The FTSE is searching for direction this morning, stopping and starting at the beginning of a yet another week of Brexit uncertainty.
On Saturday MPs voted to withhold approval for the Prime Minister’s Brexit deal forcing him to write to Brussels to ask for an extension of the October 31 deadline. Brussels was probably left speechless given that this letter was followed up by two more in which the PM told the EU he is actually against the delay.
Brussels’ confusion aside, the main Brexit stage will be back in Parliament today as Boris Johnson asks MPs to vote on his deal. As Theresa May put it in a debate: “I have a distinct sense of déjà vu here.”
Investors seem increasingly confident that despite the outcome of today’s vote a messy Brexit will be avoided. The new optimism has spilled both into the currency market and the debt market with the pound initially slipping after London markets opened but gradually firming to break above $1.30, a level last seen in May. UK government bond yields have also bounced to reflect the new level of investors’ confidence.
Banking shares rally as pound bounces
The FTSE is trading nearly flat, weighed down by a 10% decline in Prudential which has proceeded with its plans to demerge its M&G business. As the pound dipped and then firmed, banking shares attracted the most volume, with the Royal Bank of Scotland and Lloyds comfortably in the lead. In contrast, oil firms are under pressure, reacting to a slight dip in oil prices and more concerns about the Chinese economy.
On Saturday MPs voted to withhold approval for the Prime Minister’s Brexit deal forcing him to write to Brussels to ask for an extension of the October 31 deadline. Brussels was probably left speechless given that this letter was followed up by two more in which the PM told the EU he is actually against the delay.
Brussels’ confusion aside, the main Brexit stage will be back in Parliament today as Boris Johnson asks MPs to vote on his deal. As Theresa May put it in a debate: “I have a distinct sense of déjà vu here.”
Investors seem increasingly confident that despite the outcome of today’s vote a messy Brexit will be avoided. The new optimism has spilled both into the currency market and the debt market with the pound initially slipping after London markets opened but gradually firming to break above $1.30, a level last seen in May. UK government bond yields have also bounced to reflect the new level of investors’ confidence.
Banking shares rally as pound bounces
The FTSE is trading nearly flat, weighed down by a 10% decline in Prudential which has proceeded with its plans to demerge its M&G business. As the pound dipped and then firmed, banking shares attracted the most volume, with the Royal Bank of Scotland and Lloyds comfortably in the lead. In contrast, oil firms are under pressure, reacting to a slight dip in oil prices and more concerns about the Chinese economy.
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