Good morning! Here’s what you need to know in markets on Monday.
1. Theresa May is on the brink of triggering Article 50 as rebel Tory MPs admit they are unlikely to have the numbers to block the prime minister in the House of Commons on Monday, reports the Financial Times. May could trigger Article 50, the mechanism for Brexit, any time from Tuesday if she succeeds in heading off the rebellion by a small band of Europhile MPs. That will start the complicated two-year process of unravelling more than 40 years of EU membership.
2. Redrow has approached its struggling rival Bovis Homes about a £3bn merger that would create one of Britain’s biggest house builders, the Times reports. The approach is believed to have been made in recent days and was rejected by Bovis’s chairman Ian Tyler. Redrow could return with a better offer, however.
3. HSBC Holdings Plc is lining up Mark Tucker, currently chief executive of insurer AIA Group Ltd, to be the next chairman of Europe’s biggest bank, sources with direct knowledge of the matter said on Sunday. Regulators in Hong Kong and London have signalled they will approve the appointment, one of the sources said, paving the way for Tucker to take up the role in the autumn.
4. Friday’s strong US jobs report gave the Federal Reserve the final clearance it needs to raise interest rates at its March meeting on Wednesday. The economy added 235,000 jobs, beating the forecast for 200,000 jobs. A month ago, markets saw a rate hike as a low probability, just 28%. The odds are now 100%, according to Bloomberg’s world interest rate probability.
5. A private equity firm which targets struggling companies will this week triumph in a two-way battle for control of Britain’s biggest toy-maker, reports Sky News. Privet Capital and Hilco, which has transformed the fortunes of HMV, the entertainment retailer, tabled takeover bids for Vivid in the last few days.
6. Theresa May’s plan to leave the EU without a trade deal if she fails to secure a favourable one would cause Britain a “major economic shock,” according to a leaked government document. May has previously stated that “no deal would be better than a bad deal,” but the unpublished Treasury report says that falling back on World Trade Organisation (WTO) tariffs is worse than any other option, describing it as the “alternative to membership with the most negative long-term impact” on the economy.
7. Asian shares rose on Monday, taking their cue from gains on Wall Street after strong U.S. job data, though the mood was cautious as oil prices plunged to 3 1/2-month lows on fresh worries of oversupply, according to Reuters. A confluence of major events this week including an expected interest rate hike by the U.S. Federal Reserve, a potentially divisive election in the Netherlands and a Group of 20 (G20) finance ministers’ meeting kept many investors on edge. Japan’s Nikkei rose 0.2 per cent to 19,633.75, its highest close since December 2015.
8. President of the European Central Bank Mario Draghi will deliver a speech on the topic of “Fostering innovation and entrepreneurship in the euro area” in Frankfurt, Germany, today at 1.30 p.m. GMT (9.30 a.m. ET).
9. Nicola Sturgeon will threaten to derail Brexit by setting out plans for a second independence referendum unless Theresa May offers Scotland a special deal, reports the Telegraph. The Scottish First Minister could name the date she intends to hold a new referendum as early as this week.
10. London copper futures rose for a second straight session on Monday, propped up by a firmer euro and supply disruption concerns following an indefinite workers’ strike at Peru’s top copper miner, reports Reuters. Three-month copper on the London Metal Exchange was up 0.7 per cent at $US5,769 a tonne by 0124 GMT. The metal lost 3.1 per cent last week, the most since December.
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