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What to Watch: Metro Bank selling loans, Whirlpool recall, and Iran tensions

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Signage is seen outside of a Metro Bank in London, Britain, May 22, 2019. Photo: REUTERS/Hannah McKay

Here are the top business, market and economic stories you should be watching today in the UK, Europe, and abroad:

Metro Bank selling loans

Embattled lender Metro Bank (MTRO.L) is close to offload a mortgage portfolio worth £500 million as it seeks to raise cash.

Metro Bank confirmed it is close to agreeing a deal with an unnamed US hedge fund. Cerberus Capital Management is tipped to snap up the loan portfolio, according to Sky News.

Metro Bank has been eyeing up ways to improve its financial position following a major accounting error that blew a blackhole in the bank’s balance sheet.

Metro Bank is set to publish its interim results on Wednesday.

Whirlpool recall

Whirlpool (WHR) has recalled around 500,000 tumble dryers after the UK government ordered the group to take action over fire risks.

Whirlpool recalled certain models of Hotpoint, Indesit, Creda, Swan, and Proline dryers that were built between 2004 and 2015. The group said that customers with an affected dryer should unplug it immediately, stop using it, and contact Whirlpool.

The fire risk centres around a fault that allows fluff from clothes to reach heating elements. Last month, the Office for Product Safety and Standards (OPSS) took an "unprecedented" step by ordering the non-governmental company to recall the products.

Iran-UK tensions continue

UK Prime Minister Theresa May will chair a meeting of the emergency COBRA committee on Monday in response to escalating tensions with Iran.

Iran’s Revolutionary Guard announced they had captured a British-flagged tanker on Friday and British-registered ships have been urged to avoid the Strait of Hormuz after the incident.

The shipping route is key to international oil trade, with around 20% of global oil supplies passing through these waters.

Oil prices jumped on Monday, with brent crude futures (BZ=F) up 1.5% to $63.40 a barrel in early trading and West Texas Intermediate crude futures (CL=F) up 1% to $56.20 a barrel.

Hammond vows to quit

The pound was under pressure on Monday after chancellor Philip Hammond vowed to quit if Boris Johnson becomes Prime Minister.

“It’s very important that a prime minister is able to have a chancellor who is closely aligned with him in terms of policy,” Hammond told the BBC’s The Andrew Marr Show on Sunday. “I therefore intend to resign.”

Boris Johnson has signalled he would be willing to take the UK out of Europe without a deal in October if he can’t strike a better withdrawal agreement with the EU. He is the strong favourite to win the race to be the next Prime Minister this week.

Hammond has consistently warned that a no deal Brexit would be disastrous for the British economy and warned last month that it could even risk breaking up with UK.

Home secretary Sajid Javid has emerged as an early favourite to replace Hammond as chancellor.

European markets ‘snooze’ as China explodes

European markets were mixed, with little momentum in most major markets.

“Europeans hit the snooze button, unwilling to get out of bed for what is looking like a pretty boring economic calendar this Monday,” said Connor Campbell, a financial analyst at SpreadEx.

Britain’s FTSE 100 (^FTSE) was up by 0.2% thanks to weakness in the pound, while Germany’s DAX (^GDAXI) was up by 0.1%, France’s CAC 40 (^FCHI) and the Euronext 100 (^N100) were both flat.

Overnight in Asia, Japan’s Nikkei (^N225) closed down by 0.2%, the Hong Kong Hang Seng (^HSI) was down by 1.4%, and China’s Shanghai Composite index (000001.SS) was down by 1.2%.

In Shanghai, the new tech focused Star Market was launched on Monday as a rival to the Nasdaq. Shares in some companies surged as much as 500% at the open.

What to expect in the US

US stocks look set to open in the green later today. S&P500 futures (ES=F) were up by 0.1%, Dow Jones futures (YM=F) were up by 0.1%, and Nasdaq futures (NQ=F) were up by 0.2%.