UK-EU reportedly strike Financial Service Deal | Calamatta Cuschieri

Market overview

The pound surged as the Times of London reported that U.K. and European negotiators have reached a tentative agreement that would give U.K. financial services companies continued access to European markets after Brexit. The GBP to EUR exchange rate is trading at €1.13 for every £1.

European stocks have opened with mixed results. At the time of reporting, the FTSE 100 is down 0.36% whilst the Stoxx 600 is up 0.12% as investors react to the Times of London news. In the US, the markets rallied yesterday ending one of the worst months since the financial crisis. This was mainly due to a strong earnings season along with positive US economic data. The Dow Jones Industrial Average and the S&P 500 closed at increases of 0.97% and 1.09% respectively. The Asian market is struggling to advance following rallies in global equities these past two days with the Asian Dow index and Shanghai composite index trading at higher levels of 0.66% and 0.13%.

UK – EU financial relations

The Times newspaper said London had agreed in negotiations with Brussels to give UK financial services firms continued access to the bloc. Government sources said a tentative deal had been reached on all aspects of a future partnership on services. An initial deal on exchange of data had also been agreed, the paper said. It added the deal was expected to be completed within three weeks.

Britain's departure from the European Union is expected to take place in March next year, but many UK-based businesses have expressed concern over the lack of progress in Brexit talks. Despite various reassurances from Prime Minister Theresa May that definite trade terms between firms in the UK and the EU will be finalised by March next year, businesses across the board are already preparing for the worst. Mrs. May's senior advisor on Europe, Oliver Robbins, was continuing the negotiations in Brussels.

Royal Dutch Shell sees profits jump

The Anglo-Dutch giant reported that earnings increased to $5.6bn from $4.1bn last year. Rising oil and gas prices in the July-to-September period were the main drivers of rising profits. Shell joins rivals BP in reporting strong results. Despite the encouraging results, Shell’s shares fell more than 1% in the early trading hours of the day. The company said that it will repurchase $2.5 billion of shares up to January 28th 2019 which is a key point for investors that are keen to see a rise in the value of their shareholdings.

Disclaimer: This article was issued by Peter Petrov, junior trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.