EU Set To Offer UK Flexible Extension

GBP

It has been reported  that European Council president Donald Tusk is set to offer the UK a 12-month delay to Brexit. Tusk would make this a “flexible” extension that allows the UK to quit the EU before the year is up if parliament agrees a deal. However, EU leaders would need to back the plan at a summit planned for next week.

Talks between Conservative and Labour continued for a second day in a bid to break the Brexit deadlock. Discussions between the two parties were described as ‘detailed and productive’ by the Government. Shadow Brexit secretary Sir Keir Starmer was not giving much away but reiterated that there will be ‘further discussions’ with the Government in the coming days.

The bill which was voted on Wednesday for extending the current deadline was put forward to the House of Lords on Thursday as they debated on whether a further extension could be a possibility. The Bill will need approval from the House of Lords so it can become a law. However proposed changes to the Bill will be discussed further on Monday. Ministers have warned that the backbench bill - put forward by Yvette Cooper could increase ‘the risk of an accidental no-deal Brexit’. Ministers believe that if Article 50 was extended with its current terms, it would deny May the power to agree a deal with EU leaders on April 10th as MPs would have to agree to any new Brexit date.

Any further extension to the current Brexit deadline would require all 28 member states to agree. If they agree but suggest a different date to the one backed by MPs then May would need bring it back to Commons for further approval. 

Lastly after meeting with the Irish President Leo Varadkar, Angela Merkel told reporters that both countries will ‘stand together’ on Brexit and said the peace process in Northern Ireland must be preserved. She also went onto say Brexit is in a ‘decisive’ stage, adding ‘’I can say this from the German Side - we will do everything in order to prevent a No-Deal Brexit’ ; fuelling hopes that an agreement can be reached very soon. Varadkar also told reporters that a ‘No-Deal Brexit’ would put Ireland in a difficult position but called for patience and understanding of the U.K.’s position. 

 

USD

The greenback rose on Thursday ahead of the release of US employment report. Weekly initial jobless claims from US department of labour read at 202,000, the lowest level since 1969; well below the 216,000 that was expected by the market suggesting the trend of an improving Labour force remains intact.
 
Furthermore, Dollar strength was supported by comments made my President Donald Trump who said a trade deal with China was very close and could be reached within four weeks. Trump said the sticking points left to resolve were tariffs and intellectual property theft as an agreement draws closer.

 

Key Announcements 

13:30 - USD: Average hourly earnings m/m - forecast at 0.2% from previous 0.4%
 
13:30 - USD: Non-Farm employment change - forecast 175k from previous 20k
 
13:30 - USD: Unemployment rate - unchanged at 3.8%