28/01/2019 - Optimism Grows Around Avoiding No-Deal Brexit

GBP

The pound finished last week at 11-week highs after optimism continued to grow around Britain being able to avoid a no-deal Brexit. The biggest indicator of progress to come out of Westminster since Theresa May’s Withdrawal Agreement was defeated is that the DUP will support the government deal in a preliminary vote scheduled for Tuesday. This shift comes with a price, and would hinge on an inclusion of a clear time limit to the “backstop” which has dogged the Irish border issue.

The House of Commons is voting on Tuesday on alternative Brexit plans after rejecting the deal that May had initially negotiated with the European Union. During the January 29th session, parliament will debate May’s proposed next steps and alternative plans that lawmakers have put forward. Markets will be eagerly watching Yvette Cooper’s motion for delaying the March 29th exit date, with foreign exchange strategists expecting further sterling strength if there is an extension in the timeline of Britain’s exit from the EU.

Key Announcements

13:30: EUR: ECB President Draghi Speech
14:00: GBP: BoE Governor Carney Speech