Good morning. After another night of drama in Westminster, the UK could be facing into an early election. Currency traders will barely have time to catch their breath this morning before attention turns to the Government’s spending review.
Chancellor Sajid Javid is expected to splash the cash when he allocates Government departments their funding as part of the one-year spending review.
He has already pledged to boost spending on schools, police and health but has also insisted there will be no “blank check”. Can Mr Javid pull off the tough balancing act in his first major announcement at the Treasury?
5 things to start your day
1)Is anti-capitalism Corbyn now the lesser of two evils for the City?Jeremy Corbyn, the scourge of bankers and avowed opponent of capitalism, is winning support from unexpected new quarters: two of the biggest global banks operating in the City of London are warming to the Labor leader. “Is Corbyn as bad as no-deal? Perhaps no longer, ”said Christian Schulz at Citi.
2)GKN to cut 1, 000 aerospace jobs as Melrose steps up turnaround. GKN’s aerospace division is to ax 1, 000 jobs, amounting to around 5.5pc of its total workforce, in what the chief executive called a “fundamental transformation” to make it a “coherent” business. Melrose acquired GKN last year after a bitter £ 8.1bn takeover battle.
3)Ferguson heads for break-up as chief executive steps down.Ferguson, the FTSE 100 plumbing company formerly known as Wolseley, will break up its business and review its listing in London just months after an activist shareholder revealed a 6pc stake in the company.
4)Why has the pound fallen through $ 1. 20 and where will it go next?The pound is in trouble. Foreign holidays just got more expensive as sterling fell below $ 1. 20 and looks set to stay there, making this the weakest sustained level since 1985. Where could this latest slide end?
5)Google investigations pile up as US states prepare monopoly probe. Google faces further pressure over the search giant’s dominance after multiple US states joined forces to investigate whether the company has behaved anti-competitively. The monopoly probe is expected to be announced in Washington on September 9.
What happened overnight
Hong Kong shares surged after reports the city’s chief executive Carrie Lam would withdraw a contentious extradition bill, which has been at the center of the territory’s weeks-long protests. The Hang Seng is up 3.3pc.
Asian stocks were mixed after a disappointing US manufacturing report reignited concern about global economic growth. The yuan edged up after a stronger-than forecast daily currencyfixing.
The Shanghai Composite index rose 0.5pc. In Japan, the Topix index declined 0.3pc.
In the US, the Institute for Supply Management’s US purchasing managers index fell below 50 in August, indicating a contraction in US manufacturing alongside other weak readings for factories around the world.
That data has caused traders to boost bets on deeper rate cuts by the Federal Reserve this year.
S&P 500 futures edged up with Treasury yields after US equities retreated and bonds rose overnight, while the dollar remained largely unchanged.
Elsewhere, the pound remained steady, even asBoris Johnson was defeated in a Parliament vote by 328 to 301 and said he would vote for an electionif Parliament opts today to delay Brexit until Jan 31.
Oil was around $ 54 a barrel amid concern an economic slowdown from the trade war may dent demand.
Coming up today
A Brexit malaise is hanging across the whole UK housebuilding sector and Barratt Developments is no safer than its peers. Underlying profit is likely to suffer from any slowdown of the last few months.
It has revealed it is on course for record profits after choosing to focus hard on improvements to its margins. The company has also avoided the slowdown in completion rates and customer satisfaction fall that has afflicted rival Persimmon.
“Given the industry has been repeatedly rocked by quality scandals, we’ll want some reassurance that this continues to be the case,” said Hargreaves Lansdown’s Laith Khalaf.
Full-year results:Barratt, Dunelm Group, Frontier Develop
Interims:Ferroglobe, Just Group, GCP, Oxford Biomedia, Secure Inc Reit
Economics:Services PMI and composite PMI (UK and eurozone), Mortgages and trade balance (US)