Daily Analysis - 21/06/2018
Brexit has never been a unanimous decision for the British and surely not for her MP’s. To the point, Ms. May has, despite her being against the decision in the 2016 poll, she could not resist the opportunity to usher through a process she was against in the face of the premiership vacated by Cameron as a result of the poll. She took a maximalist position toward which her parliamentarians balked. Balked and triumphed yesterday as they secured the right to amend and propose alternatives to the final Brexit agreement which Ms. May formerly had been against. Did not strengthen the GBP though. The situation economically is going to get a whole lot darker before dividends from the exit start to appear on the economic landscape.
The Cable continues to fall as the strength of the USD is on a march. Too strong to overtake the result of some unity and welcome sanity to Ms. May’s headstrong and often wrongheaded approach to the divorce proceedings. It seems that the end of the weakness in the GBP is not yet in sight as the costs to the British economy are a long way from becoming clear. However, there are those pundits who consider benefits to the British economy will be large indeed. They just won’t kick in for years.
The world, at least the world of crude oil traders, and it is not a small intimate world. Crude is the most widely traded commodity on the planet, is waiting on tenterhooks for the result of the OPEC meeting on Friday in Vienna. We expect that the cartel will announce that the production quotas on the members of the cabal will be raised to accommodate lost production from Venezuela and assumed sanctioned Iranian production imposed by the Americans, which it needs to be stated, has not yet been imposed. Nonetheless, despite having a fair idea of the outcome of the meeting and the fact that the price has been falling for over a week now, despite 2 weeks of inventory trimming suggests that the markets are already over pumping trying to capture as much of the higher price sales as they can before price falls further.
The London index of stocks, similar to the GBP versus the US dollar, is falling. Not a runaway bear trounce, but a gradual fall. Interpreting this is tricky as are all stock analyses these days as they are all, even within the same region very mixed in their daily closing outcomes.
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