Summary for the 17th of January 2019


The Labour party didn’t win the majority of the vote for its proposal of no confidence vote against the British prime minister, Theresa May and her government. The proposal got 306 votes for and 325 against. This is the second time May won a vote of no confidence proposal. The first time was in December and yesterday was the second time. She has now until Monday to present a plan B for a Brexit deal to the British parliament.

She gives the indications after Tuesday night that she is going to cooperate with the other parties in the parliament. Many signs point to a postpone of a Brexit deal. The EU indicated yesterday that it would accept a postpone of Brexit deal as far as 2020.

The British pound (GBP) has risen in value lately due to the majority in the British parliament shows signs of wanting to avoid a hard exit and May’s comment of cooperation with the other parties in the parliament.

British consumer price index (CPI) has been trending downward lately because of the effect of a weak GBP has decreased. The CPI fell in December to 2.1%, year over year. Core CPI (ex. food and energy) rises from 1.8% to 1.9% year over year in December.

The U.S’s government shutdown is now in its 26th day, the longest recorded U.S government shutdown. This is having a consequence on the economy, and the White House has projected a negative 0.13% effect each week on the economy. Another consequence will be that President Trump will postpone his state of the union speech on 29th of January.

NAHB’s Housing Market Index in the U.S shows a rise to 58 from 56. The index fell sharply in the last two months from 68 in October to 56 in December. The fall in the U.S 10 years treasury bond yield leads to many borrowers able to refinance their mortgages, which is good for the housing market.

Fed’s Beige book, released yesterday shows that the activity in the U.S economy is still modest to moderate, though the energy and the industrial sectors seem to be slowing in activity.  Also it shows that the labour market is still tightening and the wages are rising, but inflation is still moderate.

Wall Street rises (16th of January) after the financial sector released a better than expected earnings report.

The U.S is accusing Huawei of industrial espionage where Huawei is being accused of stealing business secrets from American companies. This might effect the trade negotiation between the U.S and China.

Indices on 16th of January:

Dow: +0.6%
S&P 500 and Nasdaq: +0.2%
Nikkei: -0.3%
Chinese indices: +0.3%.

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