Good morning, the pound extended its strong rebound last night after MPs backed the Brexit delay bill and rejected a general election, surging above $1.22 against the dollar.
It is something of a reversal in fortune for the battered currency after it sank to a 34-year low on Tuesday (excluding the 2016 “flash crash”). Since that plunge, the mood has changed dramatically in Westminster and on currency markets. Can sterling build some momentum today?
Meanwhile, markets are expected to see gains today after a breakthrough in the US-China trade tensions.
5 things to start your day
1) Sajid Javid has found the magic money tree as he declared an end to austerity. In the deluge of big numbers, there’s another little one that stands out: 0.34pc – the record-low yield at which the UK’s 10-year government bonds traded earlier this week, as investors showed their fear of a possible no-deal exit.
2) The Retail Price Index will be ditched but rail commuters could be waiting years. The flawed inflation measure will be scrapped but not until 2025 at the earliest – much to the chagrin of long-suffering rail travellers.
3) Fragile Europe is facing twin threats of a global recession and no-deal Brexit. While Britain would suffer the bigger economic shock from a no-deal Brexit, the eurozone would also be transformed, Ambrose Evans-Pritchard argues.
4) The Billionaire Uniqlo founder is seeking a female successor. “Aesthetic sense” is one of the qualities that Tadashi Yanai believes makes a woman an apposite successor to his Japanese clothing empire.
5) An “agile” ECB can’t fight eurozone fires on its own, Christine Lagarde is warning. The incoming president of the ECB urged governments to play a more active role in aiding the region’s economy.
What happened overnight
Asian shares extended gains on Thursday and US stock futures jumped after China said it will hold trade talks with the United States in early October, raising hopes they can de-escalate their trade war before it inflicts further damage on the global economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.8pc, while the Shanghai composite index surged 1.8pc. Japan’s Nikkei added 2.4pc.
But Hong Kong’s Hang Seng has shed 0.9pc after strong gains yesterday when its Chief Executive Carrie Lam announced the withdrawal of the controversial extradition bill.
US stock futures reversed early losses and rose 1pc.
The Chinese yuan jumped versus the dollar in offshore trade, while safe-haven assets such as gold and the yen fell.
The US-China talks announcement followed a call earlier in the day between China’s Vice Premier Liu He and US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin, the Chinese Ministry of Commerce said in a statement on its website.
Trade teams from the two countries will hold talks in mid-September before the high-level talks next month, the ministry said. Both sides agreed to take actions to create favourable conditions, it said.
A spokesman for the US Trade Representative’s office confirmed that Mr Lighthizer and Mr Mnuchin spoke with Liu and said they agreed to hold ministerial-level trade talks in Washington “in the coming weeks”.
Coming up today
Full-year results: Alumasc, Genus, Go-Ahead Group, McBride, Redrow, Mid Wynd Investment Trust, HSS, SIG
Interims: Melrose, Mpac
Trading statement: Dixons Carphone
Economics: New car registrations (UK)