AM update: RBS to axe 259 branches, UK-US trade deal slammed, pound down

There were some jitters in Asian trading overnight in part due to weaker Chinese factory numbers (Caixin purchasing managers’ index). In Hong Kong Tencent, again, came under pressure, down -2.7%. However the Nikkei climbed +0.41% with Komatsu and Concordia Group climbing +5.6% and +4.7%. There was also some more positivity on tech stocks generally aided by the US Nasdaq’s stronger +0.73% lift yesterday.

The unanimous decision by OPEC to extend production cuts for nine months through 2018 did see a bit of compromise around the edges: Russia wants to increase production to stem market share worries posed by US shale producers.

Rising oil prices are goading US shale players back into the market (shale drillers have upped output every month this year according to latest Energy Information Administration data). So OPEC will include a production limit review at its next main meeting in June 2018. Brent crude is up +0.6% this morning at 63.05.

Overnight the pound was -0.06% down against the dollar at 1.3521 and -0.2% weaker against the euro at 1.1347. A just-out report from Natwest Markets warns of considerable 2018 volatility for sterling – but the direction of travel is positive it claims. At 9.30am UK Markit manufacturing PMI numbers emerge. 

• UK FTSE 100 7,326.67 -0.90%
• Dow 24,272.35 +0.82%
• S&P 500 2,467.58 +0.82%
• Nasdaq 6,873.97 +0.73%
• Nikkei 225 22,819.03 +0.41%
• DAX 13,023.98 -0.29%
• CAC 40 5,372.79 -0.47%
• Gold 1,278.50 +0.14%
• Oil WTI 57.58 +0.31%

RBS to close more than 250 branches

Earlier this morning the BBC reported that up to 25% of all RBS branches in Scotland are to close. RBS is blaming the move on online services – many customers are simply not using bricks-and-mortar branches in the way they used to. The list of branches likely to go is here. In total, 259 branches across the UK will shut with more than 650 jobs going in total. 

The move is also being affected by bank margins. With sustained low interest rates over such a long period of time, bank profits are coming under ever closer pressure. 

RBS – it managed to pull through the Bank of England’s annual stress tests earlier this week, just – has now closed its ‘bad’ bank and is looking to profitability for 2018, though this exercise has caused RBS to shutter an extraordinary range of global assets including an Asian cosmetics business. 

Trump trade deal claimed a 'waste of time': Shutterstock

Trump trade deal 'a waste of time' – Joseph Stiglitz

Negotiating a UK-US trade deal with President Trump is a singular waste of time, according to ex World Bank chief economist Joseph Stiglitz. Stiglitz was talking to the Today program this morning. 

"If you look at what he has been putting forward as a negotiating position in the NAFTA discussions you get a feeling of how much of a waste of a time it would be,” he told Today. "He's proposed that NAFTA be a five-year agreement.”

Stiglitz claims Trump has chucked a hand grenade into international trade relationships. He ended: “I think it would be just a waste of time for you [the UK] to use your scarce resources to try to have a trade deal with the United States.”

Breaking news: A 100-megawatt Tesla-built battery has begun pushing power into a South Australian electricity grid. South Australia has been increasingly exposed to electricity cuts. The battery is linked to a nearby wind farm. Uber rival Lyft has closed losses for the first half of the year with revenues tripling.