Brexit Commentary And Effects on Gold Price
Prime Minister Theresa May stepping down as leader of the Conservative Party kicked off the month with a bang, she did however, announce she will remain in charge until her successor is found.
The search is already in full swing, with the remaining two candidates being the former foreign secretary Boris Johnson, and the incumbent of that position, Jeremy Hunt.
Johnson is the clear favourite amongst Tory party members, his popularity stemming in part from him being a leading Conservative Europsceptic. Whilst his charisma and personality put him in a strong position to battle Nigel Farage and Jeremy Corbyn, he will undoubtably be a divisive choice due to the UK being split over Brexit.
Johnson has already stated his intention to leave the EU regardless of whether a deal has been agreed by the end of October, whereas Hunt believes he can negotiate a better Brexit deal than Theresa May. Hunt has also gone on record to say he would delay the departure from EU beyond the current date should an agreement be on the cards. Hunt is of the belief a no deal Brexit will be "political suicide" for the Conservatives.
The final result is expected around July 22nd.
Gold Price per troy ounce: Max and Min TBC
Silver Price per troy ounce: Max and Min TBC
Cross party talk between the Conservatives and Labour collapsed this month with Jeremy Corbyn claiming the talks had “gone as far as they can” and maintained a position to reject the prime ministers Brexit deal when it goes back to Parliament for the next vote.
Sterling plummeted to a 2019 low as a currently trading at $1.26899 is only a whisker away from the 3rd January low of $1.25188. If media reports render themselves true, the revamped Brexit deal is likely to be thrown out along with the Prime Minister so sterling could be in for more shocks in the not so distant future.
With ongoing political uncertainty and the susceptibility of the pound to any Brexit commentary it would be unwise to invest heavily especially over the medium term.
Gold responded first showing an uplift reaching almost £1010 before dropping just below £1000 per ounce eroded by a strengthening dollar. The dollar bounced back to life following positive US housing data and reports on low unemployment.
The global backdrop and on-going trade tensions could unravel the gains made, with gold blossoming as the go to safe haven investment. Investors are already shunning riskier bond options with emerging markets posting a $2.6bn outflow according to EPFR Global and emerging market currencies declining such as the the Chinese offshore renminbi. $2.6bn of outflows were reported in risky US bond instruments, and equity funds reported a weekly outflow of $20bn. The general shift could be signs that investors are making moves into safe haven instruments and planning for a downturn. Brexit certainly complicated the UK situation and any global slowdown will be felt even harder here if we don't figure out a way forward as businesses continue to suffer as a result of the political impasse.
In a final attempt in what could be her last opportunity as prime minister, Theresa May offered on Tuesday a “new deal” to Labour which included the possibility of a second EU referendum. The 10 point plan was immediately shot down by Jeremy Corbyn, who claimed the deal was “a repackaging of the same old bad deal”.
The wall of opposition from both sides with a solution no closer than ever led to a fall in sterling to 2019 lows on Wednesday morning. The pound fell 0.3 per cent on the day to trade around $1.2660, its lowest level since early January. The currency had rallied briefly on Tuesday prior to the above mentioned “new deal”.
Derek Halpenny, head of global market research at MUFG called the prospect of Mrs May “breathing new life” into her deal on the terms of Brexit “negligible”.
“We therefore concur with the fresh slide in the pound from the highs reached just prior to the statement as there now appears a growing risk that a fall away in Conservative support on a fresh vote would not be compensated by increased Labour Party support,” he said.
At present, sterling is the worst-performing developed market currency against the US dollar this month. Sterling was trading 0.2 per cent lower against the euro, pointing towards the 13th session in a row in which it has weakened against the single currency.
Gold Price per troy ounce: High @ £1001.37 / Low@ £974.43
Silver Price per troy ounce: High @ £11.74 / Low@ £11.33
Whilst Brexit is being negotiated the UK government has spent somewhere close to £2bn on no-deal contingency under the banner of “Operation Yellowhammer” and “Operation Brock”. These cover everything from traffic congestion to maintaining medicine and food supplies. This is a phenomenal amount of money for something which may not even see the light of day as I am sure you will agree. With an extension granted up to Halloween which hopefully doesn’t produce a scare, the UK government has chosen to taper the operations and shelving Operation Brock. With the PM’s deal dead in the water hope turns to cross-party solutions and negotiations with Labour leader, Jeremy Corbyn. The PM is looking to get more support and a swift fourth vote on a deal to avoid EU elections in May. Jeremy Corbyn held no punches back claiming that the PM’s handling of Brexit is a “diplomatic failure”. Many on the left are in support of a second referendum and may take some serious whipping to back a cross party deal whereas conservative members are hostile to a soft Brexit. With Mr Corbyn and his party officially supporting a customs union a meaningful vote seems ever more unlikely! Some Eurosceptics are warming to the idea of a customs union with some arguing it is a necessary compromise to get something remotely recognised as Brexit over the line.
As of 11th April investors continued a 4 week streak of abandoning UK stock funds bringing the total exodus to a colossal $25bn since the referendum vote. According to Goldmann Sachs Brexit has been calculated to cost the UK £600m per week which includes losses sustained by companies relocated to the bloc.
With all the gloom the FTSE 100 stocks are up 10% between January and March and the FTSE 250 a more suitable indicator for domestic performance is also up 15%, which indicates economists would argue Brexit is not necessarily the overriding performance lever contrary to what the media is spinning up!
The boom could be short lived especially if no-deal happens and the IMF continues rhetoric that the UK will enter recession but now claim the UK economy will suffer 7 times harder than the rest of the EU. I believe we export 49% of all goods to the bloc so at best this will be disrupted, and worst case cease altogether until a trade deal is established.
Sterling was little affected, currently trading on Monday at $1.31104 hardly budging from April 1st $1.31104.
Gold Price per troy ounce: High @ £1004.67 / Low@ £971.22
Silver Price per troy ounce: High @ £11.74 / Low@ £11.42
The final vote on 12th March will get the backing of Eurosceptic MP’s, notably Jacob Rees-Mogg and the European Research Group) ERG, if the PM picks a leaving date within the year! If we leave the EU on the 29th of March, there is to be a 21-month transition period which is too long for many anti-EU MP’s and the offer is if she cuts this short, they will vote for her Brexit the deal! Politics at its finest…. I'm not sure what 12 months difference would make in the grand scheme of things but I’m no politician.
Michel Barnier, the EU’s chief Brexit negotiator, has reportedly told EU ambassadors that no progress has been made during this week’s Brexit talks but Downing Street remain positive that a “new” deal can be struck in time for March 12th with DUP backing essential to passing any vote.
Adding more pressure to the situation is the fact that less than 50% of the UK-non EU trade deals remain incomplete and are likely to be half cooked come the departure date from the EU. There are still 161 trade agreements to revise which is no small task and there will be no overnight fix. Liam Fox, the UK international trade secretary, once promised that all agreements would be ready “one second after midnight in March 2019”…….mentioned just to recap on some of the political fiction we have been served. How trade agreements and physical trade itself will manifest after the vote remains to be seen as many countries will not be obliged to follow EU trade rules and could fall back on WTO rules or even their own interpretation of these.
The pound is currently the lowest valued G7 currency with blame fairly and unequivocally leveraged at our political establishment. The strength of the dollar is also keeping the pound low and the optimism that no deal could be taken off the table is already confined to history!
Following the announcement by Theresa May to put no-deal to a vote in Parliament the pound rallied to a 9-month high of just over $1.33 but the optimism dissipated quickly as the main deal was voted down, but thankfully for businesses and the UK no-deal was also rejected.
With sterling currently bobbing around on a sea of uncertainty 6 options remain for MP’s:
- A third vote on Theresa’s deal
- General Election
- Vote of no Confidence
- No Brexit.
Following an overwhelming vote by MP’s to extend the Brexit deadline on Thursday, the uncertainty surrounding the future of the UK’s status remains in limbo. Donald Tusk, President of the European Council, is open to a “long extension” which adds to Eurosceptic dismay and adds even more pressure to accept and pass a third vote on the Prime Minister’s deal:
In a slight change of tune Mr Hammond, UK chancellor of the exchequer, said on Thursday that MP’s had “to explore other options for Parliament to express a view about how we resolve this impasse”. Previously he had been an advocate of a softer Brexit but seems spooked by what could be a lengthy departure with some commentators expecting proceedings well beyond 2020. He has also handed Eurosceptic MP’s and the house at large a dangling carrot as he claims austerity could be eased if the UK avoids a disorderly exit, piling even more pressure to vote the Prime Ministers deal through next week. The UK’s rate of borrowing is at its lowest since 2002 sitting at just 1.1% of GDP and this leaves some headroom for an extra £15bn if Britain leaves on good terms. The alternative options remain bleak if the UK does indeed leave without a good deal and any long term delay could even see Britain partake in European elections, adding yet another reason for Eurosceptic MP’s to turn.
Boris Johnson described the back-stop arrangement “detrimental to the interests of this country” as he maintains his position as a hard line Eurosceptic, whereas Jacob Rees-Moog flirts with the idea of backing the deal if it received the backing of the DUP. Talking to LBC radio he said,
“No deal is better than a bad deal, but a bad deal is better than remaining in the European Union in the hierarchy of deals, a two-year extension is basically staying in the European Union”.
If these two prominent groups, the DUP and ERG, support the deal many more who voted against the deal or abstained are likely to vote it through. The DUP are looking for guarantees that any law or regulation applied to Northern Ireland would extend to the rest of the UK but as this is not currently in the withdraw agreement, which the EU refuses to open again, then it is their request that it is written into UK law.
Following protests all over the country which included a blockade on the M6 from pro-Brexit truckers, which I was caught up in, to millions of pro-EU protestors on the streets of London to the highest ever signed petition to revoke article 50 going through to Parliament it is clear tensions are running very high
A third vote this week looks likely but unless there is a significant change to the deal speaker John Burscow aims to block the motion as part of legal precedent from 1604 which lays out that the same deal cannot keep coming back to the House of Commons for parliamentary vote.
Flying in the face of Brexit is the fact that the UK employment rate falls to lowest since 1975 with some 220,000 jobs added in the three months up to January 2019. The official unemployment rate stands at 3.9% and shows no sign of slowing. Businesses are concerned about the future, investment is shrinking with wages generally increasing yet we are seeing more and more jobs reported to be filled. How much of these jobs are Brexit related would be interesting to learn as most news stories involve the closing of plants e.g. Honda or halting expansion plans e.g. Nissan. Often, I read of an efflux of jobs and I can’t seem to balance a struggling economy with data that suggests more people in employment, logically this doesn’t add up so where are all these jobs!
Sterling is refusing to show signs that a no-deal Brexit remains highly likely with the recent vote against no-deal not legally binding as the default to not approving a deal is leaving on WTO trading terms. Sterling is clinging around £1.32 which suggests investors have a blind faith that politicians will not ruin the economy and are just using no-deal as a bargaining chip. In terms of gains in 2019, the pound, believe it or not, is one of the best performing currencies of the year.
|Vs US Dollar||Year to Date % (as of March 20th )|
|New Zealand Dollar||1.9|
Ernst and Young are estimating £1tn of assets are on their way out of the UK as a result of Brexit and 7,000 city jobs are likely to be relocated with concerns raised about lost tax revenue. Whether we like it or not high paid finance jobs of the city are responsible for a significant portion of tax revenues for the UK government. With these jobs gone, short term, there is no replacement with conservative estimates from EY put at £600 million per year.
Theresa May must be on her final days after MP’s seized control on the House of Commons on Monday night looking for alternatives to the current deal. The DUP and tory eurosceptics failed to fall in line and therefore the third vote will not be taken to Parliament. Cross party mutiny has taken hold with Tory and Labour members joining forces amid a backlash of further resignations. A soft Brexit is possibly on the cards or even a second referendum!
Will the PM hang onto her job? Anyone else who takes office will be burdened with the job and dealt a losing hand. It’s an impossible task to keep all parties satisfied!
Gold Price per troy ounce: High @ £1032.89 / Low@ £990.00
Silver Price per troy ounce: High @ £12.38 / Low@ £11.80
Theresa May suffers another humiliating defeat on Brexit plan B. Not only does she have the most savage political plight of modern times but she also has a split of her own poltical party to deal with. What the EU must think of a political system in the depths of anarchy where a full house of commons is unable to make a meaningful vote on anything I don't know. We are told the deal is the best we can expect, though I am not sure as I am no expert on the matter. I do think that the utopian claim of a clean break with fantastic UK oppurtunities is fantasy however. Maybe some MP’s need to stop playing political games, climb back into reality and vote on something that makes a difference rather than abstaining from a vital vote.
Mark Carney once again steps into the world of politics warning that Brexit “could go quite badly” and that the process is an “acid test” for global trade. Let us be honest there is not really any precedent to base these comments on, that is bar his expertise which amounts to educated guesswork like everyone else. I agree without doubt that short term consequences would be painful but any warning from Mark Carney or anyone else always appears to be a short-term view. He goes on to say the Brexit vote was a “leading indicator” to re-order globalisation but I am not in agreement as the vote to leave the EU for many was an emotional plea rather than a business one, with many voting purely on the basis of curbing immigration. I am sure if you asked voters in Stoke and Sunderland was re-ordering globalisation their main reason for voting, the answer is not likely to be yes. For me this concludes that the vote is being interpreted in ways far detached from its original intent and introducing geo-political tensions, trade wars and general populist movements as fallout simply goes to serve a political or business agenda. It goes nowhere near addressing the inequality and struggle faced in many “forgotten” towns of the UK and at the end of the day should a recession strike after March 29th, we are likely to find those towns who voted to leave being the hardest hit.
Markets on the other hand are still suffering with outflows from EU stocks at its highest rate since 2016 with Brexit weighing heavy on an already shallow growth forecast. We are not talking small number here! According to the EPFR European equity funds lost $5.9bn between the 6th and 13th of February with Germany losing $574bn, the UK $449bn, French funds lost $224bn and the trend continues. Will the sun rise again in April or maybe Brexit will be reported as the most extravagant April fools gag of all time!
The Prime Minister has announced a final vote on her Brexit deal come March 12th. Many in business and even politics see her behaviour as reckless and dangerously running down the clock. She must have a full house in her final hand to have the confidence to do this, but then don’t rule out stupidity! I need faith in humanity and that the people who run this country have intelligence so let’s assume she has more than just confidence going into these final negotiations.
In the meantime across in the Labour camp Corbyn has caved into party pressures and has officially declared Labour will offer a second referendum on EU membership. This follows the departure of seven (now eight) MP’s split from Labour to join 3 from the conservatives to form a new pro-EU centrist party. The conservative MP’s to break away are Heidi Allen, Anna Souby and Sarah Wollaston and the Labour MP’s who have defected are Chuka Umunna, Luciana Berger, Mike Gapes, Chris Leslie, Angela Smith, Ann Coffey, Gavin Shuker, and Joan Ryan. Personally, I think central approaches to policy that mix and match the best form both camps can work for society at large so it will be interesting to see how the split, calling themselves “The Independent Group”, in UK politics plays out.
Aside from politics Brexit takes its toll on the UK’s AA credit rating which has been thrown into doubt as ratings agency Fitch put us on a negative watch citing the risks of a no-deal Brexit. The general uncertainty, lack of political deal making and ultimately the “unknown” effects on trade that could result if the UK bombs out of the EU in 6 weeks time have officials at Fitch nervous. I am unaware of any other agencies taking similar measures apart from echoing concern, but I can’t help thinking this move simply provides ammunition to the pro-Europe camp. For example, Moody’s and S&P have not adjusted their ratings since September 2017 and June 2016 respectively. In my opinion as there is so much political nonsense at play, they should refrain from an update until we know what deal is reached and what the reality of the situation is. Ploughing in with a threat of ratings adjustment is just bound to fire up pro-EU MP’s and the media. It was back in 2013 when the UK lost its AAA rating and since not made much progress in gaining back this accolade. Even with a Brexit deal the AAA rating seems a future prospect at best.
For those in favour of some positive Brexit news the UK has reported that over 167,000 jobs were added in Q4 2018 which flies in the face of general Brexit sentiment, reports and the wider global economic slowdown. Employment currently stands at 75.8% according to ONS data which gives us a nice contrast for an article after the Brexit divorce date. Hopefully this is not the calm before the storm!
Gold Price per troy ounce: High @ £1031.84 / Low@ £984.66
Silver Price per troy ounce: High @ £12.55 / Low@ £11.67
Corbyn is planning a vote of no confidence which would lead to a general election should Theresa May's Brexit plan end up down voted in the House of Commons. A general election may be the only way to break the deadlock as Labour pushes for a permanent customs union but many in Government are worried not only about Mr Corbyn but the potential for extreme socialist policies from his inner circle once they gain power. It is for this reason a vote of no confidence is likely to fail but we will see as the drama unfolds!
The Airbus chief, Tom Enders, remarked Brexit as "really unbearable" and in an AGM briefed staff and the Chancellor as follows:
“Whether you think that leaving the EU is good for the UK or not, by all means: stop filibustering around this issue, allow for an orderly, agreed Brexit and find an agreement with Brussels,”
We couldn’t agree more, and we would like to see all representatives in Parliament working together rather than playing politics which could all end disastrously for the electorate. At this stage a delayed divorce is looking likely.
On 15th January Theresa May’s plan wasn voted down. Gold price climbed in anticipation before the vote up to £1014 and then following the vote immediately dropped to below £1002. The markets are all over the place with some taking comfort that a Brexit is no longer around the corner and even hopes from some in the business world that Brexit will not happen at all. It does seem unlikely, to me at least, that we will leave with no deal, but it is starting to look like Theresa May won’t be leading the negotiations much longer as she faces a vote of no confidence tonight (16th January).
Mr Corbyn has called for Theresa May to talk no-deal off the table as a pre-requisite to entering any form of cross-party talks, claiming acceptance of the current deal is essentially blackmail to an otherwise chaotic divorce.
Tusk decries EU sceptics saying that he is “wondering what a special place in hell looks like for those who promoted Brexit without even a sketch of a plan for how to carry it out”. Tensions appear to be simmering over with the EU demanding Mrs May find a realistic way to break the backstop impasse. Reports from those with inside knowledge predict any revision proposed as part of the Brady amendment will be rejected. As we approach March 29th the prime minister is pinning hopes on concessions being made as the deadline approaches. The state of limbo is doing no favours for business and our economy – I just wish someone would compromise!
Gold Price per tr oz - High @ £1012.94 / Low@ £955.82
Silver Price per tr oz - High @ £12.17 / Low@ £11.12
Theresa May lost a Commons vote on Brexit legal advice at the beginning of December and has been forced to publish the advice. This is the first time in history that a British government has been in contempt of Parliament. Sterling fell to $1.2672 an 18th month low following the historic vote. Mark Carney declared the Norway solution a risk for financial stability and went on to tell parliament's Treasury select committee "We would not be comfortable outsourcing supervision of this incredibly complex and important financial sector….. one that in living memory brought the country to its knees". The Norway option would leave the UK subject to EU rules that it could not influence. To add to Mrs May's woes the ECJ claimed the UK could unilaterally end the Brexit process giving the anti-Brexit camp something to cheer about.
On 12th December Theresa May headed to Brussels to re-negotiate what appears to be a fairly bad deal for the UK after having survived a vote of no confidence spearheaded by eurosceptic MP's. I have previously said the EU would not allow the UK to get a good deal due to a risk of contagion in other eurosceptic states. We shall see if the Prime Minister has any cards left to play apart from any deal being better than no-deal! I do hope no deal doesn't become a fait accompli if talks break down any further! We would like to direct you to Andy Serki's parody of Theresa's deal as it couldn't better sum up the mood! The ECJ rules that the UK can remain sovereign and unilaterally revoke article 50 which surely would be better than no deal if it came to it.
After a failed mission to renegotiate with the bloc businesses were reeling in horror as the government seriously considers a no-deal divorce without offering any support to adjust and make plans. Calls for a second referendum start to echo around the chambers of Whitehall and right now it's understandable that investors are avoiding the UK. I can't see this changing until the government can give some definitive answers on what will happen come the 29th March. Norway has publicly come out stating they would not welcome Britain into the EFTA and cannot understand how the UK could accept EFTA terms in their pursuit of absolute sovereignty. On the opposite benches Labour appears to offer no alternatives with Jeremy Corbyn unable to take a clear stance on the matter leaving the Conservatives the pick of a bad bunch!
Gold Price per tr oz - High @ £961.04 / Low @ £922.33
Silver Price per tr oz - High @ £11.47 / Low@ £10.71
UK business leaders call for a people’s vote on the Brexit deal whilst Leave.EU funding questions give rise to dubious answers. We wonder whether, if the funds are indeed proved to be illegitimate, would this void the vote and trigger another referendum? How would this one go if the public were given another chance? On Monday, Brussels and Dublin rejected Mr Raab's plans for the Irish backstop but this was swiftly followed by announcements of progress. I wish someone would just give me an update when it's all over with! On the 14th November negotiations reached a climax as a draft treaty is prepared ready for cabinet approval. How its even possible for the UK to get a good deal I do not know! The EU would be foolish to offer anything but a bad deal as any prosperity the UK gains outside of Europe would be ammunition by other EU sceptic governments to leave the bloc. Any agreement requires approval by the UK cabinet, EU states, the House of Commons and then finally the European Parliament......some task! The UK will still be obliged to pay into the EU budget up to 2020 and by 2025 all payments are expected to complete reaching an estimated £50 billion! Any extension to the transition period beyond 2020 could see the UK make further payments into the EU budget! Concessions the prime minister has been compelled to accept include environmental targets, state-aid rules, EU business competition and labour laws. It looks like we are tethered to the EU customs union, EU regulation and budget financing for many years to come. With the inevitable trade friction and decreased rates of immigration over the next 15 years it is expected to cost the UK 3.9% GDP, equivalent to £100bn, a rather sobering figure....This accompanies the Bank of England announcement that a no deal scenario could cause the steepest recession since the second world war! Whichever way we look, short term at least, the UK is bound to suffer a decline in GDP and the economy is likely to retract. This is almost a given as we try to figure out how to trade with the bloc (arguably our largest supplier and customer) and even get into the process of negotiating global trade deals. These agreements will take time and will not simply be switched on come March 29th 2019.
Gold Price per tr oz - High @ £962.32 Low @ £904.10
Silver Price per tr oz - High @£11.46 Low@ £10.85
Right now we do not know what effect, if any, Brexit will have if any on the price of gold. It is likely that the effect on business will drive the price of gold up and down so keep an eye on the FTSE 250 and FTSE 100 for signficiant changes. The process will undoubtedly have an effect but the full extent, regrdless of all predictions, are unknown. There is a constant set of beliefs or arguments both optimistic and bleak, that one way Britain will flourish and the other where we whimper into the shadows of our former economic self. Whilst all the poof and politics plays out, the markets and gold price will not reveal its longer term self. The longer we delay and push the divorce day back the longer the markets will be in limbo and the prices themselves will remain all over the place. The EU has approved the use of London's clearing houses in the event of a no-deal Brexit. This addresses one of the major concerns of the financial industry. However, the EU has also announced that no help will be provided to financial institutions who suffer at the hand of a no-deal Brexit. To add to this an estimated €100bn of UK bank bonds will not be contractually eligible within the EU. The uncertainty that prevails could be ploy to get banks to relocate and any fall out from the process is likely to hit financial markets hard if a no-deal Brexit is the final result.
Gold Price per tr oz High @ £924.84 Low @ £905.13
Silver Price per tr oz High @£11.24 Low@ £10.73
Negotiations started off positively with Michael Barnier announcing that a deal could be fixed in November. The outlook returned to its usual pessimistic no-deal scenario after May’s speech and the country eagerly awaits an update. We are predicting with almost certainty that the divorce deadline will be extended keeping markets, currencies and precious metal prices quite unpredictable. The prospect of a hard border with Ireland still hangs in the air with significant political and social implications. Overall the situation is providing little investor confidence with sterling suffering and gold prices picking up as a result!
Possibly less of global concern (we imagine) but still making headline news in the UK we have the resignation of Boris Johnson (Foreign Secretary) and David Davis (Secretary of State), making 6 front bench departures in the last 12 months for the PM. Both appalled by Theresa May's chequers proposals they left government giving sterling a quick punch down to a 3 week low but it did soon after recover to very little concern for longer term investors. Boris a "champion" of the Brexit squad appears to be filling in his application form for the PM's role for when the inevitable coup reveals itself. With 2 EU negotiators handing in resignations we only hope Dominic Raab takes the reigns and doesn't himself jump ship! Brexit itself appears to be generating more headlines than effects on the economy so far with the FTSE 250 showing good growth from March 2018 onwards. It remains to be seen what the prospect of "No Deal Brexit" or any Brexit at all will look like for the economy. The prospect of Boris running for PM and triggering a general election is making investors wary as this could eat into the Brexit departure timeline even further. Investors stepping back from UK assets generally equals a win for gold price with June showing a high of £951. Most likely this increase is being masked by the strength of the US dollar as we briefly discussed above.
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