Quick note: Brexit....
Chief Economist & CIO
Summary: EU and UK reach agreement on Brexit but PM Johnson still needs to find a way through Parliament with the DUP saying NO
- What: Brexit deal – or the skeleton of a deal – is done
- Next: EU Council Minister meeting this afternoon. Saturday votes in UK Parliament and in EU council and European Parliament (EP has veto in this case)
- Outcomes: Most likely it will pass in Europe – UK is 50/50 as of now.
- Market reaction: A Yes, will benefit Europe (DAX) more than FTSE as the UK still have to deal with extremely negative credit impulse – we maintain underweight UK currency exposure, but with no live position for now.
- Conclusion: This does not solve anything – it buys time, and in best case it offer some short-term clarity. If deal fails in Parliament we face General Referendum and another dead-line end of January, i.e: The never ending story..
Recommended Twitter accounts to follow:
- Laura Kuenssberg (BBC) @bbclaurak
- Katya Adler (BBC) @BBCkatyaadler
- Lisa O'Carroll (Guardian) @lisaocarroll
- Mehreen (FT) @MehreenKhn
- Sky News @SkyNewsBreak
- Leo Varadkar (Irish PM) @LeoVaradkar
The deal done is effectively one where everything is delayed by four years vis-à-vis Northern Ireland, NI:
Short-version of below: NI will under both EU and UK law next four years, then they will have vote decide what to do. In spirit this is violation of Good Friday agreement, but one the Tory party is willing to do in order to “normalize” situation.
For now: Labor and Lib. DEM calls this deal – “worse, than the May deal….”
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.