Yahoo Finance What to Watch: Theresa May's confidence vote pound rises, stocks surge
Here are the top business, market and economic stories you should be watching today in the UK, Europe and abroad:
Theresa May facing leadership challenge
British prime minister Theresa May vowed on Wednesday to fight back as some of her Conservative party members look to oust her in a formal vote of confidence this evening. She warned a leadership change now would delay or even imperil Britain’s planned divorce from the European Union, which is scheduled for 29 March.
The fate of Brexit has been thrown up in the air by May’s failure to sell her divorce deal to British members of parliament.
Speaking outside her Downing Street residence, May said she would fight for her job with everything she has got.
RELATED: British businesses are triggering their Brexit contingency plans
Pound reaction
The pound jumped a bit against the US dollar (GBPUSD=X) to trade around $1.25 in the wake of the announcement of the leadership challenge, scheduled for Wednesday evening. It also climbed a tad against the euro (GBPEUR=X) to trade near €1.11.
However, currency strategists are expecting further downward pressure on the pound in the coming weeks and months.
“There are generally so many concerns around the broad political landscape with Brexit and also domestically in the UK, that it concludes with a vision that there is no light at the end of the tunnel for the British pound,” said Jameel Ahmad, global head of currency strategy at the brokerage firm FXTM.
Rebound for stocks and oil
European stock markets were unfazed by the political turmoil, with both the FTSE 100 (^FTSE) and FTSE 250 (^FTMC) in London notching gains of about 0.8% and 0.5% in morning trading.
Meanwhile, the CAC 40 (^FCHI) in Paris was surging by 1.3% in morning trading and the DAX (^GDAXI) in Frankfurt was rising by about 0.8%.
Stock markets were rebounding as US-China trade tensions eased a bit. They were also up based on expectations that oil output cuts in 2019 would stabilise the supply-demand balance in energy markets. Brent crude (BZ=F) and WTI crude futures (CL=F) were both rising by about 2% in morning trading.
US stock futures were rising on Wednesday morning, with the Nasdaq (NQ=F) setting itself up for a 1% jump at the open. The S&P 500 (ES=F) and Dow Jones industrial average (YM=F) were not far behind.
Superdry struggles
Superdry (SDRY.L) shares plunged by about 30% on Wednesday after the British fashion chain warned on profits for the second time in less than three months, blaming unusually warm weather for hitting sales of winter jackets and sweaters.
The company, which has been striving to reduce its reliance on winter clothing, said it would look at closing or relocating stores and renegotiating rent to save money.
The warning came as bigger rival Inditex (ITX.MC) also blamed an abnormally warm September in part for missing third-quarter profit forecasts. Inditex owns retail brands including Zara and Massimo Dutti.
With files from Reuters
