Market Brief: May backing down from Brexit showdown
17 Oct 2017
In a further sign that Brexit bad news is not totally priced in to the markets, yesterday afternoon saw Cable drop half a cent on a piece of news indicating that the negotiations were heading for a catastrophic breakdown unless the European Union signals this week that it will allow talks to move on to trade.
Today's data releases |
Key levels | |||
---|---|---|---|---|
09:30 | UK CPI, RPI, PPI | Support | Resistance | |
09:30 | UK Retail Price Index, House Price Index | GBP/USD | 1.3012 | 1.3338 |
11:15 | UK BoE Governor Carney testifies to lawmakers | GBP/EUR | 1.1064 | 1.1438 |
Market overview
In a further sign that Brexit bad news is not totally priced in to the markets, yesterday afternoon saw Cable drop half a cent on a piece of news indicating that the negotiations were heading for a catastrophic breakdown unless the European Union signals this week that it will allow talks to move on to trade.
Later in the day and ahead of the important EU Leaders Summit in Brussels Thursday/Friday, it looked as if the Prime Minister had climbed down from her push to position the Summit as a make or break event to try and expedite Brexit talks. Mrs May travelled to Brussels for talks with Jean-Claude Juncker. However, it appears that, beyond a statement of agreement on divorce talks accelerating, there was no specific action agreed. The EU Summit later this week is clearly still important in shaping the talks to come, but following the outcome of yesterday’s meeting, it still does not look as if there will be a breakthrough that leads the talks onto discussing trading arrangements quickly. German Chancellor Angela Merkel and French President Emmanuel Macron have also presented a united front and have warned that the EU would not start discussing a transition deal unless Britain puts more money on the table.
In Spain, investors are awaiting the next move in a crisis that has weighted on Spanish assets. Sources cited by TV3 report that the Catalonian regional government will not respond to Spanish government on Thursday on independence and Carlos Puigdemont, the regional president, refused to clarify whether he declared independence from Spain last week, missing a Monday deadline set by the central government. He instead called for dialogue.
Later in the day and ahead of the important EU Leaders Summit in Brussels Thursday/Friday, it looked as if the Prime Minister had climbed down from her push to position the Summit as a make or break event to try and expedite Brexit talks. Mrs May travelled to Brussels for talks with Jean-Claude Juncker. However, it appears that, beyond a statement of agreement on divorce talks accelerating, there was no specific action agreed. The EU Summit later this week is clearly still important in shaping the talks to come, but following the outcome of yesterday’s meeting, it still does not look as if there will be a breakthrough that leads the talks onto discussing trading arrangements quickly. German Chancellor Angela Merkel and French President Emmanuel Macron have also presented a united front and have warned that the EU would not start discussing a transition deal unless Britain puts more money on the table.
In Spain, investors are awaiting the next move in a crisis that has weighted on Spanish assets. Sources cited by TV3 report that the Catalonian regional government will not respond to Spanish government on Thursday on independence and Carlos Puigdemont, the regional president, refused to clarify whether he declared independence from Spain last week, missing a Monday deadline set by the central government. He instead called for dialogue.