Strong and stable?
On 18 April, when PM Theresa May announced that she would ask the UK’s electorate to give her an enhanced Brexit negotiation mandate by way of an early election, my (well documented) view was that she would improve her majority and this should in turn be positive for the UK’s Brexit negotiation prospects, which turn should contain the Brexit damage for the economy. The argument was that she would have gained more headroom to negotiate compromises with the remaining EU, because of a larger majority and because she would have 2 more years until she faced re-election.
Political cycles and economic imperatives
Risk comes in many different forms and arises because of uncertain outcomes. In the case of the general election this week, as the campaign progressed the outcome actually became more, not less, uncertain. However, the general level of financial risk did not appear to materially change. Do markets care about the outcome of this election?
New EU bank insolvency regulations pass the market test
This week saw a major European bank being declared at risk of failure by the European Central Bank (ECB). For the first time, a European bank was bailed out by investors, rather than taxpayers, as was the case during the financial crisis in 2007/08.
Trump’s Softening Stance
Donald Trump is going “all in” on getting the repeal of Obamacare through the US Senate, according to top Republicans. The President met with congressional leaders on Tuesday to urge them to follow through with an aggressive timetable for repealing the law, so that the administration’s other key concerns – the ever-present national debt ceiling and promised tax reform – could be seen to quickly.
Gulf States sever ties with Qatar – implications on oil
The Gulf States, led by Saudi Arabia, shocked the world this week by cutting ties with neighbour Qatar and closing all borders with the small mineral rich nation. The Gulf States, which have large Sunni populations, stated that Qatar had provided funding for terrorist organisations and supporting Iran, which has a Shia majority.
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