A Halloween Brexit
Although the British Prime Minister didn’t get her Brexit deal through Parliament, she managed to secure a new date for the divorce, October 31st. French President Emmanuel Macron strongly opposed a delay past June 30th as it would make the EU vulnerable but the EU members voted for a 6 months extension, with an opportunity for review in June. The UK GDP figures released yesterday showed that the British economy is on track for a stronger-than-forecast first quarter. The Office for National Statistics revealed that the gross domestic product grew by 0.2 per cent in February from a month earlier, attributing the modest grow to manufacturers stockpiling before Brexit. Despite all the news, the pound was little changed at 1.3080 against the USD and 1.16 against the EUR this morning.
In the EU, the European Central Bank (ECB) officials confirmed their commitment to keep interest rates at record lows while the ECB president, Mario Draghi, reassured investors that the central bank long term bank loans and its negative interest-rate policy to tackle the economic slowdown. The EUR weakened after Draghi insisted on the fact that the current global risks will continue to have a negative impact on the Euro-zone and as a result, the ECB confirmed no rate hikes for the rest of 2019.
In the minutes of the Federal Open Market Committee’s March 19-20 policy meeting released last night in Washington, the FOMC members signalled that a change in interest rates (either way) is an option but that due to events such as the slowing European growth, the ongoing trade war between the US and China or even Brexit, it’s likely that interest rates could remain on hold all year.
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