EU Agree to Changes Ahead of Vote


Sterling rallied to a 22-month high against the Euro yesterday evening after Theresa May said she had secured legally binding changes on her Brexit deal. The Pound peaked after David Lidington announced the Brexit breakthrough in the House of Commons. May said she ‘passionately believed’ in her Brexit deal and had now addressed the concerns raised by Parliament in January over the Northern Irish backstop. The PM Said she had ensured there would be ‘no indefinite backstop’ and any attempt to keep the UK in the backstop by the EU would be dealt with by an ‘arbitration mechanism’.

Yesterday May headed to Strasbourg to meet Jean Claude-Junker for last minute talks to seek further concessions over her Brexit deal. In the evening she announced two documents were agreed by all parties, first document was ‘joint legally binding agreement’ regarding the Irish backstop issue and the second document was a ‘joint statement’ which is an agreement that the backstop will be replaced by alternative arrangements by 2020. The main concern over the Irish backstop problem was that it would keep the U.K. tied to the customs union agreement indefinitely. May has now got the changes in place and went onto say “MPs were clear that legal changes were needed to the backstop. Today we have secured legal changes. “Now is the time to come together to back this improved Brexit deal and deliver on the instruction of the British people.”

European Commission president Jean-Claude Juncker did imply that there will be ‘no third chance’ in renegotiating the deal agreed. He went onto say “let us speak crystal clear about the choice – it is this deal or Brexit might not happen at all.” Now attention turns to whether May can get her renegotiated Brexit over the line.

Key Announcements

10:30 – GDP m/m: forecast at 0.2% from previous -0.4%
10:30 – GDP: Manufacturing production m/m – forecast 0.2% from previous -0.7%
13:30 – USD: CPI m/m – forecast 0.2% from previous 0.0%
13:30 – USD: Core CPI m/m – forecast 0.2% from previous 0.2%
19:00 – GBP: Brexit Parliamentary Vote