Famous veterans stepped down quietly after louder Brexit election campaign

The UK election this month was mostly about Brexit while NHS is also one of the biggest interest of the people. The outcome, Tory's decisive majority, implies that the serial decisions will be made far quicker than before the election.

Looking at the parliament from a side way, some famous members have left the House of Commons as a result of the election or own wills. Even before the election, John Bercow had resigned as a Speaker, and Lindsay Hoyle, the former deputy speaker, was designated as a new Speaker.
sky news: Sir Lindsay Hoyle wins race to replace John Bercow as Speaker in House of Commons

Kenneth Clarke, the Father of the House until Nov 2019, retired after 50 years in politics. Like other former veteran MPs, we could expect to hear his voice through the media or public speeches perhaps.

The Guardian: Boris Johnson should 'stop campaigning and start governing', says Ken Clarke

Dennis Skinner, a veteran Labour politician since 1970, also known as Beast of Bolsover, has been defeated by the Tory candidate. Dennis Skinner has served as MP for almost a half century and is older than Kenneth Clarke who stepped down as mentioned. 

BBC News: General election 2019: How Dennis Skinner lost his Bolsover seat

Philip Hammond, the former Chancellor of the Exchequer, stepped down as a MP at the election. He has strongly opposed to "No-deal" Brexit. It implies that he was presumably uncomfortable with the recent Tory leadership that does not rule out crashing out of EU without the deal.

The Guardian: No-deal Brexit would be a betrayal, says Philip Hammond

Their resignations are because of their different reasons and wouldn't simply be attributed to a devision in the country. However, the veterans who have served for the last decades had some senses of unity, and they left the parliament. Hopefully, UK will be more united again in coming years.

Mr.Johnson won decisive majority, but the market doesn't look optimistic enough?

[EURGBP is approaching the level near Brexit referendum 2016]

The UK election yesterday resulted a big trophy for Tory and Mr.Johnson, and British pound scarcely reacted stronger before the exit polls released. While the FX market responded optimistically as concerns over the hung parliament faded away, it doesn't mean No-deal Brexit is ruled out from the plan.

On the Brexit day which is no later than 31-Jan-2020, UK actually doesn't get Brexit done, but they just start the trade talk with EU. The trade deal is expected to be agreed and ratified by Dec-2020, otherwise the consequence could be No-deal Brexit on Jan-2021 unless the extension is given.

Observing EURGBP market, GBP moved stronger yesterday but it is still weaker than the level before Brexit referendum 2016. It also implies that the market cannot be as optimistic as it was before the referendum. Perhaps, No-deal possibility is still priced in.

Ref. BBC News: Brexit: What happens now?

European Banks continue cutting jobs

It has been for about two years since I summarized job cut announcements by European banks. These days, the glooming trend still continues with a bunch of job cut announcements from large European banks.
As mentioned in the past post, digitalization play a role to automate the internal processes which were once handled by the employees whose salaries were relatively higher. More and more you get benefit from your retail banking on your smart phones or laptops, banking jobs not only of traditional services at the local branches, but also the intermediate process such as risk assessment are tightened. (Perhaps, no longer needed.)  This phenomenon seems be irreversible, and therefore this is considered as a structural change in the banking industry. Where the bankers goes after dropping out?

As if joining to the trend, the car industry is also about to squeeze jobs, attributing to a rise of the electric vehicles. A recent story tells that Audi plans massive job cuts in their home country Germany, a champion of the industry.

BBC: Audi to cut 9,500 jobs to fund electric car push
Carmaker Audi is to cut 9,500 of its 61,000 jobs in Germany between now and 2025 to make more money available for electric vehicles and digital working.
The cuts - which aim to save €6bn (£5.1bn) - will be achieved through an early retirement programme.
But the Volkswagen-owned firm also said its move into electric cars would mean the creation of up to 2,000 jobs.
It comes less than a fortnight after Daimler said it would cut more than 1,000 jobs by the end of 2022.
The car industry is facing a downturn in key markets, including China, as well as increased costs as it meets tougher European Union emissions regulations and the costly switch to electric vehicles. Audi saw falling sales, revenues and operating profits in the first nine months of 2019.

And some stories of job cut announcements in banking industry, too.

FT: Europe’s banks slash 60,000 jobs as outlook turns negative

Bloomberg: Global Bank Job Cull Tops 75,000 This Year as UniCredit Cuts

IBT: Italy's Largest Bank In Trouble? UniCredit To Layoff 8,000 Jobs Amid Western Europe Struggles

Some says it is "Japanification", the deja vu which Japan have experienced decades of economic stagnation. But we are facing structural changes in the industries rather than the market bubble. In Europe, it seems be even worse than Japanese deja vu in the last decade.

UK election and GBP on 12-Dec-2019

UK election is ahead on 12-Dec-2019, which held first time on December since 1923.
According to the latest polls, it predicts Tory's majority while it's not comfortable enough to avoid a hung parliament.

Evening Standard: UK opinion polls: Conservatives set for majority of 28... but hung parliament possible as support drops
YouGov has interviewed approximately 100,000 people about their voting intentions in the past seven days.
It said the margin of error could put the final number of Tory seats anywhere between 311 and 367, suggesting a hung Parliament cannot be ruled out.
Sterling fell by around a third of a cent against the US dollar after the news. Financial markets fear a hung parliament would extend the uncertainty over if or when Britain will leave the European Union, which it is currently due to do on January 31,

As mentioned on the above story, outcome of the hung parliament will drag GBP down sharply as the uncertainty over Brexit consequence.
EURGBP is currently near the level after the Brexit referendum 2016.
If British constituencies successfully avoid the hung parliament, the Tory's Brexit deal is expected to be passed before 31-Jan. (some days of technical extension maybe in the worst case.) In this case, GBP will be stronger, approaching toward the level before the Brexit referendum (EURGBP below 0.80).
If it resulted as a hung parliament, EURGBP could jump to around 0.90 - 0.92 up to the highest in 2019.

In the meantime, today's trend and momentum of EURGBP indicates the upward direction in a coming week including the UK election date, which implies the possible hung parliament outcome...
While we recommend to watch out the latest polls, it is also interesting to see if the indicator still reasonably work under the critical event against the market. Let's see tomorrow.


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