J. P. Marín-Arrese | All Brexiteers want is fast delivery and no one better placed than Boris to capitalise on their anger and frustration.
Patrik Lang, Head of Equities Research, Julius Baer | A further delay on 31 October seems currently the most likely scenario. General elections later on will decide the fate of Brexit. For continental European equities, we see a 10% downside in the event of a hard Brexit, mainly driven by financials and autos.
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!
A more severe than expected economic downturn, the ongoing US-China trade war, eventually a hard Brexit, and unsolved challenges such as protectionism or the lack of confidence in the euro. Here are some trends that will impact markets in 2019.
If Theresa May could deliver on the proposals in her speech the UK would not see a ‘ hard Brexit ’. PM May suggested, to our mind, a ‘ cherry picking approac.Furthermore, PM May did not address the divorce bill the EU has said it will see.
BoAML | Turning to the long term outlook, we still expect that leaving the EU will worsen the UK’s trading terms with EU countries more than it improves trading terms with other countries. Assuming this thesis proves correct, it will come with economic costs. The recent better-than-expected data tell us nothing about that judgment, but political events suggest to us that it is on track.