The pun above was simply too good to miss. Musing upon its formation ahead of May’s speech before the House of Commons this afternoon its brilliance seemed surpassed only by its malleability and simplicity. Perhaps a pun on the gift giving on one’s day of birth should May’s speech have been a triumphant suggest; otherwise a patriotic reminder of the landing on the beaches of Normandy should the performance have stood the chance of changing the course of European history; upon the maturity of an unspeakable shambles, it could even be a pun on a plumbing fixture commonplace in continental Europe used to clean one’s… see Wikipedia for the rest. Despite the brilliant malleable simplicity of the pun, having watched May’s speech closely, none of the three interpretations appear appropriate!
Certainly, as is clear from the foreign exchange market, May’s deal cannot be considered a path defining moment in the future of Britain’s relationship with Europe – these events normally invite a shift of more than 0.5% in the exchange rate! Sadly, neither might it be considered a gift to parliament nor the Commons’ reaction a birthday-like reward to Mrs May! Much to the disappointment of my title, even the greatest sceptics of May’s performance this afternoon would not have condemned her words to the status of… See above.
Enough fun. What did May really offer? Well first off, to the immediate disappointment of markets, she ruled out delaying Brexit negotiations seemingly putting a lid on the market-friendly suggestion that Article 50 be delayed. Counterbalancing this disappointing news, May quickly followed up by extending Parliament’s right to have a greater say in the future UK-EU trade deal. Overwhelmingly, however, from where I’m sitting, Plan B is Plan A with its fingers crossed even tighter. As a Conservative pro-second referendum Member of Parliament stated on Twitter, “It’s like last week’s vote never happened”.
MPs and markets now have a week in order to digest the PM’s statement before voting on what will materialise as an overwhelmingly neutral motion. The Pound immediately tried to test the lower bound of today’s trading range, however, finding limited support and encouraged by the inclusion of Parliament in the final vote, the Pound rose to test and struggle to break 1.29. From the looks of things, this rate will not survive tomorrow unless something tangible is found to support the largely technical move – sell the Pound fast?
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – A revised 2024
Charles Porter
Thu 21 Sep 2023
A revised 2024 The Dollar opens stronger this morning following the Federal Reserve’s decision last night. The decision confirmed interest rates were to stay on hold following this meeting. As we have highlighted following previous decisions, the forward guidance offered by the Chair Jay Powell was once again underwhelming. However, the Dollar’s bid this morning […]
Morning Brief – OECD
Humphrey Percy
Wed 20 Sep 2023
OECD Those fun loving folk at the Organisation for Economic and Cultural Development are at it again by forecasting that the UK will in 2023 stand at the very top of the G7 for….our rate of inflation at 7.2% which is a great deal more than the promised rate by the UK Government for the […]
Morning Brief – GBP
Humphrey Percy
Fri 22 Sep 2023
GBP While the Bank of England’s decision to pause on raising rates by the narrowest of margins with voting 5-4, that resulted in GBP being sold sharply which reflects the market’s view that while inflation at 6.7% looked better than expected yesterday, the effect of higher oil prices and petrol and diesel at the pumps […]
