Access both platforms from your single Saxo account.
Macro Brief: Brexit soap opera continues
Christopher Dembik
Head of Macro Analysis
Summary: The ongoing Brexit saga has offered a great deal in the way of political spectacle, but little overall direction.
Without much surprise, UK Prime Minister May suffered another humiliating defeat yesterday. Northern Ireland's DUP and the Brexit-supporting ERG group did not back the deal negotiated by the government considering that changes do not deliver (1) legally binding changes to the withdrawal agreement and (2) an exit mechanism from the backstop.
In addition, US inflation was out lower than expected (both headline CPI and core CPI) which was considered by forex investors as mildly dollar-negative since it broadly reduces pressure on the Federal Reserve to normalise monetary policy.
Today’s focus will be on Brexit again as the Parliament is expected to vote on whether to leave the European Union with no deal, which will likely be rejected as well. Then, MPs will vote on whether to seek an extension of Article 50, which will probably pass on Thursday. It does not mean that the Brexit soap opera will end anytime soon since PM May will need to go back to Brussels to ask the EU-27 for an extension, which is not a done deal.
In other words, the GBP should see a choppy ride in the coming days. Today, EU ambassadors should also discuss Brexit in Brussels. Elsewhere, one of the most important data releases will be US construction spending in January. Consensus expects an increase of 0.4% versus -0.6% prior. This good figure should mostly result from an increase in nonresidential construction while private residential construction is expected to continue declining.
In addition, US inflation was out lower than expected (both headline CPI and core CPI) which was considered by forex investors as mildly dollar-negative since it broadly reduces pressure on the Federal Reserve to normalise monetary policy.
Today’s focus will be on Brexit again as the Parliament is expected to vote on whether to leave the European Union with no deal, which will likely be rejected as well. Then, MPs will vote on whether to seek an extension of Article 50, which will probably pass on Thursday. It does not mean that the Brexit soap opera will end anytime soon since PM May will need to go back to Brussels to ask the EU-27 for an extension, which is not a done deal.
In other words, the GBP should see a choppy ride in the coming days. Today, EU ambassadors should also discuss Brexit in Brussels. Elsewhere, one of the most important data releases will be US construction spending in January. Consensus expects an increase of 0.4% versus -0.6% prior. This good figure should mostly result from an increase in nonresidential construction while private residential construction is expected to continue declining.
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)