26/ 03/ 2019

Brexit Mess Continues & Relief Keeps the Euro Afloat

Sterling weakened on Monday after British Prime Minister Theresa May admitted there was not yet enough support to put her Brexit deal to a third vote, while parliament plotted to pull the process away from her government. The pound had jumped higher earlier in the day on media reports that lawmakers would vote on Tuesday on May's twice-defeated Brexit withdrawal agreement - that had raised traders' hopes that May's deal would pass and prevent Britain from crashing out of the European Union.

Theresa May will be working behind the scenes to garner support for the deal that had been once voted out by Parliament. Rebellion in the ranks has led to calls for her resignation. While her days appear to be numbered, anything remains possible.Theresa May is not yet done. There is the talk of a possible vote on her Brexit deal as early as today. Its last chance saloon for the British PM and the Tories. The rebels are pushing for the PM to formally announce her resignation. Resignation would be in exchange for support for the deal. A full circle for a handful of politicians that brought a catastrophic end to Britain’s membership with the EU.

It’s going to be a rollercoaster ride for the pound in the days ahead as members from the varying camps on Brexit look to shore up the necessary support to deliver their preferred outcome. Any hint of a parliamentary vote on Theresa May’s deal and expect the Pound to rally. A deal is going to be better than uncertainty going into what would likely be a chaotic Wednesday.

25/ 03/ 2019

Week Ahead | Brexit, Trade Talks, the Mueller Report and Stats in Focus

After the much more dovish than expected Fed economic projections and shockingly poor Eurozone manufacturing data last week, it looks like major world economies are at the brink recessions. In the currency markets, Yen and Swiss Franc ended as the strongest ones of falling global yield and risk aversion. That’s not much a surprise. But more importantly, it was argued that Canadian economy is facing more intense-than-expected moderation in the economy. If US would be in recession, Canada will only be worse. Sterling was the second weakest while Euro was the third. Despite very dovish Fed, Dollar ended the week mixed only.

Looking ahead, Brexit, U.S – China trade talks, the Robert Mueller Report and a mass of economic data will provide the markets with plenty to consider in the week ahead. U.S – China Trade War expect more updates on trade talks. The markets will be looking for a resolution to outstanding issues to pave the way for a Trump – Xi Trade Summit. From UK, the Brexit, it’s do or die for the Pound. One more Parliamentary vote on Theresa May’s deal next week is expected following the EU’s extension ‘till 22nd May. From US,Robert Mueller, a possible curveball. With the U.S President having avoided any interviews, anything is possible and needs to be monitored.

21/ 03/ 2019

Dollar Strong streak ended against Rivals due to Weak Fed Forecasts & Focus shifts back to BOE Minutes

The Dollar suffered heavy losses globally after the Federal Reserve stunned markets by abandoning all plans to raise rates this year, a signal its three-year campaign to normalize policy might be at an end. The central bank also trimmed its forecasts for economic growth and inflation, while lifting that for unemployment. Sterling is mixed for today even though it’s the weakest one for the week. EU summit in Brussels will be watched for formal responses to UK’s request for Article 50 extension.

Looking ahead, it’s a busier day on the economic calendar from US, data sets are likely to influence, outside of the numbers, more U.S-China trade war chatter may also be on the cards. Comments on Wednesday raised some concerns over whether an agreement can be reached ahead of an anticipated Trump – Xi meeting next month. It’s a big day for the Pound, as the the BoE will deliver its March monetary policy decision later in the day. With uncertainty over Brexit continuing to linger, there’s unlikely to be any surprise guidance from Carney and the team. On the Brexit front, the EU Summit kicks off today and British Prime Minister Theresa May will be looking for approval of the Brexit extension.According to reports, the extension request was for just 3-months. With Parliament having failed to agree on a deal, how member states view the timeline will be of interest. The EU may force Britain into a lengthier extension, which should be Pound negative.

20/ 03/ 2019

Brexit and the FED in Focus

Dollar trade generally higher today as markets await FOMC rate decision. But gain is very limited as traders are guarding against unexpected dovishness in Fed. In particular, such dovishness could be embedded in the new economic projections. Meanwhile, Swiss Franc is the second strongest for today, followed by Euro. On other hand Australian Dollar are the weakest ones. Sterling is mixed as EU await UK government’s letter for Article 50 extension.

Looking ahead, the Fed is due to make its rate announcement later today and is expected to keep its benchmark overnight interest rate unchanged. Brexit chatter, updates on the U.S – China trade negotiations and the FED will be the areas of focus.