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USDCAD TECHS

Stronger In a Range

AUDUSD TECHS

Weaker In A Range

US TSYS SUMMARY

Ending The Week On A Soft Note

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Bearish Risk Growing

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Stronger, But Still Vulnerable

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SP500 PE Ratio vs. CPI Inflation

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The escalation in tensions between the UK and France over fishing rights in the waters surrounding the Channel Island of Jersey have cooled following the withdrawal of a French fishing fleet that had threatened to blockade the port of St Helier.

  • This sparked the UK gov't into sending two Royal Navy ships to the area to protect shipping to and from the port. This in turn led to France sending two of its own naval patrol ships to the area.
  • The entire episode came around as a result of confusion and disagreement over the implementation of the EU-UK Trade and Cooperation Agreement with regards to fishing rights in the region and how they should be obtained by French vessels.
  • While fisheries emerged as one of the most highly politicised issues of the Brexit saga, there remains the prospect that on other issues, whether related to trade, the Northern Ireland border (which recently has shown signs of a breakthrough in talks), or the application or disapplication of rules from the UK or EU side, could be difficult to predict ahead of time and escalate fast providing a shock to markets and politicians.
  • There are dispute-resolution mechanisms encoded within the TCA, but some of these have yet to be set up and indeed at present mainly focus on some of the major international bilateral issues involved in Brexit, such as the NI border. Some hindrances thrown up by Brexit are more likely to be dealt with at a micro level (as seen in the incident in Jersey), bypassing official dispute resolution channels until they break open into a more antagonistic confrontation.