Sterling is trading lower against all of its major peers today with the conclusion of the EU summit reportedly seeing UK PM May’s Chequers plan widely rebutted which has raised the prospect of a no deal scenario further. The FTSE is on course to post a solid week of gains with the index joining in a broader risk-on move seen in stock markets around the globe with investors giving rising trade concerns short shrift as they drive equities higher.
Chequers plan rejected by EU
The so-called Chequers Brexit plan devised by Theresa May earlier this summer was dealt a potentially fatal blow yesterday with EU negotiators telling the PM that it simply “would not work”. The proposal has been much maligned almost since the day it was unveiled with Brexiteers such as Boris Johnson and David Davis both resigning from the cabinet as they felt it was too soft, and now it appears that the EU won’t accept it either. This leaves the PM in a particularly testing conundrum and the question now is whether she shelves these plans and adjusts her strategy or whether she sticks to her guns in the face of this widespread criticism.
The pound had hit its highest level against the US dollar since July on Thursday following some surprisingly upbeat retail sales data, which backed up the recent increase in inflation, but it has since pared those gains and the currency remains vulnerable to any further developments which are seen to increase the prospect of a hard Brexit. Sterling is still higher by around 1% on the week against the US dollar and should it end around these levels then it would represent the best week in 6 months. However, this is more a reflection of weakness in the buck rather than strength in the pound if truth be told, with sterling actually lower on the week than the Euro and overall it is little changed.
Auction to decide bidding war for Sky
Barring any dramatic last-minute withdrawals, this evening will see a quick-fire auction begin which will end the bidding war between Comcast (NASDAQ:CMCSA) and Twenty-First Century Fox (NASDAQ:FOX) for broadcaster SKY (LON:SKYB). The process is expected to start shortly after the market closes for the weekend and could see a large move in the stock which has seen the share price double since just before the initial Twenty First Century Fox offer was made in 2016. The stock currently trades around £15.80 - a fair premium above the current highest bid from Comcast of £14.75 with traders clearly of the opinion that Fox will look to increase their present of of £14.
Auctions of this nature are extremely rare with their being only 3 situations like this since 2007 and it should be noted that the last time this procedure was expected to be implemented (in 2012 during the battle for Cove Energy) Royal Dutch Shell (LON:RDSa) pulled out before the auction began.