October 4, 2018 / 7:29 AM / a year ago

Daily Briefing: UK vows crackdown on Russian intelligence operations

LONDON (Reuters) - Britain issued statements overnight accusing Russian military intelligence of directing a host of cyber attacks aimed at undermining Western democracies by sowing confusion in everything from sport to transport and the 2016 U.S. presidential election. Russia has yet to respond but has in the past repeatedly denied such accusations.

FILE PHOTO: Russian President Vladimir Putin aims a rifle made by Russian firearms maker Kalashnikov Concern at the Patriot military theme park outside Moscow, September 19, 2018
"As is well known, espionage, like prostitution, is one of the world’s oldest professions"

The Dutch Ministry of Defence and UK officials are scheduled to hold a news conference in the Hague this morning that's also expected to be about Russian intelligence activities. In the wake of the Skripal poisoning, Britain has been active in trying to persuade other European capitals to back further sanctions on Moscow.

Irish PM Leo Varadkar heads to Brussels as the decisive period for Brexit negotiations begins. The core of the discussion today will be about the European Union stance in resolving the disagreement with the UK on managing the Irish border after Brexit: the aim is still to get much of the deal worked out by the EU summit later this month.

The FT reports that Dublin would back any push by Theresa May to keep all the UK in a temporary customs union with the EU until a permanent arrangement was worked out - something Brussels has until now balked at.

France's Emmanuel Macron visits Charles de Gaulle's grave today on the 60th anniversary of the French constitution, which de Gaulle introduced in 1958 with sweeping powers for the office of president.

Macron will no doubt pay homage to his predecessor and to the stabilising effects which the constitution had on France, at the time seriously buffeted by the aftermath of the Algerian conflict. The added piquancy of the event is that Macron is still aiming to revamp the charter to cut the number of lawmakers by a third and introduce an unaccustomed dose of proportional representation.


Growing evidence the U.S. economy is picking up steam just as the rest of the world cools has catapulted 10-year U.S. Treasury yields to their highest in seven years and the dollar to its strongest in six weeks, unnerving global markets fearful of the rising cost of dollar funding around the world.

Outsize gains in U.S. September business confidence and private-sector payrolls saw markets rush on Wednesday to fully price in the four more U.S. interest rate rises that the Federal Reserve has been signalling, and which Fed chief Jerome Powell reinforced this week by describing the U.S. economy as "remarkably positive".

Ten-year Treasury yields climbed more than 10 basis points on Wednesday to their highest since 2011, the biggest one-day gain since just after the U.S. election in November 2016. They extended that climb overnight to as high as 3.23 percent and the 2-10-year U.S. yield curve steepened above 30 basis points for the first time since July.

The dollar’s rise was broad- based, with dollar/yen rising to the year’s highs and euro/dollar falling below $1.15 for the first time since mid-August.

With Brent crude oil prices rising above $86 per barrel, many emerging markets heavily dependent on dollar borrowing and energy imports are feeling the heat. Hong Kong, Seoul and Jakarta benchmark indices all fell more than 1 percent overnight with Japan’s Nikkei in the red too.

India’s rupee hit another record low and Indonesia’s rupiah fell to its weakest in 20 years. MSCI’s emerging-market equity index suffered its biggest fall in four months.

Prime Minister Theresa May arrives on stage dancing to Abba's 'Dancing Queen' before delivering her keynote address on the final day of at the Conservative Party Conference in Birmingham, October 3, 2018

Buoyed by both the upbeat economic news and the approach of a third-quarter U.S. earnings season next week that’s likely to clock annul profit growth in excess of 20 percent, the S&P500 came within a sliver of record highs late Wednesday – even though the bond market disturbance has seen futures drop 0.5 percent today.

European stock futures are marked down by a similar amount as European government bond yields rose in tandem with Treasuries.

— A look at the day ahead from European Economics and Politics Editor Mark John and EMEA markets editor Mike Dolan. The views expressed are their own —

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