Daily Brexit update Flexible Plan leaves markets unfazed
Plan B looks like a lightly tweaked Plan A
Share this:
Theresa May proposed no new approach nor measures in an answer to Parliament's rejection of her Withdrawal Bill last week that was billed as Plan B, but in fact looked like a lightly tweaked Plan A. After a signal that a period of consultation that filled her diary with a busy timetable of meetings across party lines is over, the chair of Parliament’s Brexit committee, Labour’s Hilary Benn, noted that whilst “her door may have been open, her mind has remained closed”. A pledge to be “more flexible” over the matter of the ‘backstop’ mechanism proposed for Northern Ireland is thereby being met coolly. After all, Theresa May continues to rule-out a ‘no-deal’ form of Brexit whilst indicating that, in her view, the EU is unlikely to agree to extend the Article 50 ‘negotiating period’ that determines when Britain’s EU exit becomes official. Unsurprisingly, the only acknowledgement given during the Prime Minister’s appearance in the House of Commons to the notion of a further referendum was to note that in her view it would strengthen any moves towards a UK break up whilst damaging respect for democracy. Also as expected, the Prime Minister envisaged a new round of talks with the EU ahead, though Brussels has made it clear it won’t renegotiate the deal, even if the bloc’s leaders are prepared to provide quasi-legal reassurances that transitional measures, like the solution for Northern Ireland, will only ever be temporary. Still, a recent decline in actual and ‘implied’ sterling volatility together with relative cross-asset calm in narrow ranges whilst May delivered ‘Plan B’ point to a market that had already made up its mind before she started. With the government’s ‘alternative approach’ in hand, the focus remains very much on the 29th January when Parliament is set to vote on the Withdrawal Bill again.
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
GBPUSD Analysis Pound holds firm after BoE decision
The pound sterling has started to show relevant strength against the U.S. dollar. At the moment, GBP/USD has gained slightly more than 1.3% in the short term, reflecting an important buying bias.
British Pound Price Action Setups: GBP/USD, GBP/JPY
GBP/JPY has flown up to a fresh 18-year high and even with a recent bout of USD-strength, GBP/USD has held up relatively well.
GBPUSD Forecast Pound Sterling loses ground after NFP release
The week ends with GBP/USD down around -0.6%, reflecting a clear loss of short-term momentum in the pound sterling. At the same time, the US dollar is showing renewed stability and continues to hold a stronger demand bias against its main rivals.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.