David Madden of CMC Markets reckons some bargain hunting has pushed shares up today.

Stocks in Europe are driving higher as bargain hunters have swooped in to take advantage of the relatively low prices in the wake of yesterday’s heavy sell-off. There hasn’t been any major positive news in the past 24 hours, but the turnaround in sentiment in the US tech sector has influenced the mood in Europe.

Recently, any big sell-offs in Europe have been driven by the moves in the US tech sector, so now that some calm has been restored over there, things are on the up here.

The pound’s recovery against the dollar came as opposition to the government’s Internal Market bill mounted.

Former PM Sir John Major has delivered a stinging rebuke, saying the UK cannot afford the consequences of deliberately breaching the Brexit withdrawal agreement:

Such opposition is significant,as the bill has to be approved by both houses of parliament - and some Conservative MPs have also voiced serious concerns.

Despite recovering against the US dollar, the pound is still down at a six-week low against the euro, at €1.099.

That’s because the euro is strengthening, following a Bloomberg report that new growth and inflation forecasts due from European Central Bank tomorrow will show little change compared to June’s.

That has dampened expectations that the ECB could ease monetary policy at tomorrow’s meeting (which would weaken the euro).

Stocks are pushing higher in London, even though the pound has also recovered from those earlier lows.

The FTSE 100 index had risen by 90 points now, back over the 6,000 point mark, with telecoms firm BT up 5.5%, consumer goods giant Unilever gaining 4.3%, and industrial rental firm Ashtead up 4.6%.

Over in Toronto, the Bank of Canada has left interest rates unchanged at 0.25% (the record low).

After its regular meeting, the BoC said that Canada’s economy has begun to recover in all provinces and territories after hitting the bottom in April, but that further extraordinary monetary policy support will be needed.

The BoC has also presented a new ‘central scenario’, which shows that the Canadian economy will return to its pre-Covid levels in 2022. This assumes there isn’t a “broad-based second wave” globally, or in Canada itself, and that the pandemic runs its course within two years.

More on the pound’s choppy day:

The futures markets were right. Wall Street has indeed opened higher, as stocks claw back some ground after three days of losses.

The Nasdaq Composite index has bounced back out of correction territory, rallying by 1.8% in early trading (up 199 points to 11,046).

Some of the tech stocks which were battered yesterday are leading the recovery. Tesla’s gained 7%, while Apple is 3.4% higher.

The CBI, which represents UK businesses, has welcomed the new grants for English firms forced to close due to local lockdowns - but also warned it’s not enough.

Annie Gascoyne, CBI Director of Economic Policy, says:

“New direct cash grants will certainly help small businesses if their area falls under new restrictions to protect public health.

“But the impact of COVID-19 is still hurting businesses, so the Government will need to look at more targeted support in the autumn. That needs to include a successor to the furlough scheme and allowing businesses to defer VAT payments from July to September.”

Phew! The pound has now clawed back almost all today’s losses, back to $1.298 (roughly where it ended last night).

Sterling is reviving as Reuters reports that the EU won’t break off Brexit talks due to the contents of the Internal Market bill.

Speaking of climbing off the mat.... sterling has now pared some of its earlier losses, back to $1.294 (down half a cent today).

At around $1.29, sterling is down a cent against the US dollar today, and down nearly five cents since the start of the month.

But as you can see, it’s still only a six-week low.

That trough in mid-March was during the market crash, when investors were piling into safer currencies such as the US dollar and the euro.

Our Politics Live blog is digging into the Internal Market Bill, and highlighting that some of the bill’s provisions break international law.

Andy Sparrow explains:

It runs to 54 pages, but one word in particular stands out. It is “notwithstanding” and it appears three times, making the same point each time, like this:

The following have effect notwithstanding any relevant international or domestic law with which they may be incompatible or inconsistent ....

Political and trade experts are also flagging up that it clashes with the Withdrawal Agreement:

More bad news on the jobs front: Lloyds Banking Group is to cut 865 jobs across the UK as the high street lender revives restructuring proposals made before the Covid-19 pandemic.

Although it’s also creating 226 new roles, this means a net reduction of around 639 jobs.

Here’s the details:

Elsewhere in the markets, shares in the UK biotech Amryt are up 52% after it announced positive results from a late-stage trial for its treatment for Epidermolysis bullosa (EB), a rare skin disorder that causes the skin to blister and tear at the slightest touch (those born with EB have skin so fragile they are called ‘butterfly children’).

Certain types of EB can be fatal in infancy. At the moment there are no approved treatments for EB. More than 5,000 people are living with the disease in the UK, and 500,000 worldwide.

Filsuvez is a therapeutic gel that aims to speed up wound healing and needs to be applied daily. It is the biggest phase 3 trial ever conducted in EB, involving 223 people, including 156 children, across 58 sites in 28 countries. Amryt said Filsuvez could be the first treatment approved for EB.

Brett Kopelan, executive director of the EB medical research charity Debra of America and president of Debra International, said:

“The proven ability to address the hallmark manifestation of this devastating disease, chronic wounds that don’t heal, in such an efficacious manner and as a therapy applied as part of the standard of care will undoubtedly lead to a meaningful quality of life improvement for patients living with the ‘worst disease you’ve never heard of’.”

Amryt intends to ask US regulators for a priority review, and will also pursue an accelerated assessment in the EU, including the UK. It expects to file Filsuvez for approval by March and hopes to launch it later next year.

Shares in Tiffany have fallen by 8% in pre-market trading to $111.00, after LVMH said it was backing out of their $16bn merger, triggering a legal battle.

The Financial Times calls today’s move “ the most high-profile example of how deals agreed before the coronavirus pandemic have soured”, explaining:

In mid-August, when Tiffany extended the deal’s closing date to November 24, LVMH countered that it still had the right to terminate the deal using a so-called material adverse effect clause, which allows buyers to walk away if a target company experiences a sharp drop in revenue and profit.

Tiffany has said its business performance is in line with that of sector peers and it is well positioned to continue growing. It has rejected any attempt to scuttle the deal.

Merger news: the takeover of US jewelry firm Tiffany by French luxury goods maker LVMH has taken a dramatic turn today.

LVMH Moët Hennessy Louis Vuitton has announced that “as it stands” the group will “not able to complete the acquisition of Tiffany & Co”, following a “succession of events” which undermined the deal.

LVMH says it took the move after the French government asked it to defer the acquisition until Janury 2021, due to the threat of tariffs on French goods at the US border.

The merger was announced back in November, before Covid-19 drove the world economy into recession and hammered stock markets. LVMH agreed to pay $135 per share, above the closing price of $121.81 last night.

Tiffany’s isn’t accepting LVMH’s move - it says it has filed a lawsuit in the US courts, to force LVMH to complete the deal. It also accuses its former suitor of dragging its feet, saying it has not filed all the necessary requests for antitrust approval.

London’s two main share indices have moved in opposite directions today.

The FTSE 100, packed with blue-chip multinationals, is up 1% or 58 points at 5988.

Oil producers BP and Shell are among the risers, up 3% each, following the recovery in crude price today. And as flagged earlier, the weak sterling is giving firms with overseas earnings a boost.

But the FTSE 250, which contains smaller UK-focused companies, has lost 0.5% or 80 points.

Firms most exposed to Covid-19 restrictions are among the fallers, with pub chain Wetherspoons now down 7.5%, WH Smith (which operates shops at airports) losing 6% and SSP Group (which runs the Upper Crust and Cafe Ritazza outlets) shedding almost 7%.

This chart from foreign exchange firm XM shows how the pound is one of the weaker assets today, while oil is clawing back some of Tuesday’s losses.

XM analyst Raffi Boyadjian says:

The pound fell to a more than 6-week low on Wednesday, crashing below the $1.30 level, as Brexit fears began to mount again. Sterling has been on the decline after Prime Minister Johnson ratcheted up the rhetoric with the EU as Brexit talks resume this week.

But the losses accelerated after the UK government’s top lawyer resigned over Prime Minister Johnson’s plan to overwrite some aspects of the Withdrawal Agreement relating to Northern Ireland, as such a move could be in breach of international law.

The chief economist at credit rating agency Fitch doesn’t expect the UK and EU to agree a new free trade deal before the transition period ends.

Instead, Fitch now expects the UK to move to WTO terms next January -- meaning (it says) growth will be slower in 2021.

Reuters has the details:

Credit rating agency Fitch has revised its Brexit view and now expects the UK-EU trade relationship to move to World Trade Organisation (WTO) terms at the start of next year due to the lack of progress in talks.

“With limited progress so far in negotiations on a free trade agreement (FTA) and time running out... we now assume that UK-EU trade will move to WTO terms in January,” Fitch’s chief economist, Brian Coulton, said during an online conference on Wednesday.

“It is very hard to model this but we have knocked around 2% off our 2021 forecast for the UK because of this change in assumption,” he said, adding the ratings agency expected the UK’s economic recovery to stall in the first half of next year.

Fitch is due to review the UK’s AA- negative outlook rating on 25 September.

New research from the Office for National Statistics shows that UK firms were consistently too optimistic about how trading would recover after the lockdown.

The ONS has been asking companies how they are performing, weekly, since Covid-19 struck. The data show that, for many companies, turnover failed to meet expectations over the summer.

That’s obviously understandable -- companies can’t accurately predict how business will fare, given the uncertainty caused by the pandemic. And maybe an optimistic nature is particularly important right now. But, it may suggest problems are building, if firms aren’t getting the new sales they hoped for.

Here’s the details:

• Between early June and mid-August 2020, the proportion of businesses expecting an increase in turnover gradually fell from 27% to 18%, while the proportion of those expecting a decrease also fell, from 16% to 10%.
• The likelihood of a business’s turnover turning out to be lower than they predicted two weeks prior was 48% between early June and mid-August.
• Businesses in the accommodation and food service activities industry were consistently the most optimistic sector (that is, turnover turned out to be lower than they expected two weeks prior).
• Smaller-sized businesses in this sample (those with fewer than 250 employees) correctly predicted their turnover 39% of the time, compared with 34% for larger businesses.

Given the dollar’s recent volatility, it’s worth comparing the pound against the euro to get a better measure of sterling’s strength.

And it’s not a particularly cheery picture. The pound is still bobbing below the €1.1 point this morning, down 0.2% today, at a six-week low.

That means sterling is 2.2% lower vs the single currency since the start of September, hit by anxiety that the UK-EU trade talks will blow up.

The euro has been pretty strong recently, hitting a two-year high at the end of August.

But...Kit Juckes of Société Générale points out that the euro is susceptible to Brexit risks, and Covid-19 risks too.

He told clients:

Sterling weakness may be a precursor to the position-clearing euro correction that the market badly needs.

If Brexit goes badly for the UK, then it goes badly for Europe, albeit less so. If Covid is causing renewed restrictions in the UK that’s because all of Europe has seen the virus return. If the fiscal hit from the pandemic is worryingly huge, then that’s true in Europe as well.

The Covid-19 crisis has forced budget airline Ryanair warn that this winter’s travel market will be a “write-off”.

Ryanair has cut its target for passenger numbers this year by another 10 million, to 50 million, this morning - and predicted a price war to encourage passengers to fly.

Mark Sweney has the details:

Ryanair’s previous forecast in July was that it would carry 60 million passengers in the year to the end of March 2021. That was a 20 million reduction on May’s forecast of 80 million, with rising coronavirus case numbers and changing travel restrictions wreaking havoc on customer confidence.

“We are guiding now for about 50 million passengers for the full year to the end of March,” said Michael O’Leary, the chief executive, in an interview with Reuters. “I think the winter of 2020 will essentially be a write-off.”

O’Leary expects to operate at about 5 million passengers per month through the winter, with pricing set to be “aggressively down” to entice travellers.

He said Ryanair was looking at closing more bases and withdrawing capacity from countries that do not have the coronavirus pandemic under control.

After slumping yesterday, the oil price is recovering this morning.

Brent crude is up 1.8% at $40.50 per barrel, having slumped by 5% on Tuesday to its lowest level since June.

Yesterday’s rout seemed to be triggered by concerns that the global recovery from the pandemic could be stalling, meaning less demand for energy stocks.

Not clear what’s changed overnight (!)... but the bigger picture is that oil prices are still down by a third this year.

Shares in pub companies have dropped this morning, after the government announced it was banning gatherings of more than six people.

JD Wetherspoon has dropped by 4.5%, while Mitchells & Butler are down 4%, following the move -- in response to a worrying rise in Covid-10 cases.

Online gaming has been one of the winners from the pandemic. And former football player David Beckham is looking to take advantage, by floating his esports team on the stock market.

The money will be used to recruit more professional players for Guild esports (perhaps good news for those who spent the lockdown polishing their Counter-Strike, Rocket League and FIFA skills).

My colleague Mark Sweney explains:

David Beckham’s esports team is to float on the London Stock Exchange to raise tens of millions of pounds to fund its entry into the booming world of online gaming.

London-based Guild Esports, which was incorporated last September and officially launched three months ago, plans to raise £20m and a valuation of £50m.

Guild Esports, which raised £5m of private funding earlier this summer, aims to create a global franchise to compete in major esports tournaments as well as a player training and scouting infrastructure modelled on the talent academies pioneered by Premier League football.

More details here:

Stock markets across the Asia-Pacific region fell today, after the heavy losses on Wall Street last night [where the S&P 500 tumbled by 2.8%]

China’s CSI 300 index lost 2.2%, also weighed down by Donald Trump’s pledge to ‘decouple’ the US economy from China.

Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s KOSPI 200 all shed 1%, with Australia’s S&P/ASX 200 down 2.1%.

Shares in conglomerate Softbank shed another 2.87%, following reports that the firm has been taking massive bets on tech stocks in the derivatives market.

Today’s losses mean the pound has shed nearly five cents, or 3.5%, against the US dollar since the start of September.

That’s a chunky move, driven partly by Brexit worries - and partly because the dollar has been recovering after its August swoon.

Jim Reid of Deutsche Bank says the UK’s plan to “break international law” will not be well received by the EU... or by some of Boris Johnson’s own MPs.

We should get further details today when the government actually publish the bill, but yesterday it was announced that the head of the UK government’s legal department had quit, with the FT saying that this was because of the Brexit issue.

Notably, even a number of Conservative MPs expressed disquiet with the plans to go against an international treaty, with former Prime Minister Theresa May asking in the House of Commons how the government would reassure future international partners that the UK would abide by its legal obligations.