Didier BOROWSKI, Pierre BLANCHET, Tristan PERRIER
the articles & research center news
Covid-19 is a symmetric shock with asymmetric outcomes. Existing imbalances within Europe such as public debt, economic models or vision for the union, turn to cracks and the EU is facing fragmentation risks. However, the EU should be able to get over it as it did with the Global Financial Crisis.
Pierre BLANCHET, Didier BOROWSKI, Tristan PERRIER, Valentine AINOUZ, Mickael BELLAÏCHE, Noah FUNDERBURK
As the Brexit bill passed UK legislation, this episode of Blue Conversation discusses the insights on the next steps following this major milestone. Listen to Amundi’s experts discussing the markets and investment impacts.
Simon FRASER, Jean-Jacques BARBERIS, Jacques KELLER, Tristan PERRIER
Now that the United Kingdom is officially out of the EU, a new phase has opened up, during which UK officials will have to negotiate a trade deal with the EU to avoid a ‘Brexit cliff edge’ at the end of 2020. The available time span is short, but an agreement is possible on either a trade deal, another extension or some mixture of the two. The negotiations should be simplified now the UK is able to rely on a solid parliamentary majority, while on the EU side there can no longer be any hope that the UK will remain in the EU.
Kasper ELMGREEN, Tristan PERRIER, Jacques KELLER
Tristan PERRIER, Laurent CROSNIER, Kasper ELMGREEN
Risks of a no-deal Brexit have receded materially over the past few weeks, implying that the Bank of England is now more likely to keep its monetary policy on hold, in a wait-and-see mode over the next year. UK nominal yields have already removed most of the no-deal risk, having repriced up by almost 30bps from their October lows, and are seen moving more in line with the global trend in nominal rates going forward.
Sergio BERTONCINI, Tristan PERRIER, Silvia DI SILVIO
Following the three-month extension granted to the UK by the EU on 28 October and the newly announced snap election, the most likely outcome is that the Withdrawal Agreement signed on 17 October between the United Kingdom and the EU will be ratified, leading to an orderly Brexit and the initiation of a transition period during which the United Kingdom will retain most of its access to the EU single market until at least end-2020. The risk of a no-deal Brexit is now greatly diminished.
Tristan PERRIER, Kasper ELMGREEN, Monica DEFEND, Laurent CROSNIER
Amundi Research & Investment Insights Unit
Recent developments and next steps: Early this month, the UK Parliament passed a motion instructing the Prime Minister (PM) Boris Johnson to request an extension of the Brexit deadline by 19 October, and rejected the PM’s request for elections before 31 October (the current Brexit deadline). This week, the UK Supreme Court judged “unlawful” the advice to susped the legislature given by Boris Johnson to the Queen. These events strengthen our view that another extension of the Brexit deadline is the most likely scenario.
Laurent CROSNIER, Kasper ELMGREEN, Tristan PERRIER