Britain’s increasingly fractious relationship with Brussels is showing up in a predictable place. The European Union could restrict euro clearing in London, the Financial Times reported on Monday. It’s a timely reminder of the risks to the United Kingdom of breezily accepting a so-called hard Brexit. Britain and the EU have for years bickered about control of clearing houses – the financial utilities that stand between counterparties on derivatives trades and provide protection in the event that a trader goes bust. Of the $762 billion of euro-denominated derivatives cleared daily, three-quarters currently occurs in London, according to Bank for International

Campaigning in the French presidential election is drawing to a climax with the first round vote taking place this weekend. The polls strongly suggest that none of the candidates will gain a simple majority, meaning that it is almost certain to go to the second round (slated for May 7th). As we noted in our last Market Insight looking at the French presidential race [1], crowd anger towards the government surged during the campaign, hitting an eleven year high in early March, readings indicative of a large reservoir of public negativity. Although such sentiments are specifically designed to capture views expressed

With UK Prime Minister having triggered Article 50, the starting gun on the two-year negotiation process precipitated by last June’s surprise Brexit vote has been fired. Even though the European Council President, Donald Tusk, published draft Brexit guidelines within 48 hours of receiving the official letter signed by PM May [1], investors can look forward (irony intended) to many months of uncertainty. As has been repeatedly stated, the final deal will be the result of hard negotiations and hence will be necessarily opaque for some considerable time (a viewpoint we outlined in a recent Market Insight [2]). Given how extremely messy and

With less than 10 weeks to go the EU referendum debate in the UK continues to hot up. The UK government is, for the first time in a generation, putting the EU question directly to the electorate. This should be viewed as a positive move and demonstrates democracy in action. However, far from there being a reasoned debate on the pros and cons of continued EU membership, to-date it has become an exercise in scaremongering. Both sides are using scare tactics to fuel emotions which they feel will give them an advantage in the debate. Fear is the most prominent sentiment