Jump to content

Brexit- could this threaten a UK-US trade deal? EMEA Brief 27 Nov

Sign in to follow this  
KatherineIG

  • Trump reported that Brexit could potentially threaten a UK-US trade deal, leaving Britain unable to negotiate a free-trade agreement with the US
  • OPEC to meet in Vienna next week to discuss levels of oil production. It is expected to be cut down by 1million to 1.5million barrels due to worries of the US-China trade war
  • Trump announced a potential introduction of applying a 10% tariff on iPhones imported from China, which could increase to 25% on January 1st
  • Ukraine to bring martial law for 30 days, following the attack from Russian military, wounding several sailors
  • Asian markets trade higher with Nikkei 225 inclining by 0.8%, Shanghai composite rising 0.42%, Shenzhen up 0.62% and ASX 200 by 0.91%
  • Brent crude oil futures rises by 2.9% to $60.48 a barrel
  • Saudi Aramco to invest $100billion globally in chemicals within the next 10 years, as well as a prediction in the next decade of an increase in production to 23billion standard cubic feet a day from 14billion, attracting $150billion worth of investments 
  • Bitcoin declined by 81% from its last year’s peak in addition to its trading volumes, with its 24-hour volume decreasing by 61% on Monday to $19billion
  • Goldman Sachs believes commodities could rise by 17% in the following months as the G-20 summit could be a ‘potential launchpad for raw materials’ 

Asian overnight: A mixed affair overnight saw losses in Chinese and Hong Kong markets, as Donald Trump raised the stakes for the upcoming talks at the G20, stating that their tariffs would be ramped up in the case of no-deal. However, Japanese and Australian markets fared much better, with a rebound in oil prices helping the ASX 200 in particular. On the data-front, Japanese BoJ core CPI rose marginally to 0.6% against expectations.

UK, US and Europe: 

Theresa May continued to face criticism from the opposition and numerous conservative members of Parliament, however, May defends her proposals in relation to the Brexit withdrawal agreement as she believes “there is not a better deal available”, even though she confesses she is not “entirely happy” with the backstop plan to avoid a hard border. It has been confirmed that the final vote will take place around the 11th December.

The US president reported that the Brexit withdrawal agreement is a “great deal for the EU”, however suggested that this could potentially threaten a UK-US trade deal, announcing that “right now, if you look at the deal, the UK may not be able to trade with us. And that wouldn’t be a good thing”. Responding to this, a Downing Street spokesman reported that the Brexit agreement would allow the UK to sign bilateral deals with countries including the US.

Looking ahead, UK markets will likely have a volatile start to the day, given the number of companies releasing their earnings this morning. In the US, keep an eye out for the latest consumer confidence as the one major data release of the day. Besides that, markets are likely to focus on current themes, with Brexit, US-China relations, and the Italian budget remaining prominent.

Economic calendar - key events and forecast (times in GMT)

image.png

Source: Daily FX Economic Calendar

3pm – US consumer confidence (November): expected to fall to 136.2 from 137.9. Markets to watch: USD crosses

Corporate News, Upgrades and Downgrades

  • Thomas Cook said that underlying earnings for the year to September will fall to £250 million, down from £308 million a year earlier. In addition, it will suspend its full-year dividend. Net debt rose to £389 million, due to delayed bookings and non-cash items. 
  • Pennon reported a 2.9% rise in pre-tax profit for the first half, to £133.6 million, while revenue was up 3.1% at £746.7 million. 
  • Greggs upgraded expectations for the full-year, saying that a good October and November meant that full-year pre-tax profit would be at least £86 million, from a previous expectation of £72 million, in-line with last year. 
  • Shaftesbury reported a 14% rise in investment earnings to £51.7 million, while the total dividend rose 5% to 16.8p per share. 
  • General Motors to cut over 14,000 jobs and close 8 plants, reducing productivity levels in factories in the US and Canada
  • Tesla sales in China tumble by 70% in comparison to the previous year, selling only 211 cars in October
  • Line shares increased as much as 17% following the news of joining with Tencent.

Altri upgraded to market perform at BBVA
Atea upgraded to neutral at SpareBank
Hikma upgraded to buy at Jefferies
Iberdrola upgraded to outperform at RBC

Aurubis downgraded to hold at DZ Bank
NMC Health cut to underperform at Jefferies
Credit Suisse cut to equal-weight at Morgan Stanley

IGTV featured video

Information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary

Sign in to follow this  


0 Comments

Recommended Comments

There are no comments to display.

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Blog Statistics

    • Total Blogs
      3
    • Total Entries
      396
  • Our picks

    • ASX Rallies on Weak Australian Dollar - EMEA Brief 22 Feb
      The AUD continues to trade lower following the Chinese ban of Australian coal to its Dalian port. The ASX has benefited for the weaker exchange rate as it is trading at its highest level since October.
      • 0 replies
    • Wall street pull back - APAC brief 22 Feb
      Wall Street pulls back: On balance, and with Wall Street a few hours from ending its session, it's been a soft 24 hours for equities. The often heard calls of a looming "new-peak" in the market in the shorter term can be heard from some. Momentum has certainly slowed down. The S&P500 has its eyes one 2815 again - that crucial area where that index sold off on three occasions from October to December last year. It could be a slow drive to arrive at a challenge of that level now. The dovish Fed will keep the wind behind US stocks; but the earnings outlook, post reporting season, has dimmed on Wall Street, while positive regarding the trade war has already been heavily juiced.


      Trade war truce already priced in? Markets are positioned for a relatively positive outcome in the trade-war, and that's manifesting in pockets of market activity. A true resolution in the trade war isn't expected, however an extension to be March 1 trade-truce-deadline seems to be. The overnight fall in US Treasuries, coupled with a topside break of copper's recent range, is a testament to this sentiment. The yield on the US 10 Year note has jumped back towards 2.70 percent, while the 3 month copper contract on the LME leapt another 0.83 per cent overnight. In G4 currencies, the US Dollar is stronger against the Euro and Pound, albeit very, very marginally, but weaker against the Yen.

      The curious case of gold: Gold prices have dipped slightly courtesy of the stronger Dollar and greater confidence in the policy-outlook for the world's major central banks. The price of the yellow metal is sitting just above $1325 presently, as it continues its short term trend higher. One of the more divisive debates amongst traders currently is the outlook for gold. Like any market, time horizons are crucial to illustrating the trend for an asset's price.
      • 0 replies
    • Galaxy Fold: Future or Gimmick Feature? - EMEA Brief 21 Feb
      Samsung announced the Galaxy Fold the first consumer available phone to feature a folding display. The new phone also comes with a $1,980 price tag.  
        • Like
      • 1 reply
  • Latest Forum Topics

×