European shares opened lower across the board after Wall Street clocked heavy losses for a second day in a row. The Dow lost 800 points on Tuesday as panic started to build not only about the eventual outcome of the China-US trade talks which are due to restart over the next three months but seem to have made no progress on some of the key dispute issues, but also about the flattening of the yield curve and expectations that the bull run in equities has gone as far as it will go.
Brexit hopes seem to fade
Anybody watching the UK evening news cannot but have come away with the feeling that the likelihood of PM Theresa May’s current Brexit proposal being accepted by Parliament is fading. For days now MP after MP, Conservative or Labour, have been bashing the deal that is on the table and if that is replicated during the vote on the proposal next Tuesday the most likely alternative outcome for Britain will be a no-deal Brexit, a worst-case scenario for the markets. This morning the pound is holding its ground at $1.2738 against the dollar and at €1.1236.
US partial market shutdown as country mourns former President
The US markets will operate at half-mast today, mourning the death of George Bush Senior. Financial industry trade group the Securities Industry and Financial Markets Association has recommended that the bond markets close for the day and although there may not be a full cessation of activities the volume of trade is likely to be only a fraction of what it normally is. Stock markets will close fully but commodity trading will continue in some form. The futures giant CME Group plans to stop trading interest rate and futures products but electronic trading and trading of energy and metals will continue.
Ryanair at loggerheads with the UK Civil Aviation Authority
Budget airline Ryanair has found itself in the crosshairs of the UK Civil Aviation Authority for refusing to pay out compensation for flight cancellations caused by strikes. The carrier was embroiled in a wage and job conditions dispute with German pilot and cabin crew unions for the better part of spring and summer which caused numerous cancellations during the busiest travel months of the year. The CAA plans to force Ryanair to pay out but has not spelled out yet a full action plan. Ryanair shares are gently moving higher this morning but may struggle to make further gains after the CAA’s decision.
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