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Pound falls with Trump threatening shutdown

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European markets closed with gains on Tuesday as United Kingdom Prime Minister started a European tour to try to save her Brexit deal. May embarked on a European tour after the House of Commons vote on the Brexit deal scheduled for yesterday was postponed. May is also reportedly traveling to Dublin tomorrow for talks with Irish Prime Minister Leo Varadkar.

The FTSE 100 ended 1.66% above the flat line. The DAX gained 1.90% at the market close. Linde Plc added 4.04%. The CAC 40 X closed 1.71% higher with Dassault Systemes surging 5.27%. The Eurostoxx 50 increased 1.64% at the closing bell with Volkswagen AG ending 3.63% in the green.

Pounds falls against dollar amid no-confidence vote rumors

The British pound traded in the red against the dollar following reports that the 48-letter threshold to trigger a no-confidence vote in Prime Minister Theresa May has been reached.

The alleged move to challenge May’s leadership comes after her decision to postpone the parliamentary vote on her Brexit deal with Brussels. She is currently in a meeting with European Council President Donald Tusk in an effort to seek last-minute changes to the withdrawal agreement.

Sterling lost 0.47% against the greenback at one point, buying 1.2499, its lowest since April 2017, while it traded flat versus the euro at the same time, going for 1.1058.

Trump threatens government shutdown over wall funding

United States President Donald Trump threatened to shut down the federal government if the funding for the wall on the border with Mexico does not receive the support of the Democrats. The funding of some of the government agencies will expire on December 21.

"If we don’t have border security, we’ll shut down the government," he said after the meeting in the Oval Office with Democratic leaders from the Senate and the House, Chuck Schumer and Nancy Pelosi. A bipartisan agreement on the matter does not seem likely, Trump added.

The administration needs $5 billion to fund the building of the wall, which is among Trump’s main campaign promises, while the Democrats are only ready to agree to $1.3 billion for border fencing and barriers.

Verizon to suffer $2B costs for planned layoffs

Verizon Communications Inc. will be charged $1.8 billion to $2.1 billion for the planned major cuts of its workforce, the United States carrier. The company said about 10,400 workers will leave in the first half of 2019, as planned by Verizon’s voluntary separation program. Half of the planned layoffs will be executed by the end of 2018.

Verizon’s Media business, called Oath, experienced unexpected pressures from the competition throughout the year, resulting in the company reporting worse than expected financial results. Oath also gave up a chunk of Verizon’s market position in digital marketing to the company’s competitors. Additionally, as Verizon plans to upgrade its 5G network, the workforce restructuring was a planned part of its cost-cutting agenda.

The Calamatta Cuschieri Traders Blog is available daily on CC WebTrader. Other market coverage including coverage of the International Bond Markets is also available.

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