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Tag Archives: Brexit

Consolidation is the Flavor of the Day

Overview:   The S&P 500's longest advance this year was stopped seemingly as concern that the flare-up in the virus will slow the recovery.  The sell-off in airlines and hotels helped spur a broader bout of profit-taking.  Most Asia Pacific bourses advanced, led by the continued rally in Hong Kong and China.  Europe's Dow Jones Stoxx 600 is posting its first back-to-back decline in nearly a month. Benchmark yields are mostly 1-2 bp softer, but China and the US are exceptions. ...

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Brexit: Running Down the Clock?

The Brexit front has seemed positively dull compared to the horrors of Covid-19 (the disease proper, the spectacularly bad responses in the US and UK, and the economic fallout), and US protests and rising social tensions. However, the lack of much apparent action, aside from the Groundhog Day sort, is a bit misleading, since letting the clock run has consequences of its own. Even though you’d not discern it from the tone of the press coverage, with the transition period over on December 31,...

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New Record Number of Covid Cases Doesn’t Curtail Appetite for Risk

Overview: A new daily high number of contagions globally has been reported, but the risk-appetites have been stoked.  Chinese stocks have been on a tear.  The Shanghai Composite rallied 5.7% today to bring the five-day advance to 13.6%.  Most other regional markets, including Hong Kong, rallied as well (3.8%).  Australia was the main exception, and it pulled back by 0.7%.  It is still up a solid 3.4% over the past five sessions. European shares are advancing.  The Dow Jones Stoxx 600 is...

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USD is Offered in Quiet Start to the New Week

Overview:  The combination of rising virus cases and the sell-off in the US before the weekend dragged nearly all the Asia Pacific bourses lower.  The Nikkei led the way with more than a 2% drop, but most bourses were off more than 1%.  China and Taiwan were also greeted with selling as markets re-opened from a two-day holiday at the end of last week.  Led by energy and consumer staples, Europe's Dow Jones Stoxx 600 recouped initially losses to poke into positive territory in late...

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Big Week Ahead

Next week is important. Two G7 central banks meet and at least half a dozen emerging market central banks. There is a European Summit and perhaps a political effort to reinvigorate the UK-EU trade talks, which seem to be crashing on the shoals of stubbornness. The ECB offers its most generous long-term targeted loan that is bound to see earlier loans rolled into this new one. Further evidence that the world's largest economy has taken a baby step toward recovery.  Let's unpack next...

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Dominic Cummings Is Either Ignorant and Lazy or a Psycho, and Doesn’t Know His William Gibson

By Lambert Strether of Corrente I was reading Consortium News’s reconstruction of Dominic Cummings’ horrid, prehensile clambering up the greasy pole of Tory Inner Party politics to become BoJo’s Chief adviser (“What Made Dominic Cummings Dash to Durham?“), when I came across this astonishing passage (I’ve helpfully lettered the gobsmacking bits in square brackets): As to the sort of persons whom Cummings says he wants to recruit into government in place of those he wants to sack, he has...

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Monday Blues: Consolidation Threatened

Overview: The MSCI Asia Pacific Index rose for a sixth consecutive session. Japan, Taiwan, Singapore, and Indonesian markets advanced more than 1%. European bourses are mixed, with the peripheral shares doing better than the core, leaving the Dow Jones Stoxx 600 about 0.5% lower near midday after surging 2.5% ahead the weekend. US shares are firm, as is the 10-year yields, hovering near 92 bp. Core 10-year benchmark yields are a softer in Europe, while peripheral yields are edging...

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Four No’s

Sometimes it is easier to have a sense of what will not happen, rather than a view of what will happen.  No Negative Rates in the US:  Nearly every Federal Reserve official has argued against the deployment of negative interest rates in the US.  It is also not completely clear that the same Congressional authorization to allow the Fed to pay interest on reserves is sufficient to take-away reserves as negative rates imply. Yet the fed funds futures strip beginning next May indicate a...

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Brexit: Posturing and Impasse

Even couples who intend to have a friendly divorce usually find they turn ugly, and the best that can be hoped for is that the acrimony turns out to be just a phase. There were never such intentions for Brexit, at least from the UK side. The triumphal Brexiteers reveled in the prospect of freeing themselves from what they saw as an oppressive Europe. The EU side started out resigned but prepared to do what was necessary to accommodate the UK’s departure. As I’ve indicated, interpersonal...

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Brexit: Yet More Chicken

While you were busy paying attention to Covid-19, the Brexit negotiations, such as they are, have been predictably going not well. Sir Ivan Rogers warned last year that it was possible that talks could break down entirely in the post March period as the Government came to grips with what would be required to complete a trade agreement. Mind you, that hasn’t happened, but EU negotiator Michel Barnier warned he didn’t expect last week’s talks, the third round this year, to go well. Both sides...

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