Brexit: UK lawmakers vote in favour of Letwin amendment

The amendment passes with votes 322-306

The amendment passes with votes 322-306

That means this will see parliament delay the decision on Boris Johnson’s Brexit deal i.e. any Brexit motion at this point in time will not be a meaningful vote.
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It also compels Johnson to seek an extension from the EU regardless of what happens now before 31 October.

On the balance of things, I think this is a setback for the pound as the immediate optimism gets sapped but if the numbers are there for Johnson, ultimately this acts as a safety net for the currency considering it rules out a no-deal outcome.

It’s still tough to gauge how this will impact the open next week but I reckon we could see some mild weakness in the pound but probably not as much as the bears would be hoping for. A further Brexit delay pushes back the optimism but it doesn’t mean that we’re headed towards a no-deal or a disastrous outcome just yet.

Just be reminded that any extension request still requires the EU to approve of one and if they do, it is just going to keep putting us in circles again. They want to keep the pressure on UK lawmakers to decide on something but so far nothing is working.

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Here’s the agenda for the Brexit showdown today

A look at how the day will play out in Westminster

Brexit

It is going to be a make or break day for Boris Johnson and his Brexit deal, and at this stage it is still unclear if he is going to get the numbers needed to claim victory.
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What we do know is the vote is likely going to be a close one and it may go right down to the wire. He may fall just short of a majority but there’s also a sliver of hope that he could pull off what many described a few months back as the impossible.

So, let’s take a look at the sequence of events for today (in London time):

  • 0830 BST – ERG (Spartans) meet to try and agree on a Brexit position.
  • 0930 BST – Parliament begins sitting. Johnson will deliver a statement on his Brexit deal while taking questions from fellow lawmakers.
  • 1100 BST – Lawmakers will begin debating the Brexit deal and speaker John Bercow will then announce which amendments are to be voted on later.
  • 1430 BST – Depending on how the debate progresses, lawmakers should start moving towards a vote around this time.

The timing of the debate and votes are still subjective as they depend on how short/long lawmakers spend on each session above.

But when it comes to the votes, we will start off with the amendments to the Brexit motion first before proceeding to a vote on the motion itself later on.

As mentioned yesterday, the key one to watch will be the Letwin amendment as it sets out an added insurance against a possible no-deal Brexit.

If Johnson’s Brexit motion fails, it could get quite messy if he chooses to ask for a vote on a no-deal Brexit instead so just be wary that this may not necessarily be a straightforward scenario as outlined by the agenda.

Here’s what you need to know as we head towards crunch time in the UK parliament:

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Mnuchin backs proposal to double IMF’s crisis fund

© Reuters. Treasury Secretary Steve Mnuchin speaks at a news briefing © Reuters. Treasury Secretary Steve Mnuchin speaks at a news briefing

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin on Friday said he welcomes a proposal to double the size of the International Monetary Fund’s $ 250 billion crisis lending fund as part of a deal to maintain overall IMF resources.

Mnuchin, in a statement to the IMF’s steering committee, said he backed the funding increase to ensure the global lender remained adequately resourced to respond to potential crises over the medium term.

He also called for various reforms to streamline the fund’s costs, modernize salaries and benefits, and adopt a more independent, centralized risk management system.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Economy News

ForexLive Americas FX news wrap: Dollar sags as Clarida keeps mum

Forex news for Americas trading on October 18, 2019:

Markets:

  • Gold down $ 1 to $ 1490
  • US 10-year yields flat at 1.75%
  • WTI crude down 19-cents to $ 53.74
  • S&P 500 down 12 points to 2986
  • NZD leads, USD lags

The pound was helped by a steady stream of Labour and dissident Conservative MPs saying they will support the Brexit bill. It still doesn’t seem to be across the finish line but it’s getting closer. At the same time, the vote may be delayed because of an amendment that will force Boris to request the extension before it takes place. That will further limit the risk of a no-deal Brexit. Cable finished at 1.2945, which was close to the best levels of the day as it climbed 50 pips in the final hours of North American trade.

More broadly, we were closely watching for signs of the Fed pushing back on the 81% chance of a cut priced into the market on Oct 30. The thinking is that the Fed would not defy a market that’s priced so aggressively without warning. The blackout starts tomorrow so Clarida’s speech was the last chance to push back. He said the usual meeting-by-meeting rhetoric but didn’t say anything that was surprisingly hawkish so the market took that as a greenlight to sell dollars. The euro led the way as it extended its recent strength in a climb to 1.1167. IT also finished at the best levels of the day/week/month in a positive sign.

The commodity currencies also benefited from dollar softness and all finished at the best levels of the week. USD/CAD fell through the Sept low despite the decline in oil and risk appetite. However the antipodeans outperformed the loonie — likely on modest Canadian election worries (the vote is Monday).

The risk trade wasn’t a part of the dollar slide as stocks fell and USD/JPY declined for the third day to hit 108.24 in a quarter-cent decline.

Have a great weekend and check back Saturday to find out what happens in UK parliament tomorrow.

Forex news for Americas trading on October 18, 2019:

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Forex – U.S. Dollar Slips as Euro Still Lifted by Brexit Deal

© Reuters.  © Reuters.

Investing.com – The U.S. dollar was lower against other currencies on Friday, while the euro was buoyed by hope that a Brexit deal will help mitigate risks of a recession in the bloc.

U.K. Prime Minister Boris Johnson made a deal with the EU on Thursday, which hinges on Northern Ireland applying a limited set of EU rules on some goods, with the U.K. only charging EU tariffs on goods passing through to EU markets.

The deal now must be passed by the British Parliament on Saturday. However, Northern Ireland’s Democratic Unionist Party said it is opposed to the proposed agreement, making it uncertain if the deal will be approved.

inched up 0.1% to 1.2897 as of 10:56 AM ET (14:56 GMT) while was up 0.2% to 1.1139.

Meanwhile the U.S. dollar dipped, as traders remained cautious after data showed the impact of the trade war has taken its toll on China.

China’s gross domestic product grew 6% annually in the third quarter, which was the slowest rate in 30 years. The news comes on the back of China trying to get more concessions from the U.S. before it signs a temporary phase 1 deal agreed on last week.

The , which measures the greenback’s strength against a basket of six major currencies, was down 0.2% to 97.172.

Elsewhere, the surged 1.4% to 0.1728 against the dollar after a five-day ceasefire against the Kurds in Syria was agreed on between President Recep Tayyip Erdogan and U.S. Vice President Mike Pence. However, reports have surfaced that the ceasefire may have already been broken.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Protests sparked by planned WhatsApp tax sweep Lebanon

Beirut, Lebanon – Nationwide protests paralyzed Lebanon Friday as demonstrators blocked major roads in rallies against the government’s handling of a severe economic crisis and the country’s political class. 

The tension has been building for months as the government searched for new ways to levy taxes to manage the country’s economic crisis and soaring debt. The trigger, in the end, was news Thursday that the government was planning, among other measures, to impose a tax on WhatsApp calls — a decision it later withdrew as people began taking to the streets. 

In some cases the demonstrations evolved into riots, as protesters set fire to buildings and smashed window fronts, taking their anger out on politicians they accuse of corruption and decades of mismanagement. 

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The protests were the largest since 2015, and could further destabilize a country already on the verge of collapse and with one of the highest debt loads in the world. The unrest could plunge Lebanon into a political crisis with unpredictable repercussions for the economy, which has been in steady decline for the past few years. 

Some of the protesters said they would stay in the streets until the government resigns.

Time and again, the protesters shouted “Revolution!” and “The people want to bring down the regime,” echoing a refrain chanted by demonstrators during  that swept the region in 2011. 

LEBANON-INTERNET-BUDGET-DEMO
Lebanese demonstrators burn tires during a protest against dire economic conditions, on October 18, 2019 in the northern port city of Tripoli. AFP via Getty Images

“We are here today to ask for our rights. The country is corrupt, the garbage is all over the streets and we are fed up with all this,” said Loris Obeid, a protester in downtown Beirut.

Schools, banks and businesses shut down as the protests escalated and widened in scope to reach almost every city and province. Hundreds of people burned tires on highways and intersections in suburbs of the capital, Beirut, and in northern and southern cities, sending up clouds of black smoke in scattered protests. The road to Beirut’s international airport was blocked by protesters, stranding passengers who in some cases were seen dragging suitcases on foot to reach the airport.

“We are here for the future of our kids. There’s no future for us, no jobs at all and this is not acceptable any more. We have shut up for a long time and now it is time to talk,” Obeid added.

Some protesters threw stones, shoes and water bottles at security forces and scuffled with police. Security forces said at least 60 of its members were injured in the clashes. 

Two Syrian workers died Thursday when they were trapped in a shop that was set on fire by rioters. Dozens of people were injured. 

Protesters were also injured.    

LEBANON-INTERNET-BUDGET-DEMO
Lebanese demonstrators wave the national flag during a protest against dire economic conditions in downtown Beirut on October 18, 2019.  IBRAHIM AMRO/AFP via Getty Images

The government is discussing the 2020 budget, and new taxes have been proposed, including on tobacco, gasoline and some social media communication software such as WhatsApp. Prime Minister Saad Hariri Hariri was expected to address the nation later in the day.

Interior Minister Raya al-Hassan insisted Hariri would not resign, saying that could spark a national crisis more dangerous than the current economic crisis.

Years of regional turmoil — worsened by an influx of 1.5 million Syrian refugees since 2011 — are catching up with Lebanon. The small Arab country on the Mediterranean has the third-highest debt level in the world, currently standing at about $ 86 billion, or 150% of its gross domestic product.

International donors have been demanding that Lebanon implement economic changes in order to get loans and grants pledged at the CEDRE economic conference in Paris in April 2018. International donors pledged $ 11 billion for Lebanon but they sought to ensure the money is well spent in the corruption-plagued country.

Despite tens of billions of dollars spent since the 15-year civil war ended in 1990, Lebanon still has crumbling infrastructure including daily electricity cuts, trash piles in the streets and often sporadic, limited water supplies from the state-owned water company. 

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Turkish Markets Rally as Erdogan Clinches Syria Deal With U.S.

© Reuters.  Turkish Markets Rally as Erdogan Clinches Syria Deal With U.S. © Reuters. Turkish Markets Rally as Erdogan Clinches Syria Deal With U.S.

(Bloomberg) — The jumped to its strongest level in almost two weeks while bonds and stocks rallied after the U.S. agreed not to impose any further sanctions on Turkey as part of a temporary cease-fire deal in Syria struck between Ankara and Washington on Thursday.

The currency gained as much as 1.3% to 5.7585 per dollar, erasing losses that were fueled in recent days by concern Washington would impose punitive measures against the Turkish economy in response to the offensive against Kurdish rebels in Syria.

The benchmark stock gauge jumped almost 4% at the open, its biggest advance since June. The yield on five-year benchmark bonds dropped more than 160 basis points, falling below 15% for the first time in a week.

“The truce deal, even a temporary one, fueled optimism among investors that the risk of sanctions has diminished significantly,” said Can Oksun, senior manager of institutional sales at Global Securities in Istanbul. “The mood is broadly more positive.”

The agreement enshrines Turkish control of a 20-mile deep “safe zone” in northern Syria, representing a victory for President Recep Tayyip Erdogan, who had been seeking one for years. The U.S. has also promised to withdraw sanctions announced earlier this week once a permanent cease-fire takes effect.

‘Brutal’ House Bill

Still, risks remain. Republican and Democratic lawmakers have vowed to move ahead with sanctions despite Thursday’s announcement. The measures would penalize Turkish leaders, financial institutions and its energy sector, as well as prohibit any U.S. firms or individuals from buying the country’s sovereign debt.

“If this bill holds as is and is passed it would be brutal,” said Timothy Ash, a strategist at BlueBay Asset Management in London. “Sanctioning sovereign debt would be lights out for Turkey, given it has $ 180 billion in short-term external debt to finance every year.”

While there is strong bipartisan opposition to Turkey’s incursion into northern Syria, Senate leaders haven’t committed to bringing a sanctions bill to a vote.

The lira was trading 0.9% stronger at 5.7803 per dollar as of 10:53 a.m. in Istanbul. The Borsa Istanbul 100 Index trimmed its advance to 3.5%, with gains being led by Turkiye Garanti Bankasi AS and Akbank TAS, the nation’s largest listed lenders.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Pound Gives Up Gain as DUP Rejects Deal “as Things Stand”

© Reuters.  © Reuters.

Investing.com – The British pound gave up gains on Friday in Asia as traders digested the latest Brexit news.

The British pound rose to near a five-month high against the U.S. dollar after the European Union Commission President Jean-Claude Juncker and U.K. Prime Minister Boris Johnson both confirmed via twitter that a Brexit deal had been reached.

However, the pound reversed gains after Northern Ireland’s Democratic Unionist Party (DUP) said it remains opposed to the proposed agreement, making it uncertain if the deal will be passed by the U.K. Parliament when it votes on Saturday.

The DUP said the proposals are not beneficial to the economic wellbeing of Northern Ireland.

The pair last traded at 1.2852 by 11:45 PM ET (03:45 GMT), down 0.3%.

For the week, the pound was on course for a 1.7% gain versus the dollar.

The pair was little changed at 7.0765. The release of China’s GDP data had little impact on the currency pair.

China’s economic growth in the third quarter slowed more than expected to 6.0% from last year, the National Bureau of Statistic reported on Friday. Analysts expected GDP to grow 6.1% year-on-year.

Meanwhile, industrial output gained 5.8% year-on-year in September, compared with a 5.0% growth expected by analysts.

Retail sales rose by 7.8% year-on-year, in line with expectations.

Fixed asset investment grew 5.4% year to date, also matching expectations.

The pair slipped 0.1% to 108.56.

The pair and the pair gained 0.1% and 0.4% respectively.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Your Money: U.S. teachers take hands-on approach to financial literacy

© Reuters. FILE PHOTO: Wood-cased coloured pencils are pictured in a shop at Faber-Castell manufacturer in Stein © Reuters. FILE PHOTO: Wood-cased coloured pencils are pictured in a shop at Faber-Castell manufacturer in Stein

By Chris Taylor

NEW YORK (Reuters) – There are a lot of hard truths about money, but here is one of the hardest: We are really bad at passing along money smarts.

As it stands, only 57% of American adults can be considered financially literate, according to a global survey by Standard & Poor’s.

A new initiation from education fundraising website DonorsChoose.org and the Charles Schwab (NYSE:) Foundation is aiming to change that with a new hands-on approach. Rather than kids reading about starting a business, why not actually open a school store? Rather than reading about concepts like supply and demand, why not start making T-shirts, and see if they can sell them?

The “Innovation Challenge” prompts teachers to craft creative FinLit projects, helps them get funded, and then monitors which ones pay off.

“Experiential learning is so important, especially for lower-income families,” said Casey Cortese, managing director of Schwab’s community services, which is taking a new hands-on approach to teaching financial literacy. “If you make lessons tangible and real, it really cements learning.”

This year’s overall winner of an online fan vote: Students of Rapunzel Galang in Lanham, Maryland, undertook virtual-reality field trips to different historical landmarks through time. They did that using VR headsets – but first they had to plan, budget, and pay for such trips, by researching about the places they wanted to visit.

Another innovative project: Xavier Lewis in Dayton, Texas, combined financial literacy with a “Mission to Mars” STEM project. Students earned money in their virtual bank accounts with attendance, class participation, and completing assignments. They could then spend that money to buy supplies to assemble rockets, rovers and hovercrafts for a simulated flight to Mars.

Other projects included creating a virtual-reality bank, filming a how-to video series on personal finance, using dinosaurs to pass along money lessons, and teaching the idea of “wants versus needs” via dramatic play.

KEEP IT GOING

While 92% of teachers say financial education is important, only 12% actually undertake it – because they just don’t have the resources, said Cortese.

To combat that with the Innovation Challenge, 15 of the top projects were developed into full lesson plans. Teachers across the country could then download them for free and use them in their own classes. The first 200 teachers who did so, and submitted a report on how it went, got a $ 250 credit to apply to future projects on the site.

The initiative has encouraged educators to think bigger and more creatively than just using a crowdfunding site like DonorsChoose to cover things like basic supplies. Since the Innovation Challenge first got started, “There has been a 66% increase in FinLit projects posted,” said Rianne Roberts, partnerships manager for the fundraising site.

Financial literacy is a long game, though. You can teach a third grader about money smarts today, but you will not know for years whether those habits have actually taken root.

When the Schwab Foundation first started partnering with the site in 2017, 350 teachers participated in its financial literacy campaigns, reaching 36,000 students. In 2019, in comparison, they have already reached 1,600 teachers and 250,000 students.

So far this year, Schwab donated $ 375,000 to the Innovation Challenge, and $ 500,000 total to DonorsChoose. Of those teachers who used the resulting materials, 98% said they plan to keep teaching financial literacy in schools.

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NZD traders – here are two opposing views

NZD traders – here are two opposing views

A summary of analysis on NZD/USD 

Westpac:

  • We suspect the looming RBNZ decision on 13 Nov is keeping the bulls at bay. RBNZ Dep. Gov. Bascand yesterday gave the strongest hint yet that it will probably cut then. At 100% priced, with a follow-up cut 80% priced, it does seem aggressive
  • Recent ,,,  data have been firmer than expected, suggesting the RBNZ has justification in remaining on hold after November
  • “Multi-month, though, we remain bearish, targeting 0.6130 which was the 2015 low. We expect the NZD/USD to be weighed down by a stronger USD which should continue to benefit from trade wars and global risks.

NAb/BNZ:

  • NZD inevitably performs poorly during economic downturns and global economic momentum remains to the downside. Easier global monetary policy currently underway and a trade war truce might be enough to stabilise growth and even engineer a modest recovery, which explains our more positive NZD outlook for next year. Despite the soft global backdrop, NZ commodity prices are holding up well and are NZD-supportive.
  • Domestic factors remain largely NZD-negative, with low levels of confidence widely evident and GDP growth on a weaker, sub-trend path. Further RBNZ rate cuts look inevitable, although these are well-priced
  • Our 3-6 month target for the NZD remains at 0.6150, with two-sided risks, mainly emanating from the global economic outlook. If economic growth momentum remains to the downside and the trade war re-escalates then that would raise the chance of a sub-0.60 handle for the NZD seen typically under global recession-like conditions. 
  • On the positive side, more encouraging developments in the trade war and a turnaround in global growth would inject some life into the NZD and at the same time trigger a broadly-based reversal in the USD, adding to potential NZD/USD gains.

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