Brexit Update - The EU Wins Round 1

21 June, 2017

Although not an outright conflict, the discussions surrounding the Brexit talks have been at best contentious and at worse polemic. Theresa May when outlining the 12 points of the Brexit strategy went on record in a speech declaring a victorious and resounding “Brexit means Brexit”. Shortly after the result of the Brexit Referendum Jean-Claude Juncker President of the European Commission asked Ukip MEPs Nigel Farage “Why are you here?” during a European Parliament meeting to discuss Brussel’s plan for Brexit.

Unfortunately for the UK the EU hasn’t suddenly turned a softer more compassionate leaf. Theresa May was forced to buckle under the initial demands of dealing with the exit fee before any other topics including trade agreements – which are arguably the most significant for the British economy since Europe is one of the UK’s largest markets.

Michel Barnier – the Union’s chief negotiator, also tore down May’s overly ambitious promises of leaving the EU – with all trade and immigration issues resolved – by 2019. According to Barnier, it was unlikely that any trade agreement would be made in the next two years.

To add insult to injury he was quoted saying about the Brexit talks “I’m not in a frame of mind to make concessions,” [sic] “the U.K. has decided to leave the EU. It’s not the other way around.”
No matter what the UK will leave the EU on March 29,2019 at 00.00 this means with a trade deal or without and markets responded with a resounding “Sell”.

The FTSE 100 dropped -0.49% to 7,488.54 down from the previous day’s close at 7,523.81. It seems that trader’s confidence waned in the Sterling also as GBP dropped from its previous closing price of 1.273 to 1.2637 against USD (-0.738%).

According to a poll conducted by Barclays Plc of 642 global investors regarding Brexit, this shaken confidence might not change – most of the polled investors said they saw the EU – UK talks being prolonged affair with delays and snags, and one of Barclays strategist even said that he assumed it would effect market sentiment.

Yellen's Testimony, BoC Interest Rate Hike, Big Bank Reports13 Jul, 2017  

Hawkish or Dovish, well today we have retrospective examples of its effect on the sentiment for a currency. In one case Yellen’s indication that national debt should be capped and that monetary policy should be gradual...

Gold Dropped as Forecasted4 Jul, 2017  

This is a notable day for several interrelated moves: the fall of the yen, the rise of the dollar, and the drop in precious metals. All these changes resulted ...

Deutsche Bank Derivative Loss28 Jun, 2017  

Although markets seemed to calm after last week’s activity, this doesn’t mean that the newsrooms are quiet. One of the big topics – is Deutsche Bank’s big derivative loss estimated at $60 million due to a risky bet placed on U.S. Inflation. According to

Italy Commits 17 Billion Euros to Keep Veneto Banks Afloat27 Jun, 2017  

Italy arranged for one of the biggest bank rescues in history, with a cost of up to 17 billion euros ($19 billion) in order to wind up two failed banks in one of Italy's wealthiest regions. However, the deal- which was approved by the European Commission...

Oil in Bear Market22 Jun, 2017  

Yesterday we saw a continuation in the drop of oil prices, which rippled out into the markets – pulling down both US and European Stock with it. This is likely a result of fears due to the non-OPEC countries ramping up production to cover the gap left from the OPEC+ agreement to restrict production...

Economic Calendar: BoJ, ECB, US Housing19 Jun, 2017  

The previous week's economic calendar had the potential to destabilize some of the world's most traded currencies...

Is the USD Going Up After its Recent Drip?16 Jun, 2017  

The US dollar is showing signs of recovery against other major currencies, sans the GBP. After the Bank of England Meeting Minutes announced an increase of interest rates, GBP/USD prices saw a significant upswing. This resulted in GBP climbing from 1.2696 to roughly 1.2755...

US dollar saw a rapid drop14 Jun, 2017  

The US dollar saw a rapid drop of its price opposite other major currencies after the announcement of the less than positive and expected statistics regarding U.S. inflation and retail sales. Retail sales dipped significantly to 0.3% in May down from the 0.4% rate of the previous month...

What will FOMC Announce Today?14 Jun, 2017  

Markets already seem to be responding to the optimistic speculation that the Federal...