Archives of “June 2019” month

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FT: EU to warn business not to expect help over a no-deal Brexit

  
  Analysis

The Financial Times report that the European Commission will tell firms to prepare for a no deal Brexit on October 31.

EU will say do not expect any help to cushion the impact of a no-deal Brexit. Companies should “take advantage of the extra time” to prepare.
  • The commission told a closed-door meeting of national officials last week that the probability of a no-deal exit had increased given the announcements made in the Tory leadership contest.
Link here, may be gated.

G20 finance ministers do not want to urgently resolve trade war

  
  Analysis

Yes, really. Not fussed. They paid lip service to the impact of the accelerating trade war:

  • growth remains low and risks remain tilted to the downside
In their previous communique they said they:
  • “recognize the pressing need to resolve trade tensions”
But this time ’round that was dropped.
They do, however, ‘stand ready’:
  • Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020
  • However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks and stand ready to take further action
Clue.
Less.
Via Reuters (who say the clause was dropped due to US pressure)

Just waking up? Missed the big weekend news (Mexico tariffs delayed indefinitely).

  
Analysis, Forex

MXN is higher in super-thin early trade here in Asia.

After markets closed on Friday we got news that US President Trump had indefinitely delayed his extra tariffs on Mexico.
  • Trump says deal reached with Mexico – tariffs indefinitely suspended
ICYMI – the tweets:
MXN is higher in super-thin early trade here in Asia. 
For the majors, impact felt in yen. USD/JPY has been as high as 108.65+

ECB open to rate cuts, would act to counter exchange rate rise – report

  
  Analysis

ECB floats rate cut scenario

ECB floats rate cut scenario
The ECB is open to lowering rates if growth weakens and/or a strong euro hurts the eurozone, according to two sources cited by Reuters.
“Two sources familiar with the ECB’s policy discussions said a rate cut was firmly in play if the bloc’s economy was to stagnate again after expanding by 0.4% in the first quarter of the year,” the report said.
The ECB wouldn’t be happy if the euro were to rise as a result of the US-led trade war.
“I’ll give you five reasons for a rate cut,” the source said before repeating “exchange rate” five times.
The euro isn’t exactly strong at 1.1331 but if the US and China become embroiled in a deeper battle, money will begin to flow out of US dollars and into euros.
More at Reuters.
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