A blow to the City of London with EU Brexit negotiator Michel Barnier saying No to any special arrangement (more below). The US tax cuts stocks rally yesterday gave some more encouragement to Asian shares overnight: the Hang Seng added +0.9% while the Shanghai was up more than +0.7% though the Nikkei dipped -0.15%.
Down under the S&P/ASX 200 clipped, almost, its highest level for a decade following strong financials and IT sentiment. Brussels meanwhile is widening its probe into Ikea’s complex tax arrangements – originally put together in the 1980s, a response by founder Ingvar Kamprad to Sweden’s high taxation – which separates the brand from the group.
Later today South Africa’s ‘Ikea’, Steinhoff, will get a heads-up on next steps. The Poundland and general household goods owner has seen its shares plummet; investors have to decide whether to flog its assets or keep the company going.
Overnight the pound was up +0.03% to 1.3388 against the dollar while the euro climbed +0.1% against sterling to 0.8810. Later this morning eurozone labour costs data emerge plus an updated German Ifo business climate index.
- UK FTSE 100 7,537.01 +0.62%
- DAX 13,312.30 +1.59%
- CAC 40 5,420.58 +1.33%
- Dow 24,792.20 +0.57%
- S&P 500 2,690.16 +0.54%
- Nasdaq 6,994.76 +0.84%
- Nikkei 225 22,868.00 -0.15%
- Gold 1,267.40 +0.15%
- Oil WTI 57.32 +0.28%
City of London 'special deal' hope dashed
Last night the Guardian reported Britain will not have a ‘special deal’ as far as the City of London goes. The EU’s chief Brexit negotiator, in an interview, was firm: he said that British financial operators would lose the right to trade freely in the EU, post-Brexit agreement.
“There is not a single trade agreement that is open to financial services. It doesn’t exist.” Barnier also criticised “the red lines that the British have chosen themselves. In leaving the single market, they lose the financial services passport.”
Barnier marked mid-March as the next point for a possible major confrontation when EU leaders officially sign off red lines. There is still no out-and-out agreement on the final Brexit bill and Barnier is still playing tough on the EU's "complete architecture", including the ECJ. The UK must accept it, he says.