Pound drops below $1.28 to 10-week low

There’s been further downside seen in the pound today with the currency falling below $1.28 to trade at levels not seen since mid-August. The declines in cable are due in part to a strengthening US dollar, with a trade weighted index of the buck hitting its highest level of the year this morning, but mainly it is down to sterling weakness, with the pound lower on the day against all its major peers other than the Japanese Yen. Stocks are trading a little higher with the FTSE 100 gaining 20 points as it looks to build on Monday’s sizable gains. The benchmark has been in a relatively narrow range for the past 3 weeks as it looks to stabilise around the 7000 mark and on the plus side it appears to have found some support unlike US indices which fell further once more yesterday.

 

BP gains on high oil prices and large cash stockpile

Shares in BP are one of the biggest gainers today, with only Ocado outperforming the oil major after it released a better than expected set of results. For the third quarter BP announced that profits had more than doubled with strong crude prices - which hit a 4 year high in the period - putting Big Oil on track to post record cash levels this year. The stock has gained around 4% in what is clearly a positive reaction to the latest figures, with underlying profits rising to their their highest level in 5-year for the past quarter, coming in at $3.8B. As an indication of how much cash the firm has flowing around at present, they’ve announced that they will now buy BHP Billiton’s US shale assets for $10.5B entirely in cash - a deal which is the largest for the company in 2 decades.         

 

Eurozone growth slumps to slowest pace in 4 years

After a stellar 2017 for the Eurozone this year has been quite the disappointment, with the latest economic growth figures missing once more. GDP for the bloc came in at 0.2% for the 3rd quarter, markedly lower than the 0.4% that was expected. The prior reading was revised higher by 10 basis points to 0.4% but overall it is clear that the region is far from firing on all cylinders. New emissions tests have hit car production in Germany but the biggest laggard seems to be Italy where the economy failed to grow in the past quarter for the 1st time in two years. This is largely due to the current political concerns with the higher than expected budget deficit recently unveiled riling both bond and stock markets for Italian assets. PM Conte has taken the opportunity to double down on his budget plans in light of this slowdown in growth, stating that the weak GDP was expected and is why the government is pursuing an expansionary budget, at the same time reiterating that the country will not change their stance on the controversial budget.