The FTSE is barely showing signs of life this morning, which is not necessarily a negative thing given the oil-induced slide at Tuesday’s close. Resources and metals companies are all heading higher this morning, relieved that oil prices are lower, given that petrol costs constitute a high proportion of their outgoings.
The case against the government’s prorogation of Parliament being heard by the Supreme Court has also left the UK markets in suspense. With two different appeals being heard this week it is not clear when the court will come to a decision as to whether the prorogation was legal or not, or if it will overrule it. The suspended animation is putting retailers, supermarkets and house builders under pressure, keeping them all in the fallers’ category.
Brent crude prices have retreated below the $65 mark after their spike to $72 earlier this week following the attack on Saudi Arabia’s major oil refinery. It seems that the Saudi state-owned oil company Aramco will be able to repair the damaged facility sooner than expected and manage to avoid any major loss in export flows of crude oil.
Government pulls the brakes on Cobham takeover
The government has scotched the planned takeover of UK aerospace firm Cobham by a US private equity firm arguing that it has national security concerns. The defence technology company, which has pioneered mid-air refueling of planes, has extensive contracts with the British army.
Afternoon focus on Fed rate decision
Any words of wisdom from the Fed’s policy makers will be closely scrutinized later today in the wake of the bank’s decision to spend $53 billion to rescue the overnight lending market. The move was triggered by borrowing costs spiraling out of control, forcing the New York Fed to come to the rescue. The issue will likely overshadow the Fed’s interest rate decision later today, widely expected to be a quarter percentage point cut despite the bank’s policy makers being deeply divided over whether it is really needed or not.
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