25 April 2019

Javier Maquieira

25 April 2019

Good morning,
 
Turbulence lies ahead for Europe. Who’d have thought it? With the elections to the European Parliament around the corner, recent electoral victories and ongoing Brexit uncertainty are leaving their mark on European politics, with anti-establishment and populist movements sweeping across the continent.

Last Sunday, fiction became reality when 41-year-old comedian and political novice Volodymyr Zelenskiy, who had played the role of president in a TV series, won a landslide victory against prominent oligarch Petro Poroshenko in Ukraine’s presidential election.

Zelenskiy’s triumph followed similar populist insurgencies in the west, with millions of voters hoping for an end to corruption and oligarchism. Meanwhile, Russian president Vladimir Putin is likely waiting for his new counterpart’s first moves vis-à-vis the Kremlin, which could lead to rising tensions in the region.

In Slovakia, last month’s election of anti-corruption activist Zuzana Čaputová as the country’s first female president adds to the trend of political outsiders in leadership positions. Although the role of president in the Central European nation is largely ceremonial, Čaputová has emphasised her pro-EU and democratic leaning, which has been a cause for celebration in Brussels.

Political polarisation is posing challenges for European leaders, too.

In Finland, Social Democrats won a narrow victory in the parliamentary election that took place on April 14, securing 17.7% of the vote – the first win for the centre-left party in two decades. The result was extremely tight, with the far-right Finns party a very close second at 17.5%. Even if the Finnish Social Democrats’ performance was weaker than polls predicted, their victory represents a rare success in the continent for left-of-centre parties, which have recently struggled in countries like France, Germany, and Italy.

At home (for me, anyway), Spain is holding its third general election in four years next Sunday, after right-wing and separatist Catalan parties rejected Prime Minister Pedro Sánchez’s budget in February. Sánchez’s Socialists, who took office following a successful motion of no-confidence to oust People’s Party’s (PP) Mariano Rajoy, are polling in first place and are projected to win 29% of the vote.

At the same time, far-right and anti-immigration party Vox threatens to attract disenchanted PP and liberal party Citizens voters and win 10%, further fragmenting the Spanish right and deepening polarisation in a country concerned about unemployment, corruption, and the issue of Catalan independence.

Back in the UK, Brexit is all go again after the Easter break. Pro-EU party Change UK’s campaign was officially launched on Tuesday. Founded originally as The Independent Group of 11 rebel Labour and Conservative MPs, the ‘anti-Farage’ formation is expected to send at least a few MEPs out of its 70 candidates to Brussels. On the other hand, Farage’s Brexit Party looks to be benefitting from the collapse of UKIP, scoring as high as 27 points according to one YouGov poll.

Although neither Change UK nor the Brexit Party have yet said which European political grouping they would join, the UK’s potential participation in the election –if Theresa May fails to avoid it– will significantly affect the makeup of the European Parliament. As a result, countries that had expected to take advantage of the rebalancing, such as France and Spain, will not receive extra seats.

With the UK back on board, the Socialists and Democrats (S&D) parliamentary group will come closer to the European People’s Party (EPP). Even then, it is likely that they will fall short of displacing the centre-right group from the top slot.

Who needs fiction, when reality is this unpredictable?

News

According to Unicef, around 170 million under-10s around the world are unvaccinated against measles, due to a combination of complacency, scepticism, misinformation on immunisations, and a lack of access to jabs. The figure includes half a million children in the UK and 2.5 million in the US, after measles cases increased by 300% in the first three months of 2019, compared with the same period the previous year. A highly infectious viral disease, measles can lead to severe health complications, including infections of the lungs and brain. It is estimated that between one and three people in every 1,000 who catch the illness die.

North Korean leader Kim Jong-un arrived yesterday in Vladivostok for his talks with Russian President Vladimir Putin. The summit will cover the issue of nuclear weapons on the Korean peninsula after North Korea and the US failed to reach an agreement in Hanoi. Russia, like the US and China, is hoping to see a reduction in North Korea’s nuclear activity. The visit of Kim Jong-un to Russia is widely seen as an opportunity for Pyongyang to show it has powerful allies and that the economic future of North Korea does not only depend on the US.

Around 600 people gathered yesterday to mourn murdered journalist Lyra McKee at St Anne’s Cathedral in Belfast. Prime Minister Theresa May was in attendance, alongside Northern Ireland secretary Karen Bradley and Labour leader Jeremy Corbyn.. Ms McKee's funeral, led by Protestant and Catholic clergy, was intended to be a cross-community, cross-border, and multi-cultural service (£).

Business & Economy

Facebook set aside $3 billion ahead of a potential fine by the US Federal Trade Commission (FTC) for privacy violations following the Cambridge Analytica scandal. According to the world’s largest social network, this figure could climb as high as $5 billion, which would make it the largest civil fine ever imposed by the regulator. Despite this, the company’s stock went up 10% in after-hours trading, whilst revenues – mostly from advertising – stood at $15.1 this quarter, a 26% increase compared with the same period last year (£).

The search is on for two new bank bosses this morning. A new Bank of England governor is sought, as Mark Carney’s extended tenure nears its end, while Ross McEwan’s resignation from RBS will increase speculation that Alison Rose is the favourite for the chief executive role there. Mr Carney has been praised by Chancellor Philip Hammond for his “steady hand” during a challenging, post-crisis period. After extending his tenure twice to ensure stability ahead of Brexit, a new advert for the job was published yesterday on the Cabinet Office public appointments website. At RBS, chairman Howard Davies said Mr McEwan would work as much of his 12-month notice period as was necessary to ensure an orderly handover.

Tesla reported a $494m loss on Wednesday after a record drop in deliveries. The car maker’s share price is down more than 20% this year, with shares closing almost two per cent down yesterday. After announcing the rise in deliveries and decrease in costs projected for the second and third quarters, the firm is expected to look for new funding in 2019 and support for its autonomous taxi initiative in 2020.

Markets

What happened yesterday?

London closed in the red on Wednesday as brent crude reached its highest reading of the calendar year on Tuesday. The FTSE 100 was down 0.7% at 7,471.75, while the pound was up against both the dollar by 0.1% at $1.2944 and the euro by 0.4% at €1.1568.

Miners like BP (down 2.11%) and Royal Dutch Shell (down 1.9%) were weaker on the whole as oil prices rose following the announcement by President Donald Trump that the US would end exemptions from sanctions for countries still buying oil from Iran.

Sainsbury’s falling stock price continues after the Competition and Markets Authority had announced its final decision on its merger with Asda. Earlier this morning, the UK’s competition regulator confirmed its intention to block the proposed combination, arguing that it would increase prices, reduce quality and choice, and harm shopping experience.

Retailers elsewhere were on the rise, with Primark owner Associated British Foods (up 2.04%) reporting expected full-year profits in line with last year’s result despite a drop in first half earnings.

Across the pond, the S&P 500 remains 16.9% higher for 2019, sustained by solid earnings, a dovish tone from central banks across the globe, and hopes of a US-China trade deal. Shares in Caterpillar (down three per cent) fell following the release of its numbers for the first quarter. Boeing’s stock (up 0.38%) remained lower than one per cent as the grounding of its 737 Max models continues after two fatal crashes killed 346 people.

Finals
Boohoo Group
Deltex Medical Group
 
Interims
RDI Reit
 
Trading Announcements
Anglo American
Capital Drilling Ltd. (DI)
Kaz Minerals
Relx plc
Synthomer

UK Economic Announcements
(11:00) CBI Industrial Trends Surveys
 
Int. Economic Announcements
(07:00) GFK Consumer Confidence (GER)
(13:30) Continuing Claims (US)
(13:30) Durable Goods Orders (US)
(13:30) Initial Jobless Claims (US)

Columns of Note

Writing in The Times, Martha Gill argues that 16-year-old Greta Thunberg has not only advanced the climate change cause but has also become an advocate for autism. With approximately 700,000 autistic people in Britain, only 32% of autistic grown-ups are in paid work. Although pressure from activists is making hiring programmes more popular, Gill concludes that the squandering of autistic talent must be put to an end by tackling discrimination and acknowledging the extraordinary skills of these individuals (£).

In The Guardian, Martin Kettle opines that the prospect of a soft Brexit is far gone. Hard Brexiteers failed in their attempts to harden Theresa May’s original deal, leaving an empty space in the political centre. Talks between the government and the Labour party are not going anywhere, even when neither May nor Jeremy Corbyn wants to be blamed for failed talks. Kettle concludes that the decision lies between extremes: either a no deal put forward by May’s successor and much of the Conservative party or a second vote promoted by Corbyn and other parties.

Did you know?

A moment (momentum) was a medieval unit of time, which equates to 90 seconds.
Source: @8fact

Parliamentary highlights

House of Commons
 
TODAY

Oral questions
International Trade (including Topical Questions)

Women and Equalities (including Topical Questions)

Business Statement
Business Questions to the Leader of the House - Andrea Leadsom

Backbench Business
Debate on a Motion relating to School Funding - Mrs Anne Main, Tim Loughton, Lucy Powell, Will Quince, Rushanara Ali

Debate on a Motion relating to Restrictive Intervention of Children and Young People - Norman Lamb, Anne-Marie Trevelyan, Helen Hayes, Tom Brak

Adjournment
Travellers in Mole Valley - Sir Paul Beresford
 
TOMORROW

No business scheduled
 
House of Lords
 
TODAY  

Oral questions
Electrification of the Midland Mainline all the way to Sheffield - Lord Scriven

Progress of the community sponsorship scheme in supporting resettled refugees in the UK - Baroness Sheehan

Importance of locally produced content and services on local commercial radio stations - Lord Storey

Current plans for detecting fires in the Palace of Westminster - Lord Berkeley

Debate
Communications Committee report 'UK advertising in a digital age' - Lord Gilbert of Panteg

European Union Committee report 'Brexit: food prices and availability' - Lord Teverson

TOMORROW

No business scheduled
 
Scottish Parliament 
 
TODAY

Parliamentary Bureau Motions

General Questions

First Minister’s Questions

Members' Business — S5M-16795 Bill Kidd: International Workers' Memorial Day 2019

Parliamentary Bureau Motions

Portfolio Questions: Culture, Tourism, and External Affairs

Final Stage Proceedings: Hutchesons’ Hospital Transfer and Dissolution (Scotland) Bill

Scottish Government Debate: Changing Lives Through Sport and Physical Activity

Business Motions

Parliamentary Bureau Motions

Decision Time
 
TOMORROW

No business scheduled