Politics to take centre stage in US and Europe - BBH
|Research Team at BBH lists down three political issues that may become talking points in the days ahead.
Key Quotes
“First, the tensions between Greece and the EU has eased since the middle of December, and a new tranche of aid is expected shortly. Greece's 10-year bond yield fell 25 bp last week to bring the decline to about 45 bp since Christmas Eve. Note that investors will likely learn in the days ahead that Greece is still experiencing deflation. Greece will also report November industrial output (6.8% year-over-year in October) and October unemployment (23.1% in September). Meanwhile, Greece's privatization efforts appear to be progressing with the sale of a 51% stake in the Piraeus ports to a Chinese company while has been managing a couple of piers.”
“Second, a decision by the UK Supreme Court on the royal prerogative regarding triggering Article 50 to begin the formal negotiations for leaving the EU is expected over the next couple of weeks. Prime Minister May confirmed two things many investors have suspects: that there were not plans for Brexit before the referendum and that the UK will leave the single market. This may weigh on sterling, which lost more than 1% before the weekend to fall for the fourth week in the past five. Separately, we note that a 24-hour London Underground strike will make for difficult commutes on Monday.”
“Third, the US Senate is set to begin taking up the President-elect's nominations. Although it is widely recognized Presidents' prerogative to pick their own advisers and cabinet, many of the nominees are particularly contentious for Democrats, and some Republicans may challenge a couple of the nominees as well. The process begins in earnest with a Senator Sessions (Republican from Alabama) nomination for Attorney General. Sessions' views on civil rights, including voting rights, same-sex marriage, and immigration, as well as Trump's proposal to establishing a registry of Muslims and imposing a ban on their immigration, will make for a particularly heated hearing.”
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