Market focus is very much on the all-important parliamentary vote on Brexit, scheduled for next Tuesday. The government has already lost two votes this week, and it remains likely they will lose the key vote next week as well.
What happens after that may well depend on the margin of any such loss, with the prime minister now having only three days to respond if she does indeed suffer a defeat.
Uncertainty remains high and various options are still possible, including another parliamentary vote or perhaps extending Article 50. Less likely, but still possible, is another referendum or a general election, which is the Labour party’s preference.
Elsewhere, global stock markets have stabilized this week on hopes of some real progress on the US-China trade talks.
On the exchanges, there has been a lack of conviction in the market due to the uncertain political backdrop.
GBP/USD hit 1.2800 this week, the higher end of its recent range, but the market remains cautious ahead of next week’s vote. Strong support remains at 1.2500.
GBP/EUR remains under pressure, but is currently holding above the psychological 1.1000 support level. We need a closing break above 1.1250 to alleviate the ongoing negative sentiment.
GBP/USD – 1-year chart
|16/1/19||UK CPI YoY||2.3%||2.2%|
|16/1/19||UK RPI YoY||3.2%||2.8%|
|17/1/19||EU CPI YoY||1.9%||1.6%|
|18/1/19||UK Retail Sales YoY||3.6%||3.3%|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2545||+0.59%|
UK Benchmark Rates
|3 month||0.91763%||2 year||1.15%|
|6 month||1.03975%||3 year||1.21%|
|12 month||1.18394%||5 year||1.28%|
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