Market Report 15th March + Brexit Update.
The pound was far less volatile during last night’s Brexit voting than Wednesday and may remain calm after the storm into the weekend. All of the proposed amendments were voted down and the government’s motion to delay Brexit passed with a majority of 210. As such, the Government, on the condition that the HoC approves PM May’s withdrawal deal before the EU Leader’s Summit next week, will seek to agree an extension to Article 50 to the end of June. However, if PM May fails to get backing for her deal, the Government will ask for a much longer extension to Article 50, likely requiring the UK to take part in European Parliament elections in late May.
Crucially, the EU 27 will want to know exactly what the UK’s objectives are before agreeing how long to delay and any specific conditions to apply during this period. This is far from clear at this juncture. The EU have already said if the UK wants a long extension then it must be for a new referendum or general election with the later already voted down in yesterdays votes.
No major UK data due to which means this afternoon’s interest will be the US February industrial production figures and preliminary March consumer sentiment survey from the University of Michigan. Analysts have penciled in a rebound of 0.6% for today’s data. Also this afternoon is consumer sentiment index which is expected to show a rise for a second month to around 95.5 from 93.8, following the drop at the start of the year related to the government shutdown.