Good morning! Here’s what you need to know in markets on Wednesday.
HSBC CEO Stuart Gulliver said trading operations that generate about 20% of revenue for the lender’s investment bank in London may move to Paris, quantifying some of the aftershocks for the UK after Brexit. “Activities specifically covered by EU legislation will move, and looking at our own numbers, that’s about 20% of revenue,” Gulliver said in a Bloomberg Television interview at the World Economic Forum in Davos, Switzerland, with John Micklethwait.
Ireland’s central bank has had over 100 inquiries from UK financial firms considering moving operations as a result of Britain’s vote to leave the European Union, Finance Minister Michael Noonan said on Tuesday. “The Central Bank has had in excess of 100 inquiries from the City of London from people who are anxious to find out what the regulatory regime would be here if they were to move activity,” Noonan told parliament according to Reuters.
The pound is losing steam. After surging higher on Tuesday on the back of Theresa May’s Brexit speech, sterling is struggling to hang on to gains. The pound is down 0.61% against the dollar to $1.2334 at the time of writing (6.25 a.m. GMT/1.25 a.m. ET) and down 0.36% against the euro to €1.1544.
Employment and earnings figures are coming. The unemployment rate and average earnings figures for November are due at 9.30 a.m. GMT (4.30 a.m. ET). Economists are expecting a slight rise in the unemployment rate, climbing from 4.8% to 4.9%, and earnings growth steady at 2.6%.
Morgan Stanley reported earnings that beat on the top and the bottom line. The outperformance was helped by a better-than-expected quarter from the fixed income, currencies and commodities division.
A newly unsealed antitrust suit from the Federal Trade Commission alleges that Qualcomm entered into an anticompetitive deal with Apple to keep its modem chips in Apple’s products, including the iPhone and iPad. The deal allegedly included “substantial incentive payments” on the condition that Apple would continue using Qualcomm’s baseband processors “exclusively” in all iPhone and iPad models from 2011 and 2012.
Toshiba is in talks to sell a minority stake in its flash memory business to US chips business partner Western Digital Corp in a bid to boost its capital base, a source briefed on the discussions said on Wednesday. Toshiba said in a statement earlier that it had been considering various options for its memory business, including a spin-off, but that nothing concrete had been decided.
Deliveroo plans to employ hundreds of new staff at a new London headquarters, trebling its current engineering headcount. The Telegraph reports that the British food delivery company plans to hire 300 software and hardware engineers at an office in Canon Street this summer to work on technology such as the Deliveroo app and logistics systems.
Brazil’s largest engineering conglomerate Odebrecht plans to reach settlements in all 12 countries where it has admitted to paying bribes to obtain contracts, two sources with knowledge of the matter told Reuters on Tuesday. The family-owned firm signed a $1.94 billion (£1.5 billion) leniency deal with US, Swiss and Brazilian prosecutors in December for its involvement in a massive bribery and political kickback scheme and is striving to survive as a multinational concern by negotiating deals in a dozen other countries where it operated.
HP Enterprise has bought SimpliVity, a Massachusetts-based storage startup, for $650 million (£526 million) in cash. At the time of SimpliVity’s last fundraising, in March 2015, the company had declared that it was valued at “more than $1 billion.” All in all, SimpliVity had raised $276 million (£223.5 million) from investors like Kleiner Perkins, Accel, and Waypoint Capital.