Free Forex masterclass
Kick start your Forex trading. Join our webinar on 30th April.
Market News & Analysis
Daily Brexit update: ‘Hold your nerves’…and keep waiting
Ken Odeluga February 13, 2019 1:25 AM
Daily Brexit update: ‘Hold your nerves’… and keep waiting
Theresa May continues to add dates to the Brexit calendar at a faster pace than progress on her key action points. Tuesday’s statement in the Commons, predictably, offered no fresh news about discussions with Brussels with which the government is at an impasse, or concrete initiatives to break another stalemate between the Prime Minister and Parliament. But we do have lots of dates. Wednesday 13th is the PM’s hypothetical deadline for returning to the House to inform MPs of changes secured from the EU on the Northern Ireland backstop. Since doing that has definitely turned out differently in practice than in theory, May’s conditional Valentine’s Day date for a further Commons debate is set to kick in. The PM had initially promised another round of votes on Thursday, but these will almost certainly not happen anymore after Downing Street noted it was "clear that discussions with the EU will need a little more time” to conclude. May set another conditional date of 27th February to debate and vote on Brexit deal amendments, if her progress report a day earlier is as light as Tuesday
Meanwhile, Prime Minister Theresa May wants MPs to ‘hold their nerves’, denying that the government is merely running the clock down to 29th March even though substantive talks on changes to the backstop have yet to begin. With Downing Street continuing to insist that there will be no Brexit delay, sterling has volatility has been rising again over the last few sessions. Against the dollar, the pound notched a 3-week low before bouncing as much as 65 pips almost back to $1.29, shortly after Bank of England governor Mark Carney made similar comments to those in his press conference last week, expecting “modest tightening” might be required if current economic expansion continued. The governor has noted on numerous occasions that the key condition for such expansion is some sort of orderly Brexit. There are 45 days to go.
How this affects our Brexit Top 10 markets:
GBP/USD: The rebound got as far as $1.2883 resistance that echoes failure highs from Monday. Below here, a return to the $1.2830 low looks logical.
GBP/JPY: Back under the long-standing pivot of 142.75, though three 142.80-ish lows point to stability.
EUR/USD: Range, range, and more range. A possible extension to the downside below $1.13 ($1.1254) looks false now with the euro on a solid 40-pip bounce. The top remains a little above $1.15.
EURGBP: Euro in control here too for a second straight daily rise that could be eyeing a 5th February top of 88.21.
UK 100: A flimsy gain of less than 0.1% whilst global markets rally more definitively on trade deal hopes. Big drops by consumer shares like Sainsbury’s and Tui, the struggling tourism firm, weigh.
Germany 30: One of the most solid sessions for some time lifts the DAX 1%.
Lloyds: Lloyds rises almost in line with the market, adding 0.4%.
Barclays: The overseas-facing bank catches more global tailwind, rising 0.7%
Tesco: A 0.7% drop partly with an eye to Sainsbury’s. The takeover regulator has extended the deadline for scrutinising the latter’s bid for Asda.Barratt: Renewed Brexit jitters need to go somewhere in the equity market. After rising over 20% for the year so far by last week, the biggest housebuilder’s shares were primed for a trim
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.