Noes have everything as Brexit chaos drags on

Summary:

  • UK Parliament failed to agree on any of the eight Brexit alternatives
  • May has suggested she could step down, if the House backs her deal
  • DUP remains reluctant to back the May’s agreement

“Noes have it” (eight times)

The tremendous disappointment - that it the way perfectly describing what happened in London yesterday after the UK Parliament failed to back any of the eight proposed Brexit alternatives. The prime aim of holding so-called indicative votes was to know what is an alternative to the current May’s agreement the UK Parliament would easily back. Therefore, a lack of support for any of them could be disappointing leaving the United Kingdom closer to crashing out of the EU without any deal.

MPs of the UK Parliament said “no” eight times on Wednesday. Source: UK Parliament

That said, one may conclude that the UK does not want to leave the EU without a deal, to have a customs union or to hold a confirmatory public vote. Notice there was also opposition when it comes to a Brexit revocation. The state of play in the UK is dramatic, as a result, Theresa May decided to propose her resignation once her Brexit agreement gets support of a majority of MPs. While such a decision could persuade some Tory rebels, there is no doubt that the Northern Irish Democratic Unionist Party remains reluctant to back the May’s deal when it is submitted to a third meaningful vote before the House. This fundamental opposition suggests that holding another meaningful vote could be pointless. Moreover, let us remind that speaker of the House John Bercow singalled last week that the new deal being submitted before the House must be substantially different from the previous two ones and this sentence was repeated on Wednesday. It signals that changing the date when the UK needs to leave the block could not be enough to “materially” change the previously rejected agreement. A debate in the House is expected to continue today albeit there is uncertain whether the MV3 could take place.

The pound remains little changed following a series of disappointing indicative votes. The GBPUSD keeps hovering between 1.33 and 1.30. A break of either the upper or lower boundary could lead to larger moves. Source: xStation5

Comments on trade talks, bleak data from New Zealand

Apart from the Brexit thread we also got some comments from Reuters concerning trade negotiations between the US and China. It said that both countries made progress in all areas of trade talks but some sticking points remained. China has reportedly made proposals on trade, including technology transfers, being more specific than ever before. Reuters said that whether to lift or keep the current US tariffs on Chinese goods was a sticking point and would be a part of talks held in Beijing this week. Finally no specific timeframe has been set for a deal, hence the talks could conclude anytime between April and June.

Meanwhile we were also offered dismal data from New Zealand. The index measuring activity outlook slid to 6.3 from 10.5 while the index of business confidence deteriorated to -38 from -30.9. Despite these grim releases, the NZ dollar has been able to recover some of its heavy losses incurred on Wednesday in the wake of the dovish RBNZ statement. The kiwi is strengthening 0.45% this morning being the best performing major currency.

In the other news:

  • Fed’s George said the Fed could take a wait and see approach and the US economy was operating above its potential

  • The Turkish lira extends its losses being 2.4% lower against the US dollar this morning, the pressure on the currency stems from poor poor liquidity conditions introduced indirectly by the government wanting to avoid undue TRY’s depreciations ahead of the local elections this Sunday

  • US 10Y yield trades at 2.351%, Japan’s 10Y yield slips to -0.1% reaching its lowest level since August 2016

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