Good morning! Here’s what you need to know in markets on Friday.
1. Bank of England Governor Mark Carney told senior government ministers that a no-deal Brexit would probably see interest rates rise rather than fall, according to people familiar with the matter. Bloomberg reports that Carney, who joined a cabinet meeting Thursday to outline the BOE’s planning for a turbulent exit from the European Union, told those present that crashing out without an agreement would lead to a fall in the pound and higher tariffs, pushing inflation higher.
2. China will not buckle to US demands in any trade negotiations, the major state-run China Daily newspaper said in an editorial on Friday, after Chinese officials welcomed an invitation from Washington for a new round of talks. China and the United States are set to return to the table with the threat of new US tariffs looming after Treasury Secretary Steven Mnuchin extended the invitation to counterparts in Beijing.
3. British pub chain JD Wetherspoon’s full-year profit rose 16.5% as it saw more customers during the football World Cup and a record heatwave. Reuters reports that pre-tax profit after exceptional items rose to £89 million in the year ended July 29, from £76.4 million a year earlier. Like-for-like sales climbed 5%.
4. UBS expects London to lose at least 25% of its euro clearing volumes as a result of Brexit and thinks the losses could be even greater in the event of a disruptive exit from the EU. UBS said in a note on Thursday that it expects the London Stock Exchange’s London Clearing House (LCH) to suffer a “25% loss of market share of the euro-denominated clearing market.”
5. Britain’s Co-operative Group, the mutually-owned supermarkets-to-funerals group, reported an 86% rise in first-half profit, driven by a strong food sales performance and the purchase of the Nisa convenience chain. Reuters reports that the country’s biggest mutual group, which also operates legal services and insurance businesses, said pretax profit was £26 million in the 26 weeks to July 7, up from £14 million in the same period last year.
6. Goldman Sachs announced a big shakeup to its leadership team Thursday as incoming CEO David Solomon moved to put his management team in place before taking over from Lloyd Blankfein. Goldman named John Waldron, one of three co-heads of the investment banking division, to president and chief operating officer, and effectively Solomon’s No. 2, according to memos the firm sent to employees on Thursday. Waldron’s new role will become effective October 1.
7. Asian shares nudged higher on Friday as moves by the United States and China to resolve a bitter trade dispute and a sharp interest rate hike in crisis-hit Turkey supported global risk appetite. Japan’s Nikkei closed up 1.19%, the Hong Kong Hang Seng is up 1.09% at the time of writing (7.25 a.m. GMT/2.25 a.m. ET), and the Shanghai Composite is up 0.05% at the same time.
8. Ross McEwan, the Royal Bank of Scotland’s chief executive, has been accused of deliberately misleading MPs in order to avoid disclosing a police investigation into an alleged bribery scandal at the bank’s restructuring unit. The Times reports that Nicky Morgan, chairwoman of the Treasury select committee, said that Mr McEwan had purposefully “withheld information of relevance and interest” when he was questioned by the committee in January about the bank’s disgraced Global Restructuring Group.
9. Third-quarter markets revenue at JPMorgan Chase & Co is down by a small percentage from a year earlier after adjusting for tax law changes, Chief Financial Officer Marianne Lake said at an investor conference on Thursday. Lake said the revenues look like they will be down by a “mid-single” digit per cent.
10. Shares of Cirrus Logic fell nearly 4% on Thursday after news that Apple would no longer include a free headphone converter dongle with iPhones. According to Barclay’s, the move will hurt Cirrus Logic, which makes analogue chips used in Apple devices.
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