Pound surge, is exit延期? ~ Highlights and schedule for January 14 ~
The Brexit plan was highly likely to be rejected, and a no-deal Brexit was drawing near. The pound had been selling off on no-deal Brexit concerns, but it surged last weekend! One reason was reports that the March 29 Brexit date might be extended. It’s just a rumor, and the truth isn’t known, but the market welcomed it and bought the pound. Regarding the extension, there seems to be an expectation that it could last until July.
Part reference
※ DMM Salon "FX Style"
http://lounge.dmm.com/detail/1215/
◎ Today’s Points of Attention
1) UK Parliament and Brexit Plan Deliberations
With a vote in the UK Parliament approaching, the atmosphere has become tense. In Parliament, bills and amendments related to the Brexit plan are being decided daily, but Prime Minister May’s position does not look favorable. Market attention has shifted to the vote itself. Will the Prime Minister be replaced? Will a vote of no confidence be submitted? Will there be a dissolution election? Will Brexit be postponed? Will there be a second referendum? Thus, the vote seems to be anticipated as failing.
Today as well, deliberations continue in Parliament. Position adjustments and headlines could change the pound’s trajectory, so I will be watching closely.
2) US Budget Bill and Mexico Border Wall Construction
Public opinion polls show that this is due to President Trump. However, more than 80% of Republican supporters appear to back border wall construction. The budget bill regarding the border wall remains unapproved. Some say it could continue until the end of February. If it indeed goes to the end of February, it could affect the redemption of US Treasury securities.
Treasury redemption date is February 15.
If the budget bill is not approved by this date, concerns about default (delayed redemption) arise. In response, rating agencies say there could be a reevaluation of US Treasuries. I will pay attention to the fate of the budget bill.
3) US Corporate Earnings and Stock Prices
This week, quarterly earnings from US companies continue. It seems that corporate earnings are being affected by the trade and tariff war. If earnings results influence US stock prices, there could be a renewed risk-off sentiment. Today, Citigroup’s earnings are released. The details and stock movement are in focus.
◎ Today’s Event Schedule
Monday, January 14
Time TBD: China trade balance
17:30 SEK: Sweden CPI (Consumer Price Index)
19:00 EUR: Euro area Industrial Production
22:00 USD: Citigroup quarterly earnings release
◎ This Week’s Key Points and Event Schedule
