29 Oct 2019
Another election vote due today
Last night, UK PM Boris Johnson failed in his third attempt to secure an early election under the Fixed-Term Parliaments Act (FTPA).
His push for an election on 12 December was defeated 299 to 70, falling well short of the 434 (i.e. ⅔ of all 650 MPs) needed under the Act to trigger an election, with the Labour party abstaining. But Mr Johnson is set to try again today to bring about an election on 12 December, albeit through the use of a one-line bill which would circumvent the FTPA by only requiring a simple majority to pass. He has previously been hesitant to go down this route as such a bill would be amendable.
Note also that House of Commons Leader Jacob Rees-Mogg confirmed last night that the government will not bring back its Withdrawal Agreement Bill (WAB). Crucially, this satisfies a key demand of the Liberal Democrats and the SNP who are pushing for an alternative polling day of 9 December in the belief this would allow more students to vote in their university towns. It is unclear at this stage whether the Liberal Democrats and/or the SNP will be willing to back the bill, having insisted that the pledge to not re-introduce the WAB be copper-bottomed. However, the Financial Times reports this morning that Downing Street officials admit that the government will probably have to compromise on the date of the election and that a “landing zone” between 9 and 12 December could be found.
US, an hour early
Clocks went back in Europe this weekend, one week before they do in the US. As such, US watchers based in Ireland, UK and on the Continent should note that major US releases including Q3 GDP (Wed), PCE inflation (Thu), non-farm payrolls (Fri) and the ISM manufacturing index (Fri) will all be out an hour earlier than usual. Also affected is the FOMC’s penultimate policy decision of 2019 on Wednesday. While we think the decision could go either way, on balance we suspect US policymakers will opt for a 25bp cut. Broader risk sentiment continues to hinge on how the US-China trade dispute evolves ahead of the APEC Summit (11-17 Nov) given that US President Donald Trump has talked of signing a ‘phase one deal’ with his Chinese counterpart, Xi Jinping. As such, the outcome of a phone call between senior US and Chinese officials which had been touted for this week will be of key interest.
Economic Releases
Nothing to note.