Chief Investment Officer
Summary: Day 1.215 since the Brexit - Will PM Johnson prevail or call an election by tonight?
What happens today: Two major votes
# Vote 1 – The WAB – Government expected to win…
# Vote 2 – ‘The Program Motion, PM” – here it is 50/50 if government will get support.
If #1+#2 pass the Commons moves to a 3rd reading where MP’s gets to attach amendments: Two such are expected: A Custom Union and 'Final Say' vote from Labour.
Saxo Bank view:
We stick by 50% chance of pass by October 31st, but there is now two other scenario’s likely: A General Election and further extension, plus of course a small but still realistic chance of hard Brexit if Downing Street insist on disrespecting Parliament.
GBPUSD- Hourly 1.3013/1.2951 – Buy/Sell Either side break – MACD turned down… Daily – clear uptrend in place..
FTSE – Range 7440 -7003 – react to break of either side….
GBP hourly:
The Guardian: The second reading will be a good test of support, but even assuming it passes, the government’s difficulties could begin in the next stage of the WAB, when MPs can table amendments. Among amendments expected are ones seeking a customs union with the EU for the whole UK and one making approval of the Brexit deal conditional on a second refer
One Conservative adviser said pro-Brexit cabinet ministers and Tory backbenchers would never be able to live with a customs union attached to the bill, so it was “not going to happen”. The aide said this scenario would probably lead to renewed push for an election, with Conservative party headquarters still preparing for a pre-Christmas poll – regardless of whether the Brexit bill passes or not.
If any of these amendments are passed, it will not only require a departure extension but will effectively wreck the bill for the government. The most likely outcome then would be for Johnson to seek an election. However, if all the amendments fail then MPs will be worked flat-out to try and pass the necessary legislation for Johnson’s deal before 31 October.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
