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
Texas, USA The third largest citrus state in the USA after California and Florida is Texas. Currently the citrus crop is under threat in Texas due to chronic water shortages owing to a long running dispute with Mexico over delivery under a 1944 treaty whereby Mexico is supposed to deliver “1.75 million acre feet of […]
Parity As we brought to you earlier this week, there is an increasing chatter in the market about whether EURUSD has the momentum to challenge parity once again. At face value, of course, this would create a meaningful value change in the world’s foremost currency pair which has already seen a significant exodus of value […]
US Dollar Surging on a strong US economy together with further geopolitical tensions in the past week, USD is at its strongest versus EUR this year and came within a whisker of breaking through 1.06 in yesterday’s trading. Against the Japanese Yen USD was 154.55 which caused Japanese Finance Minister Shunichi Suzuki to break cover […]