Stocks shrug off US unrest, China tensions amid easing of Covid-19 lockdowns – business live

Data flash: UK consumer borrowing fell and repayments rose during the Covid-19 lockdown.

Bank of England data shows credit card lending tumbled to -7.8% in April, compared to a year earlier. That is the second straight negative reading and compares to growth of 3.5% in February, before the pandemic hit the UK.

Weak demand overall meant that the annual growth rate for total consumer credit fell below zero to -0.4% year on year, its weakest growth rate since August 2012.

There was also a notable jump in debt repayments. Households repaid £7.4bn of consumer credit, on a net basis in April, which was the the largest net repayment on record. It’s also double the repayments logged in March.

Heathrow Airport’s holding company has been put on credit watch – meaning it will be monitored closely for any changes – by ratings agency Standard & Poor’s.

It comes as the transport hub tries to offset the impact of coronavirus travel restrictions.

Heathrow explained that the agency expects Covid-19 to have a “more severe impact than anticipated on passenger traffic, while recovery to pre-crisis volumes may not occur until at least 2023.”

Heathrow boss Javier Echave said:

We continue taking decisive steps to protect Heathrow’s financial resilience.

In addition to our strong liquidity position, we are reducing our operating costs by at least £300 million, cutting our capital expenditure by over £650 million and adapting our operating model to help us keep Britain’s hub airport open safely and protect vital supply lines throughout this crisis.

We will continue working to maintain investor confidence.

The pound is one of the best performing currencies today.

Cable is at one-month highs at around $1.25, but it has US dollar weakness to thank for its rise.

David Madden, a market analyst at CMC Markets UK, explains:

Sterling has been downbeat recently as there hasn’t been much progress made in relation to the post-transition period [Brexit] agreement, but the pound has popped today.

The US dollar continues to decline. The currency lost ground in the latter half of last week, so now the minor worries about the trade situation with China, along with fears about civil unrest in a number of US cities has put even more pressure on the greenback.

In other housing news, the FCA has announced that it is extending mortgage payment holidays for customers struggling due to the Covid-19 outbreak and lockdown.

Those who have already requested a freeze to payment will have a chance to ask for a partial or full extension for a further three months.

Here are some of the other changes:

• Customers that have not yet had a payment holiday and who experience financial difficulty have until 31 October 2020 to request one.

• The current ban on lender repossessions of homes will be continued to 31 October 2020. This will ensure people are able to comply with the government’s policy to self-isolate if they need to.

• Payment holidays offered under this guidance will not have a negative impact on credit files. However, consumers should remember that lenders may use information obtained from other sources, such as bank account information, in their lending decisions.

Germany has opened for trading and the DAX has shot past its European peers, jumping 2.5% to its highest level since 5 March.

Seems there’s still appetite for equities this morning. Here’s how Europe is looking at the open:

• FTSE 100 is up 0.5%
• France’s CAC 40 is up 0.8%
• Spain’s IBEX is up 0.6%

We’re still waiting for a print for the German DAX, which was closed for the Whitsun holiday on Monday.

Howard Archer, chief economic advisor to the EY ITEM Club, notes that this is the first time that the coronavirus restrictions would have been reflected in the Nationwide house price index.

Worth remembering (for anyone who didn’t try to move) that the UK lockdown brought the housing market to an abrupt standstill.

House moves were banned apart from those that were “reasonably necessary,” estate agents were banned from listing new properties and house hunters were only able to do virtual viewings. After seven weeks of lockdown the housing market reopened in mid-May.

Good morning and welcome to our rolling coverage of the world economy, the financial markets, eurozone and business

It’s hard to believe that during a global pandemic, when protests are raging across the US over the killing of George Floyd and geopolitical tensions are simmering over China’s control of Hong Kong, that investors would still be flocking to the equity market. But here we are.

Stocks in the US closed higher overnight, with the S&P and Dow up around 0.35% each, even as president Donald Trump threatened to deploy the United States military to American cities to quell civil unrest.

Asian markets also continued their upward march, with the Hang Send up 0.7%, Japan’s Nikkei 225 up nearly 1.2% and the Shanghai Stock Exchange rising 0.2%. Europe is expected to follow suit.

As Michael Hewson, chief market analyst at CMC Markets UK, explains:

The main focus once again appeared on the longer-term prospects of the easing of lockdowns across the world, though if the violence on US streets continues for much longer US investors might have to cope with a lockdown of a different kind, imposed by the National Guard.

This is something that President Trump hinted he might well do if the various states aren’t able to contain the outbreaks of violence across US cities.

A deluge of PMI data on Monday also seems to have buoyed sentiment, including those in Italy which were much better than expected given the impact that Covid-19 and the resulting lockdown had on the country’s economy.

But as Hewson points out, even as lockdowns ease across Asia and Europe there is an “undercurrent of anxiety” that some countries might be leaving their coronavirus lockdowns too quickly ,which could put some populations at risk of a second wave of infections.

However, that is not expected to impact the positive open across major European indices, at least not this morning. We’ll bring you that print once trading begins.

The agenda:

• 9.30am BST: UK mortgage approvals, net mortgage lending, and consumer credit for April