Italy’s 66th government since WW2 looks set to fall

Trade continues to dominate the headlines with Donald Trump’s tweets around US tariffs driving sentiment. The emergence of China’s appetite to use its currency as a shock absorber also added volatility. August’s volumes are traditionally lighter and that helped catalyse a very weak start for US equities albeit a lot of the losses had been … Continue reading “Italy’s 66th government since WW2 looks set to fall”

Markets learn to live with some protectionism

On Monday 15th July, President Trump lent the White House lawn to US manufacturers to celebrate the ability of the US to make things for itself. He explained that it is a win-win situation if the US buys products made just down the road, with more and better-paid jobs resulting from the purchases. He signed … Continue reading “Markets learn to live with some protectionism”

Looking back at the markets through June

A selection of articles looking back through the markets last month. Brexit: no further forward   Global market review The third anniversary of the Brexit referendum came and went in June, and still the issue of Brexit remained up in the air. As the clock ticked towards the extended deadline of 31 October, the Conservative … Continue reading “Looking back at the markets through June”

Whatever it takes…to raise inflation

The European Central Bank has consistently failed to meet its inflation target in the seven years since the region’s sovereign debt crisis. Nor has the market any faith that it might do so in future. With the European Union (EU) elections out of the way, the horse-trading over a host of top EU jobs will … Continue reading “Whatever it takes…to raise inflation”

The Middle East stirs some old worries

America is intensifying its policy against Iran in the Gulf, and challenging more EU policy over Iran and energy as well as trade. Donald Trump has spent the last week moving markets. His decision to push back hard on China before agreeing a trade deal led to sharp sell offs in the Shanghai market and … Continue reading “The Middle East stirs some old worries”

Trump’s bid to take on the EU could crush the German economy

The EU’s Trade Commissioner held out an olive branch to Donald Trump last week as the bloc tries to prevent tariffs being put on the auto sector – but the move looks likely to fail. An escalating trade dispute between Brussels and Washington now appears inevitable – and Germany will feel most of the pain … Continue reading “Trump’s bid to take on the EU could crush the German economy”

Will France cut taxes in response to protests?

For 21 weeks now, the Gilets Jaunes have taken to the streets of French cities to protest. It began as a demonstration against high and rising fuel taxes. These tax increases hit families getting children to school and the adults to work, and cut the earnings of the self-employed working from their vans and cars. … Continue reading “Will France cut taxes in response to protests?”

Is the UK stuck in Brexit limbo?

The UK has been granted its second extension to the Article 50 deadline, averting a no-deal Brexit that would have happened on 12 April. The UK now has until 31 October to ratify the current Withdrawal Agreement, although there was some disagreement amongst other EU members as to how much longer the UK should be … Continue reading “Is the UK stuck in Brexit limbo?”

Pressures on the EU as elections loom

We are in the long run up to the European Parliamentary elections. This will be followed by the appointment of a new European Commission. It means there will be an argument over the future direction of EU and euro policy, with a wide range of views from those who with En Marche in France want … Continue reading “Pressures on the EU as elections loom”

UK economic outlook hinges on May selling deal

The UK government and European Commission have announced that the broad terms of the UK’s Withdrawal Agreement have been finalised. This lays the path for completion in the next few weeks, and the UK entering a transition period following its exit from the European Union on 29 March 2019. The 585-page draft agreement follows most … Continue reading “UK economic outlook hinges on May selling deal”

EU caught up in internal war of words

The President of the EU Commission had some choice words to say about the Italian budget dispute. Jean-Claude Juncker argues that Italy has to keep to strict budget limits on spending and borrowing that has been laid down by the EU. He went so far as to suggest it would mean the end of the … Continue reading “EU caught up in internal war of words”

Doom Loop

The most likely candidate for the next ‘Lehman moment’ is in Europe. In some ways the regulatory response that followed in the years after the collapse of Lehman Brothers has been a success. The days of racy balance sheets chasing outsized profits on wafer thin capital are largely over; replaced by a mantra of prudence … Continue reading “Doom Loop”

Trade wars should not derail growth

Markets worry about a trade war, and relax when they think it is about to be settled. Mr Trump’s attempts to negotiate new trading terms are often called a war but it’s actually a hard negotiation. The President threatens or imposes higher tariffs with a view to getting the other side to propose lower ones … Continue reading “Trade wars should not derail growth”