Tag: EU

  • Sterling Weakened But Demands Increased

    Sterling Weakened But Demands Increased

    Sterling Weakened But Demands Increased

    Sterling weakened from five-month highs.
    Stocks in London dropped on Wednesday.
    The UK and the EU close to concluding a draft agreement on Brexit.

    Sterling has experienced decreasing from five-month highs. At the same time stocks in London fell on Wednesday. This disturbing situation came on concerns of talks between the UK and the EU to secure a Brexit deal. At this moment it looks like everything may fall apart.

    This was the second volatile day in the UK markets caused by political uncertainty about the Brexit. At the end of last week talks about Brexit were continued. To the end of last week, sterling has surged about 5%. But on Wednesday the negotiations were paused. The national currency and stocks dropped on that news. The fresh news about Michel Barnier’s optimism about getting a deal couldn’t help.

    Sterling has surged some 5% since late last week when London and Brussels restarted intense Brexit talks.

    Wednesday morning showed a bad result for sterling. Sterling was down 0.3% at $1.2731, off session lows. Also, it a lot below a five-month high of $1.28 hit the day before.

    Sterling weakened 0,3% against the euro too.

    Trading volumes have grown in recent days.  According to Refinitiv data, investors purchased and sold much more pounds than any other day in the past 12 months.
    UK and EU officials renewed talks on Wednesday, but without an agreement before the summit that will be held on Thursday. The companies listed on the London market that operate at home, such as housebuilders or banks, grown last week. For example, JP Morgan’s domestic asset basket has beaten some exporters and the blue-chip FTSE 100.
    Trading in sterling options showed high volatility in the currency.
    British government bonds profited from the restored uncertainty. The10-year yields down 3 basis points at 0.66 %. September inflation data had a limited market influence.
    Britain’s inflation rate slipped to grow as expected in September. The reason should seek in petrol prices. They dropped at the fastest rate in more than three years.

     

    But demand for the British pound has continued Wednesday.

    Investors are focused on the situation concerning Brexit. So, yesterday fresh news appeared. The UK and the EU are close to achieving an agreement on Brexit. The only concerns are will Boris Johnson gets support from Northern Ireland’s Democratic Unionist Party. Investors are waiting for the summit on Thursday. After that, the scenario of Brexit will be more clear. 

    The GBP stabilized after an important rally last week. Optimism toward the agreement of the Brexit process started to decline. EU diplomats want additional concessions from UK PM Boris Johnson. The important economic reports from the UK should come soon.

  • European ETFs: Invest in the World’s Biggest Regional Economy

    European ETFs: Invest in the World’s Biggest Regional Economy

    European ETFs

    by Guy Avtalyon

    European ETFs give a large diversification in mutual funds and with a bit of the fee. If you buy one security as a foreign investor you will have exposure to a lot of firms in the EU. Why Europe is interesting for investors? First of all, some of the biggest companies are located in Europe. So, it is a great opportunity for foreign investors to invest in EU ETFs. The European Union factors about 20% of the world GDP, therefore it looks like one of the most valuable investment targets in the world. 

    Benefits of Investing in European ETFs

    Europe is one of the best-shielded business areas around the globe. To be honest, there are still some risks after the crisis in 2009. The companies in Eastern Europe have better growth potential than Western Europe. Anyway, having EU ETFs in your investment portfolio is a great choice and I’ll try to explain why that is.

    First of all, in Europe are some of the most successful companies. For example, a lot of US investors are very interested in them. Moreover, Europe is consists of several areas. That makes European ETFs very good for diversifying a stock portfolio without the risk which developing markets may give. The added quality is that the EU is honestly low-risk. Just compare it with Asia, for example.

    Many investors are now attempting to enter the European Union market through mergers and acquisitions. Also, by investing in its main businesses. The EU is, in fact, welcoming foreign investment. 

    Here is full information that will help investors about investing in European Union.

    Risks of investing

    Of course, there are some risks involved. 

    The main risk is that the members of the EU are very connected and dependent on each other. At first glance, nothing is bad with that but if a crisis occurs it will spillover among them, and business in the union may fall down like a house of cards. As I mentioned above, Wester Europe economies have slower growth and they may seem less attractive for investing. Especially for investors who want more risky investments.

    Where to find: Top European ETFs

    MSCI European ETF (NYSE: VGK)

    Vanguard is available in Europe. Its European funds are based in Ireland. Vanguard allows non-residents to buy their ETFs/funds through a broker. So you can not directly do it through them. Vanguard’s ETF is a good option but it involves currency exchange. You can simply open an account with any broker with access to the NYSE ARCA. That is the stock exchange where Vanguard ETFs trade. The rest is simple, buy it just like with any other international stock.

     

    iShares MSCI United Kingdom ETF (EWU)

    A lot of investors favor “tracker” funds. They allow you low-cost investments. But not all tracker funds are low cost. Moreover, the fund charge is not all you pay, you will have to pay the broker or fund platform too. The good news is that as your portfolio grows the broker will charge you less on a sliding scale.

     

    SPDR DJ Euro STOXX 50 ETF (NYSE: FEZ)

    FEZ includes the 50 biggest EU companies but the large-caps from countries that don’t use the euro, including the UK, Switzerland, and Sweden, are not included. But, FEZ’s portfolio includes companies from France and Germany. As a difference from other EU funds, it does not hedge euro exposure. 

     

    European ETFs provide the most comfortable approach to get exposure to European markets and the easiest access to invest in Europe. In comparison to buying foreign stocks directly, it is for sure.

    Further, European ETFs are an excellent method to diversify your stock portfolio with low-risk investments. To be honest, I have to say that European ETFs will not suit every investor. Risk seeking investors wouldn’t like them, or for younger investors, European markets are not volatile enough. Yes, there is pretty much a lack of excitement.

  • Pound falls on the UK PM’s threats

    Pound falls on the UK PM’s threats

    3 min read

    Pound falls on threats of "no-deal" Brexit

    • GBP reached a record low against the Euro.
    • Pond falls against the US dollar too.

    Boris Johnson, the new UK Prime minister refused to reconsider his threat to leave the European Union with “no-deal Brexit”. This decision already has a negative influence on the pound and pound falls.

    GBP reached a record low against the Euro.

    Pound falls

     

    But the pound falls and GBP is under great pressure according to latest reports. It fell against the US dollar too.

     

    Pound falls on threats of "no-deal" Brexit

     

    The pound-to-euro exchange rate is quoted at 1.0853, the pound-to-dollar exchange rate at 1.2161. This level wasn’t noticed since October 2016. The date when former Prime Minister Theresa May declared her plan to trigger divorce from the EU. It is a clear sign that sterling fell to an almost-three-year low as no-deal Brexit worries rise. And now, pound falls more.

    Johnson “isn’t bluffing”

    The ‘no deal’ Brexit will happen on October 31. The reports came after a meeting on Monday between European Commission officials and Brexit diplomats.

    The Guardian and The Telegraph cited unnamed EU diplomat who said that “no deal’ Brexit appears to be the UK government’s “central scenario”. Both media reported the EU is taking this situation as “[their] working hypothesis is ‘no deal’.”

    The investors are worried about Johnson’s stance. His “no-deal Brexit” thinking isn’t a good signal for them. Rehan Ansari, the currency expert at Caxton FX, commented for Express.co.uk the current exchange rate developments.

    “The data, however, was not enough to get the Pound off the back foot. GBPEUR printed a new low at 1.0819, a level not seen since August 2017,” pointing out that “any volatility will likely be influenced by politics”.

    The market expectations

    The market expects a ‘no deal’ Brexit scenario, it is obvious. The forex strategists are seeking to set the levels that the British pound might be aiming. Some of them gave some numbers and found an alternative answer. Forex strategist Jordan Rochester said the GBP will settle at “hard Brexit equilibrium”. This is recognized as the level where the UK’s accounts would begin to balance themselves.

    The main issue for the UK is that it is reaching a historically high deficit. In the first quarter of this year, it was at -5.6% of GDP. The consequence is that the UK imports goods and services more than it exports. That is an outflow of currency.

    But there are some optimistic opinions. For example, Robert Halfon, a conservative politician, has faith that the drop of the pound will give more profit to exporters and boost British tourism. 

    “Hopefully holidaymakers will choose GB as a holiday destination,” he stated. Britons think it would be nice if it would be the truth. The truth is that leaving the EU may have a bad influence on the UK economy and national currency. But there is almost no chance for that to happen, as it is evident from Bank of England’s predictions of 1-in-3 chances for post-Brexit recession.

    Clearly Departing

    Johnson said many times that he’ll lead the UK out of the EU on Oct. 31. With or without a deal. Moreover, he has directed government departments to develop the plans for this divorce from the EU until the Halloween deadline. Johnson personally is going all over the country searching for wider support for his plans. 

    “If they can’t compromise, if they really can’t do it, then clearly we have to get ready for a no-deal exit, and I think we’ll do it,” Johnson said. “It’s up to the EU, it’s their call.”

    The investors’ concerns

    If the UK leaves the EU with a ‘no deal’ the country could be faced with dry-out of investment capital. The investors are cautious, and they could leave the pound ‘high and dry’.

    The UK internal capital depends on outside capital. But the balance may be established. If pound drops more that would decrease the incentives to import. At the same time, it would increase the incentives for export. Hence, achieving a balance.

    The pound falls as markets raise expectations of the new political risks and a ‘no deal’ Brexit on October 31.

  • Euro – Is it Going to Die?

    Euro – Is it Going to Die?

    4 min read

    Euro - Is it Going to Die?
    From 27 January 2019, 17 of the 19 national central banks in the euro area is no longer issue €500 banknotes. In order to ensure a smooth transition and for logistical reasons, the Deutsche Bundesbank and the Oesterreichische Nationalbank will continue issuing the notes until 26 April 2019.

    Existing €500 banknotes will continue to be legal tender, so you can still use them as a means of payment and store of value (i.e. spend and save them). Similarly, banks, bureaux de change and other commercial parties can keep recirculating the existing €500 notes.

    Like all denominations of euro banknotes, the €500 note will always retain its value and can be exchanged at a national central bank of the euro area at any time.

    To be charitable, you could say the euro has proved itself merely by surviving until its 20th birthday this January.
    That is a low bar.

    Some politicians and economists would say that the European monetary union has failed as an economic and political endeavor.

    The evidence of Europe’s ‘Lost Decade’ is that it can only ever be made to work under a regime of technocrats.
    That is to say, nation-state elected parliaments, was cleared out of their control over taxation, spending, and the core economic policies.

    “One day, the house of cards will collapse,” says Professor Otmar Issing, the founding chief economist of the European Central Bank.

    The EMU adventure has led to the “most serious economic crisis in the history of the European Union, said the others. It has done “more lasting damage” to Europe than the Great Depression of the 1930s and put eurozone states against each other. All of them are fighting for control over the policy.

    With 2019 beginning, the leading EU economists analyze the bloc’s single currency the EU. Which they argue has caused more harm than good.

    The political dynamics have become poisonous. Years of rolling crisis “entrenched and amplified the power and influence of creditor countries such as Germany”, working through the ECB and the European Council.

    EU bodies enforcers of a German-imposed strategy of debt deflation and fiscal contraction. The responsibility of adjustment fell on the weaker states. That was leading to a bias for the whole system.

    Yet nothing is actually changing.

    There is no attempting to probe the disaster

    Those in power of the EU still think they were right. Everything is about ideology.

    One of the aspects of the present situation is disappointment with the “European Dream”. The belief that policies preferring concepts like community relationships, sustainable development, and international cooperation would give Europeans an advantageous lifestyle and influence in the world, collapsed. Europe, particularly as the idea of the European Union, is no longer the object of dreams. It becomes a cause of concern and even fear. And the euro carries part of the guilt for this shift of perspective.

    Euro - Is it Going to Die? 1
    The common currency was put into place in 2002, by 19 of the 28 EU member states. But the growth in eurozone countries has been inferior compared with countries that did not join the monetary union.  Notably, the United Kingdom, Norway, and Sweden showed more progress. This aspect is important to understand the public disappointment with the EU. People couldn’t see the realization of the promise declared at the time of the euro’s launch.

    Today, most Europeans are assured that the common currency has negative impacts on their economy.

    Most of the countries have low growth but rising unemployment

    So it looks that the eurozone is in the middle of the crisis. The basic problems first posed isn’t resolved.

    For example, the unitary currency system locks the relative exchange rates between countries.

    For a stable economy, it is necessary to have the possibility to adjust exchange rates. Moreover, there is no such thing as a true European budget. Without exchange rate adjustments or budget transfers, it is left to the labor market. Therefore salaries have a negative effect on the hunt for budget balance.

    What is clear is that the status quo cannot persist indefinitely if the Euro is to survive in the long term.

    The Brexit devastated EU economic capability

    Truth is, youth jobless rates reached 57% in Greece, 56% in Spain, and much the same across Italy.  These levels are illogical in a modern developed democracy.

    Hundred thousand economic refugees came to work in Britain. From Eastern Europe came to the UK instead of going to the eurozone as they did before. The wave had a great impact before the Referendum UK.

    EU budget talks for 2019 collapsed

    The last year’s negotiations between the Council of the EU and the European Parliament for the 2019 budget failed to reach a compromise by the legal deadline. Later in December, they made the deal.

    But Europe’s economy is weakening. It would not have said the recession was imminent but the article by economist Victor Hill connects some events in directions many haven’t considered.

    Hill begins the article this way.

    ”Across Europe, and particularly in the 18-member Eurozone, the economic news is sobering. It’s now clear that the credit crunch in emerging markets which has played out over most of this year, plus the slowdown in China, are having negative consequences in Europe. Yet, despite the ongoing trauma of Brexit, the UK is cruising along relatively smoothly—for now.”

    The first such event is the coming end of the European Central Bank’s quantitative easing “Asset Purchasing Programme.”

    The ECB has been buying bonds, stocks, and anything else that isn’t nailed down wholesale.

    Asset prices have gone up

    Mario Draghi and his team borrowed the US Federal Reserve’s plan and made it more insane. Since 2017, they have been stepping down purchases. The step should reach zero in early this year.

    The EU needs a growing core to stimulate growth for the whole continent.

    Where the EU has made practically zero progress is crisis prevention. In some areas, they are even growing back.

    The politics have gotten worse. The price to pay for those bailouts, reform packages, rescue funds, and European Central Bank bond-buying schemes has been political fragmentation, at first. But by now, this becomes outright polarization. And this is happening in both “core” and “periphery countries”.

    The eurozone still relies on the European Central Bank to hold everything together. And instead of a treasury, they have a politically unstable consensus on the need for the ECB to act as a lender of last resort for governments.

    Policymakers need to support the ECB. But the eurozone will not be able to avoid a discussion on better fiscal alternatives forever.

    The eurozone is still dangerously imbalanced

    The size of the northern countries’ account surplus is an obvious symptom of the basic differences. It will need to rebalance to solve the problem.

    And moreover, there is the weak governance of some parts of Southern Europe. This will be very difficult to support politically.

    The current state of the global economy is like to be the crash. There are unsolved problems everywhere. There’s the Brexit issue, Italy’s populists, the US-China trade conflict and a lot more. The bad news everywhere.

    Euro - Is it Going to Die? 2
    The defenders of the euro at the European Central Bank (ECB) sit in Mario Draghi’s trap of a zero-interest policy. The bank president’s inaction could prepare the territory for the next big crisis.

    The world’s largest asset management firm, BlackRock, is warning its clients against investing in European stocks. They are saying the risks of doing so are too high and that the bullish period is most likely over on the Continent. There’s the concern, seeing investors increasingly putting resources into US sovereign bonds in pursuit of safe yield.

    And it’s a warning signal when yields on longer-term bonds are lower than those on bonds with a shorter maturity.

    Such an inverse yield curve could be an indication of a downturn

    Today’s debt is higher than before the global financial crisis, amounting to 225% of global GDP (according to the IMF) or 245% (according to the Bank for International Settlements). The eurozone stipulates its members must not let their debt exceed 60% of GDP. But, global debt is rising faster than growth.

    The bottom line

    What does this mean?

    This means that the economic growth we’ve seen in the past years has been achieved on credit.

    When the bubble explodes all will have to tighten their belts. Some nations will no longer be able to take the multibillion-dollar rescue packages. And the ECB’s Mario Draghi cannot lower the lender’s interest rates to lever up the economy.

    The ineluctable conclusion is that a monetary union of budgetary sovereign states cannot be made to work.

    The euro is essentially unsustainable. And, therefore, it is going to die.

    risk disclosure

  • Pound falls on Brexit stage fright and BoE Decision

    Pound falls on Brexit stage fright and BoE Decision

    2 min read

    Pound falls on Brexit stage fright and BoE Decision 1

    The Sterling pound yesterday dropped below 2-week lows in the early London session.

    The investors priced-in Brexit uncertainty ahead of a crucial meeting between Theresa May and the European Commission President.

    The GBP/USD currency pair dropped to new 2.5-week lows following the Bank of England‘s interest rate decision in the mid-European session.

    The GBP/USD currency pair yesterday dropped to a low of 1.2855 following the BoE rate decision before rallying to a high of 1.2997 on Mark Carney‘s balanced comments.

    Sterling is trading little changed at around mid 1.2900 before the UK Prime Minister Theresa May reaches Dublin to meet her Irish counterpart and discuss the problematical border plan.

    Cable (GBPUSD, often referred to as “The Cable”) tested fresh lows in the mid-1.2800s on Thursday. Although running to recover some ground later and close the day with small gains. It was a small drop in open interest and a decent raise in volume.

    There is a potential continuation of the bounce, which will leave at the same time occasional dips shallow.

    At the time of writing, the Pound was down 0.02% at $1.2932.

    Pound falls on Brexit stage fright and BoE Decision

    image Pound falls source Yahoo Finance

    The 4 hours chart shows that the pair quickly recovered above its 200 EMA, although it has already tested levels below it. A bearish 20 SMA keeps capping the upside, while technical indicators have recovered from oversold levels, now losing upward strength within negative levels, indicating that the risk of an upward extension remains limited. The pair would need to surpass the 1.3040 resistance to be able to extend its gains toward the 1.3100 price zone, yet as long as Brexit uncertainty prevails, the most likely scenario is sellers taking their chances on spikes above 1.3000.

    Support levels:  1.2925 1.2880 1.2835
    Resistance levels: 1.2995 1.3040 1.3090

    What about shares?

    UK shares were having a good day on Tuesday, with the FTSE 100 has gone from strength to strength as the morning has progressed.

    Shortly before midday, the UK’s benchmark share index was up 106.95 points, or 1.5%, at 7,141.08.

    The index was given a lift early on by BP’s better-than-expected results, which have pushed the oil giant’s shares up more than 5%.

    Shares were also boosted after the pound fell back in the wake of the disappointing survey of the UK services sector.
    Currently, rate is $1 = £0.7728.

    Shares often rise when sterling falls. The weaker currency lifts the value of companies’ overseas earnings when they are brought back to the UK and converted back into pounds.

    Governor Carney’s said on Thursday, that further rate hikes should not be priced out of the Pound.

    Focus returns to Brexit and whether Theresa May can find more support for concessions to deliver a deal pleasant to Parliament.

    All options are still on the table

    With the UK government still working its way to the UK parliament with the Brexit agreement approval, the Brexit uncertainty is set for the next weeks. The 2019 GBP/USD forecast highly depend on the result of the Brexit deal going forward. All options are still on the table leaving different GBP/USD scenarios all applicable.

    Sterling could fall past 1.2000 level that historically frames the bottom and serves as a territory of rebound for GBP/USD in case of hard Brexit. The reasonable solution for all interested parties in the UK parliament, the UK government and in the EU should be to avoid the scenario of no-deal Brexit. That would throw the UK economy and Sterling into confusion with the Bank of England saying the bottom for Sterling would be some 25% lower.

    Also, no transition Brexit would realize an unfavorable scenario for Sterling with falling to the lowest level since 1985 of 1.0700. Such scenarios are still considered doubtful. Should such scenarios develop, it is almost a sure shot for traders while buying GBP/USD at historical or/and cyclical lows.

    The chance of the UK finally making some kind of Brexit deal with the European Union is still the mainstream scenario for the UK and for GBP/USD.

    A no-deal Brexit is still not the most probable scenario for the UK economy going into 2019. The UK parliament stands in deep opposition to the Brexit deal agreed by the government.

    The ruling Conservative party is divided profoundly.

    risk disclosure

  • Mass exodus if May allows no-deal Brexit?

    Mass exodus if May allows no-deal Brexit?

    3 min read

    Brexit deal, is it to be or not to be? 7
    More and more of British companies have already triggered emergency plans to manage with a no-deal Brexit. If the UK crashes out of the EU. Many of them will move operations abroad, claim the British Chambers of Commerce.

    It said that in recent days alone, it had been told that 35 firms had activated plans to move operations out of the UK, or were stockpiling goods to combat the worst effects of Brexit.

    It looks that many companies had acted to protect themselves since May’s Brexit deal was decisively rejected by MPs in the Commons earlier this month.

    The worst effects of a no-deal Brexit

    Actually, it has seen a sharp increase in companies taking actions to try and protect themselves from the worst effects of a no-deal Brexit. No deal has gone from being one of several possible scenarios to a firm date in the diary.

    Last week the Airbus, Europe’s largest aerospace manufacturer, which employs 14,000 people in the UK and supports another 110,000 through supply chains, warned of potentially disastrous effects of no deal on its UK activities.

    Tom Enders, the boss of Airbus, said: “Please don’t listen to the Brexiters’ madness, which asserts that because we have huge plants here we will not move and we will always be here. They are wrong.”

    UK exporters need access to the EU’s customs union

    Ever since the vote to leave the EU in 2016, business groups including the BCC and the Confederation of British Industry have lobbied ministers, arguing that UK exporters need access to the EU’s customs union. Because it allows goods to be imported tariff-free.

    The CEO of Airbus, the global leader in aviation, clearly warned that Brexit threatens to destroy the developmental life in the UK. He urged the British to “not listen to the madness of Brexit’s supporters,” who argue that Airbus will remain forever in the UK because there are huge factories in that country.

    Airbus has more than 14,000 employees in the UK. Another 110,000 people work in related activities.

    Britain should leave the EU on March 29th.

    The Dutch authorities have announced that they are in contact with more than 250 foreign companies planning to move to the Netherlands due to the UK leaving the European Union.

    “It is not so easy to move huge factories to other parts of the world, but the Airplane Industry is a long-term business. We will redirect investments quickly in case there is no agreement on Brexit with the European Union. Do not be misled, because a lot of countries are barely waiting to be opened factories of Airbus parts there”, said CEO of Airbus Tom Enders.

    But the prime minister May has insisted that the UK must leave both the customs union and EU single market. And that the referendum result of 2016 is to be fully respected.

    YOU WOULD LIKE TO READ Brexit deal, is it to be or not to be?

    Political debates about no-deal Brexit

    Labour MP Yvette Cooper has revealed to the Observer that two major employers in her West Yorkshire constituency had written to her. They are warning of the damaging effects of no deal on their UK operations. Burberry, the luxury goods manufacturer, employs 750 people in Castleford and Haribo, the confectioner, 700 across her constituency.

    Cooper is pushing for a Commons amendment that would pave the way for Brexit to be delayed until the end of this year. It looks that MPs may need to work longer and lose their February half-term break if Brexit is to be delivered on time.

    The extra hours will be needed to get its legislation onto the statute book before the planned 29 March exit.

    Theresa May will seek backing for her deal in another Commons vote on Tuesday.

    Commons leader Andrea Leadsom described bids by MPs to prevent a no deal as a “thinly veiled attempt to stop Brexit”.

    Writing in the Sunday Times, she said this would be an act of “constitutional self-harm”.

    The UK is due to leave the EU at 23:00 GMT on 29 March and the prime minister has faced repeated calls to rule out the prospect of leaving without a deal if no agreement can be reached.

    There is a grave concern about a bill, proposed by Labour MP Yvette Cooper. It could extend Article 50 – which triggers the UK’s withdrawal from the EU by nine months. That means the prime minister has to secure a deal by the end of February.

    The Queen does not show any political views but…

    The British Queen has called on citizens to find “common language” and respect “different points of view”.

    Commentators say the remarks are considered the debate about the Brexit, while deputies will have to vote again next week on an agreement to leave the European Union.

    BBC journalist who follows the royal family, Nicholas Bichel, believes that there is no doubt that the queen “sends a message”.
    The Queen, as head of state, remains neutral in political matters and usually does not express her views on the controversial issues.

    However, speaking at the event marking the 100th anniversary of the Sandringham Women’s Institute in Norfolk, the queen said: “The continued emphasis on patience, friendship, a strong community-focus and considering the needs of others are as important today as they were when the group was founded all those years ago.

    Of course, every generation faces fresh challenges and opportunities. As we look for new answers in the modern age, I for one prefer the tried and tested recipes, like speaking well of each other and respecting different points of view; coming together to seek out the common ground, and never losing sight of the bigger picture. To me, these approaches are timeless, and I commend them to everyone.”

    The queen’s call touched the same questions as her Christmas message, in which she invited people to treat others with respect, “even when there are deepest differences.”

    The Brexit rises tensions on the once-bloodiest border in Europe

    Thousands of people travel every day for over an hour and a half across the Irish Sea to the United Kingdom. This is not only an important commercial line but an important cultural connection for many in Northern Ireland, which now directly depends on the parliamentary majority Theresa May.

    The city Larne shows its loyalty to London. The roads through the nearby villages are painted in the colors of the crown. Local Unionists the Irish, angry opponents of Catholic Irish, have their MP, Sammy Wilson.

    “We have strong historical ties with the rest of the United Kingdom for hundreds of years. It’s a common faith, a common language, and we will not give up on that,” he said.

    Unionists, who support the government Theresa May, refuse to support her proposal for Brexit if their relationship with the rest of Britain become more difficult. And the prime minister has not given them a satisfactory proposal so far.

    The main concern of the Unionists is whether the peace agreement for Northern Ireland which has ended decades of bloodshed will be respected.

    May is facing the problem that Wilson is not ready for a compromise.

    Their interests would be satisfied if they would leave the EU without an agreement. Then, they could say that this item has been removed from the agenda.

    Wilson argues that the Union’s insistence on the status of the border is a violation of the terms of the peace agreement.

    “This would mean that our laws are written in Brussels, not London. In other words, we would be constitutionally separate from the rest of the United Kingdom, which is a breach of the Belfast agreement,” said Wilson.

    The MPs also proposed a number of amendments with alternative proposals, which include postponing the deadline for abandoning the EU on March 29, in order to avoid issuance prior to reaching an agreement.

    Many MPs fear that leaving the EU without a formal withdrawal agreement would cause chaos in ports and business disturbances, although some supporters of Brexit support this option, and believe that this view is excessive.

    YOU WOULD LIKE TO READ The Brexit deal that risks “letting the British people down”

    Another amendment concerns the escape and ensuring that the border between Northern Ireland and the Republic of Ireland will not be returned.

    Both the UK and the EU believe that restitution of border controls could jeopardize the peace process, but Brexit’s advocates are afraid that the safeguard mechanism could connect Britain with EU rules for an indefinite period without any declaration of them.

    Risk Disclosure (read carefully!)

  • Brexit deal, is it to be or not to be?

    Brexit deal, is it to be or not to be?

    4 min read

    Brexit deal, is it to be or not to be? 5
    Theresa May, the British PM, looks for a compromise with her political opponents that will deliver a Brexit deal. She is entering the most delicate and dangerous negotiations of the country’s split from the European Union.

    On Wednesday night, there was an attempt in Parliament of opposition to oust her government in a vote of no-confidence 24 hours after her agreement with the EU was emphatically rejected by the historical margin for any sitting government of 230 votes.

    But May survived and opened talks in an effort to break the deadlock. Now she must return to Parliament to set out her Plan B by Monday.

    Point is that the UK has just 10 weeks left before the departure deadline.

    According to Bloomberg, “May is prepared to blur her red lines to find a plan that will get through Parliament, according to a person familiar with the matter. That could mean keeping close ties to the EU, an outcome backed by opposition parties.”

    On the other side, the European Union demand she radically rethinks the UK’s red lines. The bloc signaled its willingness to delay Britain’s withdrawal for a longer time.

    That means, the EU had been preparing to make limited concessions over the much-loathed Irish border backstop to help May convince Parliament to back her deal.

    But the after Tuesday night it is changed: European governments now believe a more fundamental shift is needed and the move has to come from the UK side, three diplomats said.

    “The government approaches these meetings in a constructive spirit and I urge others to do the same,” May told the House of Commons after winning the confidence vote. “But we must find solutions that are non-negotiable and command sufficient support in this House.”

    Economic consequences of Brexit deal

    The pound initially rose after the historic vote on the Brexit deal. There were some expectations a cross-party approach would yield a Brexit plan that protects the trading connection with the bloc.

    But the Theresa May discovered that the price of her opponents’ cooperation could be too high.

    Rival party leaders promptly began to establish their conditions for taking part in talks to rescue May’s Brexit strategy. On the table is the option of delaying Brexit and even staging a second referendum on the membership of the EU.

    The leader of the main opposition Labour party, Jeremy Corbyn refused to take part at all in talks about the government’s new Brexit plan.

    Corbyn, the Labour leader, said May must rule out a no-deal Brexit as a precondition for discussions. After a spokesman for the prime minister later told reporters she was not doing so, Corbyn’s camp said no deal was “blackmail.”

    A “no-deal” Brexit is where the UK would cut all ties with the European Union overnight.

    Labour party, Scottish National Party, and Liberal Democrat members of Parliament favor closer trading ties with the EU. More than May has proposed. Labour party, for example, is advocating full, permanent membership of a customs union with the bloc.
    That sound as anathema to many pro-Brexit members of May’s Conservative party.

    British authorities warn that leaving the EU without a deal could lead to a recession, with the pound falling as much as 25 percent and house prices taking as much as a 30 percent hit. Already, suppliers to manufacturers are stockpiling just in case.

    Time is running short, and the prime minister has urgently scheduled calls with EU leaders to discuss the next steps.

    It’s unclear how much the EU can help.

    The bloc is willing to extend the Article 50 negotiating period beyond the summer. In order to find a deal if necessary, according to some diplomats. But on Wednesday, the EU’s chief Brexit negotiator, Michel Barnier said there’s no way to remove the need for the most contentious part of the agreement, the so-called backstop plan for the Irish border.

    According to some diplomats, European governments are willing to delay Britain’s departure well into the second half of the year.

    Brexit deal, is it to be or not to be?
    So, there is a chance for Brexit to not happen on the long-ago scheduled date of March 29.

    The economic exodus because of Brexit deal

    The increasing likelihood of a no-deal split is pushing wealthy Europeans, who have made their homes in the UK, to move out. According to Anthony Ward Thomas, founder of a firm of the same name that specializes in overseas relocation.

    He confirmed 296 moves away from Britain in 2018. That is an increase of 82 percent. Favored destinations are Paris, Brussels, Zurich, and Geneva, as well as southern France and Spanish locations such as Majorca. In other words the territories of EU countries.

    Popular destinations also include the Channel Islands, which don’t apply capital gains or inheritance taxes. Relocation inquiries increased more than 50 percent in the second half last year compared to the first six months.


    Customers are typically wealthy, having at least 5 million pounds ($6.4 million) at their disposal. They are European Union citizens moving with their families. There are some retirees seeking warmer weather but also favoring “more stable” political climate.

    It pretty much looks that the people are abandoning the ship because it is sinking.

    And the exodus may accelerate after the rejection of Theresa May’s Brexit deal.

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    Italy has also emerged as a magnet for moves, spurred by Brexit and the introduction of a new tax regime two years ago. This country was previously a focus mainly of the second-home owners. But these days, a new home buyer in Italy is, for example, entrepreneur or hedge-fund manager. They moved their families, bought homes, and started to work remotely.

    Financial consequences

    The pound drifted on Wednesday and gilts sold off even though the margin of the Prime Minister’s loss was way above the threshold many analysts feared would trigger panic. The prospect of a no-confidence vote in May later that evening has also failed to disrupt assets amid a general assumption she will prevail.

    Brexit deal, is it to be or not to be? 2
    The one soft spot was the FTSE 100 Index of shares, which tends to fall when the currency performs well.

    The key to the robust showing from UK assets appears to be in the scale of May’s defeat. A belief is growing among many financial professionals that there’s an increasing chance of a so-called soft-Brexit or even no Brexit at all. Those are outcomes many investors would cheer.

    Brexit deal, is it to be or not to be? 3
    It looks that the chances of a no-deal Brexit are so slim now it’s not even really worth considering anymore. It looks that the resolution will be an even softer version than May’s proposal or a new referendum.

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    That’s a view shared by a host of analysts who expected May to survive the no-confidence vote called by the opposition.

    The markets offer evidence of a pickup in confidence among traders. The cost of insuring UK banks’ subordinated debt fell, while volatility on pound options has slumped.


    So, we can say that Prime Minister Theresa May’s record defeat in Parliament over her Brexit divorce deal caused a curious response from markets: Optimism.

    The pound drifted on Wednesday and gilts, which is a traditionally safe investment, sold off even though the margin fell way below the threshold. And many analysts feared it would trigger panic. The prospect of a no-confidence vote in May later that evening has also failed to disrupt asset prices amid a general assumption she will prevail.

    Not everyone sees the glass as half full

    One undeniable outcome of the defeat of May’s deal is a further delay to the Brexit process and yet more uncertainty for traders. Dean Turner of UBS Global Wealth Management is among those recommending caution.

    Fidelity International Leigh Himsworth is also wary. He’s reminding investors that a no-deal Brexit remains the default option. And that the mechanics of any other possibilities are difficult. He recommends investing in liquid assets and hedging against the various outcomes.

    Brussels’ chief negotiator, Michel Barnier stated Brexit is at a standstill after the crushing rejection of Theresa May’s deal by MPs but offered to return to the negotiating table if parliament forces her to shift the “red lines”.

    So, we will see. Monday is coming very soon.

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