May's Deal Expected to be Rejected

11th March 2019 Market Update

Get a snapshot of the day's most important market events and currency movements sent straight to your inbox every morning. Sign up to our Daily Market Report.

?? GBP -  There was no data out on Friday, but markets appeared to be spooked heading into the weekend after the EU unveiled a proposal on Friday that the UK had rejected days earlier. The pound finished lower on the week against most of its peers.

The only key Brexit development over the weekend was PM Theresa May and EU President Jean-Claude Juncker having a telephone conversation but with no real breakthrough. May was scheduled to fly to Brussels today but that has now been cancelled ahead of her key Brexit deal being attempted to be voted through on Tuesday. Markets appear to be positioning themselves for her deal to be voted down once again, despite cabinet ministers urging their Tory colleagues to support May’s plan.

If her deal does get voted down, parliament will have an opportunity potentially on Wednesday to vote on delaying Brexit to avoid a no deal situation. Markets have already priced in this potential eventuality as was seen by the highs we saw the pound make two weeks ago.

The only economic data out this week will be on Tuesday morning with manufacturing and industrial production.

?? EUR - The euro managed to bounce back on Friday following the 21-month lows versus the dollar on Thursday. The move didn’t seem to be based on any particular euro related news flows, but more to do with the fall on the US dollar on Friday following the disappointing nonfarm payroll print.

News this morning from Germany has shown that German industrial production fell by 0.8% when markets were expecting a rise of 0.5%. The decline was largely influenced by lower demand for heavy duty machinery and equipment, adding to the continuing woes for Germany.

The big news this week from the eurozone will be inflation figures on Friday, which is expected to come in at 1.5%.

?? USD -  Friday’s job figures were a mixed bag after the unemployment rate fell to 3.8% and hourly earnings increased by 3.8%. Whilst this could’ve been positive for dollars market paid more attention to the nonfarm payroll figures which showed that only 20,000 jobs were added in February, causing the dollar to come off its recent highs.

In focus this week will be retail sales figures today, inflation figures tomorrow and then durable goods orders on Wednesday.


GBP: Volatile week expected for the pound ahead of key Brexit votes
EUR: Euro recovers off 21-month lows on Friday
USD: Unemployment drops to 3.8% but Nonfarm disappoint


Find out more about our Money Transfer service for personal & business international payments. We're committed to giving all clients the best rate possible, along with flexible and personalised service. Save time and money by reducing risk through a simple and efficient service.

FairFX Money Transfers


Back to Blog