US-China trade talks promise hope

London shares tracked their US peers higher as the Turkish currency market stabilized and there were tentative signs that the US and China are working towards a negotiated agreement in their dispute over trade and tariffs.  Negotiators from the two countries are due to meet in November and at the end of the talks there is a meeting scheduled between President Donald Trump and his Chinese counterpart Xi Jinping. Asian stocks responded well to the news with the Shanghai Composite index bouncing back up 1.11% and Hong Kong’s Hang Seng rising 1.36%. The dollar also changed tack, rising this morning after a 0.5% drop on Friday.

UK business confidence falls to new low

Brexit is continuing to knock business leaders’ confidence in the British economy and the recent interest rate rise is not helping. An Institute of Directors survey which engaged with 750 UK business leaders shows that that confidence has now dropped to its lowest level this year. The result is typically a reflection of the general state of the UK economy and takes into account the strength of retail sales, the pound’s exchange rate and interest rates. This year, as the Brexit deadline starts to draw nearer, business confidence is largely mirroring the state of the UK’s negotiations with the EU. The last time the IoD confidence index was in positive territory was in April when there was progress in Brexit talks, but since then the index has been gradually declining.

UK house price drop in August

Although the pound mostly held up this morning, reflecting the perceived improvement in the state of the China-US tariff dispute and the stabilizing of the Turkish lira, the latest house price moves will weigh on the currency.

UK house prices fell 2.3% on the month in August with an increased number of sellers trying to sell their properties fast now that the UK interest rates have risen. The average value of houses has dropped by roughly £7,200 in the month, with the biggest falls in London and the commuting areas around it.

The pound traded up 0.08% against the euro, up against the yen and down 0.04% against the dollar.

TBC Bank not affected by Turkey’s woes

TBC Bank is showing that Turkey's woes don't necessarily mean that lenders in other emerging economies are destined to struggle.

Profits in the second quarter have soared as the Georgian economy continues to go from strength to strength.

Government moves to reform the former Soviet economy by squashing corruption and cutting red tape are paying off: the IMF expects Georgia to notch economic growth of around 5% a year for the next five years.

TBC is expanding its margins rapidly as it focuses on higher yielding, but riskier loans. Bad debts, though, while rising year-on-year, are tracking in line with management's expectations and the balance sheet looks in decent shape.

TBC has announced it's eyeing more international expansion opportunities and it will be intriguing to see how much further afield it will travel after its recent move into Azerbaijan.