+353 1 662 3001 info@greshamhouse.ie

Share Appians news

  • Theresa May finally provided her long awaited resignation speech. She follows, fellow Conservative Prime Ministers (Thatcher, Major and Cameron) who also had to resign because of the party’s divisive and long suffering relationship with the EU. Initially, there could possibly be up to 15 candidates to replace May, with Boris Johnson perceived as the early favorite. The appointment of a “populist” pro no deal Brexit leader may ultimately cause the disintegration of the Conservative Party via a second referendum or general election. However, consideration should also be given to the distinct possibility that an extension to the Oct 31 deadline may be required.
  • The Trump administrations economic attacks on Huawei and Xi Jinping’s visit to a rare earth factory has seen the trade war move into more dangerous territory. The perceived US attack on future Chinese economic progress may be prolonged and extensive. Many believe that the US will struggle to succeed in the short term for three reasons (1) the Chinese are unlikely to acquiesce to overt US demands (2) Trump seems to evaluate his economic stewardship via the performance of the equity market – the longer the trade war plays out the greater the negative impact on the economy and the market and (3) Trump, unlike Xi Jinping, is not president for life.
  • Early indications from the EU parliamentary elections would suggest that on an aggregated basis little has changed. Pre- election, the fear was that populists would prove to be sufficiently successful in the capturing of seats that they would be able to disrupt EU parliamentary activities. These fears ultimately proved unfounded.
  • Manufacturing PMIs (see below) from the US and Eurozone were released last week highlighting that global uncertainty caused by the trade war has provided a more subdued economic outlook for both economies. A continuation of such a scenario will create a change in tone and actions for monetary policymakers.