Global Uncertainty is on the Rise

Brexit demonstration at Brexit debate, Palace of Westminster, photo by ChiralJon

Political uncertainty is on the rise across the globe. With conflict within Europe, a government shutdown in the US, and other developments around the globe, things are starting to look a bit shaky. Here’s a look at key areas important to pay attention to.

Brexit

This rejection will likely come with some volatility in the British Sterling. As the “Brexit” fades out, some are predicting that the currency could rise as high as 20%. This could, in the short term, affect the UK’s rate of exportation since such rise in the currency will make it more expensive for other countries to import from the UK. But, remaining in the Union (if they choose to withdraw plans) will allow them to retain favorable trade conditions with other Europen countries which should mitigate some of the negatives.

Shutdown

Many expected the shutdown to conclude quickly, as previous shutdowns have. But, under the Trump administration, this is now the longest period of time the government has been shut down in the history of the country. Although, markets in the US are faring better than global markets, and despite a recent rally, the S&P 500 is still about 12% down from its previous high. Unless President Trump changes his mind on preventing a reopening, further selling is likely as investors flock to safety from market volatility caused by uncertainty over when this shutdown will end.

Eastern Bickering

All of this friction has cast doubt over future cooperation in the region as well as the US’ ability to contain North Korea and China. That is, a conflict between western allies are a benefit to those who seek to gain ground in international politics and markets. Unless South Korea can find a way to allow past conflicts to fade, expect some potential weakening of economic conditions in the area as well as more gains by the Chinese (which is already expected to be the world’s most powerful economy by 2024).

Huawei

Limiting Huawei’s presence in Poland would cause damage to both Poland and Huawei. Huawei owns about 50% of the Polish telecommunications infrastructure market and Poland is one of Huawei’s biggest markets outside of China. However, if that infrastructure is being used to spy on the Polish people, the Polish government might have to take the hit alongside Huawei’s credibility as a legitimate company. In other words, further uncertainty, market volatility, and relationship straining around the globe are likely thanks to Chinese government spying.

Conclusion

Originally published at medium.com on January 15, 2019.

Sociology and Demography guy with hobbies in the finance world. Fatherhood and family structure research.