Saturday , January 18 2020
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Tag Archives: Brexit

Conservative Win in Britain Means More Than Economic Trouble Ahead

Yves here. Just as with Trump, the press and public too often gets wound up in Boris Johnson’s dramas, and loses sight of the common-welfare-destroying policies that the Conservative Party has made its calling card. Although this post covers familiar terrain for Brexit readers, the high level overview may be  helpful for contacts who don’t keep close tabs. By Malcolm Sawyer, Emeritus Professor of Economics, Leeds University Business School. Originally published at the Institute for New...

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Brexit Update

Three and half years after what was initially a non-binding referendum, the UK has seen its way to leave the EU.  The House of Commons passed the necessary legislation last week as Tories enjoys a parliamentary majority.  The House of Lords takes up the measures now. Although the Conservatives do not have a majority and a vigorous debate is expected, the unelected body is most unlikely to block Brexit.   What happens next?  The UK will formally exit the EU at the end of the month. ...

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Brexit: The End of the Beginning?

This is going to be a shorter Brexit post than I would like, but since the UK and EU are yet again in a jockeying and attempting-to-put-down-markers phase, the speculation to development ratio is high. You might have missed it between Iran and royals furors, but the Withdrawal Bill passed its third reading in the House on party lines and is expected to sail though Lords. •Harry and Meghan driven out by Royal British Media 👑•As you work till you die at 75 on 0hr contract Boris Johnson...

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Hopes of De-Escalation Help Markets Stabilize

Overview: The Iranian retaliatory missile strike on Iraqi-bases housing US forces initially sparked a dramatic risk-off response throughout the capital markets. The muted response by the US coupled with signals from Tehran that it had "concluded" its proportionate measures saw the markets retrace the initial reaction. It was too late for equities in the Asia Pacific region, and several markets (Japan, China, Korea, Malaysia, and Thailand) fell more than 1%. Europe is faring better,...

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Geopolitical Angst Eases, Helps Equities and Underpins the Greenback

Overview: Without fresh escalation, investors cannot maintain a heightened sense of geopolitical anxiety.  The recovery of US shares yesterday set the tone for today's rebound in Asia and Europe. All the equity markets in the Asia Pacific region rallied today, led by a 1.6% rally in Japan and a nearly 1.4% advance in Australia, with the exception of Taiwan. Europe is also recouping much of what was lost over the past two sessions, and US shares are trading firmly. Bond yields have not...

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2020 Vision

Palpable uncertainties that had been hanging over the investment climate in 2019 were lifted at the end.  The UK election leaves no doubt that Brexit will take place at the end of January.  The new NAFTA looks to be ratified in early 2020.  The US and China have reached an agreement that marks a cessation of the escalation of the tit-for-tat tariffs. Outside of NAFTA2.0, the immediate risks have subsided, but closure is elusive.  The UK and EU will be locked in trade negotiations in...

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Equities Rally While the Dollar Slumps into the Weekend

Overview:  Equities are finishing the holiday-shortened week on a firm note, encouraged by strong holiday internet sales in the US.  Most markets in the Asia Pacific region advanced except China and Thailand, while Japanese markets were mixed after weak industrial output and retail sales.  The MSCI Asia Pacific Index rose for the fourth consecutive week.  Europe's Dow Jones Stoxx 600 is pushing to new record highs in its third straight weekly advance.  It has only fallen in three weeks...

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The Loss of Fair Play

This site regularly discusses the rise of neoliberalism and its consequences, such as rising inequality and lower labor bargaining rights. But it’s also important to understand that these changes were not organic but were the result of a well-financed campaign to change the values of judges and society at large to be more business-friendly. But the sacrifice of fair dealing as a bedrock business and social principle has had large costs. We’ve pointed out how lower trust has increased...

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Sterling Drops as New Brinkmanship Begins

Overview: Efforts by a UK Prime Minister emboldened by a strong electoral victory to ensure that trade negotiations with the EU are not extended as the divorce has encouraged further profit-taking on sterling. After testing the $1.35 area on the exit polls last week, sterling had returned to where it closed before the results were known near $1.3160. Sterling is leading all the major currencies lower against the dollar, and the large accessible emerging market currencies (e.g., South...

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Stunning Tory Victory and US-China Trade Boosts Risk Assets

Overview: The combination of a US-China trade deal and exit polls showing the Tories securing a majority in the House of Commons boosted risk assets, sent sterling flying, and the euro sharply higher.  Separately, the Fed stepped up its efforts to make as smooth as possible funding over the turn of the year. Led by more than 2% gains in Hong Kong and the Nikkei, and more than 1% rallies in China and South Korea, the MSCI Asia Pacific Index rose the most in six months today. Europe's Dow...

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