Part two of the vote trilogy today
After yesterday’s volatile session which saw swings of more than 2% for GBP/USD, the pound paused for breath during the Asian session as we now await the Parliamentary vote whether to leave without a Brexit deal or not. The EU has said yesterday’s vote has “significantly increased the likelihood of a ‘no-deal’ Brexit”, adding that the EU’s ‘no-deal’ preparations are now more important than ever. The EU has stated that the Withdrawal Agreement will not be revisited.
There seems to be a growing expectancy that PM May will ask for a delay to Brexit, a move the EU27 has said it would consider and decide by unanimity, only with a “credible justification for a possible extension and its duration”. That said, the EU has stated that any Brexit delay must not interfere with the EU parliamentary elections due on May 24-26. European Commission head Juncker has said the UK must leave on May 23, at the latest, or would have to take part in those elections.
GBP/USD is now at 1.3085, holding above the 200-day moving average at 1.2989 and the 55-day moving average at 1.2965.
GBP/USD Daily Chart
UK financial press are suggesting that a group of UK lawmakers are testing whether Parliament may support such an agreement, which is aimed at mitigating the impact of an exit without agreement. The agreement is said to involve the UK offering to pay the EU for such an agreement thorough to 2021 at the latest, with a deadline of May 22 for actual Brexit being suggested. It is meant to be voted on tonight.
EU industrial production to echo Germany’s weakness?
It’s not the most exciting of data calendar’s today, with Euro-zone industrial production in January expected to fall 2.1% y/y. Throughout the day we will get to hear speeches from the ECB’s Mersch and Coeure. Will they touch on EU growth (or the lack of it?). The US session features February producer prices (matching CPI’s benign reading?) and January durable goods orders.
The full MarketPulse data calendar is available for viewing at https://www.marketpulse.com/economic-events/
OANDA Senior Market Analyst Craig Erlam previews the trading week and gives the latest on Brexit.