Sterling slips again as investors digest Johnson’s gambit

Global stocks hold steady as European shares gain

Global stocks were steady on Thursday, while the pound slipped afresh as markets digested Boris Johnson's decision to shut down parliament to protect his Brexit plan.

Sterling fell 0.2 per cent to trade back below $1.22, as investors and economists assessed the implications of Mr Johnson's gambit. Deutsche Bank strategist Jim Reid said the bank sees a 50:50 chance of Britain leaving the UK without a deal.

“The reality now is that, under the new schedule, UK parliament has just under a week in early September followed by just over a week in late October to prevent a no-deal outcome,” he said.

European stocks moved higher in early trading, with the composite Stoxx Europe 600 rising 0.5 per cent after a lacklustre session in Asia.


As ever, investors were tuned to developments in the trade conflict between the US and China. On Thursday morning China’s Commerce Ministry said the two sides are discussing face-to-face talks that were scheduled to be held in September. Both sides “should create conditions” for progress, a spokesman said in comments reported by Reuters.

Energy stocks provided a bright spot on Thursday as Asia-Pacific indices struggled for direction, after figures showed US oil stockpiles dipped, pushing up prices.

Overnight on Wall Street, the S&P 500 had ended 0.7 per cent higher as energy shares rose.

The yield on the two-year note remained above that of the 10-year Treasury on Thursday after marking the deepest inversion of the yield curve since 2007 earlier in the week.

An inverted yield curve is seen as an indicator of a possible recession.

The yield on the 30-year Treasury fell to a historic low on Wednesday amid expectations for weaker inflation and slower growth. – Copyright The Financial Times Ltd