Michel Barnier’s back in town today and the news of his trip saw a boost in the value of Sterling. The two sides have agreed the principles for the intensified talks and, for today at least, things seem to look a bit more optimistic than they were earlier in the week. The plan is for both sides to meet every day until there is a deal agreed, or not, with a timeline from the UK that this should be done in early November. We’re not sure whether this timetable constitutes us being in “the tunnel”, where the final stages are concluded in the strictest of confidence and with no leaks, but even if we are we wouldn’t be surprised if word gets out somehow – though wouldn’t it be amazing if the next time we wrote about a Brexit deal it was to say ‘there is a Brexit deal’?!
The rally in Sterling caught many by surprise and the short sharp spike took us back to levels that we haven’t seen since early September. It’s a fairer barometer to use the value of the Pound versus the Euro to determine interest in Sterling, as the Dollar has its own issues at the moment. On that basis, the move higher is noticeable but doesn’t show complete faith that this isn’t another groundhog day situation.
The Dollar’s main problems are an election and a stimulus package, and neither have a known date of completion. The Stimulus package hasn’t yet made it back to the Senate because Nancy and Steve still can’t split the difference between $1.8 and $2.2 trillion dollars and the election is seeing so many postal votes that it is likely that the counting isn’t going to be completed in key swing states on time. The Washington Post is reporting that the US Postal Service in certain states is running behind normal delivery windows and some of those states have imposed strict deadlines that say any ballots received after 3rd November will not be counted, creating a narrow window for people to act and get their vote posted. The USPS is struggling on multiple fronts and is also coming into a peak parcel period, which was already busier because everybody is doing more online shopping too – these parcels are being prioritised over votes. If you’re struggling to sleep this evening, click on this deep dive by the Washington Post into the issue.
Online payment giant PayPal gave Bitcoin a boost yesterday as it said that will allow its customers to store and spend the crypto currency on its platform. The move is a huge coup for the currency, as giving almost 350 million PayPal customers access to it will bring it even more into the mainstream and considerably increase its transaction volumes. The long held issue with high volume transactions is that the technology underpinning Bitcoin can’t cope, but PayPal is addressing that by using its own technology and in the process think that they will be able to address the volatility concerns that many merchants hold – with fears that in the time it might take to receive and then convert the currency, it could be worth a whole lot less than it was at the start of the transaction.
In another seamless link: PayPal co-founder Elon Musk saw his net worth back up a little yesterday, as Tesla earnings beat expectations and the stock price climbed higher once again. The stock has been a rollercoaster this year, but that rollercoaster has climbed 400% and the company says it is still on target to reach 500,000 vehicle deliveries in 2020 . Tesla’s market cap is now almost $400bn and it’s price-earnings ratio is over 1,000. We’re sure the market knows better than us, but that does feel a touch overvalued.
Today we’re looking to Rishi Sunak to provide some clarity and consistency from the government over lockdown support packages. Mr Sunak will address the Commons this afternoon after a roundtable with business leaders this morning. Expectations are for some more support to tier two areas and hopefully a blanket approach to what you can expect if you find yourself in tier three. Trying to find some more detail on what might be coming we also stumbled on a Times article that says Mr Sunak’s old boss at Goldman Sachs is a leading contender to become the next chairman of the BBC… what are the odds?!
Have a great day