The pound put in an impressive performance yesterday, backed up by robust economic numbers and a new development on the Brexit front which could ultimately pave the way toward a second referendum.
Firstly, on the data front, a solid jobs report saw sterling climb higher just after 0930. The number of applicants for jobless benefits rose by less than expected while average weekly earnings grew by 3.4% vs. 3.3%. In addition, the unemployment rate fell to 4% from 4.1%. Another jobs report displaying a resilient labour market which is slowly but surely starting to see workers paid more for their efforts. The pound rose modestly after this release, to the tune of 0.15%-0.20% across the board.
It’s now been confirmed that Jeremy Corbyn has tabled an amendment in Parliament calling for a series of indicative votes on ways to resolve the Brexit impasse. This would see MPs vote on a number of different outcomes which would then be used to help the government define which direction the House would like policy taken. MPs would be able to vote for all options given, allowing a list to be created of the most popular solution for the current stand-off. It’s quite conceivable the option for a second referendum may be on such a list. This will put shivers down the backs of many pro-Leave Conservative MPs which may well end up working in May’s favour.
Today’s economic calendar is light. Many will be preparing for tomorrow’s ECB monetary policy announcement while following the ongoing US government shutdown saga which is entering its 33rd day.
Written by Viv Savani. 8:58am, January 23rd 2019
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