Euro dips further as French central bank chief warns the country risks being ‘strangled by interest rates’ – business live

Euro extends last week’s 1.2% drop amid French debt fears and political uncertainty in Europe

Key events13m agoClarkson shares jump after profit upgrade amid 'record' freight rates in some areas22m agoEuropean stock markets rise while government bond yields retreat37m agoBrent crude drops below $100 a barrel after Saudi oil price cut1h agoFTSE 100 firm Informa to buy UK events group Clarion for £2.2bn1h agoGerman factory orders slump in August2h agoIntroduction: Euro dips further as French central bank chief warns the country risks being ‘strangled by interest rates’ The Banque de France, the French central bank in Paris. Photograph: Joly Victor/ABACA/ShutterstockView image in fullscreenThe Banque de France, the French central bank in Paris. Photograph: Joly Victor/ABACA/ShutterstockKey events13m agoClarkson shares jump after profit upgrade amid 'record' freight rates in some areas22m agoEuropean stock markets rise while government bond yields retreat37m agoBrent crude drops below $100 a barrel after Saudi oil price cut1h agoFTSE 100 firm Informa to buy UK events group Clarion for £2.2bn1h agoGerman factory orders slump in August2h agoIntroduction: Euro dips further as French central bank chief warns the country risks being ‘strangled by interest rates’Shares in Clarkson jumped after the world’s largest shipping services provider upgraded its profit forecast, boosted ⁠by ​elevated freight rates amid geopolitical tensions.

While the environment remains “very volatile,” the company said it ⁠expected underlying profit before tax this year to be “not ​less than £135m” – above ‌analysts’ predictions of £115.2m, and ‌49% higher than last year.

The Clarkson share price rose 6.8% on the news.

Higher freight rates triggered by the Middle East conflict and the strait of Hormuz closure have benefited the company, which ‌posted record first-half profits in August.

The company reported strong ​trading in August and September, and said it had seen “record freight rates” in some areas. Its broking division delivered revenues significantly ahead of previous estimates, it said.

double quotation markThe ongoing geopolitical complexity has created further volatility across commodity and freight markets, accordingly in some areas we have seen record freight rates and this has also then passed through to asset prices.

European shares are rising while government bond yields retreated, after soaring to multi-decade highs last week.

The pan-European Stoxx 600 index rose 0.8%, on track for a third session of share gains. In London, the FTSE 100 index advanced 82 points, or 0.8%, to 10,580.

The Danish biotech company Genmab is leading gains, up 8.1%, after it said that their blood cancer drug combination with US drugmaker AbbVie reduced the risk of disease progression or death in a late-stage clinical study.

Epcoritamab, jointly ‌developed ⁠by the two companies to treat patients newly diagnosed with ‌a type of lymphoma, is an immune-based therapy that helps the body’s T cells attack cancer cells

The combination treatment reduced the risk ​of disease progression or death by 51% in newly diagnosed patients compared with the current standard treatment, R-CHOP, alone.

Germany’s Dax rose 0.7%, France’s CAC added 0.5%, Italy’s FTSE MiB gained 1.1% and Spain’s Ibex climbed 0.9%.

On bond markets, the UK’s 10-year benchmark gilt yield dropped 6.5 basis points to 5.36%, while the 30-year yield fell a similar amount to 5.88%, bringing some relief to Andy Burnham’s government ahead of the budget on 28 October.

Oil prices have continued to fall, dropping below $100 a barrel.

Brent crude, the global benchmark, fell as low as $99.38 a barrel, and is now at $99.54 a barrel, down 0.8%. US light crude dropped more, 1.2% to $88.34 a barrel.

Saudi Arabia unexpectedly cut its oil prices for sale to Asia in ‌November to six-year lows while raising them for northwest Europe and the Mediterranean, according to Reuters, which got hold of a pricing document on Monday.

The largest crude exporter in the Middle East set the November Arab Light crude oil official selling price to Asia at $5 a barrel below the average of Oman and ​Dubai prices, down $3 from the previous month. The discount for November is the widest since June 2020, Reuters ​data showed.

Speaking to reporters on the South Lawn of the White House, Donald Trump said on Monday that he is “always” open to direct talks with Iran, while tensions between Washington and Tehran remain high.

Informa, the FTSE 100 events business, has struck a £2.2bn deal to buy the US events organiser Clarion from the private equity firm Blackstone.

The £2bn takeover will add more than 100 events to Informa’s portfolio – from the defence and security exhibit DSEI held at London’s ExCel, to the comic book and pop culture themed AwesomeCon in Washington.

View image in fullscreenA person dressed as a robot attends the 2022 Awesome Con comic convention at the Walter E. Washington Convention Center in Washington, D.C. Photograph: Bryan Olin Dozier/NurPhoto/REX/ShutterstockStephen Carter, Informa’s chief executive, said the company was “accelerating the focus” on its core trade events business, as it also laid out plans to spin off its academic publishing arm, Taylor & Francis.

Informa told investors that in order to fund the Clarion deal, it will raise £940m through a share placing, which will include a £250m offer for armchair investors through the broker RetailBook.

The FTSE 100 group has struggled this year, with its shares slipping by 1%, as it was forced to reschedule several key events in the Middle East due to conflict in the region.

Last year Carter moved his residency from the UK to the UAE. Informa makes more than a third of its revenue in India, the Middle East and Asia. Its joint venture in Saudi Arabia, Tahaluf, makes annual revenue of more than $250m.

In Germany, manufacturing orders slumped in August, falling more than expected.

Factory orders tumbled 10.6% from the previous month, according to the federal statistics office, but were up 2.7% compared with August last year.

The main reason behind the monthly drop was a sharp decline in the “manufacture of other transport equipment” sector – aircraft, ships, trains, military vehicles, where new orders plummeted 61.5% after more than doubling in July due to an exceptionally high volume of large-scale orders in the manufacture of ships, railway rolling stock and aircraft.

In the three months to August, new orders rose 1.3% compared with the previous three months.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The euro remains under pressure amid French debt fears and political uncertainty across Europe, trading near a 17-month low against the dollar, down 0.13% to $1.1206.

The single currency has extended its 1.2% drop last week, and is down more than 4% this year, as investors worry that France’s high debt burden could threaten the stability of the wider eurozone. The head of the French central bank has warned that the country risks being “strangled by interest rates” if it does not get to grips with its deficit.

Emmanuel Moulin, the governor of the Banque de France, told the Financial Times that the eurozone’s second-largest economy could win back investor confidence despite the “serious and worrying” moves on sovereign debt markets in recent days.

double quotation markFrance is not Greece during the eurozone crisis. If it can pass a budget this year to reduce spending and narrow the deficit as the government has proposed, then markets will be reassured by this concrete step of fiscal consolidation.

double quotation markIf we don’t act, there is indeed a risk of being gradually strangled by rising interest rates. We have to remain masters of our own destiny.

The French government is battling to control its stretched public finances in the run-up to next year’s presidential election, with teachers, students nurses and civil servants protesting against budget cuts.

Read moreA sell-off in French bonds, sending their yields soaring last week, eased on Monday. The interest rate that France pays to borrow over safer German debt on benchmark 10-year bonds, called the spread, widened, but then tightened again.

Mohit Kumar, chief European economist at Jefferies, said:

double quotation markFrench [bond] spreads have tightened in the last two sessions, falling from an intra day high of over 150 basis points to 136bp currently. We don’t think that we are in a sovereign crisis.

Our fear is that as spreads move above 150bp, we could see some contagion risks not just to other French names, but also onto European peripherals. We have highlighted a number of times that deficit concerns should be a greater risk for investors than near term inflation. Market is going after the weakest link in the deficit picture which is France and the UK.

Asian stock markets rose, after a rally in technology stocks lifted the Nasdaq on Wall Street to a record close; supported by weaker-than-expected US jobs growth which dampened expectations of an interest hike from the Federal Reserve this month. Oil prices also retreated. However, US 10-year and 30-year Treasury bond yields hit fresh 24-year highs overnight.

AI heavyweight Nvidia gained 2.1% to a record closing high, lifting its market value to $5.76tn.

MSCI’s broadest index of Asia-Pacific shares excluding Japan climbed 1.2%. Japan’s Nikkei added 1.1%.

8.30am BST: Eurozone S&P Global Construction survey for September

9.30am BST: UK S&P Global Construction PMI for September

10am BST: Eurozone retail sales for August

11am BST: Financial Conduct Authority annual meeting in Edinburgh

1.15pm BST: US ADP employment change weekly data