Daily Brexit update: No “shafting” please

No one is getting “shafted” by Theresa May, the Prime Minister says


Daily Brexit update: No “shafting” please

No one is getting “shafted” by Theresa May, the Prime Minister said on Tuesday afternoon. She has an indisputable point. The continuing layer of uncertainty about what Downing Street’s strategy actually is logically means no-one is getting anything, for now at least. Largely as expected, a trip to speak in in Northern Ireland has so far yielded no fresh developments, though at least some headlines. Ironically, the most important news concerns plans for events away from the region, with the long-awaited announcement that May will return to Brussels on Thursday. Despite that, the standing ‘no’ from the EU to more negotiations on the N. Ireland backstops, is still, doing just that. In case anyone has any doubts though, here’s chief negotiator Michel Barnier, on Monday: “What we have negotiated is the best that can be achieved”, and, regarding possible time limits for the backstop “such reassurances cannot be time limited”. So, good luck negotiating. Still, political will is beginning to be displayed in some quarters, mostly due to the low appetite for no-deal both there and here. Germany’s Angela Merkel, called for a creative solution to the deadlock, saying “there is still time." And if not, the resigned admission that Brexit might well have to be delayed is being expressed more and more openly across political lines in Brussels and London. The market’s disengagement is becoming more and more palpable.

How this affects our Brexit Top 10 markets:

GBP/USD: The day for sterling traders has been more about a near unbroken string of soft official data and economic indicators, even if Brexit is an underlying factor. The latest miss was a services PMI print. The effect was a confirmation of cable’s falling trend since last week’s three-month top. The $1.30 handle is toast for now after $1.3009 corroborated support gave way. A $1.2929 floor from earlier in January has broken the fall as steeply oversold short-term oscillators attract interest but the rate still looks heavy.

GBP/JPY: The strongest yen move against majors on Tuesday, with an 85 sen drop for the pair eyeing hourly swing lows of 142.72 from Friday.

EUR/USD: Another set of ‘reality check’ data pushes the euro through another presumed support. Below $1.14 little is in the path before $1.137s.

EUR/GBP: Here sterling rallies, hitting resistance at 88.13p.

UK 100: BP’s unsurpassed quarter helps boost the benchmark to its best day for weeks with a 2% rise.

Germany 30: It’s a more bullish session more broadly, lifting the DAX 1.7%

Lloyds: Lloyds, often a cleaner insight on Brexit sentiment, rose 0.4%.

Barclays: More-global Barclays added 1.3%.

Tesco: The retailer rose 2%. The latest read on big supermarkets’ market share was not an abject disaster.

Barratt Developments: Caution ahead of the group’s update tomorrow capped the shares despite the FTSE’s rise. It closed 0.2% lower.


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.