Daily Brexit update: Possible Brexit vote delay alert
Could Theresa May do another Theresa May? Could the Prime Minister delay the ‘meaningful vote’ she promised Parliament for a second time, or the third, including an earlier ‘meaningful vote that was initially set for December but in the end took place at the end of January? Sterling is at a one-week low. The rate is pressured as much by concerns that the farcical overtones across British politics a few weeks ago could return, as much as by the implication of a Brexit possibly delayed or made more chaotic. The Attorney General’s dulcet tones and palpable erudition, on show in recent parliamentary appearances, has failed to win over senior EU officials and he has come away with no breakthrough, so far. (Talks will resume into the weekend.) Hence the speculation that the Prime Minister might repeat the gambit seen the last time on a prior occasion that her Brexit deal faced a ‘no’ vote. If a similar thing happens on or before the mooted next date of 12th March, it is clear the level of market optimism and relaxedness that followed Downing St. signalling no-deal was not an acceptable outcome, could be eroded.
Tariffs—a concern with obvious resonance outside of the Brexit saga—have also exercised both the news columns and the lobby on Wednesday, though to less market effect. MPs from both main parties are demanding that the government publishes plans for import tariffs in the event of Britain leaving the EU without a deal. And they want them before 12th March. The tariff angst is another reminder that uncertainty will remain plentiful and clarity will be sparse, regardless of whether votes planned for next week go ahead or not.
How this affects our Brexit Top markets:
GBP/USD: Sterling’s descent is approaching the 38.2% marker of its January-late-February sprint. In other words, the drift of 7-month highs could soon reach a ‘normal’ span. Will it exceed it? If it does, it will be the clearest signal yet that participants are retreating from more sure-footed positions seen during January and February. $1.3028 is a support to watch, though the 100-hour moving average (last at $1.3148) has notably cradled the rate so far in the U.S. session.
GBP/JPY: Off the 148.56 4-month peak from last week, downward progression has not been alarming. It may become more so, under Tuesday’s 146.59 low.
EUR/USD: ECB-focused euro is still trapped between $1.12 to $1.15 for a sixth month. It was last hovering near intermediate support at $1.1310.
EUR/GBP: Two weak EU currencies make for slow action, though bouts of euro ascendance in the pair underscore the pessimistic sterling phase. The rate was up 36 pips just now at 86.13p.
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