The FTSE 100 is on course to close at a record high for the 12th successive day * Chinese exports slump amid fears of a US trade war * Germany’s Merkel poised for Brexit negotiations * Bank of England’s Saunders: jobless rate could stay below 5% * US retail sales rise 0.6% in December * Sterling volatility mounts as May prepares Brexit speech * UK Christmas retail: the winners and losers 4.23pm GMT HEADING INTO THE CLOSE, THE FTSE 100 IS WELL ON COURSE FOR ANOTHER RECORD CLOSING HIGH. The fall in the pound is one factor in the gains, as it has been since the Brexit vote, but there are others. Jasper Lawler, senior market analyst at London Capital Group, said: There was a strong rebound in the pharmaceutical shares which sold-off in the wake of Donald Trump’s press conference. Markets have pared bets the President-elect’s hostile attitude to drug pricing would spill over to international markets. Homebuilder Barratt Developments and Kingfisher were top risers whilst disappointing economic data from China and a downturn in the price of gold hurt mining company shares including Randgold Resources. This week the pound dropped to a three-month low against the dollar and a two-month low versus the euro. Next Tuesday Theresa May will set out the long-awaited approach the government will take before triggering article 50. The PM has difficult balancing act of trying to offer some more clarity to the British public, parliament and financial markets without losing the upper hand in negotiations with the EU. If the Prime Minister confirms the UK will leave the single market in a “Hard Brexit”, the British pound could drop below 1.20 against the dollar, and quite possibly into “flash crash” territory soon thereafter. More likely the PM will be a little coyer. The uncertainty of being unspecific is not good for Sterling either, but leaving the door open to staying in the single market should support the pound. 3.38pm GMT Back with the situation in Greece, and German finance minister Wolfgang Schäuble has suggested the EU might take over the country’s bailout if the International Monetary Fund decided not to get involved. Here is the report from EurActiv via Reuters: Berlin is weighing up the possibility of the EU taking over theGreek bailout in the event that the International Monetary Fund decides to end its role in it, German Minister of Finance Wolfgang Schäuble said on Friday. In an interview with Süddeutsche Zeitung , Schäuble floated the idea that if the IMF decides to pull out, Europe could figure out its “own solution” within the eurozone. He added, though, that such a solution must guarantee a strict implementation of the bailout’s terms. “If we continue solely then we will have to better guarantee the agreements ... This role could be assigned to the ESM,” he emphasised, saying that if the absence of the IMF brings major changes [to the agreement] then the new conditions will need the approval of the German parliament - which is preparing for elections next autumn. However, Schäuble warned that if the Greek side does not deliver on its commitments, it will be the end of the current programme, and new negotiations will be required. Continue reading...
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