IMF's Christine Lagarde pleads with the UK to stay in the European Union -as it happened
- Europe preparing for any outcome from UK poll - Schiuble
- Lagarde says EU has made UK richer and more diverse
- European markets rise as Brexit campaign pauses
- Oil price rises for first time in seven days
- German bond yields back above zero
- Greece secures a7.5bn emergency loan
6.09pm BST
After another torrid week, European markets ended on a high note. Investors were in calmer mood as the prospect of Brexit appeared to fade a little, with the mood helped by the suspension of the campaigning by both sides for a while.
Banks and housebuilders, which had fallen sharply in recent days on concerns about the effect of the UK leaving the UK, were among the biggest risers. But Wall Street was weaker, with Apple down on worries about its sales in China. The final scores showed:
5.41pm BST
#Brexit probability declines as campaigns remain quiet https://t.co/X0nlxDklcE via @RJ_FXandRates pic.twitter.com/GJ0EruCnvk
4.41pm BST
Europe has to find a new way to build trust between member states and the people, European Central Bank president Mario Draghi has said.
In a speech in Munich in honour of former German finance minister Theodor Waigel, he said:
Today we face a choice - between leaving things as they are and moving forward. And this is not a choice without costs.
We have seen that the price of inaction is high. We have seen how it leaves the economy vulnerable to instability. We have seen how the perceived impotence of public authorities in meeting the needs of their people feeds into frustration and rejection. And we have seen how that risks undermining trust in and support for our institutions - and even the European Union itself...
4.26pm BST
European markets are holding onto their gains as we head into the close, but Wall Street has fallen back. Recent Federal Reserve comments showing concern about the state of the global economy have not helped, nor has a drop in Apple's share price on worries about iPhone sales in China. Joshua Mahony, market analyst at IG, said:
For once we are seeing market jitters emerge from the US markets today, as relatively solid session for the FTSE has been overshadowed by a sharp deterioration in US equities today. The fears surrounding a Brexit have abated somewhat today, with a break from the polls allowing for a more positive end to a very mixed up week for UK equities. Crucially, the incessant rise in crude prices today has provided enough emphasis to keep the main UK benchmark afloat.
Today's ultra-dovish comments from the traditionally hawkish St. Louis Fed President Jim Bullard mark a significant shift in emphasis at the FOMC, with an indication we could only yet see one hike in the next 18 months. While there is no doubt that Fed confidence will have been knocked by this month's payrolls shocker, the accompaniment of a growth slowdown means that Janet Yellen's dream of a summer hike may turn into a dream of a 2017 hike.
4.06pm BST
The uncertainty over the result of the UK referendum has seen investors pull out $1.1bn from UK equity funds in the past week, according to Bank of America Merrill Lynch.
This is the fastest pace for 13 months and the second largest outflow over the past decade, after the last general election.
Brexit- there's really nothing to be afraid of, honest pic.twitter.com/IM9NXmI22p
3.40pm BST
Donald Tusk, head of the European Council, has shared his meeting schedule for next week.
Wonder what they'll find to talk about at 10.30 on Friday 24th?
My agenda next week: https://t.co/DSHlHapmCe pic.twitter.com/sYLPRL8DGM
3.33pm BST
It's the calm before next week's probable storm in the markets, according to Connor Campbell, financial analyst at Spreadex. With European shares heading higher after the suspension of Brexit campaigning, Campbell said:
Doing its best to dampen the day's rebound was the Dow Jones, the US index opening 20 to 40 points lower after the bell. There wasn't necessarily much to cause that decline bar a relatively weak pair of housing starts and building permits readings. Nevertheless the Dow sporadically dipped below 17700, perhaps playing catch up with the sharper declines seen across the week in Europe.
Talking of Europe, while the Eurozone indices lost some of their lustre (the DAX now up by a reduced 0.7%) the FTSE held on its growth this afternoon, the UK index increasing by 1.1%. The pound, meanwhile, saw an even more surprising rise, with cable at points grazing $1.43 for the first time since the start of the week.
3.14pm BST
The result of the UK referendum could spark a spate of central bank intervention in the currency markets, including the Bank of England and potentially the Bank of Japan which has been worried about the strength of the yen anyway.
But a Brexit is less of a risk than Grexit - if Greece left the eurozone - according to Alan Ruskin. strategist at Deutsche Bank. He said in a note to clients:
The most likely scenario for the Bank of Japan to intervene and sell yen in the currency market, is if US dollar/Japanese yen threatened or breached Y100 following the UK referendum. Presumably, the Yen would also be registering even larger gains versus European currencies in such circumstances. In that situation, the Bank of Japan would likely intervene 'under the cover' of the UK referendum vote, by making a strong case to the US and G20, that i) Japan is being placed under unique duress from a dramatic tightening in financial conditions allied to the stronger yen; and, ii) that the exchange rate is reflective of volatile international events, and not domestic conditions.
Were sterling trading to become particularly unruly following the UK referendum (say Cable through 1.30 and continuing to drop) the Bank of England is unlikely to sit idly by. Were the Bank of Englan to intervene to support the pound, it would make sense to also have the ECB and Federal Reserve intervene on the Bank of England's behalf, as a signal of global solidarity.
Only if events in the foreign exchange market were reflective of a global systemic event that might trigger a significant tightening in financial conditions in the the US, would the Fed intervene on its own book.
3.01pm BST
More on the comments from German finance minister Wolfgang Schiuble on Brexit. Reuters reports:
Schiulbe said on Friday that Europe was trying to prepare for any possible outcome of Britain's referendum on whether to stay in the European Union.
Speaking after a meeting of EU finance ministers in Luxembourg, Schaeuble also said Europe was well prepared to respond to current Brexit-related anxiety in financial market.
2.41pm BST
Wall Street is down in early trading.
2.38pm BST
According to Reuters, the German finance minister Wolfgang Schiuble says Germany is trying to prepare for all eventualities following the UK referendum on EU membership.
He added:
We think we are well prepared to respond to the current anxiety in financial markets.
2.06pm BST
US housing starts dipped in May according to the Commerce Department.
Privately-owned housing starts fell 0.3% to 1.164m from a downwardly revised 1.167m in April.
U.S. housing starts dip, permits maintain gains https://t.co/z3Ts9pzg2T
1.43pm BST
Also this on BHS:
The former finance consultant of BHS has broken down how Dominic Chappell took money out of BHS. Extraordinary https://t.co/f2hSKyiN81
1.41pm BST
The parliamentary committees investigating the demise of high street retailer BHS have published some more written evidence as part of the inquiry.
Following the announcement on 25 April 2016 that BHS was now in administration, Sports Direct contacted Duff & Phelps with a view to putting together a second rescue package.
A subsequent meeting took place at the offices of Arcadia on 27 April 2016. I attended this meeting in person along with my acquisition team. The other attendees included, amongst others, Sir Philip and Phil Duffy of Duff & Phelps.
Mike Ashley on why he didnt buy BHS https://t.co/719yBO4ITU
1.16pm BST
Jonathan Loynes, chief European economist at Capital Economics, says a British vote to leave the EU would force the European Central Bank to act.
European equity markets would be very likely to drop further and peripheral bond yields could rise further, raising the threat of a re-ignition of the [eurozone] debt crisis.
Meanwhile, an appreciation of the euro against a declining pound would exacerbate any negative effect on exports to the UK.
12.34pm BST
Speaking of CNBC, it also has an interview with US Federal Reserve board member James Bullard, who said there should only be one rate hike before 2018. CNBC reports:
St. Louis Fed President Jim Bullard, in a significant shift in his outlook for the U.S. economy, now says low growth and a very low fed funds rate of just 63 basis points will likely remain in place through 2018.
Bullard, reversing earlier forecasts that looked for growth to pick up and rates to rise, now says 2 percent growth is the most likely forecast and that rates will remain low. Bullard also sees unemployment at 4.7 percent and trimmed-mean PCE inflation of 2 percent during this window.
CNBC: Fed's Bullard: Only one rate hike needed through 2018 https://t.co/vqUJT4Quvt
12.25pm BST
More from IMF managing director Christine Lagarde.
Speaking on CNBC she said there were significant benefits from the UK being in the European Union, and that Brexit was a concern not just for the UK but for the world.
CNBC: IMF's Lagarde Exclusive with steve_sedgwick: There are significant benefits from being in the E.U. pic.twitter.com/saH8Cv0EIn
12.07pm BST
Brexit would hurt the UK more than the EU according to Italy's Prime Minister, Matteo Renzi (Reuters is quoting the Tass news agency in Russia).
Of course it would be a problem but it would be a small problem for Europe and a much larger problem for Britain.
11.46am BST
Brent crude oil is inching closer towards the $50 a barrel mark - currently up 2% at $48.12.
Mihir Kapadia, chief executive of Sun Global Investments, has a view:
Crude oil prices have risen today for the first time in a week, with global markets enjoying a respite from worries about the upcoming EU referendum.
The anticlimactic return back below $50 per barrel for prices recently has taken the wind out of some traders' sails, after a light at the end of the tunnel in the form of $53 a barrel last week was met with a 5-day slide.
11.31am BST
US cosmetics company Revlon has agreed to buy Elizabeth Arden in an $870m (611m) deal, which will bring together Revlon's hair colour products with its rival's anti-ageing creams and celebrity fragrances.
11.08am BST
Jasper Lawler, analysts at CMC Markets, has this take on the markets:
Fear-based trades sent markets to extreme levels in a short space of time and they have snapped back. Gold soaring to two-month highs typified the level of market anxiety. It's sharp reversal has typified the sentiment reversal.
The course-reversal across markets has seen everything that was doing badly, do the best and everything that was doing poorly, outperform.
11.04am BST
German bond yields are back in positive territory, reflecting a tick-up in risk appetite on Friday.
The yield on benchmark 10-year bund yields is 0.005% after turning negative for the first time ever earlier in the week amid heightened investor caution.
10.49am BST
The pound is rising against the dollar and the euro this morning.
Sterling is up 0.4% against the dollar at $1.4254 and up 0.2% against the euro at a1.2672.
10.36am BST
Full story on Christine Lagarde's speech:
Related: IMF chief urges Britain to stay in Europe
10.30am BST
Lagarde's full speech is available here.
She says the UK has benefited from additional jobs and income gains generated from increased trade with the EU as a result of its membership.
This is not trade that would have happened anyway, or trade that has simply been diverted away from other parts of the world.
The formation of the EU and the single market has been instrumental in generating more trade than would otherwise have been the case.
10.21am BST
Lagarde is also making a broader argument for unity in Europe.
Pro Europeans must speak out against the tide of negativity surrounding the European project, she says:
Right now, too many Europeans are worried about their cultural identity, their security, their jobs, incomes, and living standards.
And too many of them are led to believe that things would be better if only Europe returned to closed borders and economic nationalism.
10.05am BST
Christine Lagarde, the head of the International Monetary Fund, has urged the UK to stay in the EU.
Giving an impassioned speech in Vienna, Lagarde said that while the EU was not perfect, Britain had been more successful as a result of its membership.
Membership in the EU has made the UK a richer economy, but it has also made it a more diverse, more exciting, and more creative country.
As in all countries, there are people who are struggling in this new environment, but for the majority of citizens, this has been a great success story.
9.47am BST
Some garden centre news now, as we approach the weekend...
9.35am BST
Connor Campbell, analyst at Spreadex, says the Greek deal is helping to lift investor spirits this morning.
Once again the markets have bounced away from their lows, a solid US session and confirmation of a fresh Greek bailout seemingly lifting investors' spirits.
Jumping by 1% the FTSE enjoyed the recovery from its commodity and finance stocks this Friday, with Brent Crude now back approaching $48 per barrel.
9.30am BST
Christine Lagarde, head of the International Monetary Fund, is in Vienna and will be giving a speech on European unity at 10am UK time.
We will bring you the highlights.
9.14am BST
The bank's are leading the charge on the FTSE this morning. Lloyds Banking Group is the top riser, up 5.5% at 65p.
Biggest risers:
8.56am BST
Markets appear to be taking a breather from Brexit fears today following the suspension of the referendum campaign.
The campaign was suspended on Thursday following the death of Jo Cox, the Labour MP for Batley and Spen.
8.46am BST
Oil prices are climbing this morning, as the fears pervading markets over recent days appear to ease.
Brent crude oil is up 1.6% at $47.96 a barrel.
8.36am BST
The FTSE 100 is back above the 6,000 mark, driven higher by the banks. It's up 74 points.
All major European markets are trading strongly this morning:
8.12am BST
European markets have opened higher, following Wall Street's gains on Thursday.
The FTSE 100 is hovering close to the 6,000 mark, up 0.8% or 48 points at 5,998.
8.02am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Good news for Greece, as its eurozone creditors have agreed to release a a7.5bn (6bn) tranche of funding urgently needed by Athens.
A cycle is ending for the country. The country is entering a stable macroeconomic, fiscal and investment environment.
Continue reading...