1409 Wednesday 30 January 2019
Last night in Common’s we learned that the future of Brexit is as clear as it’s ever been really. The signals that could be read are that largely, parliament are keen to avoid a ‘no deal’ Brexit, but not keen on delaying Brexit in order to avoid that outcome. Although the EU27 almost all announced that the time for negotiation was already over last night, Theresa May is heading back to Brussels today to try and open the door. The card in her favour now is that she can now state that she has the backing of government behind her this time, but we are yet to see if this will be enough.
In terms of market reaction, the FTSE has responded positively pre and post voting gaining nearly 3% since trading began yesterday. The GBP/EUR and GBP/USD are both down nearly 0.5% over the same time period. Sectors sensitive to Brexit issues including homebuilders and miners have largely been up; the latter has even fought off the tragic news from the Vale disaster.
Moving forwards, many of the instruments mentioned above are all likely to be sensitive to, firstly the outcome of May’s renegotiation with the EU27 and there will no doubt be further peaks and troughs that Brexit still has in store for us.
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