Thursday, 20 April 2017 05:15

The French Election is a Nightmare

(Paris)

The French election is casting a dark shadow over markets as the country heads to the polls this weekend. The race has four main competitors, but it is increasingly looking like a nightmare scenario for markets: candidates from the far right (Marine Le Pen) and the far left (Jean-Luc Melenchon) are likely to make it through to the final round of voting on May 7th. That would mean no mainstream candidates in the final round of the election, or a lose-lose for markets. Le Pen wants to take France out of the Euro, and Melenchon has far-left economic policy.


OxWFD: Look out for the Euro and European bonds to get hammered as the votes become clear. If Le Pen wins expect doubts about the future of the Euro/EU to be running high.

Source: Wall Street Journal

Published in Europe

(London)

A couple of days ago UK prime minister Theresa May called a surprise snap election in the UK. Unexpectedly, she announced that she would seek Parliament to approve a general election on June 8th. Parliament has now approved that request with a dominant majority. That means the Labour party will have just a few short weeks to mount a campaign against the Conservatives. May believes an election is needed now in order to ensure a strong mandate, and thus bargaining position, with the EU as she negotiates for a good Brexit deal.


OxWFD: May proved herself to be very shrewd. The election is so close, it is not nearly enough time for the opposition to mount a well-executed campaign.

Source: Wall Street Journal

Published in Europe
Wednesday, 29 March 2017 10:40

The UK Officially Starts Brexit

(London)

After nine months of posturing, arguing, deliberating and legal wrangling, the UK officially triggered its exit from the EU today. The legal mechanism for the the UK to leave the EU is called Article 50, and today PM Theresa May officially triggered it by sending a formal letter to the president of the EU notifying of the UK’s intention to leave. The triggering means there is exactly two years until the UK departs the EU, a period which will be full of negotiations between them. The Pound rose on the news.


OxWFD: While there is still some debate over whether Article 50 is revocable, this is pretty final—the UK is leaving the EU.

Source: Independent

Published in Europe
Monday, 20 March 2017 12:07

The Brexit Date is Now Official

(London)

The battle over Brexit has been brewing for nine months now, and the outcome seems just as unclear as immediately after the vote, as the UK has not struck any deal with the EU and it is even unsure if it wants to. However, one aspect of the vote has now been clarified. Britain will trigger “Article 50”—the legal procedure for leaving the EU—on March 29th. The date came from a spokesman representing PM Theresa May. The official triggering will be followed by two years of negotiations with the EU.


OxWFD: It looks like it is really happening. However, there is a still a battle going on over whether it is reversible or not.

Source: Bloomberg

Published in Europe

(London)

Get ready for a nasty fight to start in Britain. Scotland voted strongly in favor of staying in last year’s Brexit referendum, and this week the country formally requested permission from the UK to hold its own independence referendum late next year before the UK triggers its exit from the EU. However, the UK has rejected the request, saying no referendum can be held until at least early 2019—a date after the UK’s exit from the EU has been finalized. That means Scotland would not have a chance to decide its fate before being carried out of the EU by the UK. A leader of Scotland’s SNP party commented “Scotland’s referendum is going to happen and no UK prime minister should dare to stand in the way of Scotland’s democracy”.


OxWFD: This is going to get very ugly before any solution is hammered out. It is not inconceivable that Scotland will simply hold this on their own and then appeal to the EU for membership. Uncharted waters.

Source: Financial Times

Published in Europe

(Amsterdam)

American investors don’t pay much attention to Holland, and perhaps rightfully so—the country’s affairs seem to have little impact on US life or markets. However, that could change soon as Dutch voters head to the polls today in a vote that could rock the EU. Dutch far-right populist Geert Wilders may win the election on a platform than has included banning the Koran and closing mosques. The vote is seen as the second (following Brexit) in a string of elections that could decide the fate of the EU. France will vote in a couple months and Germany in September.


OxWFD: If Wilders wins there will be a populist in power in a major European country which is at the heart of the EU. If France follows the whole project could crumble.

Source: Financial Times

Published in Europe
Tuesday, 14 March 2017 10:46

Brexit to be Triggered Any Day

(London)

British PM Theresa May’s Brexit bill has cleared all its Parliamentary hurdles, paving the way for the PM to formally trigger Brexit any day. This article says she is planning to do so in the last week of March. However, the event is being overshadowed by Scottish leader Nicola Sturgeon’s call for permission for a second referendum before the UK actually leaves the EU. May, however, wants the vote to take place after March 2019, when Britain actually leaves the bloc.


OxWFD: Scotland and England are at loggerheads. Why would Scotland want to wait to get force-fed the terms of London’s exit when it could vote prior to the actual departure? This will be messy.

Source: Financial Times

Published in Europe
Monday, 13 March 2017 10:42

Scotland Seeks New Referendum

(Edinburgh)

Scotland and the UK have been at odds for centuries, embedded in a tenuous alliance for the last three hundred years. Two years ago, Scottish nationalists failed by a narrow margin to leave the UK, but now the leader of that party is trying to secure a second Scottish referendum following the UK’s vote to leave the EU. The leader of the SNP, Nicola Sturgeon, wants a vote once the details of the Brexit negotiations are decided but before the UK actually leaves the EU. “What Scotland deserves is the chance to decide our future in a fair, free and democratic way and a time when we are equipped with the facts we need”, says Sturgeon.


OxWFD: Technically the government in London would need to approve this referendum, but we expect Scotland will end up undertaking a vote either way.

Source: Wall Street Journal

Published in Europe
Thursday, 09 March 2017 10:43

Scotland Weighs Date of Next Referendum

(Edinburgh)

The Brexit soap opera continues in Europe, but an important story within it is Scotland. The country voted strongly to remain in the EU, a direct contrast to its southern neighbor. And while it has been lobbying with London to give it special powers to stay part of the EU single market, the English have reportedly not been listening. Now, Scotland’s chief political leader Nicola Sturgeon is weighing the possible date for a new referendum on UK membership, and she says Autumn 2018 looks like a good choice. The country has not definitively chosen to hold a second referendum, but says it may if the British don’t account for its demands.


OxWFD: The English better be careful or they are going to end up very lonely and isolated, losing Scotland at the same time as Europe.

Source: Financial Times

Published in Europe
Monday, 27 February 2017 09:58

Get Ready for a New Scottish Referendum

(Edinburgh)

We have stayed away from covering too much of the in-fighting currently going on in Britain over Brexit and how to proceed in negotiating with the EU. However, something potentially very troubling came out this weekend that could weigh on global markets—there may be another Scottish referendum in the near future. Scotland has been furious over Britain wanting to leave the EU (Scotland is heavily pro-EU), and it has complained that London has not listened to its questions and concerns about Brexit. Therefore, the country is mulling over planning a new referendum on UK membership, and UK PM May has reportedly said it was okay so long as it occurred after the UK leaves the EU.


OxWFD: British political logic is confounding to outsiders, so it is hard to say how this may play out. However, we suspect Scotland will not want to wait until after the UK leaves the EU to have its referendum.

Source: Bloomberg

Published in Europe
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