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| Markets weighed down by geopolitical tensions and Brexit worries – business live | Markets weighed down by geopolitical tensions and Brexit worries – business live |
| (32 minutes later) | |
| Brent crude oil is continuing to rise, up 2.3% this morning at $63.92 per barrel. | |
| That’s a fairly subdued reaction to the escalating tensions in the Gulf, suggesting the markets aren’t expecting the detention of the Stena Impero to prompt a full-blown military clash. | |
| The big fear is that the Strait of Hormuz could be closed to international oil traffic. | |
| Hussein Sayed, Chief Market Strategist at FXTM, says oil could easily spike by $10 or $20 per barrel if this critical shipping route was badly disrupted. | |
| The little reaction seen in prices suggest two things. One, markets do not believe that these tensions will further escalate and two, the ongoing trade disputes will further hit demand while the US supply continues to reach new highs. | |
| While fundamentals do support lower oil prices, investors need to carefully watch the developments in Strait of Hormuz. After all, the Strait is responsible for one-fifth of the world’s oil supply, and any disruption will lead to a significant spike in prices. | |
| The pound is dipping in early trading, as investors fret about the Brexit crisis. | The pound is dipping in early trading, as investors fret about the Brexit crisis. |
| Sterling has dropped below the $1.25 mark, after chancellor Philip Hammond announced yesterday that he’d resign if Boris Johnson won the Conservative leadership battle. | Sterling has dropped below the $1.25 mark, after chancellor Philip Hammond announced yesterday that he’d resign if Boris Johnson won the Conservative leadership battle. |
| Hammond surely faced the sack otherwise, for showing insufficient enthusiasm for Brexit. His replacement will be someone who shares Johnson’s belief that Britain shouldn’t fear a no-deal exit from the EU. | Hammond surely faced the sack otherwise, for showing insufficient enthusiasm for Brexit. His replacement will be someone who shares Johnson’s belief that Britain shouldn’t fear a no-deal exit from the EU. |
| Johnson’s latest argument - if man can walk on the moon then the Irish border shouldn’t be a problem - isn’t providing the pound with much support today. | Johnson’s latest argument - if man can walk on the moon then the Irish border shouldn’t be a problem - isn’t providing the pound with much support today. |
| Investors are watching to see if Johnson can maintain his position that Britain definitely, definitely leaves the EU on Halloween, as Neil Wilson of Markets.com explains: | Investors are watching to see if Johnson can maintain his position that Britain definitely, definitely leaves the EU on Halloween, as Neil Wilson of Markets.com explains: |
| Watch for a harder tone on Brexit and the very clear message that Oct 31st is a hard date. As previously argued, the reality of parliamentary arithmetic may see this soften in due course. Pound traders will be watching the new PM like hawks over the coming days. | Watch for a harder tone on Brexit and the very clear message that Oct 31st is a hard date. As previously argued, the reality of parliamentary arithmetic may see this soften in due course. Pound traders will be watching the new PM like hawks over the coming days. |
| Sterling will remain vulnerable to the prospect of a no-deal exit on Oct 31st. | Sterling will remain vulnerable to the prospect of a no-deal exit on Oct 31st. |
| Asia-Pacific stock markets have fallen today, dragged down by worries over the global economy -- and fresh protests in Hong Kong. | Asia-Pacific stock markets have fallen today, dragged down by worries over the global economy -- and fresh protests in Hong Kong. |
| China’s Shanghai index tumbled by 1.3%, closely followed by Hong Kong’s Hang Seng (-1.2%) while Japan’s Nikkei lost 0.25%. | China’s Shanghai index tumbled by 1.3%, closely followed by Hong Kong’s Hang Seng (-1.2%) while Japan’s Nikkei lost 0.25%. |
| Stephen Innes of Vanguard Partners says the clashes between police and demonstrators is hitting the markets: | Stephen Innes of Vanguard Partners says the clashes between police and demonstrators is hitting the markets: |
| The Hang Seng is suffering yet another Monday hangover as weekend demonstrations gridlocked Hong Kong again. The pro-democracy protests that began last month in opposition to the contentious extradition bill are showing little signs of abating. | The Hang Seng is suffering yet another Monday hangover as weekend demonstrations gridlocked Hong Kong again. The pro-democracy protests that began last month in opposition to the contentious extradition bill are showing little signs of abating. |
| The longer these demonstrations persist, the more massive of a toll both in real and psychological terms will negatively imprint on Hong Kong’s thriving financial centre. | The longer these demonstrations persist, the more massive of a toll both in real and psychological terms will negatively imprint on Hong Kong’s thriving financial centre. |
| 'Where were the police?' Hong Kong outcry after masked thugs launch attack | 'Where were the police?' Hong Kong outcry after masked thugs launch attack |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Global markets are subdued this morning, weighed down by worries over the global economy, rising tensions in the Middle East, and the prospect of a new UK prime minister. | Global markets are subdued this morning, weighed down by worries over the global economy, rising tensions in the Middle East, and the prospect of a new UK prime minister. |
| Germany’s finance ministry has cast a cloud over the new week, warning that its factory sector faces tough challenges. | Germany’s finance ministry has cast a cloud over the new week, warning that its factory sector faces tough challenges. |
| In a new monthly report, it said manufacturers are suffering from a slowing global economy, which is hitting demand for exports. | In a new monthly report, it said manufacturers are suffering from a slowing global economy, which is hitting demand for exports. |
| “Leading indicators as well as shrinking order books point to a lasting period of economic weakness in the industrial sector.” | “Leading indicators as well as shrinking order books point to a lasting period of economic weakness in the industrial sector.” |
| That’s not an understatement. Earlier this month we learned that German factories had suffered their biggest drop in orders in a decade, down over 8% year-on-year. A reminder that Germany’s economy, once the powerhouse of the region, has been hurt by the US-China trade war and the wider eurozone slowdown. | That’s not an understatement. Earlier this month we learned that German factories had suffered their biggest drop in orders in a decade, down over 8% year-on-year. A reminder that Germany’s economy, once the powerhouse of the region, has been hurt by the US-China trade war and the wider eurozone slowdown. |
| Elsewhere, some investors are sitting tight until they know whether the US Federal Reserve will cut interest rates next Wednesday (the Financial Times is confident they will lower borrowing costs by 0.25%, judging by today’s front page). | Elsewhere, some investors are sitting tight until they know whether the US Federal Reserve will cut interest rates next Wednesday (the Financial Times is confident they will lower borrowing costs by 0.25%, judging by today’s front page). |
| FT: Fed poised to lower rates for first time in a decade #tomorrowspaperstoday pic.twitter.com/ZEfYsxAej6 | FT: Fed poised to lower rates for first time in a decade #tomorrowspaperstoday pic.twitter.com/ZEfYsxAej6 |
| Such a rate could would please Donald Trump, but might not be enough to brighten the economic outlook. | Such a rate could would please Donald Trump, but might not be enough to brighten the economic outlook. |
| Traders are also watching events in the Gulf closely, after Iran seized a UK-flagged tanker, the Stena Impero on Friday. Outgoing UK PM Theresa May is chairing a security meeting on the crisis this morning, as relations between the two countries deteriorate. | Traders are also watching events in the Gulf closely, after Iran seized a UK-flagged tanker, the Stena Impero on Friday. Outgoing UK PM Theresa May is chairing a security meeting on the crisis this morning, as relations between the two countries deteriorate. |
| UK defence minister rejects criticism over tanker seized in Gulf | UK defence minister rejects criticism over tanker seized in Gulf |
| Worrying times, and an early test of Boris Johnson’s diplomatic skills.... | Worrying times, and an early test of Boris Johnson’s diplomatic skills.... |
| Concerns over escalating tensions in the Gulf have pushed the oil price up this morning, gaining 1.5% or almost one dollar per barrel to $63.37. | Concerns over escalating tensions in the Gulf have pushed the oil price up this morning, gaining 1.5% or almost one dollar per barrel to $63.37. |
| #CrudeCheck | ब्रिटेन- ईरान के बीच खाड़ी में तनाव के चलते कच्चे तेल में हल्की बढ़त, #BrentCrude 63 डॉलर के पार। pic.twitter.com/6A3cKAuFFn | #CrudeCheck | ब्रिटेन- ईरान के बीच खाड़ी में तनाव के चलते कच्चे तेल में हल्की बढ़त, #BrentCrude 63 डॉलर के पार। pic.twitter.com/6A3cKAuFFn |