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
Data Day Despite salient data already having been published in China and France so far this morning, we are far from finished with the deluge of data due to reach the market today. The most important of which will be those that we have signposted in earlier briefings: Eurozone and US inflation figures. Given just […]
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UK Labour market The Bank of England yesterday broke cover to drive the message home that due to the UK’s labour market remaining tight, it was premature to start talking interest rate cuts and it was not just Governor Bailey who was calling for higher for longer interest rates but also his MEPC colleague Jonathan […]