Welcome to the week of April fools. Some financial media outlets and institutions tried to participate in the event, but overall, nobody fell for it. As a matter of fact, this week’s news saw more scepticism than any other week. It makes a person think whether or not we should have April fools every week. Nonetheless, news about Brexit is as real as it gets, and it is still meddling with the GBP. Let’s find out this week’s most impactful news.
Another Brexit Delay?
Theresa May has filed a request to the EU, asking for another Brexit delay. At this point, it is hard to determine whether or not Tusk will be disposed to comply with the request. In the past, it was in both parties’ interest to have a tangible exit plan, but by now, the UK has shown nothing but incompetence to agree on anything.
There is fear that Brexit will indeed happen next week, and what’s worse, is that it may happen without a plan. If that were to happen it’s safe to say that the UK could have a Mayless May ahead of it.
Saudi Arabia to exit Oil deal with the US if NOPEC passes
The United States is in the process of discussing a bill which could expose all of the OPEC members to the US antitrust lawsuit.
Saudi Arabia has filed a “threat” saying that if the bill passes, they will seize all sale of Oil in USD and find “another currency” to deal with. This could be devastating for the USD as it is very closely tied to Oil. However, disregarding an opportunity to expose cartels could be an even bigger hit to the US’s judicial system.
Nomura laying off 100 employees in Europe
Nomura has been having some financial issues in its European business as it seems. The company is preparing to lay off around 100 employees from its London-based team, which covers the European, Middle Eastern and African divisions. This was not a surprise as the CEO of Nomura warned about this back in late December 2018.
According to the announcement made by co-COO Kentaro Okuda, the company is seeking to cut costs in the EMEA region, as well as exit high-rate bond trading from the Americas.
South Korea to soften crypto regulations
South Korea, which introduced an implicit ban on ICOs is considering to soften up its legal framework for cryptocurrencies.
In order to implement the changes, a member of the committee suggested that they use South Korea’s sub-jurisdiction, the Jeju Island and see how matter unfold there with the new regulations. Overall, the change in the restrictions is quite hard to achieve in the country, as bureaucrats find it hard to compromise citizen safety.
The ASIC – A new ESMA?
Australia has just passed a bill concerning the Product Intervention Law. The law is directed towards retail brokers that offer various options to their customers. If the bill passes into law, the ASIC will have the power to intervene in various product offerings from the retail brokerages and at some point even restrict them.
Some say that this is a lesson the ASIC learned from ESMA. Therefore, fears of new restrictions on the sale and marketing of CFDs in Australia is to be expected.
EUR/USD – Another downward channel?
Thanks to the massive fall of orders on German Industrial Goods in February, the Euro has been having a hard time catching up to its former glory last month.
The Growth forecasts in Germany have been altered thanks to this information, reportedly cut in half in fact. It looks like the pair is doomed to continue falling unless something similar happens to the USD.
GBP/USD – Still struggling
Thanks to the unending nightmare known as Brexit, the GBP has been having a hard time forming a relatively stable pattern. The pair can be seen falling below the 1.30000 mark multiple times within this week.
Theresa May also appealed for another prolongation of the deadline. Asking it to be set for June 30th. The fate of the GBP will be determined by Tusk’s answer, which is unlikely to be positive.
Therefore a further tanking in the price should be expected by the end of next week. If the answer is no, then Brexit may happen without a deal, dooming the exchange rate for the foreseeable future.