The pound surged and gilts fell after The Times reported Brexit negotiators have tentatively agreed to give UK financial services companies continued access to European Union markets after Britain leaves.
Sterling rose as much as 1.1 per cent and UK government bonds dropped for a second day as the prospect of a full Brexit agreement was seen reducing economic uncertainty. That is bringing forward expectations for an interest-rate hike to next year, just before the Bank of England announces its latest policy decision and inflation outlook later Thursday.
“The pound has strengthened sharply during the Asian trading session driven by renewed optimism that the EU and UK are closer to a Brexit deal than widely feared,” said Lee Hardman, an analyst at MUFG. “The positive Brexit headlines have provided a more supportive backdrop for the pound heading into today’s BOE policy meeting.”
The pound was up 1.1 per cent at $1.2905 by 8.30am in London, with 10-year gilt yields two basis points higher at 1.46 per cent. The currency had briefly jumped on Wednesday and gilts were put under pressure after a letter was published showing UK Brexit Secretary Dominic Raab expected a deal to be finalised by November 21.
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Read more:
Brexit no-deal seen shaving 1.6 points off UK growth next year
UK's new Brexit 50p leaves Britons less than enthusiastic
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The optimism over Brexit negotiations may complicate matters for gilt traders and BOE governor Mark Carney ahead of the policy meeting Thursday. UK money markets have moved forward their pricing for the next rate hike to November 2019, from February 2020 on Tuesday. That is still later than markets were expecting just a month ago amid increased fears of a no-deal Brexit.
“The BOE governor will likely reiterate his warning about the very damaging growth impact of a ‘no-deal’ Brexit,” said Credit Agricole head of G10 currency strategy Valentin Marinov in a note.
“Given that pound sentiment has taken quite a beating of late, Carney’s comments could reverberate strongly and keep the latest bounce in the pound to the test.”
MATCH INFO
Syria v Australia
2018 World Cup qualifying: Asia fourth round play-off first leg
Venue: Hang Jebat Stadium, Malayisa
Kick-off: Thursday, 4.30pm (UAE)
Watch: beIN Sports HD
* Second leg in Australia on October 10
RESULT
Australia 3 (0) Honduras 1 (0)
Australia: Jedinak (53', 72' pen, 85' pen)
Honduras: Elis (90 4)
The biog
Name: Dhabia Khalifa AlQubaisi
Age: 23
How she spends spare time: Playing with cats at the clinic and feeding them
Inspiration: My father. He’s a hard working man who has been through a lot to provide us with everything we need
Favourite book: Attitude, emotions and the psychology of cats by Dr Nicholes Dodman
Favourit film: 101 Dalmatians - it remind me of my childhood and began my love of dogs
Word of advice: By being patient, good things will come and by staying positive you’ll have the will to continue to love what you're doing
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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Match info
Uefa Champions League Group F
Manchester City v Hoffenheim, midnight (Wednesday, UAE)
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Company name: Farmin
Date started: March 2019
Founder: Dr Ali Al Hammadi
Based: Abu Dhabi
Sector: AgriTech
Initial investment: None to date
Partners/Incubators: UAE Space Agency/Krypto Labs
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Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
