Daily Brexit update: On the road again
Brexit is but a truck stop away but exactly what will happen in 12 weeks’ time when Britain is no longer part of the European Union remains unclear. On Monday, the government looks to have partly made good on its promise to hold the ‘meaningful’ parliamentary vote in the week beginning 14th January. Citing sources, the BBC reported the motion would happen on Tuesday 15th. Since the vote was dramatically postponed last month though, there have been no discernible signs that vehement House of Commons opposition to the Withdrawal Bill has shifted in Downing Street’s favour. As such, it’s little surprise that the government’s latest efforts to demonstrate readiness for the worst outcome after 29th March have been lambasted. Westminster’s ‘war game’ involved a convoy of some 90 lorries being driven through the south east. Critics, among them, the Road Haulage Association, said the trial was too little too late.
How this affects our Brexit Top 10 markets:
GBP/USD: As seen during much of late last year, sterling is being supported by everything but Brexit planning. A big rebound in risk appetite that began last week after comments by the Federal Reserve chair Jerome Powell notably kept the dollar under pressure to the benefit of sterling, among other major currencies. Still, don’t knock the removal of greenback pressure. It accounts for most of GBP/USD’s circa 3% rise from 2nd January lows…right into highs near $1.2775 notched earlier on that day. Sterling is now faltering at them again.
GBP/JPY: The yen, like all safe havens, has been on the back foot since Friday. Sterling’s sizeable three-session surge to ¥138.8 faces a challenge at the psychological ¥140. The rate staged a failed reversal there at the end of last month.
EUR/USD: The euro has also been unleashed against the dollar. At $1.148 it is close to a 2nd January hourly top of $1.1497.
EUR/GBP: Yet sterling at least gives the appearance of outright strength, rising as much as 40 pips on Monday to 89.90p. Early 90s remain obdurate resistance.
UK 100: Non-Brexit related pressure on heavyweight shares stymied the UK benchmark’s participation in a risk rally at the start of the week.
Germany 30: Germany’s top-tier market was afflicted by a dynamic similar to the FTSE’s.
Lloyds: A major brokerage upgraded the stock, lifting it 1%.
Barclays: Broad ‘risk-on’ equated to a moderate gain for Britain’s more international large bank.
Shell: A flat close after a 6.5% run higher in six days.
BP: No.2 Oil Major, which also closed unchanged, has advanced even more than its rival. Since a bottom on 27th December it has notched a run higher of about 8%.
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