Good morning! Here’s what you need to know on Wednesday.
The pound slumped again in late trading on Tuesday. Sterling’s horrible run over the past week and a half shows no signs of letting up on Tuesday, after Britain’s currency hit several fresh 31-year lows against the dollar, dropping below $1.21 at one point. In Asian trading on Wednesday, the pound recovered a little, and is up by 1.25% to $1.2273 as of 6:45 a.m. BST (1:45 a.m. ET).
Asian shares are slipping. Asian shares flirted with three-week lows on Wednesday after a dour start to Wall Street’s corporate earnings season knocked U.S. stocks, while the dollar and Treasury yields rose on growing expectations of a U.S. rate hike in December. As of 6:50 a.m. BST (1:50 a.m. ET) China’s Dow Jones Shanghai is 0.33%, while Hong Kong’s Hang Seng has slipped 0.89%.
The FTSE 100 — Britain’s benchmark share index — hit the highest level in history on Tuesday, smashing its previous record, set in April 2015. Around 12.05 p.m. BST (7.05 a.m. ET) on Tuesday the index hit 7,128 points, surpassing its previous intraday high of 7,123, an increase of around 0.4%. After hitting its peak it pulled back, eventually closing down by 0.35% for the day at 7,073 points.
Vollkswagen may cut up to 2,500 jobs per year over 10 years by moving workers into early retirement, Handelsblatt reported on Wednesday, citing Bernd Osterloh, chief of the carmaker’s influential works council. Top management and labour leaders are locked in “tough” talks on future strategy and cost savings at the troubled VW brand, Osterloh said in an interview with the German business daily published on Wednesday.
Get ready Britain: Inflation is coming back. As pessimism over Brexit and next year’s Article 50 trigger weigh down the pound, everything in the UK is going to get a little more expensive than it used to be. Unfortunately, because a declining pound is also going to hold back the economy, don’t expect to get a pay rise to compensate.
The world economy is stuck in a ‘rolling cycle of crises.’ In an interview on Tuesday, Charles Schwab’s chief investment strategist, Liz Ann Sonders, told Business Insider’s Henry Blodget that the massive debt buildup in the economy hit a wall in 2008, leading to the global financial crisis, and that the fallout from that crisis was still causing problems in economies throughout the world.
The company formerly known as Snapchat is looking for someone to oversee its stock plan ahead of its planned $25 billion IPO. A recently posted job listing for aSenior Stock Plan Administrator says the role will “play a key role in managing Snap Inc.’s global equity incentive programs, with a focus on global tax compliance and regulations.”
South Africa’s rand crashed more than 4% on Tuesday. The rand’s plunge follows earlier reports that prosecutors issued South Africa’s Finance Minister Pravin Gordhan with a formal summons to appear in court on fraud charges in November.
Relations between the US and Russia took a nosedive last Monday when Washington announced it would be suspending its negotiations with Moscow over its refusal to halt airstrikes on Syria’s largest city, Aleppo. That was only the start of a long week — one that saw the two countries entering their lowest point in relations since the end of the Cold War.
Thanks to stronger-than-expected demand in China and continued growth in emerging markets, global steel demand — after falling in 2015 — looks set to rebound modestly in 2017, continuing the recovery seen this year. That’s the view of the World Steel Association, an industry body that represents approximately 85% of the world’s steel production, who are forecasting a modest increase in demand in 2017, albeit with many caveats.