Brexit: No more time – new backstop?

After UK Brexit votes  this week, the situation with the UK- EU is still the same. No new news  – this means that solution is not ready yet. The UK Parliament agreed that the deal could be done if the Irish border issue, the backstop, would have a new approach. What that would be, is still unclear and the EU has said  on Wednesday that there would be no new agreements.

The UK Parliament voted that no new timeline was given, which means that the March 29th exit-day is still valid. Prime Minister Theresa May was granted a mandate to negotiate with the EU collaques about the Irish border issue. According to news agencies, she is not travelling to Brussels this week any more.

The UK Parliament is having the Brexit-vote on Valentine´s Day, the February 14th and according to Bloomberg, some EU diplomats are expecting to have the EU summit about the Brexit on the March 21-22.

The financial markets have seen increasing prices in spite of the turbulence in this Brexit-matter. For example in London the FTSE 100 -index ended up 1,58 % to 6941 points, but also the Wall Street increased to new level due to the news that the Federal Reserve will be “patient” with the future interest-rates moves. The Feds Funds Rate is now at 2,25 – 2,50 percent and the Fed is still having the 2 percent inflation target.

Dow Jones was up 1,61 % to 24976 points, the S&P 500-index was up 1,51 % to 2679 points and technology-index Nasdaq was up 2,01 % to 7169 points.

The US-China tradetalks are having a new chapter when the Chinese economic advisor, Vice Premier Liu He is meeting with the US Treasury Secretary Steven Mnuchin today and tomorrow.

In Asia, the stockmarkets were mixed while the HangSeng increased by 0,40 % to 27642 points and the Nikkei-index in Tokio decreased by 0,52 % to 20 556 points.




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Stocks made comeback – Fed planning press calls 2019

The US stock markets made their comeback during Thursday trading. After the morning decline the stocks turned to green at the end of the trading day and for example the Dow Jones -index ended up 1,14 % to 23 138 points.

Investors were worried about the economy outlook related to tradetalks between the US and China, the goverment shutdowns and latest macro data regarding the consumer confidence.  According to the Conference Board ,the confidence index declined to 128,1, while the market estimate was 133,5 (Bloomberg).

Some new insight was given during the day, while it is expected that the US and China negotiators will meet on January the 7th in Beijing to continue the trade talks. One of the biggest issues is  also the tech-company Huawei and its position in the US markets. According to Reuters, President Donald Trump is considering different options related to the company and its security issues.

The recent discussion about the Federal Reserve and its interest rates policy has had its impact on the communications of the Central Bank. The Chairman  Jerome Powell is considering having press calls after each Fed meeting, starting next year. This would have its new impact on the trading activities as well, while new comments, and maybe market-moving comments may appear after the meetings.

The tech-index Nasdaq ended up 0,38 % 6579 points and larger S&P 500 -index 0,86 % to 2488 points.

In Europe the FTSE 100 -index declined 1,52 % to 6584 points – in Frankfurt the Dax-index ended down 2,37 % to 10381 points and in Paris the CAC 40 -index declined 0,60 % to 4598 points.

In Asia, Nikkei-index ended up 3,88 % to 20077 points in Tokyo but in Hong Kong the Hang Seng index declined 0,67 % to 25 478 points.

Euro gained 0,72 % against dollar and was 1,114 dollars. The UK sterling gained 0,13 % was was 1,265 dollars.

The Swiss franc gained as safe-haven currency against euro and dollar and was 0,9875 dollars and 1,129 euros.

Brent crude (ICE)  declined 2,92 % to 52,88 dollars per barrel.

Business Finance

Trump: Opportunities in the stock markets

US President Donald Trump said on Tuesday, the Christmas Day, that the US stocks offer now opportunities to buy. He commented the stock market turbulence and information related to Treasury Secretary, Federal Reserve and the US economy in general.

He said that he has the confidence related to the Treasury Secretary Steven Mnuchin. The fianncial markets were surprised by the information that Mr Mnuchin had called the largest banks related to the market volatility and liquidity issues this week. He also spoke with the market regulators.

President Trump also pointed that there is now opportunities in the stock markets while the US companies are great and they are doing well. News related to the Federal Reserve and its policy and management, the President repeated that the Central Bank has raised intetrest rates too quickly, but in general he is confident with the bank otherwise.

The financial markets were closed on Tuesday. On Wednesday, the 26th December or Boxing Day, the markets will be open in the Nasdaq and NYSE stock exchanges. But on the other hand, the markets will be closed in the London Stock Exchange and in the Nordics on Wednesday.

Business Finance

Global markets up on Monday -busy week ahead

The stock markets ended up on the Monday trading in Asia, Europe and Wall Street. According to the markets, one of the biggest reasons for the positive trend was the agreed US China tradewar situation with the new 90 days negotiations timetable.

Dow Jones -index was up 1,13 % to 25 826, S&P 500 index was up 1,09 % to 2790 points and Nasdaq 1,51 % to 7441 points.  In Paris CAC 40-index increased 1 % 5053 points and in Frankufrt the Dax-index ended up 1,85 % to 11 465 points. In London the FTSE all shares index was up 1,04 % to 3863 points.

In Asia the Shanghai index was up 2,57 % to 2654 points and HangSeng in Hong Kong + 2,55 % to 27 182 points.

There are major happenings during this week. For example in London, the Parliament is having debate about the Brexit deal before the vote on next Monday the 11th. On Wednesday there will be the US national day of late President George H. W Bush.

Federal Reserve´s  Vice Chairman Richard Clarida said in the Bloomberg interview on Monday that the US economy is in good shape and that the outlook is solid.

Business Finance

China to cut interest rates – Fed to act next year – EU to focus avoiding turbulence

The Bank of China has cut its benchmark lending rate to record low and also lowered the reserve-requirement ratios for lenders. The decision came after sell-offs  of Chinese stocks during the couple of weeks. The reason is also to add cash and support the economy which has showed signs of poorer growth  performance. The one-year rate was reduced by 25 basis points to 4,85 per cent. Many economists expect the Chinese GDP annual growth to decrease under 7 percent during the second-quarter.

The Financial Markets ended lower on Friday in New York and in London. On the other hand the German DAX-indeksi was slightly up, with a year return of over 17 percent.  The Shanghai Shenzhen CSI 300 -index has gained over 100 percent this year.

There has been growing speculation also when the US Federal Reserve will act regarding the bond buying and rate hikes. According to Goldman Sachs analysts they predict that the Fed will rise the rates late next year. The estimate was published last week.

In Greece, the decision to make a referendum on spending cuts on July 5th 2015 has caused concerns among EU-finance ministers. According to media sources, EU is now focusing more how to avoid financial turbulence during next week.

The European Central Bank has increased Emergency Liquidity Assistance weekly to Greek central bank to funnel the lenders.

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