The pound has stabilised a little after this week’s drop to an 11 month low on growing concerns about a no-deal Brexit.
It has gained a little ground against the dollar – up 0.03% – but is still in negative territory against the euro – down 0.37%.
Oil prices are on the rise after the US introduced a new series of sanctions against Iran, prompting concerns about crude supplies. Brent crude is currently 0.9% higher at $74.42 a barrel.
Meanwhile analysts at S&P have warned that the US-Chinese trade row could move from goods to services.
On the economic front, UK house prices grew by 1.4% month on month in July, a better result than had been expected, while consumer spending remains strong, according to Barclays.
But in Germany there were disappointing industrial output figures, a day after a fall in factory orders.
On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow.
4h ago14:34
Wall Street opens higher
The rise in the oil price has lifted US energy stocks and pushed Wall Street higher at the open.
The Dow Jones Industrial Average is currently 0.4% or 101 points while the S&P 500 has opened up 0.23% and the Nasdaq Composite is 0.28% better.
4h ago14:26
And here’s our full story on the Halifax house price survey:
5h ago13:23
Here’s our latest story on the US sanctions on Iran:
Donald Trump has warned America’s trading partners that anyone who does business with Iran will not be doing business with the US, after his administration reimposed blanket sanctions.
The US president described the new sanctions, which hit Iran’s access to dollars, gold and precious metals, as “the most biting ever imposed”.
“In November they ratchet up to yet another level,” he tweeted. “Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!”
Within hours of the sanctions taking effect, the German carmaker Daimler, which announced a joint venture in Iran last year, said it was halting its business activities in the country.
The punitive measures came into force in the early hours of Tuesday, and follow Trump’s decision in May to renege on the landmark 2015 deal to curtail Iran’s nuclear ambitions.
The sanctions also target a range of industries, including Iran’s carmaking sector, and will be followed by a set of additional and even more stringent measures by 4 November, including an embargo on the import of Iranian oil and sanctions on its banking sector.
Trump’s latest comments appear aimed at the EU, which is attempting to protect European businesses from the sanctions and has vowed to safeguard firms.
Companies have been instructed that they should not comply with demands from the White House for them to drop all business with Iran. Those who decide to pull out because of US sanctions will need to be granted authorisation from the European commission, without which they face the risk of being sued by EU member states.
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The VIX index – a measure of the stock market’s expectation of volatility – is heading lower.
It is currently down 2% at 11.03 having earlier fallen to 10.9, the lowest level since January.
S-China trade row could move from goods to services – S&P
The US-China trade battle could spill over from goods into services, according to S&P Global Ratings. The S&P report ssays:
This is because China is running out of room to retaliate on goods.. China’s recent threat to impose tariffs of 5% to 25% on a further $60 billion worth of U.S. goods (5,207 product lines) means that, together with the $50 billion of goods already announced, about 85% of its American imports (totaling $130 billion in 2017) could be taxed.
The threat is in response to the Trump administration last week announcing that it may increase its proposed tariff rate on Chinese imports valued at about $200 billion to 25% from 10%. Together with the previously-announced tariffs on $50 billion of Chinese imports, the total amount of $250 billion represents about 50% of the value of China’s annual exports to the U.S. in 2017.
“With China running out of room to retaliate on goods (i.e., 85% versus 50% coverage), China could opt to pursue non-tariff actions affecting services and investments from the U.S.,” said S&P Global Ratings analyst David Tesher.
The U.S. has a net services surplus with China. A retaliation that spilled over into services could hurt U.S. sectors that rely on China’s expanding import market for growth. This step-up in tensions could also exacerbate investor worries about China, damaging business and consumer confidence and growth prospects. We note that the trade tension is already weighing on the Chinese currency and stock market sentiment.
Oil prices are continuing to rise in the wake of Trump’s new Iranian sanctions. Brent crude is now up 1.27% at $74.69 a barrel. West Texas Intermediate – the US benchmark – has climbed 0.94% to $69.66. David Cheetham, chief market analyst at XTB, says:
The US has reimposed sanctions against this morning, with an executive order signed by President Trump that targets financial transactions involving the US dollar, the purchase of commercial plans and metals including gold and the Iranian automotive sector coming into effect. From a financial markets point of view, the price of crude oil could be where these decisions are most keenly felt, with the increased animosity threatening to disrupt Tehran’s significant output. This is unlikely to be reflected immediately, with Iranian production expected to remain at present levels for the time being, but should further more stringent sanctions come into play then we could well be set for a supply shock in the oil market which would trigger a sharp move higher.
The complex nature of this situation means that it is not just the US and Iran that could be impacted, with the bulk of Iranian crude actually being sold to other countries. The issue lies in whether the US look to force allies to also shun oil from Iran, and if this occurs then there’s a real chance that OPEC will struggle to make up the lost supply and this would drive the price of oil up.
Oil prices are continuing to rise in the wake of Trump’s new Iranian sanctions. Brent crude is now up 1.27% at $74.69 a barrel. West Texas Intermediate – the US benchmark – has climbed 0.94% to $69.66. David Cheetham, chief market analyst at XTB, says:
The US has reimposed sanctions against this morning, with an executive order signed by President Trump that targets financial transactions involving the US dollar, the purchase of commercial plans and metals including gold and the Iranian automotive sector coming into effect. From a financial markets point of view, the price of crude oil could be where these decisions are most keenly felt, with the increased animosity threatening to disrupt Tehran’s significant output. This is unlikely to be reflected immediately, with Iranian production expected to remain at present levels for the time being, but should further more stringent sanctions come into play then we could well be set for a supply shock in the oil market which would trigger a sharp move higher.
The complex nature of this situation means that it is not just the US and Iran that could be impacted, with the bulk of Iranian crude actually being sold to other countries. The issue lies in whether the US look to force allies to also shun oil from Iran, and if this occurs then there’s a real chance that OPEC will struggle to make up the lost supply and this would drive the price of oil up.
source:-.theguardian.
