Brexit’ Ruling Reveals Cracks in Britain’s Centuries-old Institutions

By KATRIN BENNHOLDJAN. 24, 2017

The New York Times

LONDON — It remains unclear whether Prime Minister Theresa May’s plans or timetable for taking Britain out of the European Union will be altered by the Supreme Court’s ruling on Tuesday that she must secure Parliament’s approval before beginning the process. Most analysts, even those who opposed “Brexit,” as the departure from the bloc is known, doubt that it will.

And Mrs. May had already said in her speech on Brexit last week that Parliament would have a vote on whether to accept the final deal negotiated with the European Union.

World’s Largest Private Bank Makes Contrarian Call on Euro Rally

by Stefania Spezzati
23 January 2017, 5:10 μ.μ. EET
Bloomberg
At a time when some investors are questioning the future of the euro, the world’s largest manager of money for the wealthy is advising clients to bet on a rally.

UBS Wealth Management recommends buying the European currency as it sees it being undervalued against the dollar and because of faster euro-area inflation. It expects the euro to climb about 7 percent to $1.15 in six months, while the majority of forecasters surveyed by Bloomberg expect it to slip to $1.03-$1.04 in the same time frame.

In ‘Brexit’ Speech, Theresa May Outlines Clean Break for U.K.

By STEPHEN CASTLE and STEVEN ERLANGERJAN. 17, 2017
The New York Times

LONDON — “Get on with it.”

With those words in a major speech on Tuesday, Prime Minister Theresa May charted Britain’s course toward a clean break with the European Union and expressed her fondest hope: that the time for “division and discord” is over.

Her much-anticipated speech outlined what promised to be a hugely complex, drawn-out negotiation, and it defined the broad objectives, but not the details, of British withdrawal. “The United Kingdom is leaving the European Union, and my job is to get the right deal for Britain as we do,” she said.

In Blow to ‘Brexit’ Plans, Britain’s Top Envoy to E.U. Resigns

By STEPHEN CASTLEJAN. 3, 2017


The New York Times

LONDON — Complicating his country’s already fraught preparations for exiting the European Union, Britain’s top diplomat in Brussels resigned unexpectedly on Tuesday, less than three months before withdrawal negotiations are scheduled to start.

The decision by the diplomat, Ivan Rogers, the permanent representative to the European Union, deprives Britain of one of its most knowledgeable officials as it tries to form a coherent strategy for untying more than four decades of European integration.

It also underscores some of the tensions at the highest level of government as Britain’s exit, known as Brexit, dominates the political agenda after last year’s referendum, in which voters opted to leave the bloc.

Euro-Area Economy Ended Year With Fastest Growth Since 2011

by Carolynn Look
4 January 2017, 11:00 π.μ. EET

Bloomberg

The euro-area economy finished 2016 with the strongest momentum in more than 5 1/2 years, bolstering the region as it heads into a year of political uncertainty.

A composite Purchasing Managers’ Index climbed to 54.4 in December from 53.9 in November, IHS Markit said on Wednesday. That’s the highest in 67 months and above a Dec. 15 estimate.

Record Capital Outflows Push Euro Toward Parity With Dollar

Higher interest rates in the U.S. are drawing money out of the eurozone

The Wall Street Journal

By MIKE BIRD
Updated Dec. 20, 2016 5:32 p.m. ET

More money has left eurozone financial markets this year than at any time in the bloc’s history, helping drive the euro toward parity with the dollar for the first time in 14 years.

The eurozone had its largest-ever net outflows in the 12 months to September, data from the European Central Bank showed Tuesday.

Eurozone investors bought €497.5 billion ($516.5 billion) of financial assets, such as stocks and bonds, outside the bloc in that period. Global investors, meanwhile, sold or let mature €31.3 billion of eurozone assets during the year. Together, that adds up to a net outflow of €528.8 billion, the most since the single currency was introduced in 1999.

Political Risks Leave Euro-Pound Analysts Most Divided on Record

by Anooja Debnath  and Charlotte Ryan
20 - 12 - 2016, 9:54 π.μ. EET

Bloomberg

For analysts trying to plot the course of the pound against the euro in 2017, the key decision is judging which side of the English Channel will see greater political turbulence.

Strategists are trying to pinpoint whether the U.K.’s exit process from the European Union or the rise of populism in the rest of Europe carries the bigger risk. The dichotomy is evident in Bloomberg’s survey of currency analysts, where the range between the highest and lowest year-end forecasts for euro-sterling is the widest going into a new year since at least 2006.

As Brexit approaches, signs of a gathering economic storm for Britain

The Washington Post

By Griff Witte December 13 at 5:16 PM
LONDON — From a modest office in a small town in northeastern England, Elliott Peckett’s family stocked the world with costumes.

Billowy white Marilyn Monroe dresses. Red velvet Santa caps. Rhinestone-studded Elvis jumpsuits.

They were shipped out by the millions to 42 countries across the globe, and they brought the profits of countless Halloween parties, Carnival parades and Christmas wonderlands back home to England.

But thanks to Brexit, not anymore. After 122 years, Peckett’s costume company, Smiffys, is moving its headquarters to the Netherlands.

Greece, Not Italy, Still Poses Biggest Challenge to Eurozone

A crisis in one country only becomes a crisis for the whole eurozone when a collective European response is required, Simon Nixon writes

The Wall Street Journal

By SIMON NIXON
Dec. 7, 2016 3:27 p.m. ET
4 COMMENTS
Not for the first time this year, the doom-mongers have been confounded. The Italian referendum over the weekend resulted in a resounding defeat for Prime Minister Matteo Renzi, who promptly announced his resignation. Yet the sky didn’t fall in, the euro dipped and then rallied, and Italian bonds and bank stocks barely budged. Other European assets were also largely unmoved.

The Latest, Greatest Threat to the Euro: Populism

Elections and referendums in the year ahead pose a far different challenge from the financial crisis of recent years

The Wall Street Journal

By GREG IP
Updated Nov. 30, 2016 11:32 a.m. ET


The euro has survived sovereign default, recessions, banking crises and bailouts. It may not survive populism.

In the coming year, the eurozone will host at least five elections or referendums that could bring a populist, euroskeptic party to power. In effect, the common currency is about to play multiple rounds of Russian roulette.

The populist threat is qualitatively different from the financial crisis that first erupted in Greece in 2009 and eventually engulfed half the region. In that case, what worried private investors was that a country, or its banks, would default on its debt and be forced to leave the euro. Investors fled, driving interest rates sky-high and plunging the continent into recession.

Weak Tea After Brexit

The May government’s additional spending won’t spur growth.

The Wall Street Journal

Nov. 23, 2016 8:47 p.m. ET


Theresa May’s government delivered another budget statement Wednesday, and we’re pleased to report that not all of the proposals are bad. But whether not-so-bad is good enough to give the economy the boost it will need to power through Britain’s exit from the European Union is another question.

Regarding the good, the best headline to come out of Chancellor Philip Hammond’s Autumn Statement is that the government intends to stick to its schedule for corporate tax cuts, with rates falling to 17% in 2020 from 20% today. That’s down from 28% under Labour Prime Minister Gordon Brown and would be roughly half the rate paid by companies in France and Germany. Mrs. May has also indicated she’s prepared to come down below 15% if necessary.

RPT-INSIGHT-Euro zone nations turn to hedge funds to meet borrowing needs

Tue Nov 22, 2016 | 2:00am EST

Reuters

(Repeats story published on Monday)

* Belgium, Italy and Spain see spike in hedge fund take-up

* Bankers warn trend could exacerbate market volatility

* Risks stir memories of euro zone's sovereign debt crisis

* Long-dated bonds sustain heavy losses in recent sell-off

By Abhinav Ramnarayan and Helen Reid

Greece to continue bailout talks, aiming to finish before December 5

Tue Nov 22, 2016 | 1:42pm EST

Reuters

Greece will continue talks with international creditors on fiscal and labor reforms, aiming to wrap up the second review of its bailout program by early next month ahead of a euro zone finance ministers' meeting, government officials said on Tuesday.

Mission chiefs of the creditor institutions overseeing the program's implementation - the euro zone's ESM rescue fund, the European Central Bank, the International Monetary Fund and the European Commission - left Athens on Tuesday, leaving remaining issues to be resolved by technical staff and via teleconference.

Euro, Dollar Flirt With Parity

Trump outlook and Fed’s likely move are strengthening dollar, and ECB may not help stop euro’s fall

The Wall Street Journal

By MIKE BIRD and  IRA IOSEBASHVILI
Updated Nov. 20, 2016 10:00 p.m. ET

A 10-day losing streak for the euro against the U.S. dollar is rekindling an old debate: Will the common currency reach parity with the dollar?

In the last two weeks, the euro has fallen 4% against the dollar, hitting $1.06, a level last seen 12 months ago.

The sharp shift in expectations for U.S. interest rates and economic growth since the American presidential election has refueled the euro’s fall against the greenback. If the Federal Reserve increases rates, expectations are the dollar would rise further by drawing money to the U.S. looking for higher returns.

Here's When the Dollar and the Euro Are Expected to Hit Parity

Forbes

by  Lucinda Shen  @ShenLucinda  NOVEMBER 21, 2016, 10:59 AM EST

Good news for dollar bulls. Bad news for the global economy.
The euro and the U.S. dollar could be trading one-for-one next year as Europe struggles with political uncertainty and the U.S. is expected to go on a fiscal splurge.

In a note late last week, a team of analysts from Goldman Sachs predicted the two currencies will reach parity by the fourth quarter of 2017. The dollar has risen 4.4% against the euro, and 2% against a basket of world currencies since Donald Trump won the U.S. presidential election Nov. 8. The euro is currently trading at $1.06.

EU’s position in Brexit negotiations does not make sense, Philip Hammond says

The Chancellor accepted that negotiations could create uncertainty for the British economy
The Independent
Jon Stone Political Correspondent

The EU’s hardline stance against the UK in the upcoming Brexit negotiations “doesn’t make a lot of sense”, the Chancellor has said, as he warned that the talks will bring uncertainty to the British economy

A Falling Euro Is Neither A Collapse Nor A Disaster - It's The Solution

NOV 20, 2016 @ 05:35 AM
Forbes

Tim Worstall ,   CONTRIBUTOR
I have opinions about economics, finance and public policy.

Opinions expressed by Forbes Contributors are their own.

The Express is getting rather overeager to tell us that a falling euro/dollar exchange rate is a collapse, an imminent disaster. When, of course, a change in exchange rates is the cure for what ails economies. That’s rather the point of having them in the first place rather than just the one world currency. So that if one economic area is doing differently than some other we can let the exchange rate take the strain of adjustment, rather than having to do that internal devaluation. You know, as the euro itself has forced Greece and Finland to do?

May's changing vocabulary signals shift from 'hard Brexit'

Nov 18, 2016 | 7:48am GMT

Reuters

By Elizabeth Piper | LONDON
There is a recognisable repetition in Theresa May's speeches about Britain's decision to leave the European Union: "Brexit means Brexit", making "a success of it" and getting "the best deal" for Britain are some of her stump phrases.

But a closer look at her speeches suggests her position on key aspects of Brexit has evolved since she took office in the aftermath of the June 23 vote to leave.

Together with public comments by ministers in her Conservative government, the changes appear to suggest May has shifted from favouring a "hard Brexit" - a clean break with the EU's single market of 500 million consumers - to supporting continued membership of that market if possible.

Sterling soars to 6-week high against weakening euro

Thu Nov 10, 2016 | 12:54pm EST

By Jemima Kelly and Patrick Graham | LONDON
Sterling surged 1.5 percent to a six-week high against the euro on Thursday, as investors unwound short positions against the pound amid uncertainty about the fallout from the U.S. election and focused on upcoming European political risks.

The pound's almost 20 percent slide since Britain voted to leave the European Union in June has been the main currency story on developed markets in the months that have followed, and investors have built up record short positions against it on the view that it has further to fall.

But the fog of uncertainty created by Donald Trump's victory in the U.S. presidential vote, after a campaign that included a range of potentially disruptive policy pledges, from building a wall between the United States and Mexico to declaring China a currency manipulator, could provide a different set of impulses over the next few months.

Trump promised Brexit ‘times five.’ He delivered.

The Washinhton Post

By Adam Taylor November 9 at 11:22 AM

As Donald Trump's campaign progressed, Britain's June 23 vote to leave the European Union was clearly on his mind.

“They will soon be calling me MR. BREXIT!” Trump tweeted in August, prompting a somewhat confused response. He soon upped the ante — telling supporters at rallies in October that the U.S. presidential election would be “Brexit plus” and “Brexit times five.”

It was certainly possible to see the similarities in the two campaigns. Both Trump fans and Brexiters tended to be people who scorned the status quo and held negative views about globalization, immigration and political correctness. Often they wanted to upend the system and evinced a desire to bring their respective countries back to greatness.