Over the past few days (weeks, months, years?!), Brexit has been dominating the headlines, but some respite came yesterday in the form of stock markets around the world. There were some significant drops in the UK, Europe, Asia and America as market confidence was shattered by reports that Meng Wanzhou, the Global Chief Financial Officer of telecoms equipment Huawei, is facing extradition to the US. The news increased concerns over the trade war clashes between the US and China, as Beijing could well renege on its plans to purchase more US goods.
The FTSE 100 fell by more than 80 points at the start of trading and took the blue-chip index of top shares in London to its lowest level in two years. In Europe, the Stoxx 600 index hit a six-week low shortly after opening, while the Dow Jones industrial average dropped by 466 points just after the opening bell rang on Wall Street. This Twitter thread explains why the arrest of Huawei’s Chief Financial Officer matters. Interestingly, Britain’s stock market suffered its worst day since the EU referendum yesterday. It has certainly been a whirlwind few days.
With the meaningful vote now only two business days away, it is impossible to ignore Brexit-related news even if you might be sick of it by now. Chancellor Philip Hammond told MPs that the UK cannot afford the economic costs of a no-deal Brexit. He went on to say that he does not believe the UK can afford the costs to society by ignoring the result of the EU referendum. The Chairman of the Conservative backbench 1922 Committee, Sir Graham Brady, said that unless May can provide clarity on how the UK can leave the backstop, the Brexit vote should be postponed.
There is still time to put strategies in place to protect your money from any adverse market movements we could see in the aftermath of the meaningful vote. That takes place on 11 December 2018 at 7pm and is likely to last for a few hours at least. We encourage you not to leave it too late before getting in touch – there are methods such as forward contracts you can make use of, where you can fix in today’s exchange rate for the next 12 months.
In the meantime, do have a read of our recently published blog on Brexit scenarios. It makes for interesting reading (if we do say so ourselves) and should certainly provide some food for thought. Remember – sterling lost 12 cents against the dollar the day after the EU referendum, when everyone expected the remain camp to win the vote. May’s bill is unlikely to get through Parliament, but will that lead to a renegotiation or leave it dead in the water? We don’t know and neither does anybody else. Get in touch now on 0207 898 0541.