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Pound's losing streak versus euro enters ninth day as May agrees to announce departure date

Theresa May
The pressure is mounting on Theresa May

Markets wrap: Pound tumbles on resurfacing no deal worries as May agrees to announce departure date

The pound tumbled to a five-month low against the dollar and entered a ninth day of decline versus the euro as the City fretted over the hotly-contested race in the Conservative Party to succeed Theresa May.

Sterling extended its slide after the prime minister confirmed that she will announce a departure date in June whether her Brexit deal passes at the fourth attempt or not. 

Traders were spooked by the prospect of Mrs May’s departure and another defeat for her deal putting the risk of a disorderly Brexit back on the table. RBC Capital Markets analyst Peter Schaffrik told clients that “a chain of events that leads to a new Brexit-supporting PM is not too far-fetched” as bookies placed Boris Johnson and Dominic Raab as frontrunners.

Sterling slipped as much as 0.7pc against the dollar at $1.2769, briefly touching at its lowest level since January. It is on its joint-longest losing streak versus the euro since its rival’s creation in 1999, sliding for a ninth day to an intraday low €1.1431.

Banking giants fined €1bn for 'Banana Split' and 'Essex Express' foreign exchange cartel

The Commission, which started its investigation in 2013, said that traders working for the banks had exchanged "sensitive information and trading plans" 

Five banking giants including Barclays and RBS have landed a combined €1.07bn (£940m) fine for taking part in two foreign exchange trading cartels named "Essex Express" and "Three Way Banana Split". 

The European Commission has fined the banks, which also include Citigroup, JPMorgan and MUFG, for participating in one or both of the cartels. A sixth bank, UBS, avoided a penalty because it blew the whistle on the cartels. 

Read the full report here

'Summer of stability for sterling out of the window'

The pressure has been piled on sterling this afternoon as the Conservatives gear up for a leadership contest that could propel a Brexiteer into Number 10.

The pound has slipped below the $1.28 mark against the dollar, briefly touching at its lowest level since January, and remains on course to rack up a ninth day of decline versus the euro.

A "summer of stability" for sterling is now "very much out of the window", warned John Goldie, FX trader at Argentex. He added:

"The granting of the delay until October was meant to be a positive for the currency but it seems that the brief respite from all things Brexit over Easter was very short-lived and we are fully back into a market that reacts to headlines and soundbites rather than fundamentals"

May to announce date for her departure next month

Mrs May was told last night that she would face a vote of no confidence unless she agreed to set out a clear timetable for her departure. 

Theresa May has confirmed she will announce a date for her departure next month, even if she has not delivered Brexit. 

The Prime Minister has agreed to meet with the executive of the 1922 committee, the powerful backbench committee of Tory MPs, at the beginning of June, when they will "agree a timetable for the election of a new leader". 

Meanwhile, Boris Johnson has confirmed that he will run to replace Mrs May as leader of the Conservative Party. Mr Johnson told a private event in Manchester "of course I'm going for it". No surprise there. 

Keep an eye on our Brexit live blog for the latest developments. 

Thomas Cook's fate is no longer in the company's own hands

Shares in Thomas Cook are down more than 15pc today after its disastrous set of first-half results. As a reminder, the holiday company suffered a pre-tax loss of almost £1.5bn including a £1.1bn writedown of assets. 

Lufthansa, Virgin Atlantic and a private equity firm that backed Wizz Air are all reported to be interested in snapping up Thomas Cook's airline. 

Our reporter  Oliver Gill has taken a look at how Thomas Cook's fate has been taken out of its own hands.

Goldman Sachs announces deal to acquire Californian wealth manager

The deal will expand the US bank's wealth management business. 

Goldman Sachs has announced an agreement to acquire United Capital Financial Partners in a $750m (£586m) cash deal. 

United Capital is a California-based wealth manager with $25bn of assets under management. 

The move will expand Goldman's wealth management business, which is comprised of its Private Wealth Management and Ayco divisions. Goldman already has close to $500bn of assets under supervision. 

EU officials urge international banks to ditch the City, Bank of England official claims

One bank chief was told "it would be sensible for him to move more of his operations to Paris, Frankfurt or Dublin, where things would be easier”.

Back to Brexit. EU officials have been encouraging international banks to leave London, saying that there will be a post-Brexit backlash against the City, a senior regulator at the Bank of England has revealed.

Sam Woods, a deputy governor at the Bank, said that “EU colleagues” had warned the head of a “large foreign bank” that the British public would turn its fire on City bankers after the UK leaves the European Union. 

Mr Woods said that one bank chief was told "it would be sensible for him to move more of his operations to Paris, Frankfurt or Dublin, where things would be easier”. 

Read the full report here.

Pret A Manger nears deal to acquire Eat

Discussions between Pret and EAT are at an advanced stage.

Pret A Manger is nearing a deal buy food-to-go chain Eat as mounting competition between high street and online delivery players sparks consolidation in the casual dining market.

Eat’s private-equity owner Horizon Capital appointed Spayne Lindsay to sell the business in February. Discussions are at an advanced stage, according to the Evening Standard, which first reported them. 

The talks come nearly a year on from Pret’s own £1.5bn sale to JAB Holdings, the private wealth vehicle of Germany’s reclusive Reimann family, which also owns Krispy Kreme Doughnuts. 

EAT has struggled with the challenging trading conditions that have triggered a wave of shop closures on the high street. Pret, by contrast, has 450 branches in 10 countries. 

Horizon, Eat and Pret declined to comment.

Read the full report here.

Donald Trump is becoming dangerously addicted to tariffs and permanent trade war

Donald Trump is not seriously seeking a trade deal. Some say his real aim to check the rise of China and force US 'traitor' companies to return home from across the world

Donald Trump’s America has the highest trade tariffs in the developed world by a wide margin. These barriers are becoming an economic way of life with each passing month.

Deutsche Bank says the trade-weighted average has risen to 4.2pc. This is double levels in Europe, Canada and Japan, and slightly higher than in China.

If he goes ahead with 25pc tariffs on the entire gamut of Chinese goods in June, the US will vault past Turkey and India. It will acquire a South American profile. This is fitting for the Caudillo del Norte since no US president has quite so resembled Juan Peron.

Read the full report here

Pound's slump is joint-longest since euro creation

The pound's nine-day slump versus the euro is the joint-longest since its rival's creation in 1999.

Sterling also slid for nine consecutive days in early 2013 with the latest decline knocking the currency 2.6pc against the euro.

Will the pound rack up a 10th day of losses tomorrow after Theresa May's showdown with top Tories?

Sterling slips to three-month low versus dollar and euro

Sterling has slipped back to a three-month low versus the euro and dollar as the pressure mounts on Theresa May.

The Government has confirmed that the Brexit Withdrawal Agreement bill will be voted on in Parliament againin the week beginning June 3 and analysts fear that sterling could be sent sliding by another crushing defeat.

RBC Capital Markets analyst Peter Schaffrik warned that the scenario in which a defeat triggers "a chain of events that leads to a new Brexit-supporting PM is not too far-fetched". He added that that risk is likely to knock investor sentiment in the near term.

Sophos rallies as it swings to profit in 'challenging' year

Sophos had seen a boom in demand in the wake of the WannaCry outbreak

Shares in Oxford-based cyber security company Sophos rallied, after it said it swung to a profit in its latest financial year despite having deemed it a "challenging" period.

Sophos said its revenue had risen 11pc in the year to the end of March, to $711m (£554m) from $639m a year earlier, helping it post $53.6m in pre-tax profit, compared to a loss of $41m the prior year. 

The company, which makes network security and antivirus software, said it had seen the number of larger transactions dip, but that there had been "stronger growth" in smaller customers. 

Read the full report here

Banks fined €1.1bn for currency trading cartels

Five banking giants have been fined €1.1bn (£1bn) by the EU for colluding in foreign exchange trading cartels.

The European Commission said traders at Barclays, RBS, Citigroup, JPMorgan and MUFG exchanged sensitive information and occasionally coordinated their trading strategies through online chatrooms.

"The behaviour of these banks undermined the integrity of the sector at the expense of the European economy and consumers," it said.

The two groups were named the “Forex - Three Way Banana Split” cartel and the “Forex - Essex Express” cartel.

National Grid profits drop as Labour threat looms

National Grid made a pre-tax profit of £1.84bn for the year ending in March

National Grid’s profits fell well below expectations for the last financial year fell after slipping by almost a third from the year before.

The FTSE 100 energy giant unveiled the disappointing results amid rising investor concern over the UK’s energy networks industry which is the focus of a sweeping Labour party nationalisation plan.

The grid operator, which runs Britain’s high voltage cables and balances the energy system, was expected to make a pre-tax profit of £2.54bn for the year ending in March, but instead generated £1.84bn.

Read the full report here

Sterling drops for ninth straight day versus euro

Sterling's decline against the euro has extended into a ninth straight day as Theresa May comes under increasing pressure to announce a departure date.

The prime minister will meet the executive of the 1922 Committee of backbench Conservative MPs this morning amid fears on markets that they will alter rules to force Mrs May out.

ING head of strategy Chris Turner warned that sterling could slip below $1.27 to a fresh three-month low as "a rule change would increase the chances of a more Euroscpetic PM emerging this summer". Sterling has dropped a further 0.3pc against the euro to €1.1444 while versus the dollar it has slid 0.2pc to $1.2837, just above yesterday's three-month low.

Markets struggle to shake off trade war worries

European markets are struggling to shake off this morning's sluggish start as trade war worries continue to dominate.

The FTSE 100 has pulled back to flat territory, aided by the pound's fourth straight day of decline versus the dollar. While the UK's benchmark index has reversed its early losses, the Euro Stoxx 50, which tracks the eurozone's top stocks, has slipped 0.4pc.

Lukman Otunuga at FXTM believes that the "conflicting signals over trade" will spark "more uncertainty and confusion in the market".

"Investor sentiment has swung back and forth this week due to the persistent uncertainty and ever-changing  jigsaw puzzle that is being mapped out around global trade developments," he explained.

Huawei warns US will lag behind in 5G

Huawei has hit back against the White House's clampdown on the Chinese tech giant, warning that the ban will leave the US "lagging behind in 5G".

The company called the restrictions "unreasonable", arguing that they "infringe upon Huawei's rights and raise over serious issues". However, Huawei also insisted that it is "ready and willing to engage with the US government and come up with effective measures to ensure product security".

The Trump administration's restrictions have stoked tensions with China just after trade talks with Beijing broke down. The US and Chinese have lifted tariffs on each others' products after the Trump administration accused China of backtracking on pledges made during talks.

Thomas Cook suffers £1.5bn loss as it confirms 'multiple' bids received for airline business

Thomas Cook said it had received 'multiple bids' for all or part of its airline

Thomas Cook said it had received “multiple bids” for all or part of its airline business as the troubled holiday company reported a dramatic increase in losses in the six months to March.

The travel agent suffered a pre-tax loss of almost £1.5bn, a near five-fold increase on the £303m loss it endured during the same period last year.

A highly promotional environment, driven by political and economic uncertainty, coupled with higher fuel and hotel costs would act as a drag on second half performance and full-year earnings, the company said. 

Read the full report here

Agenda: Markets struggle after Trump stokes China tensions by blacklisting Huawei

Donald Trump stepped up his attack on Huawei

Trade tensions on global markets resurfaced after the Trump administration stepped up its attack on Huawei, putting in place restrictions to stop US companies from doing business with the Chinese mobile phone giant.

Donald Trump declared a national emergency to give his government sweeping powers to clampdown on Huawei, effectively banning the tech giant from the US's 5G network. 

The company has been added to the US government's "Entity List”, meaning that American companies wanting to sell equipment to Huawei will need a licence issued by the US Bureau of Industry and Security. A ban stopping the US government from using its equipment was also widened to all American companies.

Commerce secretary Wilbur Ross said the ban will "prevent American technology from being used by foreign owned entities in ways that potentially undermine US national security or foreign policy interests".

Global stocks continued to swing between gains and losses on the latest developments in the trade war. Stocks across Europe slipped back into the red, giving up some of the gains made after Mr Trump delayed his decision on car tariffs by six months. The FTSE 100 dropped 0.3pc in early trade while eurozone blue-chip stocks slid 0.4pc.

Full-year results: 3i, Burberry, Investec, National Grid, Sophos

Interim results: Countryside Properties, Euromoney Institutional Investor, Grainger, Thomas Cook

Trading statement: Balfour Beatty, Hill & Smith, Just Group, Keller, Premier Oil, TI Fluid Systems

Economics: Housing starts (US), Building permits (US), Trade balance (EZ)