The European Union is considering forcing the U.K. to wait until June for formal negotiations to begin on the terms of Brexit, eroding the time Prime Minister Theresa May has to land a deal, according to EU officials.
The 27 other members of the EU have pinpointed a meeting of government ministers in Luxembourg on June 20 as the moment to authorise the opening of two years of talks. May has set the agenda, but once she triggers the exit, power shifts to the EU and she will have to be patient.
As well as limiting how long the two sides have to find common ground, pushing the start of the divorce discussions until late June risks upsetting businesses and banks that are seeking early clarity on just what the U.K.’s withdrawal from the EU means for them.
While leaders of EU countries will gather in April or May for a summit to agree on the “framework” for talks, actual discussions with the U.K. can’t begin until ministers officially approve more detailed negotiation directives to be drawn up by the Brussels-based European Commission. It’s unclear how fast after that authorisation the two sides could arrange to sit around a table.
The dollar rose on Tuesday, bolstered by a widely expected U.S. interest rate increase from the Federal Reserve this week and also bolstered by political risks in Europe as Dutch elections get under way.
The Fed started its two-day monetary policy meeting on Tuesday, with the futures market pricing in a 95 percent chance of a U.S. interest rate increase on Wednesday. A higher-than-expected rise in a U.S. inflation gauge added to the dollar's positive tone and further reinforced already firm expectations of a Fed rate hike on Wednesday. Data showed that U.S. producer prices rose more than expected in February and the year-on-year gain was the largest in nearly five years.
Market Participants will also be focusing on the Fed’s ‘dot plots’ or interest rates forecasts for insight in to how many rate hikes we can expect to see this year and if there is any variance from the initial three rate hikes forecast for 2017.
Francois Fillon was charged Tuesday with misuse of public funds, casting a permanent shadow over his bid to become France’s next president. Fillon was informed of the charges after being questioned by investigative judges looking at whether family members did any real work while on the public payroll as his parliamentary aides, according to the French financial prosecutor’s office. Fillon, who had been due to meet the judges on Wednesday, has denied any wrongdoing and denounced the investigation as a plot by his political opponents to undermine his candidacy.
While the judges’ decision confirms the worst-case scenario for Fillon, he’s already promised to stay in the race whatever happens and faced down a rebellion of party officials seeking his ouster. With less than six weeks to go before the first round of voting, the 63-year-old former prime minister is in a distant third in the polls, suggesting he’d miss out on the May 7 run-off between independent Emmanuel Macron and the anti-euro nationalist Marine Le Pen.
09.30 – GBP – Average Earnings Index 3m/Y; Forecast at 2.4% against previous of 2.6%
09.30 – GBP – Claimant Count Change; Forecast at 3.2k against a previous of -42.4k
12.30 – USD – CPI MoM;
12.30 – USD – Core CPI MoM;
12.30 – USD – Retail Sales MoM;
18.00 – USD – FOMC Economic Projections;
18.00 – USD – FOMC Statement
18.00 – USD – Federal Funds Rate
18.00 – USD – FOMC Press Conference