Talking Points:
- Ongoing Brexit deliberations will be the main focus of market participants during the week as key deadlines approach and no clear deal has emerged – two-way volatility in the British Pound[1] should remain high.
- The US government shutdown has sidelined many key economic data releases, including Friday’s December US Durable Goods Orders, and it’s possible that the Q4’18 US GDP report the following week is delayed as well.
- The European Central Bank meeting on Thursday could bring about a slight dovish adjustment to policy in light of the destabilization in inflation expectations.
Join me on Mondays at 7:30 EST/12:30 GMT[2] for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.
All Week | -- GMT | GBP Brexit Negotiations Ongoing Ahead of January 29 Deadline
UK Prime Minister Theresa May has presented her ‘Brexit Plan B’ to parliament and reactions have been tepid at best. It seems that the prime minister’s renewed effort to get her deal through the House of Commons differs little than her first attempt, and by judging from the reaction of parliamentarians, it seems doubtful that ‘Plan B’ will pass muster either if a vote is held by the January 29 deadline. Reports over the weekend indicated that UK PM May might attempt to renegotiate the Good Friday Agreement, a politically fraught endeavor that would undoubtedly add a new matrix of complexity to an already overbearing Brexit problem.
At this point, if a no deal, ‘hard Brexit’ is to be avoided, it would appear that an extension beyond the March 29,
