In the past week European and global politics, strong US growth data, mixed global macro numbers and eurozone, Chinese and Indian central bank policy have eclipsed Trump-mania. What is perhaps more remarkable is markets’ reasonably benign, “risk-on” reaction, bar the euro’s sell-off in the wake of today’s ECB policy meeting. One interpretation is that markets have become complacent to the risks presented by President Trump’s constellation of pseudo-policies, surging nationalism in Europe, the UK’s uncertain economic future and continued capital outflows from China. I have a somewhat different take, namely that markets are rightly discounting some of the more extreme and perverse scenarios, including: Protectionist US policies coupled with higher US yields and a strong dollar collapsing tepid emerging market, and eventually global, economic growth; The “no” vote in the Italian referendum leading to the economic collapse of the European Union’s third largest economy; Surging European nationalism culminating in the collapse of the eurozone and/or European Union; The British government opting to sacrifice growth in exchange for a hard version of Brexit and; Capital outflows from China ultimately forcing policy-makers into accepting a Renminbi collapse and shocking a corporate sector with significant dollar-debt.

1. 1
Black swans and white doves
In the past week European and global politics, strong US growth data, mixed global macro
numbers and eurozone, Chinese and Indian central bank policy have eclipsed Trump-
mania.
What is perhaps more remarkable is markets’ reasonably benign, “risk-on” reaction, bar
the euro’s sell-off in the wake of today’s ECB policy meeting.
One interpretation is that markets have become complacent to the risks presented by
President Trump’s constellation of pseudo-policies, surging nationalism in Europe, the
UK’s uncertain economic future and continued capital outflows from China.
I have a somewhat different take, namely that markets are rightly discounting some of the
more extreme and perverse scenarios, including:
1. Protectionist US policies coupled with higher US yields and a strong dollar
collapsing tepid emerging market, and eventually global, economic growth;
2. The “no” vote in the Italian referendum leading to the economic collapse of the
European Union’s third largest economy;
3. Surging European nationalism culminating in the collapse of the eurozone and/or
European Union;
4. The British government opting to sacrifice growth in exchange for a hard version of
Brexit and;
5. Capital outflows from China ultimately forcing policy-makers into accepting a
Renminbi collapse and shocking a corporate sector with significant dollar-debt.
Global news, data and events have eclipsed Trump-mania in past week
Donald Trump has enjoyed a near-monopoly on news headlines since being elected President a month
ago. But in the past week European politics, the surprise resignation of New Zealand Prime Minister John
Key and Mexican central bank governor Agustín Carstens – both highly regarded, strong US growth data,
mixed global macro numbers and eurozone, Chinese and Indian central bank policy, have for now eclipsed
Trump-mania (see Figure 9).
What is perhaps more remarkable is markets’ reasonably benign, “risk-on” reaction, bar the euro’s sell-off
in the wake of today’s ECB policy meeting. Emerging market currencies, which had stabilised against the
dollar in late-November, have appreciated in the past week (see Figure 1), global yields have stabilised,
global equities are within touching distance of a two-month high and European markets have on the whole
taken Italy’s “no” referendum result in their stride.

2. 2
Figure 1: Emerging market currencies – off the
floor
Figure 2: Global manufacturing PMI points to
global GDP growth of 3% yoy or more in Q4 2016
Source: investing.com, BIS Source: IMF, national statistics offices
One interpretation is that markets have become complacent to the risks presented by President Trump’s
constellation of pseudo-policies, surging nationalism in Europe, the UK’s uncertain economic future and
continued capital outflows from China which the media has focused on intensively. I have a somewhat
different take, namely that markets are rightly discounting some of the more extreme and perverse
scenarios, including:
1. Protectionist US policies coupled with higher US yields and a strong dollar collapsing tepid
emerging market, and eventually global, economic growth;
2. The “no” vote in the Italian referendum leading to the economic collapse of the European Union’s
third largest economy;
3. Surging European nationalism culminating in the collapse of the eurozone and/or European Union;
4. The British government opting to sacrifice growth in exchange for a hard version of Brexit and;
5. Capital outflows from China ultimately forcing policy-makers into accepting a Renminbi collapse,
which would shock a corporate sector with significant dollar-debt and jilt emerging market asset
prices and global risk appetite (a de-facto repeat of August 2015).
I will explore the first three themes in this research note and return to themes 4 and 5 in my forthcoming
pieces.
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Aug 16 Sep 16 Oct 16 Nov 16 Dec 16
Including CNY, left scale
Excluding CNY
GDP-weighted basket of Emerging Market
currencies vs USD (23 April 2010 = 100)
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Global manufacturing PMI, left scale
Global real GDP, % year-on-year
(IMF methodology)

3. 3
1. Renewed fears of collapse in global economic growth once again overdone
In the past couple of years I have played down the risk of an imminent collapse in global economic growth,
pointing to the reflationary impact of years of monetary easing by the world’s major central banks (see The
global growth story – cause for concern, not panic, 17 December 2014). And indeed global GDP growth
bottomed out in H1 2016 at around 2.8% year-on-year and rebounded to around 2.9% yoy in Q3 2016,
broadly in line with my forecast (see Global central bank easing nearing important inflexion point, 16
September 2016).
Moreover, the latest indicators, including the up-tick in global manufacturing PMI to 52.0 in October-
November from 50.9 in Q3, suggest that global GDP growth may hit or even slightly exceed 3.0% yoy in Q4
2016 (see Figure 2), again broadly line with my expectations (see Be careful what you wish for, 1
November 2016).
Modest rebound in global GDP growth but still some (different) ammunition
This pace of growth is still modest compared to average GDP growth of 3.6% per annum in the past
decade. Moreover, the foundations of global growth could be compromised if, as I expect, developed
central banks refrain from cutting policy rates further and if nationalist and protectionist policies take hold in
the US and globally. However, I think there is a tendency to over-state this dual risk to global growth.
First, bar the US Federal Reserve, developed central banks are unlikely to start tightening monetary policy
any time soon. The ECB’s decision today – a nine-month extension to its QE program until December 2017
with monthly bond purchases of €60bn – is a prime example of a very dovish tapering of central bank
monetary policy. Ultimately the ECB has committed to another €540bn of bond purchases, rather than the
€480bn which analysts had expected (a six-month extension with monthly purchases unchanged at €80bn).
Second, while the room for developed central banks to cut policy rates further and/or extend QE programs
may be limited, a number of emerging central banks will next year likely revisit the possibility of rate cuts.
The Reserve Bank of India left its policy rate unchanged at 6.25% on 7th
December, contrary to analyst
expectation of a 25bp cut. Its decision was in line with my view that “the RBI may stay on hold until market
conditions stabilise" (see Fast and Furious - Market drift, 15 November 2016) but I still see scope for further
rate cuts in India and Indonesia, amongst others, given still high real central bank policy rates.
Third, there is mounting evidence that governments in both developed and emerging economies are willing
and able to loosen fiscal policy in a bid to compensate for the diminishing returns from monetary policy
stimulus. US President Trump has committed to a significant increase in infrastructural spending and
Chinese fixed investment growth, which had slowed over the summer, has picked up in recent months (see
Figure 3). British Chancellor Philip Hammond announced in his mid-year October budget a £14.2bn
increase in capital spending over five years, focussing on science, innovation, digital infrastructure, housing
and transport (see EM currencies, Fed, French elections and UK reflation “lite”, 25 November 2016).

4. 4
Figure 3: Chinese new loans and fixed investment
growth has picked up in recent months
Figure 4: Global trade has been flat-lining year-to-
date
Source: PBoC Source: CPB World Trade Monitor
Trump protectionism – Bark worst than bite
US President Trump’s penchant for protectionist policies and dismantling of international trade agreements
alongside a stronger dollar and rising US yields have understandably fuelled concerns about already
modest growth in emerging markets saddled with dollar-denominated debt. GDP growth remains lacklustre
in some of the largest emerging economies, including Brazil, Russia and South Africa. Moreover, a number
of Non-Japan Asian economies, including Singapore, Thailand and Taiwan, are experiencing a growth
slowdown (see EM currencies, Fed, French elections and UK reflation “lite”, 25 November 2016). The
erection of US trade barriers would undoubtedly act as a headwind to these open economies.
Higher US tariffs and protectionist barriers may eventually, at the margin, stimulate the beleaguered US
manufacturing sector. But there would also likely be a clear cost to the US, at least in the near and
medium-term, and for that reason I ultimately expect Trump’s bark to be worst than his bite.
Greater tariffs would increase the cost of US imports of goods, which in 2015 amounted to $2.3trn or 13%
of GDP, given the difficulty of substituting imported goods for domestically-produced goods in the short-run
(the UK’s recent experience is telling – despite Sterling’s collapse in the past year, the trade deficit on
goods and services has actually widened due to the increase in the value of imports outstripping that of
exports). At the same time it would be naïve to expect the United States’ trading partners not to retaliate
with protectionist measures of their own, putting a brake on US exports worth 8.5% of GDP. The net result
is that global trade, which has flat-lined in the past year according to the CPB (see Figure 4), would likely
go backwards and act as a drag on global growth.
So the price the US would likely have to be willing to pay is more expensive and/or weaker imports, higher
imported inflation and/or weaker domestic consumption, less competitive exports and potentially weaker
global demand for US goods – a tough sell to a consumer brought up on reasonably cheap imports.
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New bank loans (left scale)
Fixed invesment
China - YoY % change in 3-month moving
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Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
World trade
Volumes, seasonally adjusted (2010=100)

5. 5
2. Italian referendum “no” vote – an Italian challenge, not a European disaster
Italian President Matteo Renzi officially tendered his resignation yesterday in the wake of Sunday’s
referendum result but European markets continue to be orderly. Specifically, the euro appreciated versus
the dollar and in nominal effective exchange rate terms in the days following the referendum (see Figure 5),
Italian government bond yields have fallen across the maturity curve (see Figure 6) and the share price of
Italian banks has surged (albeit from historically depressed levels).
Figure 5: Euro stronger post Italian “no”
referendum but losing ground post ECB meeting
Figure 6: Italian yields have tightened versus
bunds
Source: investing.com, ECB Source: investing.com
This is broadly in line with my expectation that “The worst-case-scenario advanced centres on reformist
Prime Minister Renzi’s resignation, the rise to power of the euro-sceptic Five Star Movement (M5S), a jump
in Italian bond yields, the fragile banking sector and economy’s collapse and Italy’s eventual exit from the
eurozone and EU. But the more likely political, financial and economic outcome from a “no” vote is perhaps
less dramatic, in my view […].” (see Renzi referendum frenzy – storm in a broken tea cup, 2 December
2016).
Prime Minister Renzi’s resignation may well usher in a less reform-minded technocratic government, led by
a senior member of Renzi’s ruling Democratic Party, and convince President Mattarella to bring forward to
next year general elections currently pencilled in for May 2018. The populist Five Star Movement (M5S),
led by Beppe Grillo, is currently enjoying 30% support in opinion polls. In the event of early elections it
would likely increase its number of seats in the lower house of parliament from 109, particularly if current
electoral rules remain in place. But the path to the top for M5S and Beppe Grillo may not be as
straightforward as currently assumed, with the Democratic Party still likely to be the largest party in the 630-
seat Chamber of Deputies.
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Euro Nominal Effective
Exchange Rate
EURUSD (right scale)
Euro indices (23 April 2010 = 100)
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01-Dec-16
08-Dec-16
Italy-German government bond yield spread
(basis points)

6. 6
The Italian banking sector, riddled with bad-loans and planning a recapitalisation of its balance-sheet, can
ill afford the negative press a “no” vote brings. But both Italian and eurozone policy-makers have a strong
incentive to shore up Italian banks and the economy, even if posturing may precede an eventual solution.
Finally, while the future of the eurozone and EU has been written off many times, I don’t envisage Italy
being the trigger for a break-up of either.
3. Rising nationalism in Europe is wake-up call, not a revolution
Only tell time will tell whether and how fast nationalist parties in Western Europe rise to the upper echelons
of power, but I would argue that there is currently a tendency to over-estimate their reach and certainly their
ability to dismantle the eurozone and/or EU. Put differently, by end-2018, the political landscape in West
Europe may not have changed as dramatically as commentators anticipate, with the traditional old guard
still largely in place, including in Germany, France, Sweden and Austria.
European nationalism riding a powerful wave
There is little doubt that nationalism and populist parties have been in the ascendancy in Western Europe
in recent years1
. They have performed well in EU Parliamentary elections, in regional elections (e.g. Front
National in France) and State elections (e.g. Alternative for Germany) and their ratings are going up in
opinion polls. In Greece, where the economic dislocation has been the greatest, the Coalition of the Radical
Left (Syriza) is already in power (see Figure 7). In Finland, the Finnish Party is a member of a three-party
ruling coalition and in Denmark the Danish People's Party officially supports the three-party coalition which
gives it a degree of indirect influence.
Left-wing and right-wing nationalist parties are more effectively channelling popular discontent against the
political and status quo and increasingly influencing the direction of domestic policy. As a result, traditional
centrist or right-leaning parties have had little choice but to take this message on board in order to remain
politically relevant and increase their chances of re-election. For example, the ruling Conservative Party in
the UK has partly assimilated the anti-immigration rhetoric which is a cornerstone of the nationalist UK
Independence Party (UKIP). The Republican candidate for next year’s French presidential elections,
François Fillon, has traditionally adopted a conservative social and economic stance but has more recently
incorporated a more nationalist bias. Even German Chancellor Merkel has had to backtrack on her pledge
to allow up to one million immigrants per annum into Germany.
Moreover, Trump's victory in the November US presidential elections and the British electorate’s vote in
June in favour of the UK leaving the EU have clearly reinvigorated nationalist parties and their belief that
they can tap voters which have historically supported more traditional parties and politicians.
1 Admittedly the characteristics which define a party as nationalist and/or populist and left-wing or right-wing are
somewhat subjective, with some parties (e.g. Five Star Movement in Italy) rejecting such labelling.

7. 7
Figure 7: Nationalist parties in Western Europe – current state of play
Source: National parliaments; Note: Nationalist parties in central and EasternEurope and in a number of smaller West
European countries (including Belgium) are excluded. Some of the smaller nationalist parties are also excluded.
Country % of EU
GDP
Nationalist
Party
Bias Leader Current seats in lower
house of parliament
Next parliamentary
elections
Presidency Note
Germany 20.4 Alternative for
Germany
Right-wing Frauke Petry &
Jörg Meuthen
No seats in 630-seat
Bundestag but represented in
10 of the 16 German state
parliaments.
Not applicable
National
Democratic Party
of Germany
Right-wing Frank Franz No seats in Bundestag or
state parliaments
UK 15.5 United Kingdom
Independence
Party (UKIP)
Right-wing 1 out of 650 seats (0.15%) in
House of Commons
No later than May 2020.
First-past-the-post
electoral system likely to
keep number of UKIP
seats very low
Not applicable
France 14.5 Front National Right-wing Marine Le Pen 2 out of 577 seats (0.35%) in
Assemblée Nationale
June 2017, over two
rounds. Front National
party expected to make
sizeable gains from 2
seats it currently holds
Le Pen very unlikely to
become President in
April-May elections.
Italy 10.8 Five Star
Movement (M5S)
Populist Beppe Grillo 109 out of 630 seats (17.3%)
in Chamber of Deputies
Elections due in
January 2022
Lega Nord Regionalist Matteo Salvini 18 out of 630 seats (2.9%)
Brothers of Italy Nationalist /
conservatism
Giorgia Meloni 9 out of 630 seats (1.4%)
Spain 7.3 Podemos Left-wing Pablo Iglesias Podemos, part of a left-wing
alliance, has 67 of 350 seats
(19.1%) in Congress of
Deputies
No later than 26 July
2020
Not applicable
Netherlands 4.5 Freedom Party Right-wing Geert Wilders 12 out of 150 seats (8%) in
House of Representatives
15 March 2017. Based
on latest polls Freedom
Party would win 33 seats
to become largest party
and Wilders prime
minister
Not applicable
Sweden 3.0 Swedish
Democrats
Right-wing Mattias
Karlsson
48 out of 349 seats (13.8%)
in Riksdag
No later than 9 Sept
2018. SD currently
polling third with around
20% which under
proportional
representation system
would give it about 70
seats.
Not applicable Unicameral
legislature (no
upper house)
Austria 2.3 Freedom Party Right-wing Norbert Hofer 40 out of 183 seats (21.9%)
in National Council
No later than Oct 2018 Hofer lost to
independent A. Van
der Bellen in
presidential elections
on 4 Dec 2016
Norway 2.2 Democrats in
Norway
Right-wing Vidar Kleppe No seats in 169-seat Storting 11-Sep-17 Not applicable
Denmark 1.8 Danish People's
Party
Right-wing 37 out of 179 seats (20.7%)
in Folketing. Party officially
supports the three-party
ruling coalition
No later than 17 June
2019
Not applicable Unicameral
legislature (no
upper house)
Finland 1.4 Finns Party Conservative/
populist
Timo Soini 37 out of 200 seats (18.5%)
in Eduskunta. Member of
three-party ruling coalition
April 2019 Sauli Niinistö Unicameral
legislature (no
upper house)
Portugal 1.2 National
Renovator Party
Right-wing José Pinto
Coelho
No seats in 230-seat
Assembly of the Republic
No later than 13 Oct
2019
Marcelo Rebelo de
Sousa
Greece 1.1 Coalition of the
Radical Left
(Syriza)
Left-wing Alexis Tsipras
(Prime
Minister)
144 of 300 seats (48%) in
Hellenic Parliament
No later than 20 Oct
2019
Prokopis Pavlopoulos,
mostly ceremonial role
Golden Dawn Right-wing Nikolaos
Michaloliakos
18 of 300 seats (6%)
No later than 23 May
2018. Possibility of
President Mattarella
calling early elections.
Unicameral
legislature (no
upper house).
Between 27 Aug and 22
Oct 2017. AfG expected
to clear 5% threshold
and gain a handful of
seats

8. 8
Influence is not the same as true power
But, beyond Greece and Finland, which account for only 2.5% of the European Union’s GDP, nationalist
parties in Western Europe are still in opposition and often have only a small share of parliamentary seats
(see Figure 8). Ultimately they will only be able to shape the future of their countries and potentially the
eurozone and/or EU if they have true power, by holding a parliamentary majority, the presidency or both.
Even Syriza is seven seats short of a parliamentary majority while the Finnish Party only has 37 out of 200
seats in the Eduskunta. In other West European countries, no nationalist party currently has more than
22% of the seats in their lower houses of parliament. In Germany, UK and France, which in aggregate
account for half of the EU’s GDP – nationalist parties currently have only 3 seats out of 1,857 in the three
lower houses of parliament. In Germany and Sweden, nationalist parties are still very much fringe political
forces with no state-level representation and only modest regional-level representation. Moreover, none of
the nationalist parties in Western Europe currently occupy the presidency. The Austrian Freedom Party’s
candidate, Norbert Hofer, got close but lost last weekend’s presidential elections.
Figure 8: Majority of West European nationalist parties only have modest number of seats in parliament
Source: National parliaments
Note: Nationalist parties in central and EasternEurope and in a number of smaller West European countries (including
Belgium) are excluded. Some of the smaller nationalist parties are also excluded. * NDP: National Democratic Party of
Germany; ** National Renovator Party; *** Finns Party member of 3-party ruling coalition; **** Syriza is ruling party.
0
10
20
30
40
50
60 Nationalist parties - Current share of seats in lower house of parliament (%)
(red denotes party in power)

9. 9
The seemingly broad-based assumption is that these parties will ultimately gain power and lead the
dissolution of the eurozone and/or the European Union. Nationalist parties will admittedly in all likelihood
increase their number of seats at elections for the lower houses of parliament in 2017-2018 in the
Netherlands, France, Germany, Italy, Sweden and Austria.
Nationalist parties will grow stronger but may struggle to become major political forces
However, based on recent polls, these parties, with the exception of the Freedom Party in Austria and
potentially the Five Star Movement in Italy, are very unlikely to win the largest number of seats let alone
secure parliamentary majorities. For example, Alternative for Germany is a minor political force and while
its anti-immigration policies are starting to resonate, it does not present a credible challenge to the
incumbent CDU-CSU coalition and Chancellor Merkel. At best, some of these European nationalist parties
may govern as part of broader coalitions and thus have to potentially dilute their more extreme policies.
There are number of reasons why these nationalist parties may struggle to become the major political
force. First, in many countries the electoral voting systems for the lower houses of parliament include
thresholds and multiple rounds of voting which work against these smaller parties securing a significant
number of seats.
Second, many of these smaller nationalist parties still do not have the political infrastructure in place at a
national level, financing or depth of personnel to effectively challenge the bigger parties. The messy and
reputation-sapping election of the relatively unknown Paul Nuttall as UKIP leader, following Nigel Farage’s
recent resignation, is a point in hand.
Third, voters are clearly rebelling against well-entrenched political players but may not always have fresh
faces to elect. In the US they elected an untested businessman with no political experience as President
and in Italy the increasingly popular leader of M5S, Beppe Grillo, is a former comedian. However, in France
for example, the two candidates most likely to compete in the second round of the French Presidential
elections next May are François Fillon – the Republican’s candidate and a former Prime Minister – and
Marine Le Pen who joined the Front National 30 years ago. They are both old-school politicians who do not
present a true break with the past.
Fourth, traditional centrist and centre-right parties are adapting to the new political, social and economic
realities which they face and are unlikely to go down without a fight. They will have also learnt valuable
lessons in the past 18 months, including the risk of calling a referendum. The demise of British Prime
Minister Cameron and Italian Prime Minister Renzi following unsuccessful referendums will likely have
made other EU leaders fearful of going down a similar route or of calling early elections. In particular, the
ruling Conservative Party’s loss in the recent Richmond by-election has likely reduced the probability of
Prime Minister Theresa May pushing for general elections, due in 2020, to be brought forward.
Finally, while electorates are clearly using their votes to express their dissatisfaction with the economic and
political status quo, there are still lines they seem unwilling to cross – namely the appointment of extreme-
right candidates to the highest echelons of power (the recent Austrian presidential election is a good
example). Europe’s history arguably acts as stark reminder of the implications of electing a far-right leader.

10. 10
Similarly, leaders of nationalist parties are still very unlikely to win presidential elections. Specifically, Front
National leader Marine Le Pen would most likely lose a head-to-head vote against François Fillon in the
French presidential elections, assuming she even made it to the second round. As I argued in EM
currencies, Fed, French elections and UK reflation “lite” (25 November 2016) it is probably too early to rule
out the winner of the Socialist Party primaries, most likely Prime Minister Manuel Valls, making it to the
second round of the elections ahead of Le Pen. While the Socialist Party is clearly in disarray, Valls is more
popular than President Hollande who ruled himself out as a candidate for the presidential elections.
Figure 9: Focus has shifted from Trump to European politics, global data and central bank policy decisions
Source: National parliaments and statistical offices, Markit,European Central Bank, Reserve Bank of India
01-Dec-2016 Global Global manufacturing PMI Inches higher to 52.1 from 52.0 in October
01-Dec-2016 US November manufacturing ISM Jumps to 52.3 from 51.9 in October
01-Dec-2016 Mexico
01-Dec-2017 France
02-Dec-2016 US November labour market data Unemployment rate falls to 4.6% from 4.9% in October and
non-farm payrolls increase by 178,000
04-Dec-2017 Italy Constitutional referendum Victory of "no" note, Matteo Renzi announces resignation
04-Dec-2017 Austria Re-run of second (and final)
round of presidential elections
Freedom Party of Austria candidate Norbert Hofer loses to
Independent/Green Party candidate Alexander Van der
Bellen.
05-Dec-2016 Global November composite PMI Unchanged at 53.3
05-Dec-2016 NZ
05-Dec-2016 US November non-manufacturing
ISM
Jumps to 57.2 from 54.8 in October
5-8 Dec 2016 UK
07-Dec-2016 India Reserve Bank of India (RBI)
policy meeting
RBI leaves policy rate unchanged at 6.25%, contrary to
analyst expectations but in line with my forecast.
07-Dec-2016 Australia Q3 2016 GDP data GDP contracts 0.5% quarter-on-quarter, the first quarterly
contraction in more than 5 years
07-Dec-2016 China November central bank FX
reserves
Central bank FX reserves fell $70bn to $3.05trn, or about
$50bn accounting for estimated FX-valuation effects.
07-Dec-2016 UK October industrial output Industrial output falls 1.3% mom - largest monthly drop in
four years - and manufacturing output falls 0.9% mom
07-Dec-2016 UK
Supreme Court to consider government appeal of High Court's ruling that Parliament, not
government, should trigger Article 50
The well-regarded and experienced Central Bank Governor Augustin Carstens, who held the
post since 2010, announces he will step down in July 2017 to head up BIS
President Francois Hollande announces that he will not be in a candidate for the April-May
2017 French presidential elections
The well-regarded and experienced Prime Minister John Key surprises markets by announcing
that he will step down as of 12 December
Lower house of parliament (House of Commons) votes overwhelmingly in non-binding vote to
trigger Article 50 by 31 March 2017, as per the Prime Minister Theresa May's self-imposed
deadline, in exchange for the government agreeing to publish details of the government's plan
for leaving the EU by 31 March 2017. Government also agrees in principle to parliament voting
on the new terms and conditions of the UK's relationship with the EU.