Yahoo Finance What to watch: Halfords bike surge, pound falls on Brexit, new EU trade chief
Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:
Surge in bike sales boosts bottom line at Halfords
Car and bicycle retailer Halfords (HFD.L) has cheered soaring cycling sales during the coronavirus lockdown, but the boost was not enough to offset tumbling motoring revenues.
The group said like-for-like bike sales jumped 57.1% in the 13 weeks to 3 July as Britons avoided public transport and took to two wheels.
Overall same-store sales dropped 6.5% after it saw trade impacted as cars stayed off the road.
Halfords saw motoring revenues plunge 45.4% in the quarter, though it said the trend is improving as lockdown restrictions ease, with batteries and battery care products in high demand as cars get back on the road.
“Having responded quickly and decisively to cater for the surge in popularity of cycling during lockdown, we are now seeing increased demand for motoring services and products as people start using their cars regularly again, having not done so for the last few months,” said chief executive Graham Stapleton.
Pound's slide continues as UK and EU clash on Brexit
The pound extended its slide against the dollar and euro on Tuesday, as tensions between the UK and EU continued to run high.
Brexit trade talks are set to resume in London on Tuesday, with mistrust and division between the two sides arguably at their highest point since negotiations began at the start of the year.
Jim Reid, a macro strategist at Deutsche Bank, said there had been “a clear escalation in rhetoric” in recent days.
The backdrop left the pound on the back foot. Sterling was down 0.16% against the euro to €1.112 (GBPEUR=X) and down 0.2% against the dollar to $1.3139 (GBPUSD=X) in early trade in London.
The pound had sold-off against both pairings on Monday, amid headlines suggesting Brexit trade talks could collapse.
The Financial Times reported that the UK was planning to table legislation that would break commitments made on Northern Ireland under the Withdrawal Agreement signed with the EU last year.
Valdis Dombrovskis becomes EU trade chief
European Commission president Ursula von der Leyen on Tuesday said that she had appointed Valdis Dombrovskis as the EU’s trade chief, a pivotal role in the bloc amid stalled Brexit negotiations and global trade tensions.
The appointment follows Von der Leyen’s decision to select Mairead McGuinness to fill the vacancy left by Phil Hogan, the Irishman who resigned as trade commissioner after coming under fire for breaching coronavirus restrictions in Ireland.
While McGuinness will take over the bloc’s crucial financial services portfolio, Ireland had been hoping that its nominee would retain the trade role, which is considered one of the most powerful positions in the EU.
Hogan’s appointment to the role, which oversees the sprawling arm of the bloc that negotiates trade deals and commercial policy, had been seen as a powerful signal that the EU would prioritise Ireland’s interests in Brexit negotiations.
Dombrovskis, the former prime minister of Latvia, currently oversees the bloc’s economic and financial affairs policy.
German car chiefs meet government to demand more aid
The heads of Germany’s powerful car companies and automotive suppliers are meeting on Tuesday evening with Angela Merkel’s government to discuss the shaky state of the car sector and what the government needs to do to shore it up.
The topic of support, in the form of subsidies for fossil-fuel cars, is high on the agenda. The government decided against funding buyer premiums on petrol and diesel cars as part of their stimulus package earlier this year, instead opting to increase subsidies on electric and hybrid vehicles.
However, calls are growing for buyers subsidies on internal-combustion-engine (ICE) vehicles too, with many politicians saying it is essential in order to help industry out of its doldrums.
Transport minister Andreas Scheuer, who is demanding a buyers’ premium for internal-combustion cars during the transition to e-cars, told German public radio (DLF) on Tuesday that the government must support the car industry and prevent massive job losses.
Government spends £12.2bn on affordable homes
The UK government has announced plans to build up to 180,000 affordable homes over the next six years, as part of a £12.2bn ($16bn) house-building programme in England.
Around half will be homes for sale, another 40% will be let at “affordable and social rent” and another 10% will be supported housing for people with physical and mental health issues.
But charities warned more homes were needed and must be genuinely affordable to fix a housing crisis, with almost 1.2 million households on social housing waiting lists in England last year.
Housing secretary Robert Jenrick also announced changes to England’s shared ownership schemes, in a bid to increase the number of buyers and make it easier for homeowners to increase their share of a property. Housing policy is devolved in Scotland, Wales, and Northern Ireland.
European stocks fall ahead of Wall Street return from holiday
European stocks fell on Tuesday as investors awaited a return to trading on Wall Street following the US Labor Day holiday weekend.
Tuesday will be the first full day of stock market trading in the US since details of the frenzy in the options markets emerged.
The Financial Times on Friday reported that Japan’s Softbank was the “Nasdaq whale” that stoked a massive rally in technology stocks and left the market vulnerable to a disorderly equities sell-off.
After months of gains, the Nasdaq last week had its worst weekly performance since March.
The pan-European STOXX 600 index (^STOXX) fell by around 1%, while London’s FTSE 100 (^FTSE) declined by around 0.5%.
Germany’s DAX (^GDAXI) was 0.6% in the red, while France’s CAC 40 (^FCHI) was down by around 1.1%.
What to expect in the US
Futures are pointing to a mixed open in the US.
Futures on the S&P 500 (ES=F) fell by around 0.3%, while Dow Jones Industrial Average futures (YM=F) were flat.
Futures on the tech-heavy Nasdaq (NQ=F), meanwhile, fell by 1.5%.
