UK Edition
Pound sinks against the euro as Jean-Claude Juncker warns of difficult second stage of Brexit talks
- Sterling slips on currency markets as European Commission president Jean-Claude Juncker warns that the second stage of negotiations, which will focus on trade, will be even more difficult than the first
- Pound sinks as much as 1pc to below €1.13 against the euro
- Stocks rebound as jitters over Donald Trump's corporate tax reforms dissipate
- Republican senator Marco Rubio had indicated that he will not vote for the reforms unless changes are made to child tax credits; reports indicate that a deal has been made
- FTSE 100 outperforms on sterling's weakness, rises 0.6pc
Markets wrap: Pound slips on Juncker warning; stocks rebound on corporate tax boost
The pound has slumped on currency markets after European Commission president Jean-Claude Juncker warned that the second stage of Brexit talks will be even more difficult than the first.
EU leaders approved talks moving onto trade terms but the pound tumbled as much as 1pc to below €1.13 against the euro on Mr Juncker's sober warning with sterling's slide against the currency worsened by Angela Merkel making a breakthrough in coalition talks in Germany.
Elsewhere, the sour mood sinking stocks this morning has lifted with the FTSE 100 outperforming its peers across the channel on the pound's pull back.
Stocks retreated after sentiment flipped on Republican senator Marco Rubio indicating that he will vote down Donald Trump's hotly-anticipated tax reforms if changes are not made to child credit. US stocks have rebounded strongly this afternoon on reports that Republicans will bow to Mr Rubio's demands.
Amazon to pay €100m to settle Italy tax dispute
Amazon has agreed to pay €100m (£88.3m) to settle a tax dispute with Italy and end a criminal investigation into whether it evaded tax in the country for four years.
Italy’s inland revenue service said on Friday that the retail giant had reached an agreement over tax payments between 2011 and 2015 and that the "path had been resumed" to ensure "the correct taxation in Italy for activities related to our country".
In April, Milan tax police said Amazon had evaded as much as €130m in taxes. The payout follows increased scrutiny on tech giants over their tax affairs in Europe.
Italian tax police have been hot on the heels of Silicon Valley giants and in May Google’s parent company Alphabet agreed to pay €306m to settle a tax dispute.
Britain's steel industry set to enjoy £3.8bn boost under Government plan
Britain’s steel industry could boost its revenues by £3.8bn a year by 2030 according to a Government report setting out opportunities to bolster the sector and increase domestic demand for steel.
The report, part of the Industrial Strategy, said that in 2015 national demand for steel was 9.4m tonnes, of which less than half - 4.4m tonnes, worth £1.6bn - came from UK producers.
UK demand is set to rise to 11m tonnes a year by 2030 according to the Future Capacities and Capabilities study, and by boosting the amount of British-made steel used here, annual sales of UK steel could rise to £5.4bn.
US stocks shake off corporate tax reform jitters
US stocks have shaken off any jitters over Donald Trump's corporate tax reforms, which plagued trading in Europe this morning, and rebounded strongly this afternoon.
Nonetheless, the issue is still hanging over the markets today, according to LCG analyst Jasper Lawler.
He explained:
"Until tax reform is signed off, end of year profit-taking and fear about a US government shutdown could impair the march to new records in stock markets.
"We suspect tax deal holdouts including former Presidential hopeful Marco Rubio will probably give way eventually to allow a last minute deal and a nice Santa rally."
How the FTSE 100 has changed since 1984 - and what it says about UK plc
Just Eat has entered the FTSE 100 today along with paper and packaging firm DS Smith and technology company Halma.
The UK's top stock market operates a fairly brutal one-in-one-out policy of promotion and relegation based on the market value of publicly listed companies.
Just Eat's acquisition of Hungryhouse - its rival - has allowed it to leap into the big leagues at the expense of Merlin Entertainment. DS Smith and Halma replace Babcock International and ConvaTec.
Such a process has been conducted on a quarterly basis since the index's inception in 1984. As such, a long-term look at the index's composition is reflective of changes in the UK's economy.
Sterling slides further against the euro on German coalition talks breakthrough
The pound has slipped another notch lower against the euro in the last few moments after it was revealed that SDP leaders have backed coalition talks with Angela Merkel's CDP.
The breakthrough has sent sterling sliding further against the euro and its 0.7pc loss today is its worst versus the currency in six weeks.
Investors are also fretting over the Brexit difficulties that lie ahead, according to Spreadex analyst Connor Campbell.
He explained:
"Time to think it the last thing sterling needs at the moment. Whenever UK investors have a spare second thoughts tend to turn to the loud tick of the Brexit bomb.
"And even with the progress seen in the last couple of weeks – and the prospect of the EU formally agreeing to move on to the next phase of negotiations this Friday – there’s still not a lot for the pound to actually be thankful for."
Conviviality broadens retail presence with £25m deal for P&H-owned stores
Alcohol distributor Conviviality has agreed to buy 109 convenience stores from a subsidiary of troubled wholesaler Palmer & Harvey, adding to its rapid expansion this year.
Conviviality will also have the franchise rights for a further 18 stores trading under the brand Central Convenience as part of the deal, which is worth £25m.
WS Retail, the division of Palmer & Harvey that is selling the stores, was not placed into administration alongside its parent company last month and has continued to trade as normal.
Palmer & Harvey went into administration at the end of last month with 2,500 immediate job losses.
Pound sinks against the euro as Jean-Claude Juncker warns of difficult next stage of talks
EU leaders may have approved Brexit talks moving on to the next stage but it hasn't been enough to lift the pound's sour mood on currency markets.
Sterling has steadily drifted down to a 0.4pc loss against the euro at €1.1344 after European Commission president Jean-Claude Juncker warned that the second stage of negotiations, which will focus on trade, would be even more difficult.
William Anderson Jones, head of UK corporate dealing at RationalFX, argued that the rhetoric coming out of Brussels this morning will do little to reassure investors.
He explained:
"After the long process of uncertainty that characterised the first phase of talks, the prospect of even more difficult negotiations to come will not reassure investors and the pound could continue to be driven by the progress of talks in 2018. Analysts will be watching events at the summit closely, and will be looking for further clues over how the next phase of talks may unfold."
Trinity Mirror expects revenue dip as advertising slumps
Newspaper publisher Trinity Mirror said it expects revenue to fall by 9pc, as advertising spending shrank and circulation fell in the last three months of the year, as it pursues a takeover of the Express.
The fall is slightly greater than the 8pc revenue drop it noted in the prior quarter.
In a trading statement on Friday, Trinity Mirror said it expected a 21pc decline in print advertising revenue and a 7pc fall in circulation revenue in the final quarter. In contrast, the group's publishing digital display and transactional revenues are expected to grow by 20pc during the same period.
Classified publishing digital revenue, which is mostly sold with print, "remains under pressure", reducing the group's expected growth for digital revenue to 10pc.
Bitcoin back on the rise after uncharacteristically subdued week of trading
After an uncharacteristically subdued couple of days of trading, Bitcoin is back on the rise again this morning.
The cryptocurrency has smashed through the 17,000 barrier this morning and hit a new record high, rising 7.7pc.
Speaking of everyone's new favourite asset class/currency/commodity, a Japanese company has announced that it will pay part of its workers' pay packets in Bitcoin if they would prefer.
GMO Internet said that it is offering to pay employees in the cryptocurrency in an attempt to "improve our own literacy of virtual currency".
GBP for me please.
EU summit puts Brexit back under the spotlight on the markets
With the EU27 expected to back moving talks to the next stage at today's EU summit, Brexit is back in focus on the markets this morning.
The pound is getting a few pre-summit jitters and snapped its two-day winning streak, pulling back 0.2pc against the dollar to $1.3412.
IG market analyst Joshua Mahony gave his two cents on today's action in Brussels:
"Interestingly, while the EU leaders have lauded Theresa May’s recent efforts, the fact that parliament could now vote down a final bill highlights that any back door concessions from May could come back to bite her.
"Despite the desire to kick-off trade negotiations in December, it is clear that those in the EU see March as the likeliest month to commence talks. With timelines already tight, the slower progression will heap further pressure on negotiations as they seek to obtain a transitional deal ahead of the March 2019 deadline."
Persimmon chairman resigns after pay row
The chairman of Persimmon is to quit the housebuilder following concerns over excessive executive pay at the firm.
Persimmon announced on Friday that Nicholas Wrigley intends to resign and also revealed that remuneration committee chair Jonathan Davie had left the group.
It follows investor consternation over a long-term incentive plan introduced in 2012, which could see the management share £600m depending on profit and housebuilding targets.
Chief executive Jeff Fairburn is in line for the biggest payout, which is set to top £100m.
Hopes of a Santa Rally dashed by tax reform stumbles
The festive spirit can prompt stocks to rally strongly in the run-up to Christmas but Republican senator Marco Rubio is this year's Scrouge and has dashed hopes of a Santa Rally.
Stocks are retreating this morning after he said that changes will be needed to be made to child tax credits before he votes for the reforms.
Vice-president Mike Pence would have the casting vote in the case of a draw in the Senate but a defeat would cause "carnage" on the markets, according to Rebecca O’Keeffe, head of investment at Interactive Investor.
She added:
"The anticipation of US tax reform has fuelled the US equity rally and given financials a major boost, so the stakes are high."
Sky and BT strike deal to sell each other's channels
Sky and BT have announced a deal that will allow the rival broadcasters to sell their channels on each others' platforms.
Under the terms of the agreement, BT will wholesale its BT Sport channels to Sky, allowing the firm to sell them directly to Sky satellite customers.
This will mean BT's live UEFA Champions League and Premier League football being made available on the Sky platform.
BT has spent north of £3.5bn on Champions League and Premier League football rights since 2012 in a bid to compete with Sky.
Agenda: Stock markets slip on Donald Trump corporate tax reform jitters
Stock markets are on the slide this morning after doubts over Donald Trump’s corporate tax reforms started to resurface across the Atlantic.
Florida’s Republican senator Marco Rubio spooked investors by saying that he will not vote for the hotly-anticipated reforms unless changes are made to child tax credits.
The Republicans have a slim two-sentator majority in the upper chamber and that will soon be trimmed down to just one after the Democrats won in a senate election in Alabama earlier this week.
The S&P 500 pulled back 0.4pc overnight while every stock index in Europe has slipped into the red this morning on the turn in sentiment with the FTSE 100 nudging down 0.2pc.
After updates from the Bank of England, Federal Reserve and ECB, it’s a quiet end to the week on the economics calendar. No major data releases are expected in the UK while in the US, industrial production figures are the main macro focus.
No FTSE 350 companies reporting.
Economics: Industrial production (US), Trade balance (EU)