The deadlock continues
Today the UK Prime Minister is heading to Europe, to hold talks with German Chancellor Angela Merkel and French President Emmanuel Macron, with the aim of securing another short Brexit extension. This comes as the government and Labour have failed to find common ground. Last night, Jeremy Corbyn complained that little progress was made as the prime minister had “not yet moved off her red lines”. MPs have already passed a law that will prevent the government from pursuing a no-deal Brexit but today or tomorrow, they will vote on a law that will instruct PM May to seek a longer extension than the one she suggested. The pound remains stable, trading around the 1.16 mark against the EUR and 1.31 against the USD, despite the latest disappointing consumer spending data: according to the British Retail Consortium, total sales (of mostly major high-street retailers and supermarkets) have dropped by 0.5 per cent year-on-year in March, after a 0.5 per cent rise the month before, the first fall since April 2018.
Tomorrow will be an important day for Europe: the European Central Bank is preparing for its decision meeting, although policy makers have already stated their hesitation in changing their interest-rate policy. Meanwhile, the Federal Reserve Bank will publish the minutes of its March meeting, which should provide investors with more information about what the FOMC members discussed (warnings about the global economy) and their decisions to remove rate hikes from the 2019 agenda and to announce an early end to balance sheet reduction program. Finally, EU leaders will be meeting for a summit on Brexit, which could significantly impact the market.
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