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Daily Briefing: Signs of movement in Berlin
November 10, 2017 / 8:23 AM / a month ago

Daily Briefing: Signs of movement in Berlin

LONDON (Reuters) - Positive noises are finally coming out of talks to form a new German government. Tonight we could get the firmest signal yet that a CDU-FDP-Greens alliance is on track and party chiefs will agree to enter formal coalition negotiations on the nitty gritty.

Angela Merkel, leader of the Christian Democratic Union (CDU), arrives at the German Parliamentary Society offices before the start of exploratory talks about forming a new coalition government in Berlin, Germany November 10, 2017. REUTERS/Fabrizio Bensch

The first key meeting of the day starts at 4.00 pm local time (1500 GMT) but statements are probably not due till late evening. There will likely be agreements in principle on some policy area but not all. It is still not clear, however, just how eager Angela Merkel’s right-wing Bavarian allies are to get into bed with liberals and ecologists.

It is the latest episode of the David and Michel show today as Brexit negotiators David Davies and Michel Barnier brief Brussels media on the latest advances - or lack of them - in their talks. An FT report this morning quotes unnamed sources as suggesting the British side may be ready to increase the amount of money it is ready to pay in the divorce bill, which is the sticking point in talks so far.

In London meanwhile, the author of the EU's Article 50 exit clause will say that Prime Minister Theresa May should stop misleading voters and admit that Brexit can be avoided if Britain decides to unilaterally scrap divorce talks. According to his speech notes, John Kerr, who was British ambassador to the EU from 1990 to 1995, will insist that the argument that Article 50 is irreversible is purely political and has no legal weight.

Such talk is of course a red rag to diehard Brexiteers: to assuage their concerns, the government said last night it would set down the March 29, 2019 leaving date in law.

A Spanish judge on Thursday freed on bail the Catalan parliament's speaker and four lawmakers while authorities continue to investigate their roles in Catalonia's banned independence drive. Some are focusing on what Carme Forcadell told the Supreme Court during the hearing.

According to court sources, she said the Oct. 27 declaration of independence was not legally binding, a comment which could undermine the secessionist push. At the time she described premier Mariano Rajoy’s actions as a “coup” and an “attack against democracy”.

MARKETS

MSCI’s index of world stocks is down again today after snapping on Thursday an 11-day winning streak that was its longest in almost 14 years.

The moves carry on from a lacklustre close on Wall Street where disappointment over signs that U.S. President Donald Trump’s tax cut plan would run into choppy waters pushed the SPX and Nasdaq to their biggest daily loss in around two weeks while U.S. Treasury yields rose. Signs are, the tax reform plan may be pushed back to 2019 which would lead to some market disappointment.

Tech was the biggest loser yesterday and that has filtered through to Asia where Japan’s Nikkei 225, up nearly 20 percent in just two months, has lost 0.8 percent.

There were also woes from Toshiba Corp which fell 5 percent on reports it could be considering offering new shares in a third-party allotment to raise cash. Asian chip related stocks are down and tech heavy Korean and Taiwanese bourses close lower. European tech shares are off a 16-year high.

editing by John Stonestreet

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