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Corbyn-May Resume Brexit Talks

4th April 2019 Market Update

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🇬🇧 GBP –  Sterling finished the day higher after talks between Theresa May and Jeremy Corbyn were described as ‘constructive’ and MPs finally managed to agree on something. In a vote in the commons last night, MPs voted by a majority of one for the PM to ask for a further delay in leaving the EU on April 12th, in order to avoid crashing out without a deal.

However, Jean Claude Juncker yesterday afternoon rejected Mrs Mays for a short delay in Brexit stating that the 12th April is the ultimate deadline and the options remain to either leave on the 12th without a deal or request a long extension of Article 50, ultimately meaning that the UK will have to take part in the European elections. On the data front, one of the main components of UK growth suffered a massive setback as services PMIs showed a contraction in the sector with Brexit uncertainty no doubt having an impact. However, the data was largely ignored as markets are probably thinking that this could well be short lived.

On the agenda today will be further talks on the May-Corbyn summit with Corbyn reportedly raising the option of a confirmatory referendum on any deal that they manage to agree to.

Sterling currently at one-week highs against most of its peers.

🇪🇺 EUR – The euro managed to bounce off its June 2017 lows yesterday after German and Eurozone service PMIs came in higher than expected. Retail sales also managed to beat forecasts coming in at 0.4%.

Data this morning however has shown that German industrial orders in February slumped by 4.2 in February causing the euro to lose some of the gains from yesterday.

No major data out today.

🇺🇸 USD –  ISM non-manufacturing figures disappointed coming in lower than forecast at 56.1. Adding to this a poor set of figures came in for ADP employment report showing only 129,000 jobs were added well below the 170,000 expected. The data could well point to a disappointing set of figures on the all-important nonfarm payroll figure due tomorrow. As a result, the dollar slipped across the board.

Data thin on the ground also stateside today as markets brace themselves for tomorrows job report.

 

Summary:
GBP: MPs Vote to delay Brexit
EUR: Service PMIs Improve but Germany still in trouble
USD: Job Figures disappoint ahead of NFPs on Friday

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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