Mergers and acquisitions dominate FTSE trading

The FTSE is powering ahead this morning on merger and takeover news, shrugging off a weak session in Asia where the start of the Sino-US trade talks in Shanghai dominated trading sentiment. 

Just Eat shares rallied more than 23% as news broke that Amsterdam-based Takeaway.com plans to take over the company in order to create a food delivery business large enough to challenge Uber Eats and Amazon-backed Deliveroo. The second big mover is the London Stock Exchange itself after it announced plans to take over of Thompson Reuters owned Refinitiv and to finance the acquisition with the issue of new shares.

Other European indices were close to flat or in the case of the CAC in slightly negative territory as a decline in car maker shares dragged the index lower. The lead faller was French car maker Peugeot after the company said it is considering closing down its Ellesmere Port plant in the UK if the plant becomes unprofitable because of Brexit. 

Sterling slides as new Cabinet shoots first warning shots at EU

The pound is sliding again as Boris Johnson’s newly minted Cabinet is beginning to jostle with the EU over Britain’s departure from the Union. Sterling dipped 0.36% against the dollar to $1.2336 after Foreign Secretary Dominic Raab told the EU it had to change its position if it wanted to avoid a no-deal Brexit. The pound is also down 0.30% against the euro despite the fact that a no-deal Brexit would hurt the EU economy too. 

Apart from Brexit, the big focus for the currency market will be the Fed’s rate settling policy meeting Tuesday where the central bank is widely expected to cut rates. With the rate cut as good as a foregone conclusion, the big question is whether this will also herald the start of a series of rate cuts in the latter part of this year or whether the relatively strong state of the US economy will prevent the Fed from any other immediate rate decisions.