Once more Theresa May has pushed back a “meaningful vote” on her Brexit deal, with the new date of 12th March just 17 days before the UK are scheduled to leave the EU. The delay has received criticism from the leader of the opposition with Jeremy Corbyn accusing the PM of “recklessly running down the clock” and it does appear to increasingly look like May’s strategy is just that, in trying to force MPs to choose between her deal and no deal.
The pound remains close to its highest level of the month against the US dollar, and trades back near the $1.31 handle. Source: xStation
However, this is unlikely to work in practice and it seems like the most plausible outcome will now see an extension of the Article 50 deadline. The rumour mill is going into overdrive about the possible next developments, and this lunchtime we will get a press conference from Theresa May in Sharm El-Sheikh at 1PM, before she delivers a parliamentary statement tomorrow afternoon on her return.
The length of the extension could be an important aspect to watch should it occur, with Brussels reportedly sceptical that a 2- or 3-month delay will achieve anything other than delaying the choice rather than effecting its outcome. Should a longer extension be agreed upon, it could be seen to solve the problem of the Irish backstop as the touted length of the transition period at 21 months would effectively render it redundant.
Ultimately, the outcome of Brexit remains something of a guessing game but somewhat paradoxically as the deadline approaches, the markets seem to be decreasingly concerned about a no deal and are seemingly pricing in little chance of this occurring.
Stocks gain as US extends Chinese tariff deadline
News that the proposed increase of US tariffs on $200B of Chinese imports has been delayed has been warmly greeted by investors and has raised sentiment with stock markets making a bright start to the week. The Shanghai Composite surged over 5% overnight on the news before European benchmarks rallied to their highest level of the year and US futures are pointing to a strong start on Wall Street, with the S&P500 called to open at its highest level since the start of December – coincidentally also a Monday after the US had announced over the weekend that they would postpone tariff increases that were initially scheduled to kick in on 1st January.
US stocks are back at their highest levels since early December and remarkably trade at similar levels to the ones seen when the last increase of US tariffs on Chinese imports was postponed. Source: xStation