March 13, 2019 — 3 min read
In the UK overnight the Prime Minister failed to get her Brexit plan passed through the House of Commons. Theresa May’s plan failed by a significant margin of 149 votes. This now moves the focus to today’s motion in front of parliament on whether or not to rule out a ‘no deal Brexit’.
The Pound initially weakened to the lows of the day on the news however has subsequently recovered – this correction higher can be largely attributed to the market perception that we are now more than likely headed down the Extension to Article 50 route.
Markets are expecting a ‘no deal’ scenario to be ruled out and subsequently an extension sought from the EU.
The focus in the UK today will be Prime Ministers questions at 12:00, Phillip Hammond’s spring statement at 12:45 and then the ‘no deal Brexit’ motion will be placed in front of the House of Commons. Should a ‘no deal’ scenario remain on the table after this afternoon’s vote traders may look to trade out of Sterling – this would see the Pound drop off.
The Euro has been stable as EU leaders have said they have done everything possible to help get a withdrawal agreement over the line and that the situation can only be solved in the UK. They added that their preparations for a ‘no deal’ situation are now more important than ever.
The US Dollar weakened yesterday on lower than expected consumer price inflation numbers being released. Prices rose by just 1.5% on a year-on-year basis in the month of February – another indicator that the FED have made the correct decision to leave interest rates unchanged and a rate hike is unlikely in the months ahead.
The focus in the US session today will be the delayed release of the Durable goods orders statistics for January, giving another good indicator to the state of the American consumer.
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