Today the Prime Minister will fly over to both Germany and France in an attempt to sell the merits of her request for another Brexit extension. Will she be greeted warmly?!
The deadline for Brexit is approaching thick and fast, Theresa May has officially asked for additional time and is now awaiting approval and confirmation of just how long she will be offered. It is understood that there is firm opposition to such an extension, with the main resistance stemming out of France via Emmanuel Macron. However, it has become apparent that Belgium and Spain are also unhappy with the situation, with all 3 countries collectively citing a preparedness for ‘No Deal’. The next 48 hours will be crucial for Theresa May. The special emergency summit is set to take place on Wednesday and it is here where she will find out exactly how much time she will be afforded.
The likely outcome is an extension which falls between 30th June 2019 and 1st April 2020. Consensus is for a longer time frame which would have an element of flexibility associated with it depending upon certain conditions. The pound will most likely trade in a fashion by which it rallies harder on a longer extension as the problems are simply pushed back even further.
Today’s economic calendar is exceptionally light. Most traders and dealers will be preparing for tomorrow which sees an ECB policy decision, minutes from the last Fed gathering, US inflation data, UK GDP numbers and, last but not least, the emergency EU Summit.
Written by Viv Savani. 8:17am, April 9th 2019
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