Theresa May

The Daily Update - May day! May day!

May Day! May Day! Markets this morning braced themselves ahead of what has so far been the most important speech of UK PM Theresa May’s career, where today she shed some light on the highly anticipated Brexit strategy.

UK markets awoke with an acute risk-off tone which saw the yield on 10-year Gilts fall ~5bps to 1.248%, and the FTSE Index plummet ~0.45%; within the first 15-20 minutes of opening. The FTSE continued to track lower after Theresa May stated that the UK ‘cannot possibly’ remain in the European single market while the yield on the benchmark gilt spiked to an intraday high 1.32%.

The Daily Update - Baltic dry index / Theresa May / Facebook

Since Donald Trump became the president-elect a couple of weeks ago there have been some big moves in financial markets, not least the global shipping industry. The Baltic Dry Index, a measure of commodity shipping costs traded at lifetime highs in the middle of 2008 at around 9,500, only to hit a 21 year low of 774, 6 months later after the GFC. After touching that low the market did bounce back to around 3,700 in June 2009, however from that time until the first quarter of 2016 it has steadily declined, touching 290 in February this year. All has changed over the last few days however as the exchange has surged to a 2 year high.

The Daily Update - Brexit / Inflation / Nissan

In a major speech on Friday in Nottingham, the Bank of England governor Mark Carney suggested that the UK’s central bank will tolerate an overshoot of its inflation target, stating that supporting economic growth still remains the priority as well as helping cushion the blow of an anticipated rise in unemployment. With the collapse in sterling pushing up import costs, inflation expectations still running high, with the 5-year sterling inflation swap rate trading at 3.45%, up from the lows of 2.90% at the beginning of August (although this has moved down from 3.615 10 days ago).

The Daily Update - Let the Brexit games begin!!

After weeks of the phoney war following the Brexit vote, yesterday PM Theresa May officially fired the starting pistol for the UK to leave the European Union when she announced the Conservative Government will invoke Article 50 before the end of March 2017. In her first speech to the Conservative Party conference in Birmingham, May said that control of immigration and withdrawal from EU law will be the priorities during the negotiations. She made it very clear that immigration and border controls will be lines in the sand during negotiations, saying that “we are not leaving the European Union only to give up control of immigration again” adding that the UK will be a “a fully-independent, sovereign country that will no longer be in the jurisdiction of the European Court of Justice”.

The Daily Update - G20 and Putin's pulls

This year's G20 Summit concluded on Monday with ~85% of the world leaders departing from China's Hangzhou City and attention seeking North Korea launch three Rodong ballistic missiles which ended up in the Sea of Japan. Poor Mr. Obama neither had a red carpet rolled out on arrival, nor an appropriate staircase, this upset Mr. Trump no end, who tweeted his total disbelief at the ‘sign of such disrespect’. ‘First World problems’ comes to mind.

It seems there was a lot of chat at the Summit but very little outcome. For one, UK PM, May stood firm, not settling on any firm trade deals, despite Japan’s 15 page memo warning of Japanese businesses’ potential exit and Obama’s statement that although 'very special', the US’s relationship with the UK is not a priority.

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