Archives of “LB&SCR H2 class” tag

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EU, UK likely to miss mid-November deadline to finalise Brexit deal – report

  
  Analysis
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Reuters reports, citing sources familiar with the matter

The report says that ongoing negotiations in London are expected to last until the end of the week but EU envoys do not expect updates this week with Brexit tentatively being on the agenda for the 18 November meeting between EU ambassadors.

Adding that they now expect negotiators to present some semblance of a deal some time next week, unless talks yield a breakthrough or collapse before that happens.

The source adds that the real deadline is late next week. In other words, they are going to miss the soft deadline at the end of this week and push it to next week instead – where we are likely to experience the same kind of episode as per Brexit tradition.

China’s Global Times says the US is becoming the biggest uncertainty in future global economic growth

  
  Analysis
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An opinion piece in the state-owned tabloid

Some of the remarks in the piece:
  • The US has rolled out a series of policies to monetize financial deficit …  which has aggravated financial risks in the country, and cast a shadow over further investments.
  • US’ failure to handle the coronavirus may even prolong the pandemic
  • skyrocketing unemployment has resulted in sliding consumption which in turn is causing a decline in exports from its trade partners
  • huge debt and expanding stock market bubbles have damaged the confidence of global investors
GT is a barometer of official thinking in China re the US, relations between the two contries are on a downward path.
Global Times editor Hi Xijin:
An opinion piece in the state-owned tabloid

UK 2-year bond yields briefly fall below that of Japan’s for the first time ever

  
  Analysis
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The Japanification of the gilt market continues

UK Japan

Japan is pretty much the benchmark for low-to-no yields in the global bond market and when another country reaches that point, it sort of rings an alarm bell to investors that there isn’t much attractiveness/value in said yields anymore.
UK long-term yields fell below their Japanese counterparts at the end of last month but now we’re seeing the front-end of the curve follow suit as well.
The rally in gilts could either be suggestive that investors are fine with being more risk averse or that those buying are pretty much stuck due to regulatory constraints.
But whatever the case is, don’t expect value investors to be searching for scrumptious returns in the UK any time soon. In turn, that may be another reason to add to the list of headwinds for the pound and the UK economy in general.
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