Sterling hits two-year low as ministers prepare for Brexit without a business deal

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Boris Johnson may have reached his goal of entering the 10 Downing Street last week, but the financial markets quickly recalled his debut the first week of his tenure as he had a mammoth task ahead of him.

Sterling This morning, the US dollar hit a new two-year low against the US dollar, with a pound buying only $ 1.2358 at the start of the session, after a weekend without Brexit briefs. The pound weakened by 0.12% against the dollar and by 0.1% against the euro.

Ministers prepare to leave the European Union without an agreement on October 31, according to several ministers, the Guardian Rowena Mason reports. Johnson's new adviser on Brexit, Michael Gove, warned that the government was "baduming" that Britain would leave without a deal on Oct. 31 and that it was a "very real prospect."

The stakes are clear for British companies. Carlos Tavares, head of the PSA group, spoke in an interview with the Financial Times last night about the possibility of closing the company's factory in Ellesmere Port, which manufactures Vauxhall Astra cars, if there is a Brexit without agreement that disrupts the exports of the factory. The jobs of 1,000 workers are at stake.

It seems unlikely that the EU is willing to make significant changes to the existing agreement, according to Fernando Barajas, an badyst at Creditsights, a rating agency. "There are few signs" that the threats of lack of agreement have had an impact on the EU's position.

General elections in the short term now seem very likely.

Yet all the political noise did not deter the negotiators in London. Over the weekend, two major mergers were successful. The FTSE 100's Just eat and Dutch Takeaway.com have agreed on a € 8 billion deal to create one of the world's leading takeaway delivery companies. Just Eat faces renewed competition from Amazon-backed Deliveroo and Uber Eats, and some activist investors have been calling for an agreement for some time.

Another big problem on the cards is the London Stock Exchange GroupMerger with the Refinitiv data company, a potential transaction of $ 27 billion. An official announcement of the conditions could happen this week when the LSE publishes the results.

Asian markets were mixed on Monday as Japanese equities weakened, while the Australian benchmark ASX 200 rose 0.95%. However, many investors will pay attention to events later in the week when Federal Reserve should reduce interest rates for the first time in 10 years.

Trade Negotiations to restore relations between the United States and China, one of the most important factors of the Fed's willingness to support the economy, will resume tomorrow, even if few hope for positive development.

L & # 39; s calendar

• 9:30 BST: Consumer Credit of the Bank of England (June)
• 9:30 am BST: Mortgage Approvals from the Bank of England (June)
• 15:30 (Paris time): index of manufacturing by the Dallas Fed (July)