Posts belonging to Category Euro



“Soft Brexit” looks more likely

Britain’s political outlook seems toxic to investors

The combination of a weak Conservative prime minister and the potential for a Corbyn government does not look attractive. Suddenly Britain looks a lot less attractive as a home for international investors. The Conservative party under Theresa May gambled on a snap election to deliver a “mandate for Brexit”. It unveiled a muddled manifesto that alienated voters and was out-campaigned by the veteran left-winger Jeremy Corbyn. The party lost its overall majority and will now be propped up by the very odd ducks in Ulster’s Democratic Unionist party.

The markets reacted less severely than might have been expected. That seems to be based on the view that a “soft Brexit” looks more likely. But it is far from clear that this is the case. David Davis, Britain’s Brexit minister, seems to be ploughing ahead with plans to leave the single market and the and the Labour leadership is unlikely to oppose this.

http://www.economist.com…   Tue.,  13  June 2017

How will the General Election result affect Brexit?

Hung Parliament

The prospect of a hung Parliament would throw serious doubt over Brexit negotiations, due to begin in earnest in just 10 days.

The BBC/Sky/ITV poll put the Conservatives on 314 seats, Labour on 266, the Scottish National Party on 34, Liberal Democrats on 14, Plaid Cymru on three and Greens on one.

The EU’s chief Brexit negotiator Michel Barnier has set June 19 as his favoured date for the start of talks, due to last around 14-18 months.

http://www.thetelegraph.co.uk…  Fri.,  09  June 2017

The Pound weakness

It’s ‘time to get bearish’ on the pound again

Deutsche Bank has turned bearish on the pound once again, saying that any possible upside for the currency from next week’s election has already been priced into the market.
Writing on Tuesday, Deutsche Bank strategists Alan Ruskin and George Saravelos used their latest FX Blueprint note to warn investors it is “time to get bearish on GBP again,” after just over one and a half months of a positive outlook on the UK’s currency.

http://www.businessinsider.com…  Wed.,  31  May 2017

Icelandic bitcoin mine

Bitcoin is going nuclear

The digital currency is hitting all-time highs, with a single coin going for more than $2,197. It’s an epic bull run that has accelerated in recent months: Just a year ago, it was sitting at just $443. This is great news for bitcoin miners, the people responsible for creating new bitcoins. Their mining infrastructure is the backbone of bitcoin. Anyone who contributes computing power to help process transactions on the network is rewarded with the chance to “mine” bitcoin.

In plain English, in return for helping keep the network up and running, they have the chance of being given a newly created piece of the digital currency. This payout makes the entire process — with the right equipment — incredibly lucrative. It has helped spawned a huge and surreal industry.

You can mine at home, and many people do. But companies dedicated to mining have also sprung up, some worth tens of millions of dollars. These companies build huge data centres, or mines, that consume vast amounts of power and perform insane computations on the hunt for digital gold.

http://www.businessinsider.com…  Thu.,  25  May 2017

Greek debt deal

Euro zone, IMF to seek compromise

Euro zone finance ministers and the International Monetary Fund will seek a deal on Monday on Greek debt relief that balances the IMF’s demand for a clear “when and how” with Germany’s preference for “only if necessary” and “details later”. Without the deal, no new loans can be disbursed to Athens, even though the bailout is now handled only by euro zone governments, and Greece needs new credit to repay some 7.3 billion euros worth of maturing loans in July.

Without the loans, Athens is likely to default – a bad start for a country that wants to return to market financing next year when its latest bailout, the third since 2010, ends in mid-2018. For its part, Greece has done what it could to secure a deal. It has agreed, albeit after months of negotiations, with the euro zone lenders and the IMF on pensions and tax reforms.

http://www.reuters.com…  Mon.,  22  May 2017

Crypto-Currencies Bubble

A surge in the value of crypto-currencies provokes alarm

IT IS hard to predict when bubbles will pop, in particular when they are nested within each other. It helps to keep this image in mind when considering one of the biggest surges in asset values of recent years: the market value of all the world’s crypto-currencies has trebled since the beginning of the year, and is now worth more than $60bn (see chart).

http://www.economist.com …  Fri.,  19  May 2017

Half of European businesses to reduce their use of UK suppliers

UK/Europe: how to avoid Brexit tariffs

 

  • 32% of UK businesses who use EU suppliers are looking for British replacements
  • Nearly half (46%) of European businesses expect to reduce their use of UK suppliers
  • 36% of UK businesses plan to respond to Brexit by beating down supplier prices
  • The UK’s “weak negotiating position” is seen as the biggest hurdle in trade talks

Businesses either side of the English Channel are preparing contingency plans which could sever supply chains between the UK and EU, according to the Chartered Institute of Procurement & Supply (CIPS).
A survey of 2,111 supply chain managers found that 32% of UK businesses who work with suppliers on the continent are actively looking for alternative suppliers based in the UK as a response to the referendum.
Businesses within the EU are even more advanced in their preparations. Almost half (45%) of EU businesses who work with UK suppliers are in the process of finding local replacements.

http://www.cips.org …  Tue.,  16  May 2017

Europe is speeding up

Euro-area GDP growth outpaces America’s

The appeal of GDP is that it offers, or seems to, a summary statistic of how well an economy is doing. On that basis, the euro-area economy is in fine fettle; indeed, it is improving at a faster rate than America’s. Figures released on May 3rd show that GDP in the currency zone rose by 0.5% in the first quarter of 2017, an annualised rate of around 2%. That is quite a bit faster than the annualised 0.7% rate reported for America’s GDP.

http://www.economist.com…  Wed.,  10  May 2017

Pro-European Macron wins a crucial election

Europe stronger with Macron victory

Europe’s political establishment entered 2017 in a state of panic. Britain had voted to leave the European Union six months before and the United States had just elected a president who was hostile to their grand project and the values it stood for. The same forces that had led to Brexit and Donald Trump – popular anger with distant elites, economic inequality and immigration – threatened to hit the continent hard in a year in which Europe’s largest countries were holding elections. The biggest risk of all was France, a country with an ailing economy, historic ambivalence toward the EU and a politician, in National Front leader Marine Le Pen, who seemed well positioned to seize on voter fears.

Instead, on Sunday, Le Pen was soundly defeated by Emmanuel Macron, a 39-year-old independent who ran on an unashamedly pro-European platform. Macron urged the French to embrace rather than reject globalization. And he vowed to work with Germany to relaunch the European Union, a project long seen as a guarantor of peace and prosperity but one which is now struggling to find its “raison d’etre” after years of crisis. Macron’s victory represents a reprieve for Europe and the liberal democratic values for which it has stood for more than half a century.

http://www.reuters.com…  Mon.,  08  May 2017

BREXIT: JPMorgan to move massively staff out of London

Dublin, Frankfurt and Luxembourg, new destinations for bankers

JPMorgan Chase & Co. plans to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg as it prepares for the U.K. to lose easy access to the European Union’s single market after Brexit, the firm’s head of investment banking said.

“We are going to use the three banks we already have in Europe as the anchors for our operations,” Daniel Pinto said in an interview Tuesday in Riyadh, referring to the New York-based firm’s local entities. “We will have to move hundreds of people in the short term to be ready for day one, when negotiations finish, and then we will look at the longer-term numbers.”

http://www.bloomberg.com…  Wed.,  03 May 2017