Brexit or No Brexit?
By the look of the dichotomous questions spreading across the globe, the first casualty of ITV’s I’m a Celebrity, Noel Edmonds, may have headed to Brussels. At the European market open this morning, the Pound Sterling rallied, gaining as much as 0.35% throughout the morning. The news that propelled the Pound high enough in order to recover its losses for the last week stemmed from a decision in European that Brexit is reversible. In other words, the legal precedent for the withdrawal of Article 50, the legislature contained within the Lisbon treaty that was invoked by the Prime Minister in order to begin the Brexit process, can simply be undone! Markets responded by awarding the Pound with value. But why? Well, on the European side of things the addition of another possibility improves the leverage that the UK has in order to maximise the value of its chosen outcome. However, looking at the all-important vote in the House of Commons next week, it is clear that showing Europhile members of the lower house that there is the possibility of undoing Brexit entirely could entice them to vote against May’s deal, weakening Sterling. Consider the case of an MP who finds a Brexit an abhorrent concept – until this morning’s confirmation of the legal precedent to unwind the motion, the member has the following options: vote against the deal and risk a catastrophic no-deal Brexit, or vote for the deal and leave wounded. Now the law maker has another choice: vote again and possibly avoid a Brexit altogether. As such the expected outcome of the vote on the 11th December has necessarily deteriorated and convincing MPs to vote with the Prime Minister may have just become that bit harder.
Today’s Global Market:
Discussion and Analysis by Charles Porter
Click Here to Subscribe to the SGM-FX Newsletter
Related Insights
Morning Brief – Federal Reserve
Humphrey Percy
Wed 8 Feb 2023
Federal Reserve Chair Jerome Powell gave a speech in Washington last night that further confirmed his hard line thinking: US interest rates will need to go up more and probably it will take two separate rate rises to see if that is sufficient-the clear implication is that if it needs more, then that is what […]
Morning Brief – Never a dull non-farm
Charles Porter
Tue 7 Feb 2023
Never a dull non-farm Non-farm payrolls data almost always provides the observers an opportunity to witness and potentially trade with some volatility in the markets. More often than not the salience of the event and the mixed expectations moving into it leads to more price fallout from the noise generated from the event instead of […]
Morning Brief – US Economy
Humphrey Percy
Mon 6 Feb 2023
US Economy The US job figures on Friday most certainly set the cat among the pigeons: with non farm payrolls expected to be up by 187,000 and the market’s expectation that Chairman Powell of the Federal Reserve was talking the talk rather than walking the walk when he had said last Wednesday that rates were […]
