The mandate to negotiate Britain’s departure from the European Union must be unanimously approved by the bloc’s remaining 27 governments, leaving “zero chance” the U.K. can clinch a deal with both immigration curbs and free-market access, the Czech envoy said.
As U.K. Prime Minister Theresa May dismissed warnings that the EU’s eastern members may veto a Brexit deal, Czech State Secretary for EU Affairs Tomas Prouza joined the intensifying chorus of ex-communist members ruling out a deal that lets Britain “cherry-pick” among the basic freedoms of movements of goods, services, capital and labor.
“There is no way whatsoever for the U.K. to have the cake and eat it at the same time,” Prouza, the top Brexit negotiator for the country of 10.6 million, said by e-mail late Monday. “I see exactly zero chance of success if the U.K. wants to create first- and second-class citizens in Europe or if it tries to separate the four basic freedoms of movement.”
Most of the remaining EU members agree that Britain can’t maintain its current trade ties while also meeting the wishes of voters from the Brexit ballot to clamp down on immigration. The hardening position of the bloc’s 11 ex-communist members has narrowed London’s room for maneuver. While May argued Monday that it’s in everyone’s “interest” to reach an agreement, her chancellor of the Exchequer, Philip Hammond, may be ready to accept giving up access to the single market because of migration goals, according to people familiar with the deliberations.
One-hundred thousand jobs would be at risk if clearing leaves the U.K., said London Stock Exchange Group Plc Chief Executive Officer Xavier Rolet.
“We estimate, conservatively, that at a very minimum 100,000 jobs, in risk management, compliance, middle office, back-office support functions -- by the way not just in London, up and down the country -- are implicated in supporting this business and clearly could be at risk,” Rolet said in an interview with Bloomberg Television on Friday. “But the point is that there are very, very few financial centers around the world that could accommodate such a global business.”
Rolet’s comments come after executives at global investment banks in London said they expect France and Germany will prevail in a tussle over the clearing of $570 billion of euro derivatives a day. The people familiar said they are making plans to deal with the fallout.
Britain needs to come home and trade more with the United States. Most of our ancestry comes from Britain, Ireland, Scandinavia. They were there for us during WWII along with Brazil. They did hops. They could not fly direct. My dad flew out of Brazil and repaired planes. We need to buy our Iron Ore from Brazil, Anglo America which I think is the largest company on the London Stock Exchange. It's partially owned by the Queen. China has basically been raping us of our jobs, money, patents, secret information. Obama has been a wimp with Russia. I'd say cut Russia off using "Swift". Maybe they were the ones stealing from "Swift" to begin with. I'd also cut them off the Internet. I would say, "You get out of Crimea and Eastern Ukraine and you can come back into our sane world. When a child is bad, you send them to their rooms and let the Lord deal with them. Just as England sent all their criminals to Australia. We need a little tough love with Russia. If they cut off the gas to Europe, we've got plenty of LNG ships that can supply natural gas. When there's extreme greed in the world and it's being pushed by the Internet. It matches up bad guys to bad guy, good to good, and evil to evil. What was the cause of WWII? Extreme Greed! It was the extreme greed of Hitler, Mussolini, and Tojo that caused them to take what was not theirs. What about us letting Hitler have Poland. He wanted more. Is this the same with Vladimir Putin taking Crimea and Eastern Ukraine and our wimp President sanctions a few of Putin's friends. And what do we do about China and the Sprat-lies and claiming the whole South China Sea as theirs. I would say that air strip could be used for commercial use and no Chinese Military around. I'd like to see how these extreme greed President Candidates deal with this. Kick the can down the road?
Britain intends to become an independent member of the World Trade Organisation when it leaves the European Union, trade minister Liam Fox will say next week, according to a report in the Sunday Telegraph newspaper.
The newspaper, without citing its sources, said Fox would use a speech at the WTO on Tuesday to say Britain would seek to be an independent member of the body so that it could negotiate its own trade deals outside of the EU.
Being an independent member of the WTO would involve Britain leaving the EU's customs union, the newspaper said, something the government has so far refused to confirm it intends to do.
Three-quarters of British company bosses are considering moving operations abroad following the vote to leave the European Union, according to a survey published on Monday.
The KPMG survey of 100 UK chief executives, from companies with revenues between 100 million pounds and 1 billion pounds ($130 million-$1.30 billion), found 86 percent were confident about their company's growth prospects and 69 percent were confident about the British economy's growth prospects over the next three years.
However, 76 percent said they were considering moving either their headquarters or their operations outside Britain because of the June 23 "Brexit" vote.
"CEOs are reacting to the prevailing uncertainty with contingency planning," said Simon Collins, KPMG UK chairman.
"Over half believe the UK's ability to do business will be disrupted once we Brexit and therefore, for many CEOs, it is important that they plan different scenarios to hedge against future disruption."
The June vote has created uncertainty over Britain's future economic and trade relationship with the European Union.
Sterling falls to its lowest level against the dollar since the beginning of July after Theresa May outlines the timetable for starting Brexit negotiations.
Theresa May said she would trigger Article 50, the clause needed to start the process, by the end of March 2017.
That means the UK is likely to leave the EU by mid-2019.
In morning trade the pound was down 1% against the dollar at $1.2854 and nearly 1% against the euro at €1.1440.
Mrs May's announcement had "unsurprisingly, been bad news for the pound", said Connor Campbell, Spreadex financial analyst.
"Sterling has been spooked by May's promise to trigger the dreaded Article 50 by the end of March 2017.
"Not only that, the PM has also put her weight behind a 'hard Brexit' to appease the more rabid members of the Tory party, something that is set to cause conflict between her and her backbenchers," he added.
"Combine all this volatility together and the pound has been left at its worst price since the start of July."
Sterling fell to its lowest intraday level against the dollar since the day after the EU referendum on 6 July, when it hit $1.2797.
Yes - she did a pretty good interview on The Andrew Marr Show yesterday, I thought.
(I'd been half-expecting that when we got to February/March, they'd announce that with the French and German general elections coming up in 2017, they were going to postpone Article 50 until after that, in an attempt to avoid wasting 6 months out of the 2-year "negotiation period" while European attention is diverted; but apparently not?)
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In this thread I tend to post and solicit news that are directly related to trading and financial issues concerning Brexit.
However the contents of this piece may have an impact in terms of London as financial hub and its future.
Britain has not yet begun its long (and likely tortuous) process of leaving the European Union. Its terms of exit from the bloc are still unclear, and ever since the vote, uncertainty has hovered over the future of London’s coveted status as a European business hub.
Enter Sadiq Khan, just months into his job as mayor of London, and himself a backer of Britain staying in the EU. (Londoners voted around 60% in favour of remaining—in some districts more than 75%.) Khan confirmed this week that his office is hammering out plans for a separate London-only work permit to ensure the city can continue to attract and recruit European workers after Britain leaves the EU.
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In relation to London-only work visa's, if it doesn't go thru then they aren't needed. But I agree, I wouldn't assume it happens, and if it does, I wouldn't assume it happens quickly.
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I agree partly with the first part of your sentence - the process has been & continues to be very inefficient - but not at all with the last. I think the British "Exit" vote has already had and will continue to have a very positive effect on the future balance and direction of the EU, with or without the UK as an ongoing member.
Entirely appropriate, imho, that the heirs of Winston Churchill are the ones to give the unelected mandarins of Brussels a good kick in the ass ! It's been a much-needed, EU-wide wake-up call.
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A UKIP candidate came to my ex-girlfriend's place when we were together campaigning. She is from Rwanda originally but Cambridge educated, about 5 foot tall and a genius psychologist. Those two grown men never reported what happened to them after they called her a bad word (not realising I was in the hallway).
I know people can be even lower than UKIP fanatics but.. so not surprised nobody knows what happened here either. But its clear Brexit is emboldening them.
The pound risks turning from prop to pain for the U.K. economy as Brexit negotiations near.
Sterling tumbled the most last week since the vote to leave the European Union in June, as investors woke up to the fact that the U.K. government’s approach to Brexit may mean forgoing access to the single market. While the currency’s weakness has helped cushion the economy in the immediate aftermath of the referendum, the latest slide may carry more costs than advantages.
The drop caused companies to downgrade profit forecasts, threatened to fan inflation, and also hinted at a further fall from grace for what was once the global reserve currency. The flash crash last week was more redolent of a frontier currency than the world’s fourth-most traded, and only Sierra Leone’s leone and the Mozambique metical have dropped more than the pound since the June 23 referendum.
While a weaker currency can give exporters a boost, those advantages can disappear when the slide is as fast and disorderly as sterling suffered last week, according to Nomura Holdings Inc. The pound’s 16 percent tumble against the dollar since Brexit may be part of a fundamental shift in the state of the U.K. economy that monetary policy alone can’t tackle, former Bank of England policy maker Adam Posen said on Friday.
Might be interesting to see a long term chart (I can vaguely remember 2.40), I'm not sure whether to expect parity next or a half-way back retrace sometime.
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Britain is facing a divorce bill from the EU for as much as €20bn, according to a Financial Times analysis that shows the bloc’s shared budget is emerging as one of the biggest political obstacles to a Brexit deal.
More than €300bn of shared payment liabilities will need to be settled in the divorce reckoning, according to EU accounts. It is a legacy of joint financial obligations stretching back decades — from pension pledges and multi-annual contracts to commitments to fund infrastructure projects — that Brussels will insist the UK must honour.
The sheer size of the upper estimate, which some EU-27 officials reckon is too low, threatens to poison the politics of the break-up and derail a Brexit transition and trade deal, according to several senior European figures involved in the process.
The €20bn upper estimate covers Britain’s share of continuing multiyear liabilities, including unpaid budget appropriations of €241bn, pensions liabilities of €63.8bn and future contractual and other spending commitments totalling about €32bn.
British Eurosceptic MPs are likely to react badly to the news that UK taxpayers might have to pay billions of pounds to Europe as the price of Brexit. One minister said: “It will have to be explained very carefully, to explain what we are getting in return for market access.”
The pound hit its lowest level on record on Wednesday, according to a Bank of England trade-weighted index, as markets priced in the possibility of a hard Brexit and the prospect of difficult negotiations with the rest of the EU.
I think what they mean is that there is a total unpaid budget appropriations of €241bn, pensions liabilities of €63.8bn and future contractual and other spending commitments totalling about €32bn in the EU as a whole and UK has a share of 20bn for that?
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Edit on Sunday : Response from Boris https://www.bbc.com/news/uk-politics-37670091 .. he runs from questions of course. I'm happy to provide the hot tar, Boris has his own feathers so that makes the task easy.
'Many things happen in the real world that prompt a sudden rush to buy sterling on currency markets. It is rare that the event that triggers excitement is something said by a lawyer in the High Court. That, however, is precisely what happened on Tuesday in the high-profile hearing over whether Theresa May needs parliamentary approval before triggering Article 50, the pathway to Brexit.
At one point in the hearing, James Eadie, a government lawyer, said the Commons would “very likely” be asked to approve the final deal that Mrs May agrees with Brussels in a little over two years. His comment prompted the pound to rally to its biggest gains since mid-August. On Betfair, the chances of Article 50 not being invoked before July 1, 2017 this morning shot up from 18 per cent to 35 per cent.
The excitement is overdone. It was always likely that the Commons would have the right to ratify the final UK-EU deal at the end of the Article 50 process, so what Mr Eadie said was hardly surprising. More importantly, by the time Britain has agreed any pact with the EU in two years, the opportunity for MPs to vote it down will be extremely limited. If the Commons refuses to ratify what has been agreed, Britain will “fall off a cliff” and on to World Trade Organisation rules which impose high tariffs, including 10 per cent on cars. That will probably be a worse outcome than any UK-EU agreement — and is one that MPs would want to avoid.'
Chancellor [sic] Mark Carney said on Tuesday that there were limits to the central bank's ability to ignore the effect of sterling's slide on inflation, as policymakers consider whether to cut interest rates next week.
Carney also told lawmakers that political criticism would not influence his decision on whether to extend his time at the BoE, but warned that any interference with its independence would hurt the currency and push up government borrowing costs.
The pound slumped on Tuesday to its lowest level since the Oct. 7 'flash crash' but recovered some of its losses as Carney spoke to a committee in Britain's upper house of parliament.
"There are limits to the willingness of the Monetary Policy Committee to look through an overshoot of inflation," he said, describing the depreciation of sterling in recent weeks as "fairly substantial".
The BoE would "undoubtedly" take sterling's weakness into account at its rate-setting meeting next week, he said.
In early September the central bank said it was likely to cut rates again this year if the economy slowed as it expected. But sterling's weakness and unexpectedly robust economic data have prompted most economists to rule out a Nov. 3 rate cut.
Rating agency warns further sharp declines will undermine the pound’s position as a reserve currency
S&P Global Ratings has called into question the pound’s future as one of the world’s reserve currencies as the rating agency affirmed its decision to strip Britain of its top credit rating following the vote for Brexit in June.
Sharp falls in the UK currency that have followed the referendum could ultimately “reduce confidence and eventually threaten its role as a global reserve currency”, S&P said in a review of the country published late on Friday.
Sterling has shouldered the bulk of the strain as investors grapple with the implications for the UK economy once it has exited the EU. It has fallen almost a fifth against the dollar since the vote with the scale of the decline raising the likelihood of higher inflation next year.
“Were sterling’s share of allocated global cental bank reserve holdings to decline below 3 per cent, we would no longer classify sterling as a reserve currency and this would negatively affect our external assessment,” S&P said.
While the dollar is the global reserve currency, the pound still has a share of just under 5 per cent of central bank foreign exchange reserves, according to the latest figures from the IMF.
Despite better than expected third-quarter GDP figures published this week, S&P warned that Brexit still presents a significant risk to the UK’s economic record.
The rating could be lowered further from AA if “we conclude that sterling will lose its status as a reserve currency or if public finances or GDP per capita weaken markedly beyond our current expectations”.
Some argue the weaker pound could prove a boon for Britain’s exporters and helping to close a large current account deficit.
S&P stripped the UK of its triple A status in late June, calling the referendum a seminal moment for the country.
Earlier this month, prime minister Theresa May announced that the government would invoke the Article 50 exit clause by March 2017, setting in motion the UK’s exit from the EU.
Mrs May’s insistence that Britain will not “give up control” of immigration has led investors to speculate that the UK will prioritise border control over access to the single market, while comments from European Council president Donald Tusk, suggest EU policymakers will not be keen to accommodate the UK.
The U.K. must hold a vote in Parliament before starting the two-year countdown to Brexit, a panel of London judges decided, likely setting up a constitutional confrontation at the country’s Supreme Court next month.
“If notice is given under Article 50, it will inevitably have the effect of changing domestic law,” Judge John Thomas said Thursday, delivering a decision that is a setback for Prime Minister Theresa May’s plan to unilaterally start the process by the end of March by invoking Article 50 of the Lisbon Treaty.
The pound -- the worst-performing major currency before the ruling -- rose to a three-week high against the dollar Thursday as investors speculated that the decision could force May to dilute her push for a so-called hard Brexit. The government said it will appeal, and the Supreme Court has already set aside time for a hearing between Dec. 5 to Dec. 8.
Honestly, I think this is very unfair to the people of the UK. They decided to leave, they were told that it was up to them, that if they voted yes, then that's what would happen. Now, it's up to parliament or the best lobbyists to decide what will happen and when. The whole thing makes me kind of sad, to be honest.
"Whoah! Bessie is commin straight for us!!!!!!! Or is that a tsunami?!?"
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As one of the 48.1% who are still absolutely stunned that Rupert Murdock / News Corporation managed to whammy the other guys, it makes me very happy.
Mostly as I have to send myself some money so that bump has good timing.
That man is the greatest threat to our English speaking democracies in modern (or all?) history. UK, Australia, USA, he has screwed up all of them.
I don't think they voted on hard or soft Brexit, whichever is now best for the people (given facts coming to light) should be decided by parliament not a cabal within it IMO.
People voted for a lot of different things under the heading of "Brexit," mostly for more money for social services, better jobs and a better standard of living. Are they really going to get that, or were they duped?
The worst problem with the EU isn't the union, but the Euro, and the UK was already outside that.
On the other hand, Britain's absence just might help shift the EU balance of power away from neo-liberal ideology, which would certainly help the Euro countries.
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Translation : "If any of you morons had been listening, you would know that I've been against Brexit from the start and have no intention of allowing it. Being a smart politician, I have to make it look as though I wished to honour the ridiculous and unnecessary Referendum, but was stymied by the courts and those nasty hedge fund managers. Now, everyone, get with the program, 'cos I'm in charge..."
Capisce... ?
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Imho, the worst problem with the EU has been the push to move from an Economic union towards a Political one.
The Euro is a serious structural issue that has benefited Germany, ie. the solutions reduce that benefit... a very difficult Catch 22 (George Soros writes most eloquently and sensibly about this).
Anyway, the UK's Brexit vote will have very positive long-term benefits for the EU as a whole, even though as I think everyone has finally grasped, I do not think Brexit will happen.
Juncker and Tusk will be gone before too long, then things may start to improve....
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I agree with the rest, but still think the Euro is the biggest problem, and the one contributing most to citizens' dissatisfaction - though certainly the EU also has structural political problems, ie, a democracy deficit.
Interesting that Stieglitz in his book on the Euro essentially agrees with Soros, though he proposes Germany exit the Euro rather than the EU, and proposes other solutions as well.
I fear they will just keep muddling along, with no one doing as well as they should, and Greece remaining devastated.
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I appreciate from your posts that you're serious about this perspective rather than joking, but like most people in the UK, I can't really relate to it at all.
It's not just that I disagree totally (though I do): it's that I literally can't understand, on any level, how people can come to imagine that this is a possible outcome.
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My tenner says the EU itself fractures before we get chance to officially leave it in its current form, regardless of Article 50 triggering or otherwise. Think about the timescales that will be involved and the trends now in place on world stages.
A new reformed entity or one of several potential children may then be a more appropriate club, if membership of anything is still deemed desirable at all.
My own opinion is that it is irrelevant to most lives in any case, these trends were going to form regardless. An inclusive organisation such as the EU could only ever have been formed somewhere near a peak in human optimism, with support from the grandest Ponzi scheme in history.
The future's bright, the future's Orange.
Cheers
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This could have legs for a number of reasons. Its now twice in the past sixteen years that California has been part of a majority that has been denied the winner in the Presidential election. It has also been part of the majoity popular vote for the House of Representatives which was awarded to the minority in the recent past. People are getting sick of what appears to be a patently unfair and undemocratic system. Additionally, Californians are tired of waiting around for people in far away 'battleground' states with whom they have little contact to determine their destiny. More and more, by the time the polls close in cali, it feels like votes here don't even count anymore. I think Californians are starting to feel like they need to take control of their own destiny.
Obviously, a lot of this will depend on how the Trump presidency develops but, think of this akin to a Scottish independence vote.
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Votes count little in our current Western democracies compared to the dominating effects of globalisation and technology, and the coming wave of automation will further compound that. Politics will eventually be seen as a historical aberration which appeared to give ordinary people some control, but in reality was always just a smokescreen to bury all protest.
Democracy was a such a quaint notion really, then again buying votes with false promises has always been a winner.
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This is a possible outcome, IMO. Opinion polls in so many countries speak of increasing popular desire for countries to leave. The democratic deficit, and constantly attempted ever-increasing fiscal and political union could easily tear the thing apart. (My suspicion is that that's going to take longer. The UK is perhaps the first of many bricks taking themselves out of the wall.)
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As long as there are people, there will always be politics. That said, I agree with you in that both internal and global dynamics outside of anyone's control often shape the agenda. Mostly, you just get to pick who you think will react more wisely to the exigent circumstances.
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Look at population growth since time began, growth, decline (war, disease, some famine though that was usually the result of more modern nation states) its the same as any long term chart steady linear-ish growth. Then came antibiotics and everything changed. Almost everything we do for peace and human happiness accelerates resource consumption so we have a certain (terminal) problem.
Look population at it since 1946, just going up and since 1994 (Rwandan Genocide, the last major one) steeply up with little war losses.
We have a massive consolidation and nearly exponentially growing billions will magically jump to a new planet in 20 years?.. A mega "selloff" of volume is about to happen if this were a chart. We are in a gigantic peace bubble and the US, Chinese and Russians (and Euros but..) leaders see the high level demographics so are positioning themselves for aggression and a resource fight.
look at this (CNN conservatives, sorry, but get past that) Africa on the world map: What's the real size? - CNN.com and get a grip on the real size of the Earth and its nations, not the distorted map version. Let that sink in to your trader mind.
Cooperation and cool headed elegant thinking (often fairly agressive) is my thing, makes me love living. Fix the problems and patch as needed. We might reach a solution via technology faster if we don't melt down.
edit: As a "Wizard" haha, somewhat over-rated title, I must add some Gandalf/Tolkien:
“Some believe it is only great power that can hold evil in check, but that is not what I have found. It is the small everyday deeds of ordinary folk that keep the darkness at bay. Small acts of kindness and love. Why Bilbo Baggins? Perhaps because I am afraid, and he gives me courage.”
Fall largely because of plunge in sterling after Brexit vote
Households in the UK have lost 10 per cent of their overall wealth as a direct result of Brexit, a report from Credit Suisse found.
In the space of 12 months, approximately $1.5tn (Ł1.2tn) has been wiped off the value of household wealth, which includes both property and investments, as sterling dropped against the dollar, the Global Wealth Report 2016 found. Since last year, the UK has lost more in percentage terms than Turkey and Colombia.
Argentina, also hit by adverse currency movements, saw a 27 per cent drop and Ukraine, still mired in a territorial dispute with Russia, fell by 19 per cent.
Yet despite the hit, the UK remains relatively wealthy when compared with other nations. The report revealed that more than half the population holds wealth of over Ł80,000. More than 2.2m in the country have assets of more than Ł810,000 — despite this number having dropped by 420,000 over the 12-month period.
Michael O’Sullivan, chief investment officer of the international wealth management division at Credit Suisse, ascribed the majority of the decrease to sterling’s fall against the dollar.
Since the UK voted to leave the EU on June 23, sterling has dropped by almost 20 per cent against the dollar.
However, he warned the precarious nature of the housing market could mean the Ł1.2tn figure could be set to rise. “[The number] is slightly flattered by the fact that the bond market rallied and equities were just off a little bit – and it doesn’t yet capture the property market.
“It could be potentially larger in dollar terms. Looking to the future, you could say the gilt market is back to where it was pre-Brexit and that the property market is starting to come off.
“If the economy doesn’t recover, wealth could fall further,” he added.
It may be a naive assumption but shouldn't the above article stress that the value being wiped out applies only if one buys a home in a currency other than GBP?
In other words, given the house value in the UK seems to keep going up, what difference does the article above make if I'm in UK and I want to buy a house?
Perhaps I'm not taking something else into consideration?
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Your logic is right, but you are only looking at one particular aspect. If you earn GBP and wish to buy a house in GBP, then currency fluctuations don't really matter to you. Your income and your mortgage have the same currency, thus you are hedged. As long as your house maintains its value in GBP you really have nothing to worry about.
On the other hand, a foreign investor may feel different. If he has a mortgage in GBP then he has a "hedge" against currency movements (house value less remaining mortgage = amount exposed to fx risk). A foreign investor who bought a house cash will have his entire capital subject to fx risk.
Where these type of discussions get more tricky relate to the other aspects, for instance, I could argue that the weakening GBP could lead to a collapse in house prices as foreign investors sell their houses to try and reduce fx losses. At the same time, you could argue that the weak GBP makes UK property prices more attractive to foreign investors and property prices should increase. Third option would be that both scenarios happen, i.e. first one and then the other.
To calculate the GBP 1.2 trillion, I would imagine that the decrease in market cap of the FTSE was used and perhaps some other data coming from the bond markets, but I am guessing that any potential housing market losses are just estimates at this point.
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Yes, I was aware of the implications about foreign investments, which I am sure can be quite considerable (although it would be useful to understand what % of a given market, UK for example, is owned by foreign entities), but I do appreciate your insight
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I would agree.
I suspect what they are doing is saying that UK investments are worth $1.5T less than they were (in USD) because of the currency fluctuation, and then just converting $1.5 to GBP. So 1.5*0.81 = GBP1.21T which is of course circular logic, since the assets in GBP are worth the same! (Should be pointed out that the FTSE100 is actually up about 15% higher than it was in June!)
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Welcome to the wonderful world of statistics. @SMCJB brings up a valid point regarding the performance FTSE 100 being positive since the Brexit vote and that means my prior post was incorrect.
You would need the detail of their calculations before you can determine whether it is accurate, but as @SMCJB pointed out the calculation was most likely done by calculating the USD loss on GBP household wealth. Technically you can't fault their math, but unless you measure your wealth in $-terms it means very little.
So yes, you are probably looking at an article meant to shock or persuade rather than inform.
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Might I ask is the pound very likely drop again? It is $1.272 now. I am going to London in February so I have a selfish reason to ask.
Is there any upcoming event likely to bring a precipitous drop or rise? On a technical level it seems to be bullish, breaking what seems to be a channel. I am thinking I should buy pounds now.
I understand Nigel Farage the Brexit architect is a disliked figure in British politics even by most Brexit supporters and he is now the darling of the president elect. In the news today he is offering to do his best to "build bridges" to the USA.
Our people go nuts at disrespect to our military but the P.E. calls P.M. May very late intentionally? British soldiers fought and died with us and for our national interest. Showing coldness to give Nigel Farage the "Trump Boost" is shameful and I was a Republican. Sorry.
Without getting involved into the politics of it (which by the way are banned from FIO), the only relevant event that at the moment comes to mind and might spook the pound again is the outcome of the appeal the government is going to debate in the Supreme Court about whether May can trigger article 50 without consulting Parliament.
Thank you xplorer, my first day I cannot imagine my fellows saying I am far off the mark in what I said however I understand the politics rule is needed.
I may just buy half ($4k) and spread the transaction.
I do not want to disrupt your thread but as you mentioned it. I have re-read the terms of use and there is no mention of political discussion being banned from the forum?
I can certainly see where gross and absolutist statements would be unwanted but how can trading be discussed in the compete absence of politics? Fundamental analysis is often pure politics. Is there moderator guidance given?
Economists have disputed claims from a pro-Brexit campaign group that leaving the customs union and new free trade deals could create 400,000 jobs, arguing it takes no account of the risks to exports.
Analysis by the Change Britain campaign group suggests that hard Brexit, where Britain leaves both the single market and the customs union could ultimately be beneficial for the UK, citing reports that the United States, India, the South American Mercosur group, China, Canada and South Korea have all expressed an interest in trade deals.
Agreements with these countries would create almost a quarter of a million jobs, it said. That figure could rise to just under 400,000 if deals were struck with Japan and the Asean group of states which includes Thailand, Indonesia and Malaysia, the group’s analysis said.
But Jonathan Portes, professor of economics and senior fellow at the thinktank UK in a Changing Europe, called the report’s figures “entirely fictional statistics” and said they did not take into account possible risks of leaving the customs union.
“Successful free trade deals would increase both exports and imports,” he said. “Calculating, as Change Britain does, a speculative figure for the number of jobs created by additional exports while ignoring the jobs lost as a result of additional imports is either deeply ignorant or deliberately misleading.”
Portes said he also believed it was misleading for the report to cite extra benefits such as free trade agreements with countries such as South Korea. “The report scores the impact of the EU-Korea FTA as a benefit from Brexit,” he said.
“Since this has been in force since 2011 – and would not necessarily continue post-Brexit, although it may well do so – this is a potential cost, not a benefit. Whatever your view on the economics of Brexit, Change Britain are again doing their best to distort the debate.”
Simon Tilford, the deputy director of the Centre for European Reform thinktank, said Change Britain “seem to assume that leaving the deepest and biggest customs union and free trade agreement in the world, the EU, with which we do half of our trade, will not have any negative economic implications and will not cost employment – that’s an unserious proposition.”
It is a strange irony that the immigration policy of Europe's leading (by far, imho, in the last decade or so) politician is in my opinion largely responsible for not one, but two extraordinary vote outcomes.
And why the disastrous German "open door" policy ? Economic greed (want young labour for the industrial engine) and guilt (from WW2).
Official report finds sterling’s sudden plunge to a 31-year low against the dollar in October was caused by string of factors
October’s flash crash in the pound – when the currency nosedived by 9% against the dollar in Asian trading hours – was caused by a combination of inexperienced traders, algorithmic trading and complex trading positions, according to an official report.
No single factor caused the dramatic moves which compounded the weakness of sterling after the Brexit vote, the international banking body, the Bank for International Settlements, said.
Other factors such as “fat finger” errors and potential market abuse cannot be ruled out, but there is little, if any, hard data to substantiate them, the report added.
The actions of individual participants, who are not identified, may have helped perpetuate the fall, as did the derivatives trading positions placed in the market. Some traders halted activity for as long as 30 minutes, including the black box algorithmic trading which relies on individuals to place orders.
Some of the trades made as sterling plunged to as low as $1.1491 – down from $1.26000 – just after midnight on 7 October were later cancelled, the BIS report said.
“Whatever the cause of the initial selling in sterling, the market was likely to be vulnerable at that time of day to sharp moves and an associated withdrawal of liquidity,” the report said.
[...]
The report breaks down the event into three stages. First, just after midnight, for a period of only eight seconds (00:07:03 to 00:07:11) sterling fell from $1.2600 to 1.2494. About Ł252m of pound-dollar trades and €52m (Ł42m) of euro-pound trades took place on the Reuters platform.
Second, at 00:07:15, the Chicago Merchantile Exchange triggered its velocity logic mechanism, which pauses trading for 10 seconds on the futures exchange. Around this time, it become more difficult to find a price for the pound on the currency markets as there were not enough “bid” offers, which would have cushioned its falls. This was an “unusual phenomenon”, the report said.
By 00:07:15 the pound was at $1.24 and “gapping between trades” to slide to $1.1491 at 00:07:41, a 9% fall. Those were the prices quoted by Reuters and the report noted that the currency traded lower on other trading platforms.
In the third phase, the pound began to recover and was 2.2% down against the dollar by 00:20:00.
The event took place amid thin trading and during a public holiday in China. which also meant big players may not have been in the market. A survey of 12 of the most active dealers showed that the lack of buy orders may have been caused by trading positions already in place.
Given the report published last week, I wouldn't be surprised if traders were trying to profit from news that are likely to spook the markets associated with the low liquidity of the Asian session. After all, low liquidity was one of the central themes of the report and it is in my view the key contributor in any of the most recent flash crashes across various markets.
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WSJ-City:
The Lego Group has said it is expanding its London office — one its largest outside of Denmark — by more than 50%, in a vote of confidence in the UK as it prepares to leave the EU. The company, whose headquarters is in Billund, Denmark, first moved into a London office in 2014. Its chief financial officer praised the UK capital for its “broad pool of talented employees.”
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Theresa May has come under mounting pressure from business and pro-EU Conservatives to ensure Britain does not crash out of the bloc without a trade deal.
The British Chambers of Commerce called on the prime minister to delay the point of exit from the EU if necessary to give her time to secure a free-trade agreement that would maintain strong access to the single market.
George Osborne, the former chancellor, also weighed in when he said that quitting the EU without a trade deal would amount to “the biggest act of protectionism in British history”.
Mrs May said in January that she would be prepared to take Britain out of the EU without a trade agreement if her European counterparts demanded unacceptable terms. Although she was confident of securing a good deal, Mrs May’s assertion that “no deal for Britain is better than a bad deal for Britain” has alarmed pro-Europeans, including former prime ministers Sir John Major and Tony Blair.
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I find that a little like saying "well if we do leave Europe we still want to keep all the things we had when in it". Well in that case you shouldn't be leaving!
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I've got to say, I find myself in agreement with Blair's recent sentiment on the matter. It seems the UK is headed down this "let's just get on with it" attitude without properly considering pros and cons.
Really disappointed with the new PM. Being prepared to have a 'no deal' means that the UK might eventually be significantly worse off.
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If I were a EU leader I would not want to give the UK relatively too good terms: it'd clearly send a signal to other member states that it's pointless to stay in.
John Major said it today - whatever deal it will be, it can't be better than what it is now. And it won't be the same either.
But May shouldn't be making it so much worse. And several critics think that's where she's headed.
So, on one hand I agree with those who say "the people have spoken, now we have to deliver Brexit", but on the other hand the people have not spoken on what the terms are.
There is also the argument that a portion of the voters may have regretted their leave vote, but I have no evidence of how significant that is. But if it were significant, shouldn't the UK as a whole have a right to rethink this?
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It's also to avoid regional partitions thoughts: if UK can leave easily why not split Belgium in two, Italy and Spain in 3 or 4 parts, etc.
I'm afraid (for UK) it's going to be an hard Brexit.
Success requires no deodorant! (Sun Tzu)
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I think its pretty significant talking to friends and family back home.
I was talking to a Wiltshire friend, a squaddie then truck driver type, super pro-Brexit before and I was surprised to hear him say (work out himself anyway) to the effect "What worries me is Trump is certain to make a war with some misfortune b******s as wartime leaders always get re-elected. Britain will have to side with him (being dependent on US trade?) but this time the young lads (British army) will be nothing more than out-and-out murders for his personal benefit".
I do wonder if a version of this is on Blair's mind. Civilisation is more fragile than people think and much of the reason the EU was formed. Ask a Croatian if they saw the Balkans war coming.
Anyway, my point if any is he and several others I know have significant "Bregret" levels and climbing. I'm just wondering now who the war will be with.
"The poker analogy which Brexiters use to describe the Article 50 process is very fitting, but not in the way they think.
In terms of understanding the negotiations in Brussels it is largely useless. Poker is about hiding cards. Article 50 is about negotiating when your opponent already knows your cards. But it is fitting on the basis that it relies on reading someone's face. And the three Brexit Musketeers have terrible poker faces.
On Sunday, all three were asked what the government had prepared to do in the event of a no-deal outcome at the end of Article 50. Boris Johnson's face contorted into a kind of pained grin as he insisted the UK would be "perfectly OK" if we fell back onto World Trade Organisation (WTO) rules."
"Downing Street said she would write a letter to the European Council, adding that it hoped negotiations on the terms of exit and future relations could then begin as quickly as possible.
An EU spokesman said it was "ready and waiting" for the letter.
Mrs May's spokesman also rejected reports an early election may be held, saying: "It's not going to happen."
Under the Article 50 process, talks on the terms of exit and future relations are not allowed until the UK formally tells the EU it is leaving.
If all goes according to the two year negotiations allowed for in the official timetable, Brexit should happen in March 2019.
A No 10 spokesman said the UK's Ambassador to the EU, Sir Tim Barrow, informed the European Council, headed by President Donald Tusk, earlier on Monday of the date that Article 50 would be triggered.
Mrs May is expected to make a statement to the House of Commons on Wednesday shortly after invoking Article 50, setting out her aims.
A spokesman said the government wants negotiations to start as soon as possible but added that they "fully appreciate it is right that the other 27 EU states have time to agree their position".
The BBC's Ben Wright said he expected the Article 50 letter to be short, possibly extending to two pages at most, and for Mrs May to use it to publicly reiterate her general objectives - such as leaving the single market but reaching a mutually beneficial agreement on trade and other issues."
As the UK looks to start the process of leaving the EU next week, optimism reigns that London will remain home for the vital physical infrastructure that underpins trading across Europe’s financial markets.
A 30-mile radius from the City contains a cluster of critical technology sites that power today’s highly computerised markets, including the trading of shares, currencies, bonds, commodities and numerous contracts for derivatives and futures.
No matter the terms of the UK’s eventual divorce from the EU or Brexit — with a triggering of Article 50 of the Lisbon treaty expected on March 29 — the City is seen as retaining its status as a key trading hub.
‘’If you’re in the business of trading London is the place to be and Brexit isn’t going to change that,” says Hirander Misra, chief executive of GMEX, a UK trading technology and services group. “It has such a position of dominance within global markets trading it will probably withstand a hard Brexit. Its influence may even increase in the future as it can connect the Americas, Europe and key Asian with Africa and the Middle East.”
For all the uncertainty over certain businesses, notably the clearing of euro-denominated swaps, potentially leaving London for the continent, the City is seen as a highly desirable location for the vital price matching engines in data centres that cement deals in milliseconds across markets.
“I find it highly unlikely that an outcome of Brexit would be that exchange matching engines, data centres and other vital cogs in the execution chain are mandated to be based in the European Union,” says Seth Johnson, chief executive of Nex Markets, which runs the BrokerTec fixed income and EBS currency trading venues.
In the opening minutes, the FTSE 100 rose 27.01 points or 0.37% to 7,370.43.
Best performer was 3i Group, adding 2.4% on the strength of a broker upgrade from Morgan Stanley.
On the currency markets, the pound was down 0.29% against the dollar at $1.2415 and 0.16% down against the euro at 1.1495 euros.
Later on Wednesday, Prime Minister Theresa May is due to give official notice under Article 50 of the Lisbon Treaty on the UK's decision to leave the EU.
"We could be in for a rough ride today, as currency traders react to the contents of the letter being delivered to Brussels and the language [Mrs] May uses in Parliament," said Neil Wilson, senior market analyst at ETX Capital.
"And we're in for a long period of volatility for the pound and UK assets as the government embarks on protracted and hugely challenging Brexit negotiations.
"Sterling will be incredibly sensitive to negotiations and will offer a clear gauge of how things are panning out."
Angela Merkel has rejected one of Theresa May’s key Brexit demands, insisting negotiations on Britain’s exit from the European Union cannot run in parallel with talks on the future UK-EU relationship.
“The negotiations must first clarify how we will disentangle our interlinked relationship,” the German chancellor said in Berlin. “Only when this question is dealt with can we – hopefully soon after – begin talking about our future relationship.”
In her six-page letter triggering article 50 and formally launching the process of leaving the EU, the prime minister said she believed it was “necessary to agree the terms of our future partnership alongside those of our withdrawal from the European Union”.
The EU institutions and 27 remaining member states, however, have long said they are determined the divorce settlement, such as the rights of EU citizens in the UK and Britons on the continent and the size of Britain’s exit bill, must first be agreed before substantive talks on a future relationship can begin.
I think the key is understanding how EU representatives such as Merkel, Tusk and Juncker can best meet May in the middle when it comes to UK exit negotiations.
It's a careful balance between safeguarding EU citizens' interests on one hand and UK citizens' on the other.
I don't see a reason for negotiations to get nasty as probably both sides would suffer, but if May thinks the UK is going to come out better off I fear she's in for a disappointment.
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! It's been a much-needed, EU-wide wake-up call.
"Whoah! Bessie is commin straight for us!!!!!!! Or is that a tsunami?!?" 
Sorry.
