The European stock market is afraid of Brexit
Trade problems of the US and China remain the Central theme for the European stock markets. The US President Donald trump said that the trade agreement with China is still “a long way”. However, he did not rule out the introduction of new duties on Chinese goods imports 325 billion. In addition, the United States can impose retaliatory measures against countries that will impose unilaterally additional tax against companies that provide digital services.
We are talking about companies such as Amazon, Apple, Facebook and Google. Earlier it became known that the office of the U.S. trade representative Robert Lighthizer started the investigation against France’s decision to introduce such a tax.
European investors remain concerned about the prospects for Brexit and the European economy in the event of a British exit from the European Union “no transaction”.
The office of budget responsibility predicts the UK that the country will face an economic downturn next year in the event of withdrawal from the EU without a final agreement. The British economy, according to the forecast, will enter a recession in 2020. UK GDP will be at least 3% lower next year in the event of Brexit “no transaction”.
At the end of July will be held the next ECB meeting, which market participants expect a possible reduction of monetary policy. This can happen, the ECB, Mario Draghi announced a new reduction in interest rates or asset purchases, if inflation begins to return to target level at 2%.