Category Archives: Brexit

If we rewind to six months ago, the largest driver behind the movements in the FTSE 100 stock index was Brexit. The general election, which was held in December, had that issue at its heart. Following the election result, the FTSE 100 index surged higher, with sentiment running positive that finally economic uncertainty could be over.

Yet the Covid-19 pandemic has seen an unprecedented shift in investors thinking so far in 2020. The sudden rise of the virus, and the harshness with which it has affected businesses the world over, are largely unparalleled. But with growing signs that the virus has been contained, and plans to reopen economies, concern could fade.

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For several reasons, this could mean smart investors should already be starting to think about Brexit again, as a key influence on the price of their investments.

In recent weeks, comments from the UK Government have been very clear on the Brexit stance. Were still being told the government will say no to any extension beyond the end of 2020 if the EU asks for it. Some may have thought that the impact of the virus would see negotiations pushed back, but thats not the case (at least thats the message so far).

This increases the chances of no agreement being reached by the two sides due to the time lost thus far. Should we have little Brexit breakthrough over the next three months, then autumn could see volatility rising for the FTSE 100 index. This would likely mimic the sharp moves following the news headlines we saw over the course of last year.

You could argue that the FTSE 100 index is already moving on from focusing on the Covid-19 pandemic. The market saw the second best April performance in a decade. Another example of this short-term memory of stock markets can be seen in the US. The NASDAQ index (which has a lot of tech names listed) is even back at January levels. This means it has seen a positive performance in 2020.

Why this could push Brexit back to the foreground is that investors will be looking ahead now to what the next big event could be. Markets in the US are starting to look towards the Presidential elections. Here on the other side of the pond, they could turn to Brexit.

So what do the above musings mean for my investing strategy? At the back end of last year I wrote a piece here, discussing where best to look. Id continue to look to buy domestic firms within the index, as these will perform better if we see a Brexit agreement before the end of the year. Look to housebuilders such as Taylor Wimpey to lead the way as demand picks up.

Also, Id look to buy defensive stocks (still with a domestic tilt). Some good examples are Tesco and J Sainsbury. These supermarkets should perform robustly, even if the UK does not have an agreement by the end of the year.

Ultimately, try and think ahead of the curve, to avoid being caught out later this year.

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2 reasons why Brexit could soon be the biggest factor influencing the FTSE 100 index - Motley Fool UK

Dollar: The US Dollar has been moderating as risk-on sentiment attempts to gather momentum, while investors begin pricing in expectations that US interest rates may turn negative before the year is over. Could the speeches by Federal Reserve officials over the coming days lead to major moves in the Greenback?

Gold: Bullion remains range-bound but has managed to seize on the chance to climb slightly higher, thanks to the softer Dollar. What would negative US interest rates mean for Gold prices?

Pound: The Pound is enjoying a slight lift as the UK is on the path towards reopening its economy. However, with Brexit negotiations set to resume this week, could the Pound see bouts of heightened volatility over the near-term?

Oil: Amid signs of more major economies reopening, Oil traders will be awaiting key monthly reports by OPEC and the IEA this week, while also keeping a watchful eye over US inventories. Can the current equilibrium hold for Oil prices?

Monday, 11 May France set to reopen economy, Shanghai Disneyland to reopen, Brexit talks to continue

Tuesday, 12 May Fed speak, US inflation

Wednesday, 13 May US crude oil inventory, OPEC monthly report, UK GDP, EU industrial production

Thursday, 14 May US initial jobless claims, IEA monthly report

Friday, 15 May Chinas industrial production, US and China retail sales, Brexit update, Euro-area GDP

Major markets: UK, Europe, Japan, US, Hong Kong, China

EMEA: Turkey, South Africa, Kenya, Nigeria, Russia

ME & GCC: Egypt, Lebanon, UAE, Saudi Arabia

Asia: Singapore, Malaysia, Thailand, Philippines, India

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The week ahead: Brexit talks to continue, US and China retail sales eyed - FXStreet

Aine McMahon, Press Association

10 May, 2020 13:10

First Minister Arlene Foster has said the British Government should not be "distracted" by talks of extending the Brexit transition period.

The UK Government has insisted the transition period will not be extended beyond 2020, despite officials in London and Brussels admitting there has been little progress in the two rounds of formal talks held so far.

December 31 is the deadline for the end of the transition period unless the UK agrees by June to extend it.

READ MORE:Passengers from Ireland to be exempt from 14-day mandatory quarantine for UK arrivals

Speaking to Sky's Sophy Ridge on Sunday, Mrs Foster said: "At the moment we are talking to the Government about Brexit. We have a very particular issue around the Ireland/Northern Ireland protocol. We have been engaging with the Paymaster and Michael Gove around that issue.

"It is important that we get clarity for our businesses in Northern Ireland.

"We should not be distracted by talk of lengthening the transition or anything like that. We need to make sure that we are focused and that we get started for the sake of our businesses in Northern Ireland."

First minister Arlene Foster. Picture by Presseye

On Friday, TnaisteSimon Coveney said the Covid-19 pandemic has made the timeline for a UK-EU trade deal "virtually impossible".

"Covid-19 has made what is already a very, very difficult timeline to get agreement virtually impossible," he said.

"Given the added complications of Covid-19, it surely makes sense to seek a bit more time to navigate our way through these very difficult waters in the months ahead so that we can get a good outcome for the UK and EU."

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Arlene Foster: Talk of extension to Brexit transition period a 'distraction' - The Irish News

The Irish border question threatens to derail Brexit talks again as the depth of the row over the EUs desire to have an office in Belfast is revealed.

The UKs paymaster general, Penny Mordaunt, has written to the EU to firmly reject a repeated request for an office in Northern Ireland: The UK cannot agree to the permanent EU presence based in Belfast, she wrote.

Mordaunt was responding to a second request this year from the EU for permission to open an office in Belfast on the grounds it was needed to oversee the implementation of new customs and regulatory checks that will apply to trade between Great Britain and Northern Ireland from next year.

According to the Irish national broadcaster, RT, the secretary general of the EUs external action service, Helga Schmid, wrote in February that there were very particular capabilities and competences required on the ground, distinctive from the more traditional competences of any other EU delegation.

She hoped the office would be up and running by June in order to bed down the new processes for traders, the detail of which has been the cause of major political rows. Boris Johnson has insisted there will be no checks and no new paperwork for traders operating across the Irish sea.

The permanent undersecretary at the Foreign and Commonwealth Office, Sir Simon McDonald, refused Schmids request in March, but she argued in a follow-up letter on 25 March that an office would be necessary.

At least during the initial phase of the application of the protocol, the EU will want to avail of these rights on an ongoing basis. To do so effectively, an office in Belfast staffed by technical experts is indispensable, she wrote.

Mordaunt rejected her argument, saying such a presence would be divisive in political and community terms.

The government said in a statement on Saturday: There is no reason why the commission should require a permanent presence in Belfast to monitor the implementation of the protocol.

The row over the office in Belfast has been simmering for months with no sign of a resolution.

Theresa Mays former Brexit adviser Raoul Ruparel tweeted on Saturday:

He rejected reports that the UK had agreed to an EU office in February 2019 and was now backtracking.

As Mays adviser at the time, he said no such agreement had been signed off on a political level. He pointed out that it would have been anathema to the Democratic Unionist party, which May was trying to keep onside ahead of a meaningful vote on the withdrawal agreement.

Even if the UK had agreed to an office last year, it would have had different functions, because Mays Irish border solution was a UK-wide arrangement that would not have involved customs and tariffs on goods entering Northern Ireland from Great Britain, he said.

The row illustrates the EUs concerns that the UK will try to row back on the deal signed in January and not implement customs and regulatory checks on animals and food entering the island of Ireland.

This would cause a major international headache because it would force checks back to the Irish border, something many have said could jeopardise peace.

Originally posted here:

Row over EU office in Belfast threatens to derail Brexit talks - The Guardian

The UKs last judicial member of the European court of justice is suing the council of the European Union and the EU court over her removal from office because of Brexit.

Eleanor Sharpston QC, advocate general to the court in Luxembourg, has lodged two claims challenging her replacement by a Greek lawyer before her term in office was scheduled to end next year.

Her departure will not necessarily end direct British involvement with the ECJ. A claim has been submitted by a team of London-based lawyers arguing that even though the UK as a nation is leaving the EU, its citizens cannot be deprived of EU citizenship without their consent.

Sharpston, whose mandate was due to end in October 2021, has submitted two claims against the council of the European Union, which represents the remaining 27 EU states, and against the ECJ itself.

At the start of the year, Brussels issued a statement saying the mandates of all UK-related members of EU institutions would automatically end on 31 January. Sharpston was the exception to the rule and was told that she would stay on until a successor could take over.

A Greek replacement for her has now been found. The number of advocates general, who advise the courts judges, is fixed at 11.

A fellow of Kings College, Cambridge and a former joint head of chambers in London, Sharpston has been at the ECJ since 2006. Earlier this year, contemplating the possibility of legal action, she told the Law Gazette: It may be that the very last service I can render to my court is to see whether there is something I can do to push back against the member states intruding into the courts autonomy and independence.

She is understood to be arguing that she should be be allowed to stay in office until her current six-year term expires and that her removal undermines the judicial independence of the court. Court rules, it is said, ensure that judges and advocate generals can only be removed when they reach the end of their mandate or reach the obligatory retirement age.

The ECJ told the Guardian it could not confirm the identity of claimants in the two cases submitted. The courts last British judge, Christopher Vajda, lost his seat in February despite the UK remaining within the single market and customs union until the end of 2020. There are 27 judges sitting on the ECJ one for every member state.

A separate action legal action has been lodged at the ECJ this month by lawyers acting for Prof Joshua Silver, a physicist at Oxford University. The claim is being led by Prof Takis Tridimas of Matrix Chambers and lawyers from the London firm DAC Beachcroft.

They argue that while the withdrawal agreement between the UK government and the EU has resulted in the UK as a nation leaving the EU, the fundamental status and rights of the British citizens of the European Union cannot be removed without their consent.

Stephen Hocking, a partner at DAC Beachcroft, said: In the withdrawal agreement, the EU council purported to remove fundamental individual rights from a group of citizens of the European Union, namely UK nationals, without any due process and without any reference to them. In doing so it acted unlawfully.

EU citizenship is a citizenship like any other, and it confers individual rights on citizens that cannot be taken away by an agreement between governments.

If he is successful, UK citizens would retain their rights as EU citizens, for example the right to live and work in EU member states.

This week Guy Verhofstadt, the former Brexit coordinator for the European parliament, tweeted in support of the legal action: People received European citizenship with the treaty of Maastricht. Will be interesting to see, if a government decides to leave, its citizens automatically lose their European citizenship. They shouldnt do!

The case, for which more than 67,000 has already been raised, is being supported by crowdfunding through the website Crowdfunder.

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British lawyer sues EU over her removal from its court due to Brexit - The Guardian

British officials expect a lot of noise between the two sides before Brussels eventually drops its hardline negotiating position. Talks between the UK and European Commission continued last week but ended with the bloc accusing Britain of refusing to engage on its plans for a regulatory level playing field and upholding existing fisheries access. But sources close to the UK negotiating team said a deal can be completed before the post-Brexit transition period expires at the end of the year.

Officials have suggested the row over the two sides redlines must first escalate before they can reach a compromise.

A source said: Im quite positive. I do believe in the core areas of this theres a good understanding between negotiators.

Im confident we will get over the disagreements. Probably a bit more noise has to happen before we get to that point.

Another round of online trade negotiations is scheduled for May 11.

Downing Street is expected to push for more one to one talks between Michel Barnier and David Frost, the EU and UKs chief negotiators, in an attempt to break the deadlock.

No10 wants senior Government officials to be able to open new channels of communications alongside the formal negotiations.

But the source said the UK would not budge on its approach to the talks and would reject the EUs continued access to Britains waters and attempts to lock the country into the blocs rulebook.

The source said: "What is slowing us up is the EU's insistence on extra provision, notably the level playing field area, aspects of governance, and of course there is no meeting of minds on fisheries.

"If they continue to insist on their position on a so-called level playing field and on continuing the Common Fisheries Policy, for example, we are never going to accept that. Draw your own conclusion from that, but I hope they will move on."

"There are some fundamentals that we are not going to move on because, not so much that they are negotiation positions, as they are what an independent state does, they added.

It is understood that British and EU negotiators hope virtual bonding sessions could help build the camaraderie needed to strike a deal.

MUST READ:Brexit snub: UK rejects Brussels' attempts to open embassy in Belfast

British officials remain confident that a deal can be struck despite the COVID-19 outbreak hindering the process.

I don't think the crisis makes any difference, the source said.

"It is a big and horrible thing to affect us but I sense that European Union chief negotiator Michel Barnier himself would like to get a deal and I sensed that before the crisis started."

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Brexit trade deal WILL be struck this year say UK negotiators - but only after EU tantrum - Express

Opinion

PUBLISHED: 14:24 01 May 2020 | UPDATED: 14:24 01 May 2020

The New European

Prime Minister Boris Johnson stands outside 10 Downing Street as he joins in the applause to salute local heroes during Thursday's nationwide Clap for Carers. Photograph: Aaron Chown/PA Wire.

Government negligence over coronavirus comes as a result of Tory preoccupation with Brexit, and we are all paying the price.

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Thousands of deaths in the Covid-19 pandemic is a tragic if inevitable statistic. Dozens of deaths of NHS frontline staff and care workers, however, represents negligence of stupefying dimensions. Now that a leaked Department of Health and Social Care report has confirmed the May and Johnson governments total failure to act on the conclusions of the 2017 Exercise Cygnus report, responsibility for the deaths of so many health workers lies firmly on the heads of the 2017-2019 government and its successor.

The prime minister now refers to the NHS as the beating heart of the nation but he leads a Conservative government and served in the cabinet of its predecessor, both of which have gone some way to starving this beating heart of the oxygen it needs to function properly.

Even Leavers cannot in all honesty deny that the preoccupation with Brexit has contributed to the governments negligence in failing to make adequate preparations for the current pandemic. It is an appalling tragedy that many NHS staff and care workers have paid the ultimate price for these shortcomings.

Anthony West

Kent

While Priti Patels statement hailing the drop in shoplifting has elicited quite a bit of ridicule, it has also done something much worse.

It has deflected attention from the fact that 20,000 people in the UK have died in hospital from coronavirus. That is one of the worst performances in the world and is a damning indictment of this governments tried-and-tested approach of using egregious nonsense to distract people.

People are dying because this government made bad decisions and wasted time while Italy and Spain struggled. They condemned and ridiculed those countries and did nothing to protect the people here.

Do not let them gaslight you into believing that they have achieved anything of merit by seeing a drop in shoplifting or that it would be very unreasonable to hold them accountable for thousands of deaths.

Audrey Christophory

Covid-19 is another one of those epochal moments when immense change happens in a short period of time. The Tories dont have the noddle to see this because it is the (now) utter irrelevance of Brexit that they think is the real story of our time.

Keir Starmer (Starmers battle on three fronts, TNE #191) should be setting up a task force to prepare for the post-Covid-19 and post-Brexit country Labour will surely inherit. The UK cant get left behind again like it did after the Second World War.

Will Goble

Rayleigh

Boris Johnsons experiences in ICU will have had a profound effect on him psychologically. Are we sure he is fit to return to lead a government 18 days later?

In rugby or football where a player on the pitch has suffered a head injury, the rules are that for the safety of the player and the wellbeing of the team, the victim cannot self-declare his own fitness to return to the field of play.

What process is there to safeguard the nation from a situation where an unfit prime minister returns to the head of government?

This is not just a medical question,

this is a constitutional question. Where are the checks and balances in the system?

John Edwards

Shoreham-by-Sea

Have your say by emailing letters@theneweuropean.co.uk

Almost four years after its creation The New European goes from strength to strength across print and online, offering a pro-European perspective on Brexit and reporting on the political response to the coronavirus outbreak, climate change and international politics. But we can only rebalance the right wing extremes of much of the UK national press with your support. If you value what we are doing, you can help us by making a contribution to the cost of our journalism.

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Coronavirus: We are all paying the price for the Tory government's preoccupation with Brexit | Latest Brexit news and top stories - The New European

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PUBLISHED: 11:34 01 May 2020 | UPDATED: 12:16 01 May 2020

Adrian Zorzut

David Davis listens in the House of Commons, London. Photograph: PA.

PA Archive/PA Images

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Davis made the claim on LBC radio with Nick Ferrari, arguing the EU were lunatics if they did not accept British demands for a no-tariff, no-quotas-style trade deal.

He said: What the European Union should do, if it has any sense at all, is to go for the option we are talking about of which is no tariffs and no quotas.

Youd have to be a lunatic to put tariffs and quotas on under the current economic circumstances so now is the time to do it. That is what we should do.

He said prolonging negotiations would create more uncertainty for UK businesses: The one time, apart from whats happening now, that we had an economic downturn since the [2017] election was when we delayed departure.

The uncertainty made all the businesses, even though claiming they didnt want to leave, suffer. You dont want to change that. You dont want to have another level of uncertainty.

The UK has ruled out seeking an extension to Brexit transition period, which ends on December 31. Recent talks in April failed to reach a breakthrough, causing the EU to ramp up preparations for a no-deal Brexit.

Almost four years after its creation The New European goes from strength to strength across print and online, offering a pro-European perspective on Brexit and reporting on the political response to the coronavirus outbreak, climate change and international politics. But we can only rebalance the right wing extremes of much of the UK national press with your support. If you value what we are doing, you can help us by making a contribution to the cost of our journalism.

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Tory MP David Davis urges government capitalise on coronavirus outbreak to seal a Brexit deal | Latest Brexit news and top stories - The New European

Boris Johnson must extend the UKs transition out of the EU for up to two years to avoid compounding the economic damage of the coronavirus pandemic with a hugely disruptive and disorderly Brexit, according to a close ally of Angela Merkel.

In an interview with the Observer, Norbert Rttgen, chair of the Bundestags foreign affairs committee, said it was now impossible to see how the UK and other EU countries could agree even a minimal outline free trade agreement this year because the talks were so behind schedule.

The transition period is due to end on 31 December unless the UK asks for a prolongation by 30 June. The maximum extension would be two years, under the terms of the withdrawal agreement. Rttgen said he could not see any sensible option other than for the UK to apply for the extension to avoid even more damage to the British and European economies. On Friday, Michel Barnier said there had been limited progress in the initial stages of virtual negotiations, which he said was disappointing.

Rttgen, a member of Merkels Christian Democratic Union party, said: Before the current coronavirus crisis, I think it would have been possible to have a minimum agreement with the UK on the broad outlines to avoid a crash [the UK crashing out with no deal], with more detailed negotiations then taking place afterwards.

I cant imagine now that this is possible, given the fact that all the EU countries, Brussels and London are so absorbed by the pandemic and this will go on. Given this situation, I dont believe that there is a realistic possibility any longer to even achieve the necessary minimum. So you have to extend.

But he said it would be up to Boris Johnson to realise the consequences of a disorderly exit amid this pandemic.

The pandemic will cause more economic damage than we can now imagine. To think that you could then add to this extraordinary situation a very disorderly exit, to me is not imaginable. I think everyone will say that this is not in the British interest or in the interest of any of us.

The Brexit transition began when the UK left the EU on 31 January. The arrangement under which the UK is outside the EU but continues to be subject to its rules and a member of the single market and customs union was negotiated by both sides to smooth the UKs exit.

The transition was also designed to allow the UK to continue much of its previous relationship with the EU while the fine details of a future trading relationship and security co-operation were negotiated.

Barnier cited an alarming lack of progress in four of the most crucial areas of the talks. Sources said he was greatly frustrated that the UK did not appear ready either to discuss detail or make compromises.

The four areas of difference were the so-called level playing field (the extent to which the UK would adopt EU standards to have access to the single market); fisheries, particularly EU access to UK waters; security co-operation and governance issues.

The German MEP David McAllister, who chairs the UK co-ordination in the European Parliament (correct) said both sides were now under enormous time pressure to organise a half-way orderly exit of the UK from the single market and the customs union.

It had been hoped that an outline deal could be concluded over the coming months, in time for it to be signed off over the summer by EU leaders. But talks between the UK and EU sides are well behind schedule, although the second set of discussions, effected by video link, ended last week.

I think there is a recognition by some of the UK side that they will have to extend but no one knows how to do it

EU officials have said that concluding deals on such complex issues already a lengthy and tortuous process is far more difficult without face-to-face meetings. One high-level EU source said: You can get so far but what you cant do is go away into small groups of six or eight people in a dark room and hammer out the final, vital details. That is not possible in a virtual meeting.

The UK is also understood to have redeployed some of its staff who were posted to the EU trade talks to coronavirus duties since the Covid-19 pandemic developed.

The issue of whether to apply for an extension is now emerging as a huge additional problem for Johnson, who prides himself on having got Brexit done. Until now, Downing Street has said it will not contemplate asking the EU for an extension under any circumstances.

To do so, Johnson would have to reverse legislation that, in effect, bars him from seeking an extension, and he would have to agree additional financial contributions to the EU to pay for that extension.

Another senior EU politician involved in the talks said there were signs of division appearing on the UK side, with some civil servants and Tory MPs believing the UK had to find a way to abandon its opposition to extending the transition: I think there is a recognition by some on the UK side that they have to extend but no one knows how to do it. The question is what Johnson will decide when he returns to Downing Street after his illness. It is a big political problem for them.

The terms of the withdrawal agreement allow a UKEU joint committee to extend the transition period by up to two years, but it must sign off on the length of any extension before 1 July. EU lawyers say that once that window is missed, EU law makes it very difficult to agree to any extension.

Charles Grant, director of the Centre for European Reform, who is regularly in touch with diplomats in EU capitals, said: It will be very hard for both sides to reach the outlines of a free trade agreement by autumn, or indeed by June, which is when the PM wants to take a decision on whether it is worth pursuing a free trade agreement.

Last week should have been the fifth round of negotiations, but it was the second. The bottom line is that on both sides the top politicians attention is focused on coronavirus, not Brexit, which makes a deal in the short term highly unlikely.

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UK will need to extend Brexit transition, Merkel ally warns Britain - The Guardian

Downing Street has reportedly agreed for negotiations to kick off on Wednesday despite the coronavirus crisis. Donald Trump is said to be desperate to reach a deal ahead of the US presidential election in November.

A source told The Sun: No10 gave the green light late this week for the talks to start.

The process has been significantly speeded up.

The talks will be carried out remotely while coronavirus travel restrictions are in place.

The first round, which will last two weeks, will be held between International Trade Secretary Liz Truss and US Trade Representative Robert Lighthizer.

Boris Johnson is said to have put off trade talks with the US until now due to ongoing negotiations with the EU.

The UK is in a transition period with Brussels until the end of 2020 as the two sides thrash out a free trade agreement.

READ MORE:UK/EU fishing plan on table 'in weeks' - but Barnier MUST give ground

The Prime Minister has repeatedly insisted he will not push back the deadline despite claims the timeframe is too tight.

Mr Trump promised to strike a massive trade deal with the UK after Mr Johnsons general election victory in December.

The US President said the agreement could be far bigger and more lucrative that any deal with the EU.

DON'T MISSBrexit deal now much more likely says Gove as he makes bold prediction[VIDEO]Former MEP reveals why Boris Johnson will not extend transition period[INSIGHT]EU WILL collapse to UK demands over no deal Brexit threat[POLL]

He tweeted: Congratulations to Boris Johnson on his great WIN!

Britain and the United States will now be free to strike a massive new Trade Deal after BREXIT.

This deal has the potential to be far bigger and more lucrative than any deal that could be made with the E.U. Celebrate Boris!

Stumbling blocks in a trade deal between the UK and the US could include food standards and the NHS.

Mr Trump sparked a backlash during his state visit last year when he suggested the health service could be on the table in an agreement.

But the US President later rowed back on the comments.

Read more from the original source:

Boris gives green light for Brexit Britain to start formal US trade talks NEXT WEEK - Express