22.10 - new political scandal is riping
- by Anna K.
Death of Saudi journalist Jamal Khashoggi puts the whole balance of the world into perspective.
How high is the chance that Brexit is going to go reversed? Well, we would say not high, given everything that was already put inside the process. a lot of the decisions were made and a lot of strain was put on international relations and economies. New trade agreements are not toward the signing process and not only between the UN and EU, but between them and other countries and alliances. And to undo everything that was done in almost impossible at this point.
But the people of the United Kingdom do not seem to mind the effort put inside the process. over the weekend a 100 thousand people including an acting mayor of London came on the streets of English capital city and displayed their dissatisfaction with the process. the crowd demanded another Brexit referendum where it is obvious now, everyone would vote FOR the Union.
Although at this point we see no official reaction of London and Brussels towards the demonstration we could always think what would hypothetically happen in case the privilege of the second referendum is given or nor to English people.
Of course, there is no guarantee that Brussels’ officials are going to accept this scenario. After all, the English people made their own bed three years ago. Now they are to lie in it. and jumping back and forth as soon as hardship is met is not a proper way to do things in the recent world. Both political and economic world have prepared themselves for Brexit to happen and for everything to be put in reverse is going to submerge markets and politicians back in chaos.
But, hypothetically, lets imagine that the right for the second vote is approved, will it influence equities in the region? Of course! Mainly, we think that the hardest hit is going to be taken by euro. After all, Brussels would display inconsistency in the international policies by allowing for the situation like that. And policies inconsistency usually is a display of any possible inconsistency at all. trust of traders – that would be the main loss of euro in this game.
Plus, focus and attention shifting from euro towards the general situation in United Kingdom will also not happen the situation.
But we already know that somehow keeping all of the trading privileges with the European Union is the only chance for pound to keep its integrity and stay afloat. Any other scenario in going to sink pound to historical lows. And no one wants that, especially May government as her main task is to go out of the game as a winner.
So, is the second Brexit referendum a real possibility? We would say no. Political ambitions of the whole region are not going to succumb to simple wished of the people at this point. We would say that this moment was missed horribly.
The name of Jamal Khashoggi was unknown to the world society until the beginning of October 2018, when the reporter just disappeared in Istanbul. It was reported that the last Jamal was seen was inside the Saudi Arabian embassy. Later the Saudi government, which Jamal was a prominent critic of admitted that the journalist was killed due to an unfortunate incident.
Over the weekend the government of Saudi Arabia admitted that Jamal Khashoggi was killed during a fight with the people he met in the embassy.
While all of that is very tragic and a lot of powerful people around the world, including Donald Trump and Belgian minister of international affairs criticized the murder of the journalist we have to try and see the consequence that the whole situation may bear for us as traders.
Well, given the Trump was really angered by the news, we would say that it is rather possible to look out for the new sanctions package against Saudi Arabia this time. And we all know that the two countries have long been engaged in the conflict of oil output with USA only now being able to surpass Saudi Arabia as the largest oil country.
So, this one conflict may result in turbulence in prices for oil. Output is not something to be messed with and there is a possibility that in order to teach Saudi Arabia a lesson, United States will threaten to sanction the country and its trading partners. Just like with Iran. Are we ready for something like that? We think no. after the plunge oil prices took last week it will take us a long time to go back into the game as we are used to.
Political climate in the world and relations of the world community towards Saudi Arabia are also likely to change. With so many journalists in the world getting in trouble and even losing their lives over their political agenda it is hard to say what measures are going to be taken by the media community. Can we be sure that there is no damaging information owned by the people in the media world? Well, of course they have every bit of information to influence the situation. and in order to protect themselves they have every right to release the it bit by bit.
All and all this conflict over the killing of Jamal Khashoggi can turn into a huge international scandal. Actually it already has turned into a scandal, for that matter. We ae only waiting to see the whole list of consequence that will surely follow. Both economic and political climates of the world are about to change and we are here to witness and react. Be prepared for rapid decisions and sudden selloffs, because they are going to happen. Oil is under the most pressure.