Another Groundhog Day moment yesterday as the Prime Minister announced she would seek a second short-term extension to Article 50. With the additional time offered she will seek to allow the Opposition leader a larger input to muster new support for her deal.
After a near 8 hour marathon Cabinet meeting, where Downing Street confiscated participants’ mobile phones, the PM finally took to her podium just after 6pm. A number of different options were discussed resulting in an apparent consensus whereby the government will seek an additional short-term extension (possibly 2-3 weeks). During this time Theresa May will sit down with Jeremy Corbyn for cross-party talks. The opposition leader openly accepted the Prime Minister’s invitation yesterday giving the pound a reason to cheer.
It appears some form of consensus will be sought on the future trading relationship with the European Union, which some Brexiteers fear could be a permanent customs union. It begs the question as to why many pro-Brexit MPs within May’s own party did not back her deal and now potentially face an even softer-styled model. The situation is fluid, so expect further developments over the next 24-48 hours. The pound has reacted positively so far, adding 0.50% of gains since May’s announcement. As expected, it’s highly likely to respond to any positive or negative headlines with the situation at such a critical point.
Today’s economic calendar is a busy one with European services PMI taking centre stage in the morning. Particular focus is on the UK release with the sector being so prominent domestically. The afternoon session sees a similar release from the US with manufacturing numbers on tap too.
Written by Viv Savani. 10:46am, April 3rd 2019
The details expressed in this market report are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. Cornhill International Payments limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information.