- House voted in favour of a series of alternative options due to vote on Wednesday
- Pound remains calm being traded below 1.32 this morning
- Fed’s Rosengren signals the Fed could increase the share of treasury bills
UK Prime Minister suffered another humiliating defeat on Monday evening when the Parliament voted in favour of a series of alternative options to the current Brexit deal she has hammered out with the European Union. The House of Commons voted 329 to 302 in favour of the cross-party amendment giving the Parliament a possibility to set up numerous votes on Wednesday (so-called indicative votes the Parliament would be able to back). A number of options are on the table including a softer Brexit, a customs union with the EU and even another referendum. Theresa May said after the vote that allowing MPS to take over the Brexit process would result in an unwelcome precedent and the Parliament might vote on something the EU would never agree on. Prime Minister added that she would not commit the government to abide by the result. As a result, PM May sticks to her current course, hence she is likely to seek the support of MPs to finally get approval of her agreement. Keep in mind such the accord has already been rejected twice, therefore persuading a sufficient number of MPs seems to be critical point for Theresa May in order to get her deal through the Parliament this week.
Almost 30 ministerial resignations have already taken place in May’s government. Source: BBC
It is also worth noting that another minister in May’s government resigned - Junior Business Minister Harrington. The overall number of resignations has already approached 30 since May's government has begun its term in office. The pace of resignations has been unprecedented and much quicker compared to previous PMs as evidenced by the graph above.
The pound keeps trading within the range 1.33-1.30. The lower bound of this range is supported by the 75DMA. Source: xStation5
Several important points from Asian session
Over Asian hours trading we were offered several points of note. First of all, the New Zealand’s trade balance produced a 12 million NZD surplus in February beating expectations of a 200 million NZD deficit. Exports increased 4.82 billion NZD (up from 4.4 billion NZD) while imports rose 4.8 billion NZD (down from 5.32 billion NZD). The kiwi is trading subtly lower against the US dollar this morning.
Secondly, we got some comments from RBA’s Luci Ellis who said that the labour market in Australia had unambiguously improved and once could be reasonably confident in the strength of the labour market data. On the other hand, she indicated that weak income growth was weighing on household consumption while falling house prices may have impacted spending on vehicles or other household goods. Her quite dismal outlook on households’ consumption was improved somewhat as she said that some of the drags on income were not likely to be permanent. She concluded her speech saying that the Reserve Bank of Australia would take fiscal policy into account when setting rates (note that the Australia's fiscal position has improved markedly recently).
Another point came from Japan where the Bank of Japan’s summary of opinions was released. The summary, being for the meeting between March 14 and March 15, said that there was room to review BoJ’s bond buying operations. However, members agreed that the central bank must maintain the current loose policy.
The Japan’s NIKKEI (JAP225) gained as much as 2.15% on Tuesday after falling rapidly the day before.
In the other news:
Fed’s Rosengren said the Fed could increase the share of treasury bills, lower duration of its balance sheet more quickly
The US 10Y yield has moved up 3 bpd in recent hours and it is trading at 2.428% this morning (the 3-month bill yield is trading at 2.388%)