PM May survived yesterday’s Tory party secret ballot, asking whether her own MPs had confidence in her. She acquired 200 votes vs. 117 against. Even though this is well past the 159 minimum threshold to remain in power, it still displays 1 in 3 Conservative MPs do not have faith in her abilities, therefore, weakening her position. In an emotional address to the 1922 Committee, prior to the vote, she confirmed she did not intend to take the party into the next election, a small concession which may have allowed some to look at the bigger picture rather than the immediate future. Sterling remained rather stable during the whole process. Throughout the day various MPs came out and publicly supported her, by 4pm it was clear she had enough support. The pound still remains under pressure but for the moment trades with a $1.26 and €1.11 handle against the US dollar and euro, respectively. The next moves may well be defined by the EU Summit kicking off today where May will attempt to acquire some legal assurances over the Irish backstop. Genuinely – good luck to her!
Today sees the European Central Bank announcement and press conference. It’s widely expected Mario Draghi will call and end to the central bank’s massive €2.6 trillion stimulus program its conducted over the last few years. However, the focus will mainly be on when he sees interest rates rising and his feelings on the general slowdown seen across large parts of Europe. Additionally, how he perceives the recent significant levels of volatility across markets. Outside of this event and it will be a fairly quiet day for data across the globe. Focus will shift back to Asia tonight with Chinese retail sales, unemployment, industrial production and asset investment data all scheduled for release tonight.
Written by Viv Savani. 8:45am, December 13th 2018
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