The European Union told the UK on Wednesday to decide on Brexit trade talks.
In London’s court
Michel Barnier, the EU’s chief negotiator, said that an agreement could be reached 10 weeks before the end of the Brexit transition, but stated that the responsibility to unlock trade talks that collapsed last week was now lying with London.
“Time is very short and we stand ready to negotiate 24/7, on all subjects, on legal texts. The UK has a bit of a decision to make and it’s their free and sovereign choice,” European Council President Charles Michel told the European Parliament on Wednesday.
Michel said the British answer would determine the level of access to the EU’s domestic market of 450 million consumers.
Chief negotiator Barnier told parliament that an agreement was still “within reach”. While Barnier said, “Time is of the essence… Together with our British colleagues, we must find solutions to the most difficult areas.” After Barnier’s remarks the pound rose, up to 1.3066 against the US dollar (GBPUSD).
London refused to continue negotiations last week, saying that the EU must “fundamentally change” its stance. The block sees this as a bluff by Prime Minister Boris Johnson.
Barnier and his British counterpart, David Frost, are set to talk over the phone again on Wednesday.
US stimulus package talks
Stocks plummeted, with the dollar falling to a six-week low as investors awaited a deal from the federal government on a stimulus package to offset the economic devastation caused by the coronavirus pandemic in the US.
The MSCI world stock index, which followed shares in about 50 countries, remained stable, with previous Asian earnings erased as European stocks turned negative in early trading and fell further into the morning.
The Euro STOXX 600 fell 0.9%, along with healthcare and real estate shares. Paris and Frankfurt indices fell 1% and 0.9%, respectively. Earnings in Sterling put pressure on London stocks.
Wall Street stock futures fell by 0.2% in the last session.
The timid mood reflects the uncertainty over the US fiscal stimulus package aimed at supporting recovery from the economic damage caused by the coronavirus.
Previously, Asia-Pacific shares outside Japan rose 0.4%. Democrats in the US Congress and the White House still have not reached an agreement on the stimulus package.
President Donald Trump said he was willing to accept a $ 2.2 trillion aid bill, despite Republican Party opposition. However, investors are concerned about whether such a package will pass through the Republican-controlled Senate.
A senior Republican told Reuters that Senate Majority Leader Mitch McConnell had privately told Republicans that he did not support a deal before the November 3 presidential election.
China central bank statement
Yi Gang, the head of the central bank of Communist China, the world’s second-largest economy, said Wednesday that even if China allows debt to rise temporarily this year to support the economy hit by the coronavirus, it will strike a balance between stabilizing economic growth and avoiding risks.
The People’s Bank of China (PBOC) executive Yi told a financial forum in Beijing that he expects China’s macro leverage ratio to stabilize next year as the economy expands after the debt indicator rises in 2020.
“Monetary policy needs to maintain the ‘gates’ of the money supply and properly correct fluctuations in macro leverage and keep it on a reasonable path over the long term,” Yi said.
The macro leverage ratio is a measure of debt held by Chinese governments, households, and corporations divided by the total gross domestic product (GDP). The central bank has not provided any details on the figure.
The International Finance Institute (IIF) said in July that China’s debt / GDP ratio is on track to increase from around 318% in the first quarter to 335%.
Russian-US nuclear negotiations
Russia said on Wednesday that it hopes to resolve disputes with the United States over expanding an important nuclear weapons control agreement.
Kremlin spokesperson Dmitry Peskov said that the extension of the New START agreement, which will expire in February 2021, continues at the level of experts. “We hope that all differences on the issue will be overcome through dialogue,” Peskov told reporters.
The United States welcomed Moscow’s proposal yesterday to extend the New START by one year if both sides agreed to freeze stockpiles of all nuclear warheads for a year.
The US-Russia nuclear pact, dating from the Cold War era and renewed in 2010, limits the number of strategic nuclear warheads, missiles, and bombers each country can deploy.
Failure to prolong the treaty risks removing these restrictions, increasing the threat of triggering a post-Cold War arms race, and increasing tensions between the world’s two largest nuclear weapons powers.
