UFG Foreign Exchange Services

7 days ago

Weekend News
Brexit:
-Times: the PM’s rivals are backing her to stay in office until the autumn if she fails to get her Brexit deal through parliament bit.ly/2VLIyRE
-Dep PM Liddington (14 Apr): Talks with Labour won’t go on for months, they continue next wk; although there’s no deadline for talks they can’t be allowed to drag out; there needs to be movement both sides on a CU policy, gvt is still against a 2nd ref

Europe:
-ECB’s Villeroy(Le Figaro): mon pol must remain accommodative; there is a serious downturn worldwide although US economy is still expanding; China is showing signs of recent stabilisation while in Europe France & Spain are holding up well
-Sources: the EU is having a closer look at how Google uses it’s Irish operations to help reduce its corp tax obligations within the Bloc bloom.bg/2v275Gg
-French Pres Macron: will address the nation at 19.00 bst this evening to announce a series of measures in an attempt to placate grassroots discontent & relaunch his presidency ahead of EU elections in May ; he will hold a presser on Weds 17 Apr
-Italian Fin Min(14 Apr): Expecting growth to pick up in the H2 as gvt measures to revive the economy take effect
-ECB’s Draghi: Key message from IMF meeting is there’ll be a significant growth slowdown this yr & multilateralism shouldn’t be undermined; global recovery next yr is subject to significant risk; on aggregate, not seeing signs of stress in the banking system; some idiosyncratic factors are decreasing, some confidence undermining factors are still looming large; is worried about CB independence inc in the most important jurisdiction in the world; we’re reaching a point where fiscal pol is becoming more important; a recovery in H2 is still a possible scenario but subject to risks
-ECB’s Vasiliauskas: Not enthusiastic about possible tiering, but let’s wait until the analysis has been made & then we’ll decide; I think it’s still a +ve tool & at this stage I don’t think there’s a need for any change
-ECB’s Praet: Tiering can mitigate some of the –ve consequences of some policy in place; no a policy instrument in itself
-S&P: Reaffirmed Germany at AAA, o/l stable; although the economy is slowing this yr, the country’s fiscal & external B/S remains strong, expecting German mfg to recovering during the yr
-SNB’s Jordan: CHF is still highly valued, SNB maintain willingness to intervene; there’s no reason to change mon pol, no risk of overheating in the economy; we have room to lower interest rates further & use the B/S depending on the economy; infla expectations are lower than several mths ago; current pol is expansionary, -ve rates are not the new normal; we have to looks at consequences of a low interest rate environment; the neutral rate is lower than during fin crisis

UK
-Deloitte Survey: 81% of CFO’s expect Brexit to lead to a L/T deterioration in Britain’s’ biz environment, the highest lvl since 2016 ref; 52% of large UK firms are prioritizing cash flow vs 47% in Q1, 9yr high, fearing a downturn reut.rs/2V2iX9K
-UK April Rightmove House Price: +1.1% m/m vs +0.4% prior; -0.1% y/y vs -0.8% prior ... See MoreSee Less

UFG Foreign Exchange Services

2 weeks ago

Brexit nightmare continues...

EU leaders give Britain six months until Brexit- However, under pressure from President Macron, the extension will be subject to a review in June under which Britain’s membership could be cut short if it fails to hold EU elections next month….The move came as senior government sources said that she intended to stay on as prime minister until parliament votes for a Brexit deal or the new deadline is reached. In a move that will infuriate Tory Brexiteers, Downing Street made clear that Mrs May’s pledge to step down was conditional on her withdrawal agreement being approved by MPs.
www.thetimes.co.uk/edition/news/brexit-may-defies-tory-rebels-with-pledge-to-stay-on-z2j6q3xnl

EU's Juncker sure UK would honor good cooperation rules during Brexit lag- European Commission President Jean-Claude Juncker said he was certain Britain would honor the “sincere cooperation” obligation and would in any case have little power to block key EU decisions on its own during a second Brexit lag until Oct. 31.
www.reuters.com/article/us-britain-eu-extension-juncker/eus-juncker-sure-uk-would-honor-good-coop...

EU's Tusk tells UK: 'Don't waste Brexit overtime'- “Please don’t waste this time,” Tusk told a news conference after eight hours of EU leaders’ talks on the matter….“June is not a cliff-edge, or a moment to take new decisions, it must be clear,” Tusk said. “June is not for decisions about extension. My intension is even not to discuss, but only to inform member states about the situation.”
www.reuters.com/article/us-britain-eu-summit-tusk/eus-tusk-tells-uk-dont-waste-brexit-overtime-id...

Irish PM says UK would crash out June 1 without EU elections- Irish Prime Minister Leo Varadkar said on Thursday the United Kingdom would crash out of the EU on June 1 if it failed to hold European Parliament elections during a Brexit extension granted until the end of October, 2019.
www.reuters.com/article/us-britain-eu-varadkar/irish-pm-says-uk-would-crash-out-june-1-without-eu...

New bid to oust Theresa May as MPs attempt to gather 10,000 signatures to change the Tory constitution- The 13 MPs present at the 4pm meeting discussed moving against the Prime Minister after the results of the local election and European Parliament elections in May to allow her successor a fresh start.
www.telegraph.co.uk/politics/2019/04/10/new-bid-oust-theresa-may-mps-attempt-gather-10000-signatu...

UK PM May not close to breaking Brexit deadlock with opposition: Labour's McDonnell- “There is the potential of a deal, but so far, we’ve still got some fundamental disagreements about the nature of our future relationship with Europe,” he told ITV’s Peston television program.
www.reuters.com/article/us-britain-eu-labour-mcdonnell/uk-pm-may-not-close-to-breaking-brexit-dea...

Varadkar Dangles Trade Carrot as U.K. Weighs Softer Brexit- The EU should be “generous” in any talks on a customs union, Varadkar told reporters in Brussels on Wednesday, adding Britain could be granted a say in the bloc’s future trade policy if it entered such an an arrangement.
www.bloomberg.com/news/articles/2019-04-10/varadkar-dangles-trade-carrot-as-u-k-weighs-softer-bre...

Customs union with EU wouldn't work for Britain, foreign minister Hunt says-“A customs union would not work for a large economy the size of the UK ... I don’t think it’s the right solution,” Hunt told ITV’s Peston program, adding he did not know if talks with the opposition party Labour Party, which backs a customs union, would solve the Brexit impasse.
www.reuters.com/article/us-britain-eu-hunt/customs-union-with-eu-wouldnt-work-for-britain-foreign...

House sales hit by market uncertainty- In a monthly poll of its members, the Royal Institution of Chartered Surveyors (RICS) found that demand for homes declined across the country in March for the eighth month in a row. It said buyers were increasingly reluctant to commit to big purchases because of uncertainty about Brexit. Twenty-seven per cent more surveyors reported a fall in inquiries than a rise last month, while 24 per cent more saw prices drop, down from 27 per cent in February.
www.thetimes.co.uk/article/house-sales-hit-by-market-uncertainty-0j9zvwcz5 ... See MoreSee Less

UFG Foreign Exchange Services

2 weeks ago

Overnight News:
Brexit:
-UK HoCs approve PM May’s plan to seek to delay Brexit to June 30 (voted 420-110)
-@RaynerSkyNews: 131 Tory MPs voted to support the PM’s extension proposal, but 177 either voted against or abstained... Theresa May now totally reliant on opposition parties
-@RaynerSkyNews: ...DUP bloc unusually numbering 9 rather than 10, with Sir Jeffrey Donaldson not voting

UK
-Downing Street Spx: Both sides working hard to agree a way forward; Labour & Tories had further productive & wide-ranging talks on Brexit; Labour & Conservatives agreed to meet again on Thursday; remain completely committed to delivering on Brexit; both sides are working hard to find a way forward
-Environment Min Gove: Several areas where we differ from Labour after Brexit talks but we’ll carry on
-Downing Street: May updated Pres Macron on the ongoing talks with the opposition to agree a way forward that respects the 2016 referendum; May & Macron discussed upcoming EP elections with the PM saying the gvt was working very hard to avoid the need for the UK to take part; May & Macron discussed the UK’s request for an extension of A-50 to June 30th
-Labour Spx: The party has yet to see a clear shift in the gvt’s position after Brexit talks y’day
-@Laura_K_Hughes: Labour: “We had further detailed and wide-ranging talks with cabinet ministers and officials today. We have yet to see the clear shift in the government’s position that is needed to secure a compromise agreement."
-Guardian: Cabinet sources: Plan has been discussed that PM May couldbring forward a WA bill in an effort to find a Brexit compromise & bypass a meaningful vote in parliament bit.ly/2YVUPVD
-Telegraph: UK Chancellor Hammond warned the value of the GBP could fall significantly if PM May fails to reach an agreement in Brexit delay with Brussels suggesting the impact of uncertainty could encourage MP’s to vote to revoke A-50 bit.ly/2Z33NQI
-@PippaCrerar:Hearing that Jeremy Corbyn met the DUP’s Nigel Dodds and Sammy Wilson today as part of Labour’s talks with MPs from across Parliament to break the Brexit deadlock; The DUP’s principal concern is avoiding divergence with the rest of the UK, which Labour believes its alternative Brexit plan provides for

EU
-EU’s Tusk: Experience & deep divisions in HoC’s give us little reason to believe Brexit can be completed by end of June; granting an extension until June 30 would increase risk of a rolling series of short extensions & emergency summits; if we fail to agree on any next extension, there would be a risk of an accidental no-deal Brexit; should discuss an alternative & longer extension; 1 possibility would be a flexible extension, which would last only as long as necessary, no longer than 1yr; flexibility would allow to terminate the extension automatically, as soon as both sides have ratified the WA, UK would be free to leave whenever it’s ready; such a longer extension would allow the UK to rethink its Brexit strategy; to address risks of long UK stay in EU we would need to agree on a number of conditions; 1 would be no re-opening of Brexit deal; 2nd would be no talks on future relationship during extension, except on the political declaration
-Draft conclusions of Wednesday Leaders’ Summit: EU to agree to further Brexit delay; if UK fails to live up to this obligation, the withdrawal will take place on 1 June 2019; extension can’t be allowed to undermine the regular functioning of EU institutions; if UK is still EU member on 23-26 May 2019 & hasn’t ratified Brexit deal by 22 May 2019, it must hold EP elections; extension can’t be used to start negotiations on future relationship; UK will remain EU member with full rights & obligations and can revoke leave notification anytime; UK shall facilitate achievement of EU tasks, refrain from any measure which could jeopardize the attainment of EU objectives; delay only as long as necessary but leave blank exact date for maximum Brexit delay to be agreed by leaders on Wednesday
-BBC: EU leaders meet at an emergency summit today to discuss a Brexit extension for the UK : PM May has asked for a delay until 30 Jun while Pres Tusk has suggested a longer, flexible delay of up to year with conditions bbc.in/2VuxLep

Others on Brexit
-US Treasury Sec: US is preparing for a hard Brexit as a very realistic outcome
-Russian lender Gazprom Bank on risks of Brexit for Gazprom: Could drive up Gazprom’s cost of borrowing, cost of financial services; recommends Gazprom increase debt-raising on European financial mkt’s other than London post Brexit; recommends Gazprom considers issuing bonds in Yuan & that Gazprom monitors GBP debt mkt post Brexit & exit the mkt if possible; CHF debt mkt could be good source of capital for Gazprom as a result of Brexit ... See MoreSee Less