Brexit Negotiations Begin

Today marks the start of the Brexit negotiations, which will see diplomats from the EU and Britain begin the complex task of unpicking almost 50 years of integration in trade, travel and legislation. The negotiations have already made their mark on the stock market, with the CAC leading the way, up 1.2 percent, while the DAX has gained 120 points.

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shareprices.com - Monday, June 19, 2017

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The FTSE 100 has piggy-backed on the gains that the Euro-zone has made, and has benefited from strong performances from oil and mining stocks. If the Brexit negotiations go as expected, then it is likely that the pound will lose ground against the dollar in the short and medium term, and this could also benefit the index since many of the companies listed in it take the majority of their earnings in dollars and will gain when their earnings are converted back into pounds.

The negotiations are not expected to achieve much in the next few days, with the early period being a trust-building exercise, where each side lays out their ideal demands. The deadline for the negotiations to complete is March 2019. Over the coming months we can expect to hear a number of sound bites from politicians on both sides - and these will keep the currency markets and the stock markets moving, but it is unlikely that there will be any certainty about the future of trade and industry in the UK for a long time to come. Meanwhile, in the USA the big news remained focused on Amazon and its offer to Whole Foods.

 

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