Tuesday , October 4 2022

Brexit and Italy will not leave investors in Europe


Frankfurt / London / Brussels (APA / Reuters) – The British crisis continues to hit stock markets this week. Some experts have questioned that Prime Minister Theresa May will survive politically in the coming weeks after the resignation of various ministers.

"While Brexit is primarily a problem for the United Kingdom and, to a lesser extent, for the rest of Europe," said David Riley, chief investment manager of asset manager BlueBay. "But the political turmoil in the UK generally encourages wider fears about further prospects of global growth." Last week, DAX lost 1.6% to 11,341 points.

The negotiated divorce agreement contradicts Brexit's hard-core ideas of their conservative group, BayernLB analysts write in a comment. Therefore, a palace revolt against the head of government is to be expected. Beyond that, the Brexit Summit scheduled for November 25th casts its shadow ahead. EU states must vote on the compromise on this.

Additional headache prepares investors for ongoing controversy over the Italian budget After the government of Rome, despite Brussels' opposition to maintaining their new debt, they could threaten capital markets adversity. "There, Italian government bonds are already traded at levels that provide for further devaluation of credit ratings by garbage rating agencies," experts of asset manager Marcard, Stein & Co. said. Such a step will greatly complicate the refinancing of the Italian banks. This could be the acid test for the European Central Bank. "Under the influence of the latest euro crisis, the ECB has committed itself to playing the role of lender of the ultimate solution for the Member States."

From the end of the equilibrium period, experts expect a little boost for the stock market. Thyssenkrupp will open her books on DAX on Wednesday. The industrial group had already admitted about a week ago that they were losing their goals. On Tuesday, BASF wants to present its new strategy.

In the US, Wall Street remains closed on Thursday over Thanksgiving Thanksgiving USA. The next day, US stock exchanges prematurely close their doors. So-called "Black Friday" is also considered the day with the highest sales in US retail. For this reason, only a few economic elements of the largest economy in the world are on the timetable. The main indicators will be released on Wednesday.

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