Conservative Majority Paves Way for Brexit | Do We Have a Trade Deal?
Published December 13, 2019
The Conservative Party won a large majority in last night’s UK elections, which has put the country on track for a swift Brexit after nearly four years of political gridlock and uncertainty. The landslide victory represents the biggest conservative majority since Margaret Thatcher’s 1987 victory, meaning Prime Minister Johnson’s Withdrawal Agreement should pass through Parliament quite easily. The pound is loving the result and initially soared to its highest level in more than a year, although it has come back down to earth a bit as we head into the New York open.
Market sentiment got a positive jolt after overnight reports suggested President Trump has signed off on a phase-one trade deal with China. It is reported that the US will cancel the upcoming December 15 tariffs and reduce current tariffs by 50% on more than $300 billion worth of Chinese goods. In exchange, China would be expected to purchase large quantities of US agricultural products, improve access to Chinese financial services sector, and implement stricter laws to protect US intellectual property. While initial reports suggested terms have been agreed to in principle, no official announcement has yet been made by the US or Chinese government officials.