories will not be axed in Britain- but addedother agreements may still be reached in the interests of national security.
4)The acquisition of Thomas Cooks entire UK store estate by family-run Hays Travel is a fairytale ending to a nightmare month for staff of one of Britains best-loved brands. But the hard work to make the deal a success starts now.
Agents of change - Thomas Cook, Hays Travel
5)British Airways boss says Heathrow is unlikely to get a third runway due to environmental concerns:Willie Walsh said the huge project to boost capacity at Europe's busiest air travel hub is likely to fall flat despite finally winning approval from Parliament last year.

What happened overnight

Asian shares rose on Friday after U.S. President Donald Trump said he would meet with China's top trade negotiator, stirring hopes for an agreement, while sterling was flat after earlier jumping on optimism over a potential Brexit deal.
The Hang Seng index added 2.2pc, putting it on course for its best day since September4.
The CSI300 index rose 0.5pcat the end of the morning session, while the Shanghai Composite Index gained 0.4pc.Japan's Nikkei stock index gained 1pc.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2pc, following on from gains on Wall Street.
Top USand Chinese negotiators wrapped up a first day of trade talks in more than two months on Thursday as business groups expressed optimism the two sides might be able to ease a 15-month trade war and delay a UStariff hike scheduled for next week.
USPresident Donald Trump said "we had a very, very good negotiation with China", while a White House official said the talks had gone "probably better than expected".

Coming up today

Trading update:Jupiter Fund Management, Man Group
Economics:Consumer price index (Germany), Import and export price indices (US)
See also:
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