May's Brexit deal faces the Brussels test
The Brexiteer push to unseat Theresa May is not going to plan but the PM still faces a herculean task to get her deal with the European Union through Parliament next month.
The backlash in Britain against May’s 560-page draft deal, looks anything but contained. It has heightened the risk of an even worse outcome than the sub-optimal deal agreed with Brussels - the biggest of all being a no-deal Brexit.
Over the past few days more than 20 Tory lawmakers have delivered their votes of no confidence against the PM to the 1922 Committee. Although some newspapers said over 40 letters had been submitted, the only person who will know for sure is Graham Brady, the chairman of the 1922 Committee of rank-and-file Tory MPs, who remains silent.
However the negative tones continue to be heard as after the European Research Group news conference journalist heard Jacob Rees-Mogg insist, “Patience is a virtue,’’ and Tory lawmaker Steve Baker say, “colleagues should try remove May after she had lost the vote in parliament”.
May will remain under-pressure as lawmakers continue to rebel against her and the plan and as the ongoing negotiations over the future framework continue. This evening May will travel to Brussels for a meeting with European Commission President Jean-Claude Juncker and while new Brexit Secretary Stephen Barclay, has been, May’s office announced that she would be taking personal charge of the last week of negotiations.
Tech slump, interest rate expectations
Tech hardware was the worst performing group in the S&P 500, followed by transportation and energy as oil slid to its lowest price in more than a year <$54.
Yesterday the S&P 500 Index briefly slid 10 percent below its September record close before clawing back just above the threshold. The Nasdaq Composite Index was almost 14 percent below the closing high it reached in August. And the Dow Jones Industrial Average shed more than 500 points, or 2.1 percent, as angst spread across global equity markets. As the market explores where prices should be, investors pointed to escalating trade tensions, signs of a looming slowdown in retail growth and cracks in the credit market as reasons for the decline.
“There’s clearly a concern about a global growth slowdown,” said Alec Young, Managing Director of global markets research at FTSE Russell. “Not so much in the US, but internationally driven. Trade has an impact on the tech supply chain, so it’s impacting the technology sector. The market wants more dovish Fed talk. The Fed has been giving guidance based on the US economy, but in recent months the market has become more focused on the global growth slowdown, and we haven’t heard about that from the Fed.”
Economists in the latest polls unanimously said the Fed will raise the federal funds rate by 25 basis points to 2.25-2.50 percent in December as growth in the world's largest economy is still solid, riding the tail-end of a $1.5 trillion tax cut boost, and official unemployment is the lowest in nearly half a century. As markets seek to find a bottom, investors will be poised to react on any comments made by the Fed members over the coming days.
Turkish Lira down 2%
Turkey’s currency was squeezed on Tuesday amid souring of market sentiment and after the country’s finance minister said commercial interest rates would carry on dropping in the following months. The lira was down as much as 2.5 per cent against the dollar on the day - on track for the biggest drop in two months - to TL5.4377. In a speech to a business forum in Istanbul, Finance Minister Berat Albayrak said the country’s commercial interest rates would drop, and reiterated that tackling inflation was the priority for Turkey’s economic policies. According to a report on his comments by the Turkish broadcaster and news site NTV, Mr Albayrak predicted that interest rates offered by commercial banks would fall from highs of as much as 50 per cent.