Final round in Brexit
European Union chief Brexit negotiator Michel Barnier will return from London to Brussels after meeting Friday morning with his UK counterpart David Frost.
The teams of the two negotiators are in challenging negotiations to reach an agreement to regulate future trade relations between the EU and the British ahead of a meeting of the leaders of the 27-nation bloc next week. New talks are planned in Brussels ahead of the summit, Reuters reported, citing EU sources.
The two sides say they are moving towards an agreement that will set terms for the trade of about $ 900 billion after December 31 — when the current transitional arrangements expire — but this progress is also described as very slow.
“We can reach a restricted Brexit trade agreement that avoids quotas and tariffs,” said Irish Foreign Minister Simon Coveney, US financial information network Bloomberg reported.
Strengthening in the Gulf of Mexico, Hurricane Delta hit the biggest blow to US offshore production in the Gulf in 15 years, halting the vast majority of oil and almost two-thirds of natural gas production in the region.
The Delta, already a big and powerful storm, may get worse as it passes through the main Gulf oil-producing region on Friday. Its winds reach 120 miles per hour (195 km per hour), according to the US National Hurricane Center (NHC). The strong tropical winds extend 160 miles from the center, NHC said.
Delta shut down 92% of US Gulf oil production or 1.67 million barrels a day; this is the highest rate since 2005 when Hurricane Katrina destroyed more than 100 offshore platforms and disrupted production for months.
Oil prices eased in early trade in Asia on Friday but maintained weekly gains of as much as 10% due to cuts in the Gulf of Mexico and a strike by Norwegian union workers in the North Sea.
Workers evacuated 279 offshore facilities in the Gulf of Mexico. Producers have moved 15 drill rigs away from the wide and strong wind area of the Delta.
In addition to oil, producers have stopped about 62% of the region’s natural gas production. The Gulf of Mexico offshore fields provide about 15% of US crude oil production and 5% of natural gas production.
Stock exchanges rise on Biden hopes
Asian stocks approached two-and-a-half years highs on Friday, as expectations for Democratic candidate Joe Biden’s victory in the US election next month rose.
Biden’s winning of the White House in the vote on November 3 and a potential subsequent seizure of the Democrats’ majority in the Senate, similar to the situation in the House of Representatives, raises hopes for a massive economic stimulus.
MSCI’s largest Asia-Pacific stock index outside of Japan rose 0.3%, approaching its highest level since March 2018, August 31. China’s CSI300 index gained 2% after a week’s holiday.
The Japanese Nikkei fell 0.1% after reaching a seven and a half month high.
The Pan-European STOXX 600 index rose 0.3% for the second consecutive weekly gains. Wall Street futures rose by 0.4%.
On Thursday, the S&P 500 gained 0.80% and the Nasdaq Composite rose 0.5% on Wall Street.
Digital currency race
A group of seven major central banks, including the US Federal Reserve, embarked on Friday on how to put forward their own projects in the face of China and Facebook’s cryptocurrency issues.
Central banks and the Bank for International Settlements (BIS) said that core features in digital currencies should include flexibility, low or no-cost availability, appropriate standards and an open legal framework, and an appropriate role for the private sector.
Jon Cunliffe, vice governor of the Bank of England (BoE) and chair of a BIS committee on payments, pointed out that socio-economic lockdowns to combat the pandemic have led to an increase in cashless payments.
Central banks have begun to take a closer look at digital currencies after Facebook announced last year to issue Libra, a digital currency that will be backed by a mix of major currencies and government debt.
In addition to the Fed and BoE, seven central banks cooperating with BIS include the European Central Bank (ECB), the Swiss National Bank (SNB), and the Bank of Japan (BoJ).
China has already implemented a pilot project for a digital renminbi. The People’s Bank of China hopes this will increase the reach of the yuan in a world where the dollar now dominates.
Kenji Okamura, Japan’s top finance diplomat, said on Thursday that China is trying to gain first-mover advantage in creating its digital currency and warned that this is “something we should be afraid of”.
The Central bank of Japan said on Friday that it will be experimenting with core functions to issue central bank digital currencies (CBDCs) during the fiscal year that begins in April 2021.