FTSE 100 hits six-month high as pound slides - as it happened
Britain's blue-chip share index has risen over 7,500 points, but Brexit anxiety is pushing sterling down
Earlier:
9.17pm BST
A late PS: Wall Street has closed at a record high, for the first time since last autumn.
The S&P 500, and the Nasdaq index, both ended at their highest ever levels, with consumer goods firms and healthcare providers leading the way.
The S&P 500 and Nasdaq both closed at record highs today. The S&P 500 closed at 2,933.62, breaking the previous record of 2,930.75. https://t.co/POhGzsss01 pic.twitter.com/CmHnFsPMBO
7.06pm BST
Donald Trump's decision to ratchet up the oil sanctions on Iran could backfire, suspects our economics editor Larry Elliott.
He reckons Brent crude could keep rising, and touch $80 per barrel in coming weeks. It could even hit $100 if Iran responds by disrupting the oil market.
Tehran has responded to the US action by pledging to close the Strait of Hormuz, through which oil is shipped from all the major Middle Eastern suppliers, including Saudi Arabia, Kuwait, Iraq and the United Arab Emirates. Were that to happen, the oil price would quickly shoot above $100 a barrel.
Then there's the fact that Trump is in effect telling China - the biggest importer of Iranian oil - that it can only do business with certain countries with the prior approval of Washington DC. That has more than a hint of imperialistic hubris about it and would be asking for trouble at the best of times. It is plain daft to be laying down the law to Beijing when the two countries are trying to avert a full-scale trade war.
Related: Ending the Iranian sanctions waiver could be own goal for Trump
7.03pm BST
Here's our news story about Harley-Davidson's results, and president Trump's trade war threat towards Europe...
Related: Trump makes U-turn to support Harley-Davidson as profits fall amid tariff war
5.33pm BST
A late burst of share buying has helped the FTSE 100 to end the day 63 points higher at 7,523.
That's a gain of 0.85%, and its highest closing level since the end of last October.
A strong day for the UK FTSE 100 as it passes 7500 helped by the oil price with BP up 2.6% at 582.5 pence
3.50pm BST
European stock markets have shaken off their earlier losses too, thanks to the euro weakening against the US dollar.
The pan-European Stoxx 600 index is now up 0.2% at 391 points, its highest level since last August.
Having spent the morning caught between the gains made by its oil stocks, and the losses incurred in the banking, mining and airline sectors, the FTSE was eventually tipped into positive territory by a sharp plunge from the pound.
Sterling dropped 0.3% against the dollar, causing cable to strike a 2-month low of $1.294 on a mixture of the greenback's strength - it's also up 0.6% against the euro - and fears over a potential vote on the Brexit withdrawal and implementation bill next week. Those losses helped send the FTSE 0.3% higher, allowing the index to cross 7500 for the first time in nearly 7 months.
3.38pm BST
The dollar is continuing to strengthen, knocking sterling down further....
Pound tumbling https://t.co/3LSenvhQGZ
3.27pm BST
Just in: Europe's consumers became a little gloomier this month.
The European Commission's gauge of eurozone consumer confidence fell to -7.9 this month, down from 7.0 in March. The broader EU-wide measure also dipped.
In April 2019, the DG ECFIN flash estimate of the consumer confidence indicator dropped in the euro area (0.7 points) & the EU (0.6 points).
At a'7.9 and a'7.7, both indicators remain well above their respective long-term averages of a'11.3 and a'10.4
aihttps://t.co/9DX5vRkSlp pic.twitter.com/yL3J98APSh
3.08pm BST
Analysts at Royal Bank of Canada have warned clients that the pound is still vulnerable to political uncertainty (as we've seen today).
Talks on finding a Brexit compromise between the government and opposition Labour Party recommence today as the UK parliament returns from its Easter break. Meanwhile pressure from within the Conservative Party for PM May to resign is growing.
The 1922 backbench committee is set to meet today with ITV news reporting that its chair, Graham Brady, is planning to tell May that she must resign before the end of June.
3.03pm BST
The FTSE 100 has burst through the 7,500 point mark for the first time since the first week of October.
Multinational companies have been lifted by the fall in the pound today, which makes overseas earnings more valuable in sterling terms. So Coca Cola (+2%), publishing firm Pearson (+2.9%) and pharmaceuticals firm Hikma (+2.6%) are among the risers.
#ftse100 breaks through 7,500 points as #oil shares gain, reclaiming October 2018 levels - daily chart resembling Loch Ness Monster (perhaps) https://t.co/Wz8UB9CSGe pic.twitter.com/TDOmUQbYWb
While a melt-up in equities - as recently predicted by Blackrock CEO Larry Fink - to our mind continues to look rather unlikely, markets could well hold onto recent gains. Even if equities don't see any further price gains, they have some attraction just because of their dividend yield. The FTSE 100 currently pays a dividend of 4.3%, well above the 1-2% returns available for UK investors from cash or gilts.
2.56pm BST
Sterling has just fallen to a two-month low, as the surge in the US dollar drives other currencies down.
The pound has dropped by a third of a cent to $1.2955, its lowest level since mid-December.
Theresa May plans another #Brexit vote next weekhttps://t.co/abc58pMDbd
A reminder
-May's deal: loses by 230 - Janaury 15
-May's deal: loses by 149 - March 12
-May deal: loses by 58 - March 29
Related: MPs may vote on key Brexit legislation next week
2.47pm BST
2.17pm BST
The strengthening US dollar is pulling the oil price down from this morning's highs ($74.70/barrel).
Brent crude is now trading around $74.17 per barrel, so still two dollars per barrel higher than late last week, before the US's announcement on Iran.
#Oil prices hit highest since Nov after#US ends waiver on #Iran oil imports from next wee.
Brent ai to $74.70, a level not seen since Nov. 1, before paring gains as mkt gained confidence that global supply would remain robust By 1255 GMT Brent $74.12, up 8 cent #OOTT
"Brent crude is now almost 50 per cent above late December's 17-month low, as the Opec cartel of oil producers have cut production, and sanctions on Iran and Venezuela have tightened supply in global markets." https://t.co/8vvNMpYrVg pic.twitter.com/vapeDeejdj
2.15pm BST
The US dollar is rallying this morning, pushing some commodity prices (such as gold) into the red.
With the US economy "ticking along nicely", the greenback is likely to remain in demand, predicts David Madden of CMC Markets.
A big move in the US dollar over the past hour. Pushes gold down to fresh lows for 2019 - is the recovery going to resume?: pic.twitter.com/60xKjO8bhH
1.34pm BST
Another US company, Twitter, has also beaten expectations....despite criticism from the White House.
The social media firm has posted an 18% jump in revenues for the last quarter, thanks to an 11% increase in users, to 134 million.
Twitter ended its reporting of monthly active users (MAU) on a high note, with its MAUs rising quarter-over-quarter for the first time since at least Q1 2018.
Twitter's decision to share only monetizable daily active users (mDAUs) going forward is in keeping with its value proposition to advertisers - a committed though not very large user base when compared with other social platforms.
"The best thing ever to happen to Twitter is Donald Trump." @MariaBartiromo So true, but they don't treat me well as a Republican. Very discriminatory, hard for people to sign on. Constantly taking people off list. Big complaints from many people. Different names-over 100 M.....
.....But should be much higher than that if Twitter wasn't playing their political games. No wonder Congress wants to get involved - and they should. Must be more, and fairer, companies to get out the WORD!
1.13pm BST
Awkwardly for Donald Trump, Harley Davidson's decision to move manufacturing out of America appears to be paying off.
The company started supplying motorcycles to ASEAN (Association of Southeast Asian Nations) emerging markets from its Thailand operations in late 2018.
The tariff mitigation realized by this strategy allowed more competitive pricing and helped drive a Q1 retail sales increase of 126 percent in these markets.
12.52pm BST
Political scientist Marcel Dirsus says president Trump should take responsibility for the tariffs imposed on US companies such as Harley....
You will reciprocate? The tariffs that Harley Davidson is struggling with were introduced by Europe IN REACTION to the tariffs YOU IMPOSED on European steel and aluminium. This is your doing! Unbelievable. https://t.co/IYb4orASg1
Most of the EU tariffs on Harley Davidson are retaliation for the president's own tariffs on imported steel and aluminum. Before Trump imposed those tariffs, Harley bikes sold in Europe faced a tariff of just 6%. https://t.co/n7jIC2ke37
12.25pm BST
Newsflash: Donald Trump has just threatened to hit Europe with fresh tariffs, over their "unfair" treatment of motorbike maker Harley Davidson.
"Harley Davidson has struggled with Tariffs with the EU, currently paying 31%. They've had to move production overseas to try and offset some of that Tariff that they've been hit with which will rise to 66% in June of 2021." @MariaBartiromo So unfair to U.S. We will Reciprocate!
Many @harleydavidson owners plan to boycott the company if manufacturing moves overseas. Great! Most other companies are coming in our direction, including Harley competitors. A really bad move! U.S. will soon have a level playing field, or better.
12.07pm BST
Phillip Inman, economics writer for the Guardian, has looked at the IHS Markit Household Finances Index, out this morning, and found it contains more evidence of rising incomes from employment feeding higher levels of consumer confidence.
Households reported the strongest rise in wages during April since the index began in 2009. The index for wages increased to 53.1 from 51.1 in March.The compilers of the index said the increase in wages income tracked the rise in official figures from the Office for National Statistics, which showed average weekly earnings, including bonuses, rose by 3.5% on the year in the three months to February. This was the fastest level of pay growth in a decade.
"The bright spot for the UK in recent months has been the resilience of its labour market, and latest survey data from households revealed that some of the positivity seen in the hard numbers has filtered through to sentiment and is supporting household finances.
"Income from employment grew at its fastest pace since the survey started in 2009, corroborating with the pick-up seen in official wages data.
11.45am BST
Higher oil costs eat into airline profits, so it's not surprising to see easyJet (-4%) and IAG (owner of British Airways) (-3.3%) at the bottom of the FTSE 100.
11.13am BST
The jump in oil stocks means Britain's FTSE 100 is holding onto its six-month high, but other European markets have dipped.
The lack of direction at the start of the week isn't surprising given the quiet bank holiday weekend but thankfully, things should pick up. Earnings season has got off to a better than expected start and we have a large number of companies reporting over the next few days.
It's still expected to be a challenging quarter for the corporates but the bar has been sufficiently lowered which may allow them to get through the season relatively unscathed. We're certainly off to a good start on that front with US markets very close to record highs.
10.49am BST
Peter Kiernan, lead energy analyst at the Economist Intelligence Unit, argues that Donald Trump is taking a risk by escalating the sanctions on Iran.
The Trump administration is banking on being able to curtail Iran's oil export revenue as much as possible, while hoping that the impact on the oil market will be limited by Saudi Arabia being able to release additional supply. Trump officials say it is seeking to maximise pressure on Iran until it returns to the negotiating table.
However, many of the political demands the Trump administration has on Iran, which go well beyond the nuclear issue, are unlikely to be conceded by the Islamic Republic, meaning that a long standoff is on the cards.
10.36am BST
As the largest purchaser of Iranian oil, China has, predictably, not taken America's move well.
Foreign ministry spokesman Geng Shuang on Tuesday said the U.S. is operating outside its jurisdiction in unilaterally imposing the sanctions. He said normal interactions between Iran and other countries are "reasonable and lawful" and deserving of respect and protection.
Shuang said China will continue to work to safeguard its companies' interests, reflecting its desire to secure foreign markets as it pursues its massive "Belt-and-Road" infrastructure initiative.
10.18am BST
Saudi Arabia's foreign minister has welcomed America's move to toughen Iran's oil sanctions, saying it should rein in Tehran.
Ibrahim al-Assaf told state media:
"Saudi Arabia fully supports this step taken by the United States as it is necessary to force the Iranian regime to end its policy of destabilising stability and its support and sponsorship of terrorism around the world."
9.53am BST
The Trump administration's "not so invisible hand" is pushing the oil price higher today, says analyst Stephen Innes.
He argues that the White House wants to pick a fight with Iran ahead of next year's elections.
Admittedly I'm feeling a tad naive this morning for not picking stronger signals from both Pompeo and Bolton with regards to Iran policy.
This despite the fact I thought a large part of the Trump election 2020 strategy would not only see the President appeal to his electorate base but of course present to the media a new villain since China will probably no longer fit the bill after a watered-down USMCA-style trade deal is signed. Well, it appears that the new villain is neither new nor surprising and was under our nose all the time.
9.17am BST
Americans won't welcome the prospect of higher gasoline bills. So, with the next election on the horizon, why is Donald Trump risking a backlash at the pumps?
Suzanne Maloney, deputy director at Brookings Foreign Policy, believes the Trump White House wants to deal "a death blow" to the Tehran administration. But such a move risks destabilising the Middle East.
The past decade has demonstrated emphatically that Washington can decimate the Iranian economy and that the international community has neither the recourse nor the incentive to wholly forestall that outcome. However, there is simply no precedent for an externally-driven economic implosion to trigger a successful transition away from a well-entrenched authoritarian regime toward a durable democracy or enhanced regional stability.
And there is even less reason to believe that the current constellation of American decisionmakers has engaged in a prudent consideration of the second and third-order consequences to U.S. interests and allies that may flow from its escalation of economic warfare against Iran. General Alireza Tangsiri, commander of Iran's Islamic Revolutionary Guard Navy, today reiterated the energy security formula that Tehran has observed for the past 30 years, warning that if Iran is prevented from exporting oil, its neighbours will face similar impediments...
As Trump moves to cut off Iran's oil revenues, what's his endgame? My take via @BrookingsInst https://t.co/8tjDo4NroJ
8.57am BST
Britain's blue-chip index of top shares has hit a new six-month high.
8.45am BST
A total Iranian oil embargo would have a noticable impact on global crude production.
Iran is thought to have produced around 1.7 million barrels of oil per day in March, out of a global market of some 80 million bpd.
8.36am BST
Iran has responded to America's move by threatening to close the Strait of Hormuz (the narrow point between the Persian Gulf and the Gulf of Oman, stretching from Iran's southern border to the United Arab Emirates).
Here's a picture, for those who skipped geography class.
8.18am BST
Shares in energy companies have jumped in early trading, as the City reacts to the US crackdown on Iran.
Royal Dutch Shell is leading the FTSE 100 risers, up 2%, closely followed by BP (+1.6%).
Suddenly we're back to supply uncertainty being a graver threat than demand uncertainty. This risks a very real prospect of an abrupt spike in prices if there is not enough supply to fill the gap. It is no guarantee that Saudi Arabia can simply open the taps, moreover having made that mistake last year ahead of the sanctions being imposed, the country will seek clear evidence that it needs to raise output before doing so.
Risks seem skewed to the upside for oil and we may see a pop higher still.
8.08am BST
America's goal is to impose a total oil embargo on Iran, explains my colleague Julian Borger.
"Today I am announcing that we will no longer grant any exemptions," Mike Pompeo, the secretary of state, said. "We're going to zero. We will continue to enforce sanctions and monitor compliance. Any nation or entity interacting with Iran should do its diligence and err on the side of caution. The risks are simply not going to be worth the benefits."
Neither Pompeo nor senior state department officials would say whether sanctions would be immediately imposed on the affected countries on 3 May, if oil purchases continued.
Related: US toughens stance on Iran, ending exemptions from oil sanctions
7.57am BST
The sanctions squeeze on Iran has driven US crude oil over $66 per barrel for the first time since the start of November 2018.
That mirrors the rise in Brent crude (sourced from the North Sea).
7.49am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
"This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue.
"The U.S., Saudi Arabia and the United Arab Emirates, three of the world's great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied.
White House statement from the Press Secretary on cooperation between the United States, Saudi Arabia, & the United Arab Emirates on Energy and Iran Policies.
( $WTI $BRENT $XLE all higher ) pic.twitter.com/CLBVl73sWi
European Opening Calls:#FTSE 7492 +0.44%#DAX 12244 +0.18%#CAC 5584 +0.06%#MIB 21913 -0.20%#IBEX 9591 +0.09%
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