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What to Watch: European stocks hit two-year low and UK's US and Saudi trade talks

Here’s a daily overview of the top business and economic developments the Yahoo Finance UK team is monitoring in the UK, Europe and abroad:

European stocks hit lowest level since 2016

Major European exchanges underwent heavy selling in early trading, following the sharp sell-off across Asian markets.

Alongside US futures, the UK’s FTSE (^FTSE), Germany’s DAX (^GDAXI), and France’s CAC (^FCHI) were all down at least 1% after the global equity selloff resumed.

Investors sought shelter in safe-haven assets, pushing up prices of the yen, gold and Treasuries.

“Global financial markets continue to struggle to rally as various geopolitical concerns weigh on investor confidence,” Nick Twidale, chief operating officer at Rakuten Securities Australia said in a note to clients.

LCG analyst Jasper Lawler said similar in his note: “Risk off the table as geopolitical tensions remain.”

READ MORE: Stock slump deepens as investors flock to havens

The UK dangles a US trade deal

Britain’s international trade secretary Liam Fox claims that US President Donald Trump is “very keen” to do a trade deal. His comments follows the Trump administration’s statement in Congress that it planned to start formal talks with the UK after it leaves the European Union.

Staunch Brexiteers for years have tried to “sell” a hard Brexit by highlighting that it will allow Britain to seal its own global trade deals with the likes of the US, China, and Japan without any intervention from other countries, such as those in the EU. That’s because if it was part of the bloc, it would be prevented in seeking side deals to the ones that all member states would have to collectively decide upon.

If Britain left the EU but still remained in the single market or customs union, it would not be able to pursue a trade deal with the US like this because it would still have to adhere to the bloc’s trading rules.

READ MORE: A no-deal Brexit won’t mean that a UK-US trade pact is going to happen anytime soon

Britain is still on a trade mission to Saudi Arabia

Britain is still going ahead with its tech trade mission to Saudi Arabia despite the global dispute with the nation over the death of journalist Jamal Khashoggi.

The UK Technology & Smart Cities Delegation will still head to Jeddah and Riyadh for an event organised by the Saudi British Joint Business Council from 18-21 November. This is with support from the UK government.

Over the weekend, Saudi Arabia said that Khashoggi was murdered but blamed a “rogue operation” for his killing. Saudi’s foreign Minister Adel al-Jubeir told Fox News the act was a “tremendous mistake.”

Khashoggi was a prominent critic of Saudi’s authoritarian regime and was last seen entering the Saudi consulate in Istanbul on 2 October. Al-Jubeir denied Crown Prince Mohammed bin Salman Al Saud had ordered the killing.

Business leaders and politicians around the world have pulled out of Saudi Arabia’s Future Investment Initiative this week and investors have withdrawn $1.1bn from the Saudi market in response to the murder.

But economist Cornelia Meyer of Meyer Resources told BBC’s Wake Up To Money programme this morning that “Saudi Arabia is more than just about money. When governments look at things, Saudi Arabia has been a very good ally to the West.”

READ MORE: Global investors pull $1.1bn from Saudi Arabia over Khashoggi ‘murder’

Whitbread eyes pod hotels after Costa sale

Photo: Whitbread
Photo: Whitbread

Whitbread (WTB.L) shares fall after the leisure group, which recently sold its coffee chain Costa to Coca-Cola for $5.1bn, reported a modest rise in profits in the first half of the year and warned on Brexit headwinds.

It said it would focus on expanding its hotel business after its Costa sale.

It is doing this by launching a no-frills hotel chain with small pod-style rooms located on the outskirts of major towns and cities. Rooms will cost from £19 a night and be less than half the size of a standard Premier Inn room.

READ MORE: Coca-Cola gets shareholder approval to buy UK coffee chain Costa

Harry Potter boosts Bloomsbury

The publishers of Harry Potter is “back on track to achieve the board’s expectations for the full year.”

The group reported a 4% rise in revenue to £75.3m. However, it clocked pre-tax profit at £1.6m, which is slightly down from the £1.7m it posted in the same period in last year.

Sales in JK Rowling’s Harry Potter series grew by 5% in the first half of the year, ahead of the franchise’s twentieth anniversary. The author also provided the company a boost with her illustrated version of The Tales of Beedle the Bard by JK Rowling.