Deadlock

Deadlock

The major surprise on the markets last week was the February US nonfarm payrolls missing the 180,000 jobs creation forecast: it was the worst month for job growth since September 2017, up just 20,000. Given how big January’s number was (311,000), the headline was shocking but analysts reminded that this is an initial reading and that the three-month trend remains solid. Following the release, the EUR/USD pair recovered from a near thirty-month low. The trend however changed when Fed Chair Jerome Powell ignored the disappointing data and maintained his outlook of the US economy and interest rates policy during his latest appearances at the Stanford University and in a CBS interview.
Downing Street admitted this morning that Brexit talks in Brussels are “deadlocked”. It leaves Prime Minister Theresa May with a largely unchanged Brexit deal and only 24 hours to secure concessions from the European Union, before Tuesday’s vote in Parliament. The vote is likely to overshadow the GDP and production data releases due tomorrow morning. Investors are already pricing in a Brexit delay, which could lead to a softer Brexit or a second referendum and in turn, a stronger pound.

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