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May Said to Offer No Brexit Favors for London Banks

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The pound slides to three-decade low, the odds of a Fed hike in 2016 rise, and India delivers a surprise rate cut. Here are some of the things people in markets are talking about today.

Pound tumbles 

The British pound is falling for a second day, reaching the lowest level since 1985 to trade at $1.2753 by 6:00 a.m. ET. The latest selloff comes as senior figures in Theresa May's government said that the administration would refuse to prioritize the U.K. financial sector in Brexit negotiations. As the pound slides, London-listed stocks rise, with the FTSE 100 Index adding 1.5 percent to climb above the 7,000 level for the first time in 16 months this morning. 

Dollar gains

The slide in the pound is not just a domestic U.K. issue, as the dollar is also climbing this morning. Positive U.S. manufacturing data yesterday pushed Treasuries lower before Federal Reserve Bank of Cleveland President Loretta Mester, who voted for a rate rise at September's meeting, said that the case for a rate hike in November would "remain compelling" in a Bloomberg television interview. The futures-implied probability of a rate hike happening by the end of the year is at 61 percent this morning. 

India's new central bankers cut rates

In a surprise move, India's central bank cut its benchmark rate by 25 basis point to 6.25 percent. This was the first decision by the new six-member monetary policy panel established under Governor Urjit Patel who replaced Raghuram Rajan at the helm last month. There was also a debut decision from Reserve Bank of Australia Governor Philip Lowe who took the reins at the bank two weeks ago. He decided to keep rates unchanged.

Markets rise

Overnight, the MSCI Asia Pacific Index added 0.2 percent with Japan's Topix index rising 0.7 percent as the yen weakened. In Europe, the Stoxx 600 Index was 0.7 percent higher at 6:13 a.m. ET, as the market gauge goes for a sixth straight day without losses. S&P 500 futures gained 0.3 percent.

VP debate

The only vice-presidential debate of the election cycle is on tonight, with Democrat Tim Kaine and Republican Mike Pence facing off for 90 minutes at Longwood University in Farmville, Virginia. With Republican nominee Donald Trump under pressure after a bad week, Mike Pence will be battling  to turn the tide against Hillary Clinton.

What we've been reading 

This is what's caught our eye over the last 24 hours.

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