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By ECU Group on 29/08/19 | Comment

It just isn’t cricket: [Idiom: It isn't fair, sportsmanlike, or legitimate]

When Ben Stokes stood at the opposite end of the wicket to Jack Leach at the weekend, England required 73 runs with no remaining wickets, to retain any hope of regaining the ashes. Few, if any, gave him an appreciable chance of success. With the opposition conspiring to unnerve and remove England’s sole remaining batsman (with no disrespect intended to Leach), Stokes’s response shocked the Australian bowling onslaught. Stokes’s strategy of taking the game to the Aussies by quickly and confidently attacking both pace and spin from the opposition.

I have no idea whether Boris Johnson is a cricket fan or whether this immense innings from Ben Stokes was in any way an inspiration, but the analogy between this batting display and the bold confrontational approach that PM Johnson appears to have invoked. There is no doubt that there is a long way to go if Johnson is to be successful in bringing a renewed withdrawal agreement to the House of Commons before the October 31st deadline. He may need to hope that the (united?) opposition drop the ball in the closing stages - instead of getting the run-out or dismissal some are becoming hysterical about. 

As Harold Wilson once said: "a week is a long time in politics”. That may never be more true than the week ahead for Parliament. Ironically, if the PM does survive long enough for parliament to be prorogued for a few weeks, then he may well have the best chance yet to negotiate something that Parliament can get behind. For many, anything else simply isn’t cricket! 

September is set up to be a very interesting month - at least for the neutral supporter. Watch this space. 

"At first I did adore a twinkling star But now I worship a celestial sun” William Shakespeare, The Two Gentlemen of Verona

In Italy, political strategy is also being tested at the highest level. A couple of weeks ago, deputy PM, and leader of the Lega party called a confidence vote in the Prime Minister that he himself had put in place only months before, Guiseppe Conte. With polls suggesting a further surge in support for the Lega (35 %) and diminished support for the 5star coalition partners, it seems likely that Salvini was expecting the confidence vote to result in fresh elections that would see the Lega as the dominant coalition partner (but not in alliance with 5star) and perhaps even Salvini installed as the PM. 

The current dynamic suggests that this was a strategic miscalculation by Salvini as the PD party and 5star attempt to form a new coalition government, united behind Guiseppe Conte. However, this is far from a done deal. President Materella has given the parties a week to formalise its alliance for government and even if they are successful at this stage it is unlikely that 5star, "a party that has long defined itself by revulsion for the PD party and the insider elitism it stands for” (- Ambrose Evans-Pritchard) will boost their ratings under such an arrangement. Salvini will be waiting - perhaps increasingly strongly - in the wings.

"I see the glass half full… but of poison” Woody Allen

Lastly, it is impossible to discuss global geopolitics without mentioning Donald Trump. Opinion, on the tactics of President Trump and his administration are likely as polarised as those in the UK over PM Johnson, or in Italy over Mssrs Di Maio and Salvini. The start of August saw a further deterioration in progress towards a US-China trade deal and a further escalation in tariffs. However, we continue to believe that the ultimate dynamic reached will be one of lower global tariffs (not higher) and a more open and free China (not a more closed US and global economy).

Against this backdrop we continue to favour the USD on continued economic and yield differentials - even if the global rush for positive yielding safe haven assets has had the net effect of dramatically lowering US yields. We remain glass half full on the US, the UK and the ultimate global economic trajectory.

August was about the fracture and dislocation, of politics, alliances and even economics. Perhaps September will be about progress.

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