UK Brexit negotiator David Davis admitted “there are still significant differences to be breached” earlier today. His remarks did little to help sterling, down -0.42% to $1.2871 at close to 4pm this afternoon. Mr Barnier waded in too: “We did not get any decisive progress on any of the principal subjects…”
The dollar was upbeat earlier but by mid-afternoon was trading at 92.82, down from its earlier 93.34 high. The buck was feeling pressure from a not-so-inspired rash of personal consumption expenditure price data: the US July PCE index rose just +0.1% in July meaning the overall year-on-year increase stayed stagnant at 1.4%. More ammunition for Federal Reserve doves to hold back on a rate rise.
On the oil front WTI crude is up +2.57% to $47.14. A major fuel pipeline to the US East Coast has had to be shut down, one of the consequences of the destruction wrought by Hurricane Harvey. Fuel prices look likely to rise on the East Coast subsequently. Some fuel prices could hit $2.50 a gallon – considerable by US standards.
The FTSE 100 closed 65 points higher tonight at 7,430; G4S shares though were down -3.21% while St James's Place dipped -1.45%.
- UK FTSE 100 7,430.62 +0.89%
- Dow 21,923.03 +0.14%
- S&P 500 2,466.61 +0.35%
- Nasdaq 6,401.28 +0.52%
- Nikkei 225 19,646.24 +0.72%
- DAX 12,069.90 +0.55%
- CAC 40 5,088.20 +0.63%
- Gold 1,321.60 +0.57%
- Oil WTI 47.09 +2.46%
America's biggest bank says sorry – again
More worry for Wells Fargo. America’s biggest bank says it has found up to 1.4m more fake accounts. The banking operator is consequently looking hard at sales targets for new business.
“We apologize to everyone who was harmed by unacceptable sales practices that occurred in our retail bank,” said Wells Fargo CEO Tim Sloan earlier today in a statement. “To rebuild trust and to build a better Wells Fargo, our first priority is to make things right for our customers.”
Several on-going investigations into the bank’s conduct from regulators and lawmakers remain.
New UK rate hike threat
In the UK Michael Saunders, a member of the Bank of England’s Monetary Policy Committee (MPC) which decides on interest rate moves, said in a Cardiff speech a near-future rate hike would likely keep inflation in check.
"In the exceptional circumstances since the EU referendum, the MPC has sought the appropriate trade-off between above-target inflation and below-potential output," Sanders says.
"The terms of that trade-off,” he added, “have shifted markedly in recent quarters. Inflation has risen well above target, while spare capacity in the economy has been absorbed faster than expected.”
Earlier this month the MPC voted to keep rates at their all-time low of 0.25% but stated rates would have, probably, to rise if inflation was to be held down.
Breaking news: Barclays expects growth in the euro area to average 2% in 2017-18. “We forecast that most of the growth will come from domestic demand components and about a third of it from investment.”
It also expects the ECB to extend QE to H1 2018 “at a reduced pace of €35-40bn per month. This would be followed in 2018 by a further extension of QE at a pace of €15-20bn.”