Some weaker than expected US data.

The New York Federal Reserves Empire current business conditions index fell from 19.4 in November to 18 in December, lower than the expected 18.6. The six month index came in at 46.6, down from 49.9 last month.

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The fall in the pound has, conversely and not surprisingly, helped push the FTSE 100 higher.

The index has reversed its early losses, up 0.13%, thanks to the number of overseas earners which benefit from a weaker sterling.

The pound continues to slide after its early gains. It is now down 0.26% against the dollar at $1.3394, its low of the day. Against the euro it has now dropped 0.39% to €1.1350. The currency has been hit by EC president Jean-Claude Juncker’s comments about the difficulty of the next stage of negotiations. Connor Campbell at Spreadex said:

The pound went from wary to worried this Friday, as investors fretted over the Brexit difficulties that lie ahead.

Time to think it the last thing sterling needs at the moment. Whenever UK investors have a spare second, thoughts tend to turn to the loud tick of the Brexit bomb. And even with the progress seen in the last couple of weeks – and the ...EU formally agreeing to move on to the next phase of negotiations this Friday – there’s still not a lot for the pound to actually be thankful for.

In the retail world, another worrying sign for high street stores, this time from H&M.

Its shares have tumbled after a disappointing trading update. David Cheetham, chief market analyst at XTB, said:

High Street retailer H&M has seen almost a sixth of its market valuation wiped off after the Swedish clothing retailer lost more ground to rival Zara.

H&M reported the biggest drop in quarterly sales in more than ten years this morning with fewer customers visiting stores and the news has caused the firm to reign in expansion plans and now possibly even consider closures.

The plight is a familiar tale amongst bricks-and-mortar retailers who have struggled of late on both sides of the Atlantic due to the growth seen in e-commerce. Rival Inditex, the owner of the Zara brand, has expanded aggressively into the space and reported a double-digit rebound in revenue growth for November and early December.

Italian banks are coming under pressure on continuing worries about bad loans, as well as the uncertainty created by next year’s general election.

The Italian bank index is currently down 1.6% to its lowest level since the end of June.

Here’s our full story on the Persimmon executive departures:

The chair of Persimmon has resigned over his role in orchestrating a £128m bonus for the housebuilder’s chief executive, Jeff Fairburn, that will begin paying out on New Year’s Eve.

Nicholas Wrigley, the company’s chair and a former banker, said he regretted not capping the bonus scheme and was leaving “in recognition of this omission”.

The Guardian understands that Wrigley had put pressure on Fairburn to donate of some of his bonus to charity, although Persimmon declined to comment.

The bonus scheme – believed to be the most generous ever in the UK – is due to start paying out more than £800m to 150 senior staff on 31 December. The payouts are linked to the company’s stock market performance, which has been massively boosted by the government’s help to buy scheme.

Persimmon’s share price has more than doubled since George Osborne introduced help to buy in 2013. About half of Persimmon homes sold last year were to help to buy recipients, meaning that government money helped finance the sale.

The pay deal, which was put in place in 2012, has been widely criticised by politicians, charities and corporate governance experts the Guardian had contacted this week.

Vince Cable, the leader of the Liberal Democrats, said the “scale of this bonus is obscene” and built on a “government subsidy”.

The full story is here:

Joshua Mahony, market analyst at IG, said:

Brexit is back on the cards as a core driver of markets sentiment today, with EU leaders expected to push negotiations into their second stage today. Interestingly, while the EU leaders have lauded Theresa May’s recent efforts, the fact that parliament could now vote down a final bill highlights that any back door concessions from May could come back to bite her. Despite the desire to kick-off trade negotiations in December, it is clear that those in the EU see March as the likeliest month to commence talks. With timelines already tight, the slower progression will heap further pressure on negotiations as they seek to obtain a transitional deal ahead of the March 2019 deadline.

And here’s our live blog of the EU summit:

Here is European Commission president Jean-Claude Juncker earlier (see below):

Back with Brexit, and Kallum Pickering, senior UK Economist at Berenberg, has been looking at the possible outcomes to the talks:

● Round one over, two more ahead: Nine months after the UK started the Brexit proceedings, the terms of divorce are broadly settled. The UK and the EU will now move on to negotiations for a transition period and future UK-EU trade. These must be completed by October 2018 to give the EU27 six months to ratify any deal. In this report, we consider the key issues for the upcoming negotiations and the likely scenarios for future UK-EU trade.

● A future trade deal rests on the Irish border question: The UK’s aim to leave the customs union seems to contradict the need to preserve the status quo in Ireland. But as part of the mutually agreed divorce, the UK has pledged to prioritise the status quo in Ireland over leaving the single market and the customs union. While this provides the grounds for a potentially (very) soft Brexit, it also crosses key red lines of the Brexiteers. This contradiction will come to a head in the UK debate before the UK and the EU can settle on a framework deal for future trade.

The potential outcomes can be grouped into four Brexit scenarios

● Soft Brexit (30% chance): As two-thirds of the members of the UK parliament are pro-EU, such a deal would probably get a majority backing in parliament. If faced with a choice between no more than a basic free trade arrangement covering only goods and a comprehensive “Norway-minus” deal, the UK could go for the later.

● Semi-soft Brexit (45%): This is the most likely scenario. The UK stays close enough to EU rules for many goods and some services to avoid a hard border in Ireland. UK remainers could support a deal that keeps the UK partly aligned with the EU while the Brexiteers could back such an agreement as it would offer the UK some room to pursue its non-EU ambitions. The UK and the EU could probably find a solution the Irish question – possibly a bespoke customs arrangement.

● No deal – hard Brexit (20%): With so many interests – and careers – at stake, the risk that talks could fail at any point remains a serious one.

● No Brexit (only 5% probability): The only possible route to a reversal of Brexit would be through fresh elections that ended up with either Labour, or some Labour-led coalition with the pro-EU Liberal Democrats and Scottish National Party, going for a second referendum that reversed the result of the first.

More on the US tax reforms. Rebecca O’Keeffe, head of investment at interactive investor, said:

European equity markets are slightly softer as investors mull the possibility that the US tax reform bill may get derailed at the last minute. The anticipation of US tax reform has fuelled the US equity rally and given financials a major boost, so the stakes are high. The Republicans can afford a draw in the Senate, as Vice-President Mike Pence casts the deciding vote, but this deal is a key risk for markets, and its defeat, while unlikely, could cause carnage.

The pound has lost its early gains, slipping back against both the dollar and euro.

Lithuanian president Dalia Grybauskaite said EU leaders would agree to move forward onto trade in the Brexit negotiations, which are expected to start in March.

But European Commission president Jean-Claude Juncker the second phase of talks would be harder than the first, which were already “very difficult.” So some of the shine has come off sterling. Connor Campbell, financial analyst at Spreadex, said:

Dependent on whether its announced in time, it’ll be interesting to see how much the pound moves on the expected formal confirmation from EU leaders that they’re ready to move on to the next stage of negotiations with the UK. And while the fact that it is almost a given at this point might dampen the sterling’s enthusiasm, considering it’s rocky December form the currency shouldn’t turn its nose up at any good news, however predictable.

Regardless it does seem like the pound is waiting for something. Against the dollar it has trickled into the red, but is still holding around $1.343, while against the euro it is effectively unchanged just below the €1.14 mark.

Wall Street fell back on Thursday on continuing doubts about the Republican tax plan, and whether it will ever get passed.

Florida senator Marco Rubio said he would not vote for the package unless there were changes to child tax credits. With only a slim majority in the Senate, the long awaited reforms seem to have hit another hurdle. Some kind of compromise plan is expected to be released today, in expectation of final votes early next week. London Capital’s Jasper Lawler again:

Republicans can’t afford to lose more than two votes, or the bill won’t get the necessary approval. Adding to tension, several Republican Senators are experiencing health problems, which could also prevent them voting. Following Rubio’s comment US indices took a turn for the worse. Investors have been watching the twists and turns of this bill with great focus, because of its expected impact on big firms.

At the moment the futures are suggesting the Dow Jones Industrial Average - which dropped 76 points yesterday - should recover around 43 points at the open today.

Many of today’s front pages are dominated by one story in particular, and that’s the Disney/Fox deal:

Here is our story on the deal:

And Nils Pratley’s view:

The strengthening of sterling is likely to see the FTSE 100 - which is chock full of overseas earners who benefit from a weaker pound - slip back in early trading. Here are the opening forecasts from IG: