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Brexit through the eyes of two British companies with direct exposure: Getlink and LSE

European economy 15th September 2020

London Stock Exchange vs EU: Refinitiv Battle Reveals Unease Over Power Of Modern Stock Markets

Johannes Petry via The Conversation | Relations between London and Brussels have been better. While Brexit dominates the headlines, another cross-channel development has recently captured the attention of financial institutions. It concerns the the London Stock Exchange’s proposed US$27 billion (£21 billion) acquisition of US financial company Refinitiv, into which the European Commission is carrying out an in-depth anti-trust investigation.

BoE

European economy 14th September 2020

BoE Preview: No Change Expected

BoE will announce its next policy decision on Thursday (noon). We expect no change in policy parameters. Current policy: Bank rate at +0.1%. OngoingQE, total YTD envelope of +£300bn (+£232bn of which bought so far), with latest +100bn announced in June.At the last meeting in June, BoE also added a weak form of forward guidance (“The Committee does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”) Expectation:…

hard brexit

European politics 13th September 2020

How The UK Went From Leader To Laggard

Compared to 2019, when the entire market was eagerly watching events surrounding Brexit, both the Covid-19 crisis and the U.S. elections are attracting more attention than the imminent end of the transition phase. However, the clock is ticking without mercy, as EU chief negotiator Barnier keeps reminding us. In light of the time it will take for legal processes in the UK, as well as on the continent, only a few weeks remain to avert a disruptive UK exit from the European common market, DWS explain.

 

 

 

Euro area growth: neither very fast nor particularly slow

European economy 11th September 2020

European Cross-Border Bank Mergers: Less Compelling After The Pandemic Than Before

EU agreement on a pandemic fund boosted market and regulators’ wishes to move towards cross-border consolidation among European banks- the ECB’s vice-president, Luis de Guindos, has already warned of the need for the sector to continue with the merger process. Scenarios have started to be built again about who should be merging with whom. But unity around the EU pandemic fund is not about banks, say analysts at Scope Ratings.

lagarde

European economy 10th September 2020

“The ECB Is Monitoring Current Developments”

The ECB has left its policy stance unchanged after today’s GC meeting. The tone of the press conference was a touch less dovish than expected and President Lagarde has not signaled any large swing in policy in the near term. The overall message was clear: the ECB is monitoring current developments (including the EUR) and assessing the efficiency of the current policy measures before acting with more accommodation

berlin against coronavirus

European politics 10th September 2020

To Revive The European Project, Listen To Gen Z

European Views | Protests against pandemic lockdown measures have been gaining momentum across the world, but it’s events in Germany that have caught international attention. The latest demonstration in Berlin at the end of August drew some 30,000 people out of their homes – and the sheer range of ideologies on display from anti-vaxxers to ecologist to the far right, has re-opened a debate in the country about what it means to participate in the modern-day political process.

ecb luminale

European economy 9th September 2020

Can The ECB Strike Back?

We do not expect ECB policy action this week, but guidance is that the ECB has its finger on the trigger for more PEPP (Pandemic Emergency Purchase Programme). Communication will not be easy, but EUR appreciation, record low core inflation and Fed policy should make for very dovish tones. We expect €500bn more PEPP in December, but inflation expectations urgently need attention too. Front-end rates will likely be supported by FX concerns, but credit risks are increasingly underpriced in by the market. Beyond verbal intervention, we think the ECB has limited options to weaken EUR for now.

hybrid car

European economy 9th September 2020

For The First Time Since 2015, More Electric Vehicles Were Sold In Europe In July Than In China

Santander Corporate & Investment | Global sales of electric cars and plug-in hybrid electric vehicles increased 72% annually and 5% monthly to 253,000 units in July (the 4th best monthly figure in history). Europe recorded remarkable growth (199% in yearly terms and 22% monthly), due to incentives and requirements to cut average emissions in the EU. Meanwhile there was a slight recovery in China (+44% on a yoy basis, but -5% monthly). Germany, France and the UK made the largest contributions to sales growth.

Chris Lagarde

European economy 8th September 2020

ECB Jawboning The Euro

Last week in financial markets saw the euro rise above the $1.20 threshold. ECB chief economist Philip Lane intervened recalling market participants that the exchange rate “mattered”. The single currency traded down to $1.18 shortly after the comments. Currency appreciation amid near-zero inflation in the euro area is unwelcome for future price developments. Christine Lagarde’s message next Thursday after the governing council will likely echo Lane’s comments.