Home > Resource Hub > Daily Market News > The EU has a Brexit road map

The EU has a Brexit road map

The EU has a Brexit road map

The Pound attempted to capitalise on two-month highs against the Dollar, just peaking above 1.2760 yesterday and held steady above 1.1850 for most of the day against the Euro. There were big revisions to the UK current account data with a lower deficit for the first half of 2016, but a record deficit for the third quarter, maintaining concerns surrounding data reliability.

There was increasing expectation that the government would lose the Supreme Court appeal – that parliament needed to be consulted on the triggering of Article 50. Theresa May has conceded in suggesting limited guidance on Brexit strategy will be provided to Parliament in return for agreement on the Brexit timetable.

In Brexit news Michael Barnier, the EU’s chief Brexit negotiator, delivered his first speech since his appointment on October 1st. The key points are as follows: several months of the two years allotted for negotiations will be needed for EU countries to ratify a Brexit deal, a complete trade deal isn’t possible and that Brexit can’t be a better deal than full EU membership.

The US factory orders data maintained the run of favourable numbers coming from the manufacturing sector, printing slightly stronger than expected with a 2.7% increase for October. The total trade deficit was $42.6bn for October from the previous $36.2bn as agricultural exports fell in the month. In contrast, there was a sharp increase in the IBD consumer confidence reading for December which boosted expectations of robust consumer spending.

There were no major Italian political developments yesterday. The markets are waiting for the 2017 budget to be passed which should trigger the formal resignation of Prime Minister Renzi. Although rumours of an early election had surfaced, there were overall expectations that a new caretaker government would be formed and that elections would be avoided.

The market is cautious ahead of tomorrow’s European Central Bank (ECB) monetary policy meeting. The bank is expected to announce an extension to the bond-buying programme, due to finish in March. However, there is uncertainty surrounding what measures will be taken and what President Draghi’s stance will be on the longer-term outlook .

Data to watch: 3pm UK NIESR GDP November Estimate (3 month). 3.30pm US EIA Crude Oil Stocks Change. 8pm US Consumer Credit Change (Oct).

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.