Daily Brexit update: Downing Street full steam ahead for Tuesday

Downing Street has been making it clear that next Tuesday’s ‘meaningful vote’ will go ahead

Daily Brexit update: Downing Street full steam ahead for Tuesday

Downing Street has been making it clear that next Tuesday’s ‘meaningful vote’ will go ahead after a possible postponement was reported. At the same time, loyal MPs have proposed an amendment to the Bill that would enable Parliament to vote on the backstop issue, the most contentious part. The move “won’t cut it”, says the DUP. Plenty of sterling volatility continues to be stoked by a seemingly inexhaustible string of permutations, ahead of Tuesday. Nevertheless, the pound has been constrained in a clear range for three weeks now. For many participants, particularly in sterling, it’s a ‘see you see on Tuesday’ situation.

How this affects our Brexit Top 10 markets:

GBP/USD: Weaker than forecast payrolls just in the rear-view mirror provide context. Yet sterling isn’t benefiting much from the dollar’s latest upset. At $1.2764 just now after a post-payrolls spike to as high as $1.2790, it’s still drifting off the week’s $1.2810 best. Less speculative and more fundamental concerns are taking hold as next week’s seismic vote draws nearer.

GBP/JPY: It’s telling that even sterling’s fastest-moving pair saw its top for the day in the early hours, with barely a spike when supportive flows ought to have appeared after weak U.S. jobs data.

EUR/USD: The euro was able to capitalise vs. dollar on fewer than forecast U.S. jobs. It was returning some of its spike to day highs of $1.1415 at last check, short of Tuesday’s $1.1420 top. Like its pair with sterling and cable, it is ranging rather than progressing.

EUR/GBP: The steadiest sterling pair shows a slight advantage for the pound, though the same conditions prevail as for the biggest sterling market, cable.

UK 100: London’s international market has caught the global ‘risk on’ mood. It has much to do with the size of losses earlier in the week. Most regions still face a down week, though an apparent OPEC breakthrough on supply cuts is adding an element of ‘relief rally’.

Germany 30: Germany’s main market is buoyed for similar reasons that may not have much to do with Brexit on Friday.

Lloyds: The largely static pound and prior negative optics earlier in the week leave Lloyds looking like one of the soberest stocks on Friday with an 18 pence loss. Compare that to Tesco, which rose as much as 5%, leading Europe’s retail sector higher, following a brokerage upgrade.

Barclays: The bounce ahead of Wall Street’s open extends Barclays’ advance given its big exposure to the U.S.

Shell: Shell has a similar tie to the states but trades almost 4% higher mostly on OPEC news.

BP: Iran has agreed to a tentative deal within OPEC whilst other members said they will cut output by 0.8 million barrels a day (bpd). Russia is eyeing a 200,000-bpd reduction.

Join our webinar

On 11th December the UK Parliament will vote on Prime Minister Theresa May’s Brexit deal. Join market analyst Fiona Cincotta at 2:00pm on Tuesday 11th December to look at how the vote could unfold and what the different scenarios could mean for the markets. Register now.


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.