FTSE: UK stocks march on despite Brexit stalemate
Fawad Razaqzada April 2, 2019 11:32 AM
So, another round of indicative parliamentary votes on alternatives to Theresa May’s Brexit deal came to pass last night and once again all the options were rejected. A motion for a customs union with the EU was rejected by just three votes. The stalemate has clearly frustrated people on both sides. Tory MP Nick Boles resigned the whip in frustration, while EU’s chief Brexit negotiator, Michel Barnier, blasted UK MPs by suggesting that there are “only majorities against things” in the Commons… and “that's not how we're going to manage an orderly withdrawal of the UK." He added that a no-deal exit is now more likely but it can still be avoided. A general election may be needed if the stalemate continues in order to avoid a hard Brexit. That would probably mean a much longer extension to Brexit, which could further increase uncertainty and hurt consumer and business sentiment.
However, despite the uncertainty, the FTSE 100 is still up a good 9% year-to-date, thanks to a weak pound and outlook for global interest rates to remain low for longer. The FTSE is showing a similar performance to the mainland European indices, so Brexit uncertainty is not just holding back UK stocks, but Europe as a whole. Indeed, because of Brexit and anaemic growth, European markets are underperforming their US peers. Nonetheless, the path of least resistance continues to be to the upside for the FTSE 100 and other EU indices and will remain that way until they create bearish reversal patterns or break a prior low. The FTSE’s technical outlook would turn bearish should it break its most recent low at around 7150, for then it will also have broken below its bullish trend line.
Source: TradingView and FOREX.com. Please note, this product is not available to our US customers.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.