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Economists have disputed claims from a pro-Brexit campaign group that leaving the customs union and new free trade deals could create 400,000 jobs, arguing it takes no account of the risks to exports.
Analysis by the Change Britain campaign group suggests that hard Brexit, where Britain leaves both the single market and the customs union could ultimately be beneficial for the UK, citing reports that the United States, India, the South American Mercosur group, China, Canada and South Korea have all expressed an interest in trade deals.
Agreements with these countries would create almost a quarter of a million jobs, it said. That figure could rise to just under 400,000 if deals were struck with Japan and the Asean group of states which includes Thailand, Indonesia and Malaysia, the group’s analysis said.
But Jonathan Portes, professor of economics and senior fellow at the thinktank UK in a Changing Europe, called the report’s figures “entirely fictional statistics” and said they did not take into account possible risks of leaving the customs union.
“Successful free trade deals would increase both exports and imports,” he said. “Calculating, as Change Britain does, a speculative figure for the number of jobs created by additional exports while ignoring the jobs lost as a result of additional imports is either deeply ignorant or deliberately misleading.”
Portes said he also believed it was misleading for the report to cite extra benefits such as free trade agreements with countries such as South Korea. “The report scores the impact of the EU-Korea FTA as a benefit from Brexit,” he said.
“Since this has been in force since 2011 – and would not necessarily continue post-Brexit, although it may well do so – this is a potential cost, not a benefit. Whatever your view on the economics of Brexit, Change Britain are again doing their best to distort the debate.”
Simon Tilford, the deputy director of the Centre for European Reform thinktank, said Change Britain “seem to assume that leaving the deepest and biggest customs union and free trade agreement in the world, the EU, with which we do half of our trade, will not have any negative economic implications and will not cost employment – that’s an unserious proposition.”
It is a strange irony that the immigration policy of Europe's leading (by far, imho, in the last decade or so) politician is in my opinion largely responsible for not one, but two extraordinary vote outcomes.
And why the disastrous German "open door" policy ? Economic greed (want young labour for the industrial engine) and guilt (from WW2).
Official report finds sterling’s sudden plunge to a 31-year low against the dollar in October was caused by string of factors
October’s flash crash in the pound – when the currency nosedived by 9% against the dollar in Asian trading hours – was caused by a combination of inexperienced traders, algorithmic trading and complex trading positions, according to an official report.
No single factor caused the dramatic moves which compounded the weakness of sterling after the Brexit vote, the international banking body, the Bank for International Settlements, said.
Other factors such as “fat finger” errors and potential market abuse cannot be ruled out, but there is little, if any, hard data to substantiate them, the report added.
The actions of individual participants, who are not identified, may have helped perpetuate the fall, as did the derivatives trading positions placed in the market. Some traders halted activity for as long as 30 minutes, including the black box algorithmic trading which relies on individuals to place orders.
Some of the trades made as sterling plunged to as low as $1.1491 – down from $1.26000 – just after midnight on 7 October were later cancelled, the BIS report said.
“Whatever the cause of the initial selling in sterling, the market was likely to be vulnerable at that time of day to sharp moves and an associated withdrawal of liquidity,” the report said.
[...]
The report breaks down the event into three stages. First, just after midnight, for a period of only eight seconds (00:07:03 to 00:07:11) sterling fell from $1.2600 to 1.2494. About £252m of pound-dollar trades and €52m (£42m) of euro-pound trades took place on the Reuters platform.
Second, at 00:07:15, the Chicago Merchantile Exchange triggered its velocity logic mechanism, which pauses trading for 10 seconds on the futures exchange. Around this time, it become more difficult to find a price for the pound on the currency markets as there were not enough “bid” offers, which would have cushioned its falls. This was an “unusual phenomenon”, the report said.
By 00:07:15 the pound was at $1.24 and “gapping between trades” to slide to $1.1491 at 00:07:41, a 9% fall. Those were the prices quoted by Reuters and the report noted that the currency traded lower on other trading platforms.
In the third phase, the pound began to recover and was 2.2% down against the dollar by 00:20:00.
The event took place amid thin trading and during a public holiday in China. which also meant big players may not have been in the market. A survey of 12 of the most active dealers showed that the lack of buy orders may have been caused by trading positions already in place.
Given the report published last week, I wouldn't be surprised if traders were trying to profit from news that are likely to spook the markets associated with the low liquidity of the Asian session. After all, low liquidity was one of the central themes of the report and it is in my view the key contributor in any of the most recent flash crashes across various markets.
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WSJ-City:
The Lego Group has said it is expanding its London office — one its largest outside of Denmark — by more than 50%, in a vote of confidence in the UK as it prepares to leave the EU. The company, whose headquarters is in Billund, Denmark, first moved into a London office in 2014. Its chief financial officer praised the UK capital for its “broad pool of talented employees.”