Final turn in Brexit
French President Emmanuel Macron and other EU leaders will insist on strict enforcement rules for any Brexit trade deal with the UK, the British daily Financial Times reported on Monday.
FT wrote, citing European diplomats, that British Prime Minister Boris Johnson’s latest statements suggesting to override the Brexit agreement if necessary showed that the EU could not trust London’s word.
At a summit to begin Thursday, EU Brexit negotiator Michel Barnier will urge European country leaders to ensure a “level playing field” guarantee for European businesses competing with British companies, backed by London’s right to take quick retaliation if London breaches it.
Johnson announced October 15 as the deadline for a trade agreement with the EU.
In a phone conversation with German Chancellor Angela Merkel on Sunday, Johnson said that in the coming days, progress must be made in post-Brexit trade talks with the EU, especially to close “important gaps” in the fishing and level playing field.
Meanwhile, Japan has concluded the ongoing trade negotiations with the United Kingdom. According to the Kyodo newspaper, the two countries will sign the agreement on October 23rd.
BoJ digital yen preparations
Bank of Japan (BoJ) Governor Haruhiko Kuroda said Monday that the central bank will begin testing on the digital yen next spring.
“It is very important that central bank digital currencies do not replace or eliminate private sector payment and payment services,” Kuroda said at an online seminar hosted by the International Finance Institute.
Kuroda also said that as the country already has a well-established health insurance and pension system, and thus it did not need a negative income tax or a basic income.
“At this stage, I don’t think we need a negative income tax or basic income system because we already have a very solid foundation, well-developed health insurance, and pension system,” Kuroda said.
US stocks’ expectations
Three weeks to the US elections, negotiations between President Donald Trump and congressional Democrats on a new aid package for the world’s largest economy hit by Covid19 remain inconclusive.
Trump said he was ready to raise his bid, which he drew at first last week but then raised to $1.8 trillion. US House of Representatives Speaker Nancy Pelosi said that Trump’s new proposal was still insufficient. Democrats led by Pelosi insist on a 2.2 trillion package.
New federal aid bets supported US stocks last week, although economic data pointed to a slowing domestic recovery. Rising expectations that Democratic candidate Joe Biden will triumph in next month’s presidential election have also helped Wall Street’s main indexes close Friday at the highest levels in the past month.
Risk cuts in oil
Oil prices plummeted on Monday as the force majeure at Libya’s largest oil field was lifted, the Norwegian strike that impacted production ended, and US producers resumed production after Hurricane Delta weakened.
Brent crude oil fell 52 cents or 1.2% to $ 42.33 a barrel before noon in London. U.S. West Texas Intermediate crude oil fell 58 cents or 1.4% to $ 40.02.
Production in Libya, a member of the Organization of Petroleum Exporting Countries (OPEC), is expected to rise to 355,000 barrels a day (BPD) after the force majeure at the Sharara oil field is lifted on Sunday.
Rising Libyan production will pose a challenge to efforts by the OPEC+ group, which consists of allies such as OPEC and Russia, to restrict supply to support prices.
