Another tumultuous week for Brexit, with the government losing the vote to keep the ‘no-deal’ option, and parliament voting to extend Article 50 beyond March 29.
There will now be a third vote on May’s deal next week, ahead of the EU summit on March 21.
If the deal passes, the extension will be to June 30 to allow the legislation to be passed.
If the deal fails again, we are looking at a far longer extension, and increased chance of a second referendum or a customs union arrangement.
On the exchanges, sterling’s recent strength continued, on the reduced risk of no-deal, and increased chances of a softer Brexit.
GBP/USD hit its highest levels since June last year, although we again saw profit taking around the recent 1.3350 high.
We continue to expect demand for sterling on any dips.
GBP/EUR hit its highest levels since May 2017, briefly nudging 1.1800. We would now look to buy on dips towards 1.1550 initially.
We expect volatility to remain extremely high next week with Brexit continuing to dominate, and important UK data also due.
|19/3/19||UK Average Weekly Earns. 3M/YoY||3.4%||3.2%|
|19/3/19||UK Unemployment Rate||4.0%||4.0%|
|20/3/19||UK CPI YoY||1.8%||1.9%|
|20/3/19||UK RPI YoY||2.5%||2.5%|
|21/3/19||UK Retail Sales YoY||4.2%||2.5%|
|21/3/19||UK BOE Bank Rate||0.75%||0.75%|
|Indices||Previous Close||YTD % Change|
|DFM GENERAL INDEX||2574||+1.74%|
UK Benchmark Rates
|3 month||0.84325%||2 year||1.09%|
|6 month||0.95750%||3 year||1.16%|
|12 month||1.11675%||5 year||1.26%|
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