Why Brexit talks are heading for a crisis, and what this will mean for the market?

Given that British Prime Minister Theresa May has revealed a deadline of March 9th, 2019 for the conclusion of Brexit talks, you'd think that the negotiations would have progressed further even at this tentative stage.

Not only has progress been painfully slow, however, but negotiations between the UK and the EU could be about to reach crisis point. This is due to the thorny issue of the Irish border, which continues to divide opinion and could well ensure that the discussions between both parties grind to a total halt.

In this article, we'll consider whether or not this point of negotiation can be amicably resolved while appraising the impact that it's likely to have on the financial markets.

What's the issue with the Irish border?

Not only is the UK leaving the single market when it exits the EU, but it's also proposing to depart from the customs union. Given this, and with Ireland remaining a fully fledged European member state, the Union is insisting that some kind of physical border must exist between this nation and Northern Ireland.

Read more: Why Brexit talks are heading for a crisis

What is Leverage? Risks and benefits

Every Forex trader knows that leverage is an inevitable part of trading processes. Actually, it is one of the most important terms in Forex trading. It is what allows you to trade with a much smaller amount of capital than you would need otherwise.

How does it all happen? What is the meaning of leverage and what are its risks? In this article, we will try to give you the answers to these questions. Let’s begin with the basics. 

What is leverage?

Let’s simply explain this: when you invest money to expand the profit, you can make more money using borrowed ones. In this case, the financial leverage can serve as borrowed money in order to get a higher return on your investment. You can use leverage to buy more assets or invest in more profitable ventures.

Leverage in the Forex market

In Forex trading, leverage is a very common concept. Traders borrow money from a broker in order to trade a larger position in a currency. Instead, a broker will want a percentage of the notional value of the trade to be held in your Forex account as cash, which is called the initial margin.

When the currency moves in the right direction, this can result in increased profits. However, leverage also magnifies losses, so it is important that traders know how to use it wisely and manage their risks. 

Leverage is expressed as a ratio and it can be used to buy more currency units with the same amount of deposit.

Read more: Trading Leverage

Dow Jones Industrials becomes active for the year

U.S. crude oil price is at $40 per barrel for the first time since December while other commodities also grow

US Markets become active

The Dow Jones Industrial Average became active for 2016, and U.S. crude oil increased above $40 per barrel, recovering after a severe beginning of 2016.

Earlier this year, investors expressed perplexity about slowing worldwide growth and the changes in interest rates in the last weeks as commodity prices became stable and the American economy showed good signs.

The Dow Industrials and S&P 500 are currently about their 2015 year-end level while they had decreased by more than 10% by February 11.

“You begin to take the recession risk off the table, you will see how the market reacts, and I believe that’s what it was,” said Lew Piantedosi from Eaton Vance.

The Dow went up by 0.9% to 17481.49, making it 0.3% increase this year. The S&P 500 grew 0.7% to 2040.59. The index is 0.2% lower in 2016. The Nasdaq Composite increased by 0.2% to 4774.99, but it still dropped 4.6% this year.

U.S. futures for crude oil went up 4.5% to $40.20 per barrel while the dollar fell and main oil producers showed a high position to freeze production.

General Electric made the Dow Industrials increase by 2.6% to $30.96.

Industrial shares were one of the biggest reasons for growth in the S&P 500 on Thursday, growing by more than 2%.

FedEx was the company that increased the most in the S&P 500, gaining 12%, to 161.34 as the company announced earning higher than expected with positive forecasts.

Read more: Dow Jones Industrials becomes active for the year