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Pound falls as date set for Brexit negotiations, it's PMI day, and Janus is sold to Henderson Global. Here are some of the things people in markets are talking about today.
May speech hits pound
British Prime Minister Theresa May outlined her plans for Brexit negotiations in a speech to her party yesterday, which seemed to point to her favoring a 'hard' Brexit. She said that the U.K. would invoke Article 50 — a move that would trigger the formal process of leaving the EU — by the end of March 2017. The pound dropped near a 30-year low in trading this morning, and was at $1.2880 by 5:58 a.m. ET.
PMI day
The fall in the pound since the Brexit vote has given U.K. manufacturing a boost, with the IHS Markit monthly Purchasing Managers Index jumping to 55.4 in September, the highest level in two years, and well above economist expectations for a reading of 52.1. In Europe, a similar survey showed manufacturing also accelerated in September, with PMI rising to 52.6, from 51.7 in August, with much of that growth concentrated in Germany's economy. Over the weekend, China's official factory gauge stayed at 50.4 for the second month, easing pressure for more policy easing.
Janus to Henderson
Henderson Group Plc agreed to buy Janus Capital Group Inc., in a deal that will see Henderson investors owning 57 percent of the new company, with Janus shareholders getting 43 percent. Shares in Henderson surged as much as 20 percent in London trading this morning and were 12 percent higher, at £260.20, by 6:01 a.m. ET. The deal is expected to close in the second quarter of 2017, with the new company planning to have its primary listing in New York.
Markets steady
Overnight, the MSCI Asia Pacific Index gained 0.7 percent, while Japan's Topix index added 0.6 percent as global bank fears subsided following reports of a $5.4 billion fine for Deutsche Bank from the U.S. Department of Justice, less than half the initial amount requested. In Europe, the Stoxx 600 Index was 0.2 percent higher at 6:08 a.m. ET, with London's FTSE 100 Index, boosted by the falling pound, gaining 1.2 percent for the best performance among Western-European markets. S&P 500 futures were little changed.
Oil bulls' patience rewarded
A barrel of West Texas Intermediate rose to $48.87 this morning, its highest level since July 5, adding to September's 7.9 percent surge in the commodity. It is a payoff for oil bulls who increased their long position in WTI by 8.1 percent last week following the surprise agreement to cut production at the OPEC meeting in Algiers. Rising prices are also helping the U.S. shale industry, where the number of rigs drilling continues to rise.
What we've been reading
This is what's caught our eye over the weekend.
- Republican's wonder if Trump can recover from 'worst week.'
- Blame the Bank of Japan for declining global bond market volatility.
- There's room for more bond buying at the Bank of England.
- A referendum in Colombia rejects the FARC peace deal...
- ...While not enough voters turn out in Hungary's immigration referendum.
- President Kanye West is more likely than the Treasury market keeping its pace.
- How Deutsche Bank's wiz kid fell to earth.
To contact the author of this story: Lorcan Roche Kelly in Dublin at lrochekelly@bloomberg.net.
To contact the editor responsible for this story: Isobel Finkel at ifinkel1@bloomberg.net.
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