The European market drifted to the holiday break, as thin trading sent the FTSE index slightly lower. This was despite the fact that the index had a stellar year.
The politics, however, moved much faster than the markets. Washington’s ban on visas for EU technology figures sparked a transatlantic conflict over regulation and free speech, while Paris sought to influence Ukraine’s future security.
Secure Trust Bank has announced that it is exiting the troubled auto finance business.
FTSE falls in thin holiday trading
On Wednesday, the FTSE 100 fell by 0.1% as London’s stock exchange closed early to prepare for Christmas.
Taylor Wimpey, Persimmon and other homebuilders each gained 0.5%. Healthcare stocks, however, fell by 0.5%. AstraZeneca, with its 0.7% decline, was the main culprit.
Since the Bank of England cut rates last week, this index has remained stable.
BP, meanwhile, remained flat despite announcing a sale of $6 billion of Castrol lubricants to US company Stonepeak. This was a key part of the $20 billion divestment program.
Many investors stayed away from the market ahead of Easter.
The FTSE 250 only managed a 0.07% increase. The FTSE 100 has risen by a healthy 20.7% over the past year. This is more than the European STOXX 600 or the S&P 500, which both gained 16%.
US-EU tech speech showdown
The Trump Administration imposed visa bans against former EU commissioner Thierry Breton, and four European antidisinformation activists. They were accused of pressuring American platforms to censor social media.
Paris reacted strongly to the statements made by Marco Rubio, Secretary of State. He referred to “radicals” who are working against freedom of speech.
Jean-Noel Barrot, the French foreign minister, condemned the action as an act of intimidation that undermined European sovereignty. He insisted the EU Digital Services Act (which Breton championed) was democratically passed and had no US influence.
Breton called it “McCarthy’s witch-hunt”, noting that the European Parliament had voted 90 percent unanimously in favor of the DSA.
This crackdown shows the deepening tensions between Washington and Europe over technology regulation. The EU has now promised to act “swiftly” and “decisively” in response if Washington does not change course.
France intensifies its Ukraine campaign
The French president Emmanuel Macron discussed Wednesday the Ukraine with NATO Secretary-General Mark Rutte. They also spoke about the “Coalition of the Willing,” France’s effort to create credible security assurances for Kyiv.
Macron said that Paris would intensify its efforts in the French capital starting January, insisting on solid security guarantees as essential for achieving “a robust peace”
It is important to consider the timing: Ukraine has just published a 20-point revised peace plan, demanding EU membership as well as NATO Article 5 security commitments. This amounts to NATO protection even without formal membership.
Macron’s support signals that Europe will not let Washington alone dictate Ukraine’s future post-war.
The January Macron summit is Europe’s effort to secure Ukraine’s safety before any ceasefire agreement gets signed. With Germany increasing its defense spending, and Rutte stating that the situation may worsen by 2027 if Europe does not act quickly.
Secure Trust increases capital ratio
Secure Trust Bank sold its consumer vehicle financing arm, worth $619 million to LCM Partners. This marked the end of a business that was in a state of bleeding.
This deal is a total death sentence for the property. The lender stopped all new loans in July.
After costs, the sale price is a little above PS442.5million book value of the portfolio. This results in a modest gain.
Secure Trust’s capital ratio will increase by 195 basis point to 14.8%. This means that the capital can be used for buybacks. CEO Ian Corfield has indicated the bank “considers” this option pending approval from regulators.
Secure Trust was forced to pay PS21million in commission redresses after the FCA tightened its rules regarding hidden commissions. This ate into their already thin margins.
The post Europe Bulletin: FTSE Slips, US-EU Conflict escalates, Secure Trust’s Big Move may change as new developments unfold.
