UK's Brexit Bill back in focus - close vote expected.
The market’s attention will continue to be on the Brexit bill’s slow progress through parliament. A key outstanding issue is whether parliament should have greater control in the event of no deal or if it rejects the final deal. A Lords amendment on Monday reinstated a greater role for parliament, but the government argues that it would reduce its leverage in negotiations with the EU if it is not able to walk away. The House of Commons today will debate the amendment after Prime Minister’s Questions. Political analysts suggest that the vote could be tight, but any compromise between the government and Conservative pro?EU ‘rebels’ could yet smooth the bill’s passage onto the statute book.
Away from UK political theatre, the third day of the ECB’s annual jamboree in Sintra, Portugal will continue to focus on price and wage-setting. It’s a very topical area of research and has massive implications for monetary policy, given the relatively low responsiveness of wage growth to unemployment in major economies in recent years. The key market focus, though, will be the policy panel after lunch comprising the ECB, US Fed, Bank of Japan and RBA central bank heads.
The pound was also marginally lower ahead of the crucial House of Commons vote on Brexit today. It was trading below €1.14 and was also below $1.32 for the first time since November.