UK Stares Down A Rough “Brexit” Ride As Tension With EU Grows

UK Prime Minister Theresa May faced a barrage of threats from her mainland counterparts as she arrived in Brussels to attend her first European Council meet. Both German Chancellor Angela Merkel and French Prime Minister Francois Hollande issued stern warnings to May that Britain faces a “rough” negotiation if she continues with her tough stance towards issues like enforcing a clampdown on immigration.  The EC gathering comes at a time when European leaders are determined to push Brexit to the sidelines as they focus on tackling the renewed Russian aggression and the ongoing refugee crisis.  In the meantime, despite the immense downward pressure on the Pound, the UK economy continues to steam ahead with inflation rising back towards targets as unemployment continues to trend at multi-year lows.

Crude oil futures are down in early Friday trade amid a strengthening dollar and comments from Russia’s biggest oil producer that output could increase if demand spikes. Since oil is traded in US dollars, a stronger greenback results in higher cost for traders who hold other currencies.  On the New York Mercantile Exchange, November crude futures fell to $50.36 per barrel in the Globex electronic session. Brent slipped to $51.17 per barrel on London’s ICE exchange.  Oil prices have declined the past two sessions after hitting a one-year high on Wednesday.  Investors remain cautious on the likelihood of a sustained rally in a market that is still grappling with supply uncertainties. Those concerns were reinforced by comments from Rosneft CEO Igor Sechin following remarks on Thursday that his country was prepared to raise production by as much as 4 million barrels a day if demand picks up.