European Commission President Jean-Claude Juncker and UK Prime Minister Theresa May held “constructive” talks in Brussels yesterday. According to a joint statement, they discussed the guarantees that could be give to underline once again that the Irish backstop’s “temporary nature”. And the “role alternative arrangement” could play in “replacing the backstop” in future. Also, additions or changes to the Political Declaration could be made to “increase confidence in the focus and ambition of both sides in delivering the future partnership envisaged as soon as possible.” EU Chief Negotiator Michel Barnier and UK Secretary of State Stephen Barclay will follow up and progress will be reviewed in the coming days.
May said after meeting with Juncker that “I have underlined the need for us to see legally binding changes to the backstop that ensure that it cannot be indefinite. That’s what is required if a deal is to pass the House of Commons. We have agreed that work to find a solution will continue at pace. Time is of the essence and it is in both our interests that when the UK leaves the EU it does so in an orderly way. So, we have made progress.”
Japan PMI manufacturing dropped to 48.5, chance of recession in 2019 rises
Japan PMI manufacturing PMI dropped to 48.5 in February, down from 50.3. That’s the lowest level in 32 months and the first contraction reading since 2016. Markit noted that “deterioration in manufacturing sector reflects stronger falls in production and new orders.” Also, “future output expectations turn negative for the first time since November 2012.”
Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said:
“Survey data for Japan’s manufacturing sector ebbed into negative territory in February, reflecting sharper reductions in demand and production. Although the initial Q4 estimate revealed a bounce back in economic activity, the PMI suggests underlying business conditions are unfavourable. This was further highlighted by output expectations turning negative for the first time in over six years, which comes as no surprise given the international headwinds Japanese manufacturers are facing such as a China slowdown and the global trade cycle losing further steam. Unless service sector activity can offset manufacturing weakness, the chance of Japan entering a recession in 2019 looks set to rise.”
Full release here.