Capital Markets, Financial

BGC Partners eyes new platform to trade US Treasuries

BGC Partners plans to launch a new platform to trade US Treasuries early next year, in a bid to return to a market in the middle of evolution, according to people familiar with the plans.  The company, spun out of Howard Lutnick’s Cantor Fitzgerald in 2004, sold eSpeed, the second-largest interdealer platform for trading Treasuries, […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Categorized | Currencies

Pound faces less room for ‘fiscal reset’


Posted on September 27, 2016

An employee manually counts 20 pound sterling banknotes in this arranged photograph inside a Travelex store, operated by Travelex Holdings Ltd., in London, U.K., on Friday, Sept. 12, 2014. The pound, already suffering its worst month in more than a year, has the potential to tumble 10 percent should the Scots vote for independence from the U.K., according to economists surveyed by Bloomberg. Photographer: Matthew Lloyd/Bloomberg©Bloomberg

Could there be more trouble ahead for sterling?

Bank of America Merrill Lynch points out that in the first five months of the fiscal year, government borrowing declined at “only half the pace forecast” in the last Budget.

    According to BofA’s Robert Wood, that means “the economy may not have been as strong as it perhaps seems from the current GDP data running up to Brexit”. That, Mr Wood continues, implies increased borrowing forecasts at the UK’s Autumn Statement on its finances, due on November 23. It also reduces the chances of the announcement then of a “large discretionary fiscal stimulus”.

    Such an outcome could be keenly felt in dealing rooms.

    As Mr Wood points out, it “would likely come as a disappointment to markets that seem to us to have taken the Chancellor’s previous suggestion of a ‘fiscal reset’ a little too far”.

    And that is not all. The timing of the decision to trigger Article 50 of the Lisbon treaty, which starts the formal withdrawal process, could run deeper toward the May 2020 date of the next general election, says the bank.

    “We assume the additional volatility that creates, and the actions it could catalyse, will depress UK growth through 2017. We assume Brexit will prove to be a chronic shock, keeping growth depressed for an extended period, rather than an acute one [ie] a recession followed by recovery.”

    The pound — already down 13 per cent since polling day and well shy of its intraday peak of $1.3445 since the vote — could face further pain.

    michael.hunter@ft.com