Good morning. Wall Street stocks were mixed on closing yesterday ahead of a key Federal Reserve address. Fed chair Jerome Powell will be giving a speech at Jackson Hole later today.
In the past, central bankers have used the Wyoming summit to announce major policy shifts and many are expecting Powell to walk back through some of his commentary from last month’s post-rate decision press conference where he said the rate reduction was merely a “mid-cycle adjustment”.
5 things to start your day
1) Hasbro has acquired Peppa Pig owner Entertainment One for £3.3bn. The all-cash deal represents a premium of 31pc of Entertainment One’s share price over the last month, and more than three times an aborted takeover attempt by ITV three years ago.
2) Germany is examining plans to prohibit banks from imposing negative interest rates on savers, threatening to leave lenders in an impossible position and greatly complicating the job of the European Central Bank as it prepares fresh stimulus.
3) The boss of computer giant HP is to step down after four yearsdue to family health reasons. Dion Weisler will be succeeded by company veteran Enrique Lores from November 1. Mr Lores, who has worked at the printer maker for 30 years, currently heads HP’s imaging printing and solutions unit.
4) Scotland’s huge deficit means that numbers for independence don’t add up. Momentum is gathering behind First Minister Nicola Sturgeon and the SNP’s renewed push for independence, but the huge budget black hole raises serious questions.
5) Profits at Bauer Consumer Media, Britain’s biggest magazine publisher with titles including Take a Break, TV Choice, Heat and Grazia, tumbled last year as sales continued to slide. Pre-tax profits for the privately owned German company fell £7m to £3.7m on an £8.4m drop in turnover to £120.3m.
What happened overnight
Asian markets headed into the weekend on a cautious note on Friday ahead of the key speech by Mr Powell, while the pound held the previous day’s rally through the evening — fuelled by rekindled hopes for a soft Brexit.
The pound has dipped slightly, but is still sitting around three-week highs after French President Emmanuel Macron echoed German Chancellor Angela Merkel in allowing Britain to find a solution to the Irish border that has dogged negotiations since 2017.
Still, Asia’s main indexes were in positive territory in the morning. Tokyo went into the break 0.2pc higher, while Hong Kong added 0.2pc, Shanghai gained 0.1pc and Sydney rose 0.3pc.
However, Singapore, Seoul, Taipei and Wellington were all in the red, with Manila more than 1pc lower.
On currency markets, high-yielding, riskier units were broadly lower as traders move into the relative safety of the dollar.
Coming up today
An appearance by Federal Reserve chairman Jerome Powell at the Kansas City Fed’s annual Jackson Hole economic symposium will be a key opportunity for further insight. “Historically, this has been used to signal shifts in the Fed’s thinking,” said Investec’s Victoria Clarke. “But this year may well take on additional importance given that it is likely to be Jerome Powell’s first public comments since the latest round of tariffs were announced.”
Interim results: Computacenter, Henry Boot
Economics: New home sales (US)