UK rating still at risk of no-deal Brexit – S&P and Fitch

The UK credit rating is still at risk from a no-deal Brexit,says the S&P Ratings and Fitch Ratings according to Reuters. 

– The agreement between the EU and the UK to further extend the process to the end of October 2019 reduces but does not eliminate the risk of a no-deal Brexit over the next six months, Fitch said on Friday.

The UK Goverment has been negotiated with the EU leaders and the UK Parliament in order to avoid this kind of situation and thus avoid the possible economic and financial stress elements. Both credit agencies have a AA rating on the UK Goverment debt.

S&P has a negative outlook for the British economy and according to the agency the outlook could be revised to stable if there will be more certainty about the negotiations with the EU.

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Stocks gained – no new news

Financial markets gained on the Wednesday trading in Wall Street. Dow Jones was trading 0,67 % to 23947, the tech- index Nasdaq was up 1,16 % to 6976 points. The composite index S&P 500- index was up 0,5 % to 2588 points.

The US-China trade talks gained also attention, when China committed to buy more US agricultural goods, energy goods and manufactured goods. Also president Donald Trump said that he is committed to make a deal.

In the UK the stocks ended up 0, 76 % to 3787 points. Prime Minister Theresa May was defending the Brexit plan. The Parliament is to vote about the deal on Tuesday next week. There were rumors in the EU side that the UK have to ask for an extention for the negotiating period.

In Germany the Dax- index ended up 0,83 % to 10893 points and in France the Cac- index ended 0,84 % to 4813 points.

In Asia the Nikkei-index ended up 1, 10 % to 20427 points. In Hong Kong the Hang Seng index ended up 2,27 % to 26462 points.

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G20: US and China to halt tradewar

During the G20 meeting in Argentina the US and China leaders, President Mr Donald Trump and China President Mr Xi Jinping agreed to halt the escalating trade war.

According to the White House spokesperson,  President Trump would not follow through his threat to raise tariffs on Chinese goods from 10% to 25% in the new year.  This has been the major issue in the discussions and also one of the biggest threats to global economy.

The countries also agreed that China will buy more agricultural, energy and industrial products from the United States. The aim is to reduce the trade imbalance between the countries.

According to White House, this new statement gives both countries 90 days time to agree upon new trade terms. If such agreement is not ready, the former tariffs increase from 10% to 25 % will become into force.

The financial markets ended up in Wall Street on Friday evening. Dow Jones ended +0,79 % to 25538, S&P 500 + 0,82 % to 2760 and Nasdaq 0,79 % to 7330 points. In Europe the markets were down with the FTSE 100 -index -0,83 % to 6980 and German Dax-index -0,36 % to 11 257 and CAC 40-index in Paris -0,05% to 5003.

Euro declined 0,67 % to 1,13 US-dollars and UK sterling ended down 0,33 % to  1,27 US-dollars.

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