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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
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