Labour plan for no-deal vote rejected
13 Jun 2019
Late yesterday afternoon, the motion presented by Jeremy Corbyn’s Labour Party to try and reduce the scope for a new Conservative party leader to deliver a ‘no-deal’ Brexit, was defeated by 309 votes to 298. With yet another boost for the ‘hard Brexit’ cohort, the ominous shadow of a ‘no-deal’ Brexit still hangs heavy, leaving little to cheer for Labour and Tory remainers.
It’s also worth noting that the first round of voting takes place among Conservative MPs at lunchtime today. Among the 10 remaining candidates, contenders must attract 5% of the votes (17 MPs) to avoid elimination. The second round is scheduled for Tuesday next week at which the hurdle for further progress rises to 10%, or 33 MPs. In subsequent rounds, the lowest candidate is eliminated until the final two are left. A run-off vote will then take place polling the party membership. Today’s results are expected at around 1pm. Boris Johnson, who seemingly did little yesterday to dent his leadership prospects at his launch, remains the odds-on favourite at 8/15.
Chances of a Fed rate cut increaseFollowing on from yesterday’s less than firm US CPI print, markets are now pricing in a higher chance of a Fed rate cut. The MoM print came in at +0.11% significantly lower than the +0.20% that was forecast. This now pretty much debunks the Feds theory that the recent soft patch of inflation is transitory. Markets were quick to jump on the news, pushing the chances of a hike at next weeks Fed meeting to 23% from 17% and to 83% from 77% at the 31st July. There has been little change in the value of the dollar since the news broke, the benchmark EUR/USD rate is still hovering in/around the $1.13 level as we go to print.
Thought of the dayMay’s RICS housing market report witnessed a surprise rebound in the house price balance to -10% from April’s -22% (revised from -23%) and against market and our own expectations of only a very marginal improvement to -21%. Amongst the report’s details there was also an improvement in the activity metrics with new buyer enquires (-3.4% from -26%), new instructions to sell (-11.3% from -34%) and agreed sales (-13% from -23%) all improving. However the commentary from RICS pointed to May’s rise being a result of a temporary boost from the delay in Brexit until the 31 October 2019.
Economic Releases10.00 EZ Industrial Production
12.00 US Open monthly report
13.30 US Jobless Claims
13.30 US Export & Import price index