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Tag Archives: Brexit

European Stocks Snap Back, Market Hopeful Italian Election can be Delayed

Outlook:  The end of the US equity three-day advance yesterday weighed on Asia Pacific shares today.  Most benchmarks fell.  Better than expected trade data helped Thailand buck the trend.  A firmer tone emerged in the European morning, and the Dow Jones Stoxx 600 has recouped yesterday's losses and more.  It was led higher by consumer discretionary, energy, and industrials.  US shares are also trading firmer today, and the S&P 500 is also retracing a good part of yesterday's 0.8%...

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Brexit: According to Script

Aside from Boris-Johnson-generated noise, like his People’s PQMs, Brexit is evolving, or devolving, on the trajectory predicted by our insightful readers. Specifically, vlade and others anticipated that the only viable route for Parliament to obstruct Johnson’s crash-out plan was to win a vote of no confidence, then use the 14 day period in which Parliament could vote confidence in a government, including one different than the one it had shot down, to create what amounted to a caretaker...

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Brexit Breakup

The Institute for Government has confirmed our reading, that if this Government wants a no-deal Brexit, it will be well nigh impossible to prevent it. Astonishingly, Labour and Remainer Tories let their best option, that of a general election before October 31, slip from their grasp by failing to keep Parliament in session and stuck to their traditional summer recess. After Johnson won the premiership, his intentions for Brexit should have been seen as clear as soon as he announced his...

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Macro Deterioration

The US-China tensions remain the dominant driver of investor risk appetites.  President Trump has repeatedly accused China of manipulating its currency on twitter, and finally Treasury Secretary Mnuchiin acquiesced after China failed to prevent the dollar from rising above CNY7.0.  China set the reference rate for the dollar lower than models based on the basket the PBOC uses implied for the past three sessions, and this helped stabilize the situation. Contrary to expectations, China...

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Austerity Has Made People Less Prepared for a No Deal Brexit

Yves here. Most commentary on the economic impact of Brexit has focused on the effects on trade, commerce, investment, the financial sector….with comparatively little on how it will affect ordinary people. By Duncan Exley, author of The End of Aspiration? Social mobility and our children’s fading prospects(Policy Press 2019) available here at a 20 per cent discount. He is the former Director of The Equality Trust. Originally published at openDemocracy The government is keen to reassure us...

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Britain After Brexit: Welcome to the Vulture Restaurant

Yves here. We pointed out some time ago that the idea that the UK would get a favorable trade deal with the US post-Brexit, and particularly post a crash-out, was bonkers, so it’s good to have official confirmation, even if it comes from the likes of Larry Summers. The US typically dictates terms in bi-lateral trade deals, allowing at most only a bit of face-saving terms-tweaking at the margin. The power imbalance will be even more pronounced in trade negotiation in the wake of Brexit because...

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The Dog Days of August are Upon Us

The die is cast. To defend the uneven expansion and ward off disinflationary forces, monetary authorities will provide more accommodation.  The Federal Reserve delivered its first rate cut in more than a decade and stopped unwinding its balance sheet two months earlier than it previously indicated (worth $100 bln of additional buying of Treasuries and Agencies).  Following the end of the tariff truce, and after the July jobs report,  the market was certain the Fed would cut rates again...

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End of Tariff Truce Trumps Jobs

Overview:  The market was finding its sea legs after being hit with wave and counter-wave following the FOMC decision, and more importantly, Powell's attempt to give insight into the Fed's thinking.  Trump's tweet than signaled an end to the tariff truce with a 10% levy on the $300 bln of imports from China that have not been subject to action previously.  Investors understood this to mean a greater slowdown and pushed yields and equities sharply lower.  The Asia Pacific and European...

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Brexit Update

The October 31 deadline for the UK to leave the EU is less than 100 days away.  The new Prime Minister is beginning to convince others that that UK will, in fact, leave at the end of October.   PredictIt.Org shows the odds of the UK leaving has risen to almost 50% from about a 33% chance a month ago.   Here is a summary of where the situation stands and some key dates going forward.   1.  Boris Johnson handily won the Tory Party leadership challenge and succeeded May.  He quickly...

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Financial Times Goes Wobbly on Brexit No Deal Impact

The Financial Times has done a lot of important reporting on Brexit, such as being early to warn of the utter lack of customs IT systems preparedness (Customs was almost certain to be getting an inadequate upgrade planned before Brexit in place late) and on the number of agreements the UK would need to renegotiate. But it would also run the occasional too-obviously-planted story, such as ones that took the City’s demands way too seriously. Today the Financial Times published a supposedly...

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