In Europe

Brexit: the Spartans won in the end

Gilles Moëc, chief economist at Axa Group | Our key assumption is that Boris Johnson wants a deal, just a different one. That is in itself complex, but not yet impossible to achieve and get passed. If he is reconciled with the possibility of no deal, then the outlook is much grimmer. At this stage we want to believe that rhetorics should not be taken at face value. It is a close call.  It has been our long-standing view that any resolution on Brexit is likely to entail elections – with the uncertainty it entails. We think the latest events have raised this probability.


Brexit: Definitely, Maybe

Chris Iggo (Axa IM) | Suddenly the Brexit stakes have been raised. Prime Minister Johnson has made a call that convincing the world that he is prepared to leave the EU without a deal and that he is prepared to take risks with democratic and parliamentary convention are worth it if it results in the UK and the EU reaching a compromise withdrawal agreement before October 31st. It is a gamble and the tactics are being challenged by both political and public responses. Yet an alternative course of action is hard to see given the lack of credible anti-no-deal strategies so far. If Johnson’s bet pays off, the UK leaves the EU with a deal, sterling rallies, and confidence to the economic outlook can return. If not, economic and political chaos will continue and probably worsen. I said I would adhere to “Sober September” – that might prove to be very challenging!


German stock market

Fishing in the choppy waters of the German stock market

Alexander Lippert (MainFirst) | The indirect effects of the current uncertainty caused by the US-China trade war are slowly extending to all levels of the German economy, which is beginning to be felt in the deterioration in growth, weak PMIs and the repercussions in export industries. It is also being felt in the German stock market.

Pound sterling is a key barometer of Brexit uncertainty

Ann-Katrin Petersen, investment strategist at Allianz Global Investor | The more uncertain the UK political environment, the weaker the GBP, and vice versa. A structural appreciation of GBP, which we deem to be undervalued, necessitates more clarity and a benign decision in the Brexit discussion.

Memorandum to Boris Johnson

Shaun Riordan | Prime Minister, You enter office in the middle of the UK´s greatest peacetime crisis. Your optimism and can-do spirit are admirable. You will need to be decisive. But your actions need to be based on reality not fantasy, especially in relation to Foreign policy, on which this Memorandum focuses…