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LONDON (Reuters) – Although yesterday's warnings by the British government about the implications of Brexit for consumers and businesses are short-lived, many of them will find the predictions of the Bank of England's governor even more alarming. , Mark Carney, on the real estate market.
Mark Carney, Governor of the Bank of England, and his private secretary James Benford leave Downing Street in London, September 13, 2018
The Times said it had told ministers that UK housing prices would fall by 35% over three years in case of a Brexit without a transaction, while mortgage rates soared. The Guardian separately stated that he described the scenario as being similar to that of the 2008 financial crisis.
Hard Brexiters will write such comments in the wake of what they termed "fear of the project" before the vote on Brexit; For her part, Prime Minister Theresa May sees it as a tool to frighten conservative voters and their elected representatives, giving impetus to her compromise with the auditors.
The Hungarian Viktor Orban announced this morning that he planned to put an end to his country with the European Union as long as this is valid in terms of internal opinion.
He took advantage of his usual radio interview on Friday morning to announce that he would decide Monday to take legal action to challenge the censorship of his government by the European Parliament this week for breaking democratic standards, providing for a "serious legal debate" . These tactics are likely to boost his Fidesz party in next year's European Parliament elections; The risk for Hungary is that it starts to discourage investors.
Meanwhile, the European Commission has seized what could be an easy victory for its own popularity: to end twice a year between summer and winter in Europe.
Polls suggest that a large majority of Europeans are tired of change and want to make it go away; by saying that it will no longer apply it, Brussels would like to dispel criticisms of intervention in areas where it is not necessary. He called a press conference to discuss the plan today.
MARKETS AT 06:55 GMT
Turkey, technology, trade, Trump – a little calm on all these fronts has improved the mood on the world markets. Global equities are up for the fifth consecutive day and emerging markets are recovering, with stocks up 1% and an emerging currency index also stronger.
After Turkey's rise, Finance Minister Berat Albayrak pledged to tackle the current account deficit. Yesterday's result was a 4% increase in the pound that continues this morning and that raises the entire Emerging Markets and Europe market.
The positive momentum was helped by the dollar's dip to its lowest level in six weeks as a result of weaker-than-expected inflation data and signs of a slowdown in underlying tensions. In the United States, retail sales will be concentrated today, which are generally quite strong in August.
And the demand for safe haven for the dollar fell following news that the US government had communicated with China for trade and Beijing had reacted positively. (Note, however, that President Donald Trump has tweeted in the US that he's "not under pressure to reach an agreement with China", but let's put that aside for the moment .)
This morning, China released strong data on retail and industry. Weaker records of trade and credit growth have reinforced the prospect that the world's second-largest economy is cooling down but is not yet in danger of slowing down.
US stocks closed higher on Thursday, again under the leadership of Apple. But the news is not uniformly optimistic. The United States accuses Russia of covering North Korean sanctions violations – Washington has imposed sanctions on a China-based technology company and a Russian subsidiary on the subject.
The ruble has not yet reacted, likely due to the general dynamism of emerging markets and the possibility of a rate hike when the central bank will meet later in the day. This is not at all certain – Russia still has some of the highest real interest rates in the world and, unlike Turkey, the political risks and sanctions push investors to leave Russia rather as doubts about monetary policy.
The second cloud is Brexit, of course. The pound sterling has been raised in recent days at six-week highs against the dollar in hopes that a trade deal will be reached. It's far from certain, however.
A warning from Mark Carney, BoE, that housing prices could fall by a third in case of chaotic disagreement. Brexit opened UK manufacturers' shares by 1 to 2% less. Carney has to speak today.
European equities are expected to close the week on a solid basis after Asian markets climbed overnight hoping for a new round of trade talks between the US and China.
Corporate profits were weak in the field, but the German retailer Metro rose 3% after its general manager said his decision to sell real hypermarkets would be satisfied. Dealers also said that reinsurers' shares could be slightly challenged after Hurricane Florence was downgraded to a Category 1 tropical storm.
In other news of the company and potential holders of securities: Close Brothers Group will sell a retail financing unit to the Swedish bank Klarna Bank; Mediaset CFO says nothing for the moment about the idea of creating a pan-European actor; J D Wetherspoon's annual profit is up 16.5%; UK Co-op's profits increase thanks to good food performance; The UK Nationwide Network Announces Additional Technology Expenses of $ 1.7 Billion.
Emerging markets had a good weekend. Equities rose for a third day and the Turkish lira headed for its second best week against the dollar since 2008, after the central bank raised its interest rates.
Even the Indian rupee has rebounded by half a percent on the record lows. However, the Argentine peso returned under pressure, losing 3% overnight and the electoral nerves weakened the Brazilian real. Average yields on local bond markets are down this week. The ruble is flat before a rate decision.
– An overview of the day of Chief Economist and European Policy Editor Mark John and EMEA Market Publisher Sujata Rao. The opinions expressed are theirs –
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