GBP: Parliament says ‘No’ seven times
No single Brexit plan – not the PM’s nor any alternative – put to the Commons yesterday has a majority against lawmakers. While votes for a Customs Union or a public vote on the terms of our exit both gained more votes than the PM’s plan did last time around, there is no guarantee that MPs will vote that way again.
The ball is now back in the government’s court and we must now wait to see whether No.10 calls for another vote on the PM’s deal this week. The agreement with the EU was that the Commons needed to vote on her plan at some point this week with a positive vote giving the UK an extension until May 22nd and a negative vote leaving April 12th as the UK’s exit date.
No meaningful vote this week takes an extension to May 22nd off the table and further increases the chance that we, mistakenly and misguidedly, tip over the cliff-edge into a no-deal on April 12th.
The lack of a deal also heightens the risk of a general election, something for which Brussels would be more than happy to allow a longer extension to the Article 50 process.
Sterling is lower this morning courtesy of that heightened no-deal and electoral risk and will be watching Downing St and Northern Ireland to see whether the intransigent DUP are offered enough to back the PM’s deal. If the DUP come on board then May is a lot closer to a majority, although there are still around 55 Conservative MPs who stand opposed to her deal.
I would not be surprised if she spins the roulette wheel again tomorrow and once again while hoping for a black, the parliamentary ball ends up on a red. If that fails, then we’re depending on something dragging us away from a no-deal exit on April 12th and to me, the only thing that does that is a general election.
USD: US GDP could fall on weaker consumers
A revised reading of US GDP is set to be released this afternoon, confirming the level of US trend growth around the 2% figure. We will be watching to see whether some weaker consumer confidence numbers have seen the consumer spending element of the report lower.
Reuters is reporting this morning that the US and China have made progress in all areas under discussion in trade talks, including forced technology transfer, but that sticking points remain. This differs little from previous leaks from the talks but we have to remain guarded about any agreement on valuation or volatility in the Chinese yuan – we can’t see that happening at all.
NZD: Confidence falls and speech could hurt kiwi further
Once again, we will be watching New Zealand data overnight. Last night’s consumer and business confidence numbers fell by more than expected and tonight a speech by Reserve Bank of New Zealand Governor Orr may be enough to increase the pressure on the Kiwi dollar following Wednesday’s surprise dovishness in the central bank’s statement.
Have a great day.